How to achieve supply chain integration?

Collaborative planning

The concept of supply chain synchronization is best understood by the framework shown in figure 5. In this figure, the whole supply chain is aiming for a shared goal that is to fulfill market demand with adequate resources. Internally, the company must establish processes that will guide the integration of people and information in developing a demand execution plan. Sales and operations planning or commonly referred to as S&OP is the process that enables the company to balance supply chain resources with market demand. The ultimate result of S&OP is a demand plan that validates the sufficiency of resources against customer requirements.

The collaborative planning, forecasting, and replenishment (CPFR) strategy is the major element in executing sales and operations planning. It ensures visibility and synchronization of data across organizations during the S&OP process. In the CPFR strategy, manufacturers and customers are involved to make S&OP output even more accurate and realistic. Coordination between organizations may include the establishment of replenishment planning, inventory level, production schedule, forecast, and customer service. In order to achieve coordination, a collaborative mindset and information sharing must also take place.

Figure 5. Supply chain synchronization framework. Source: Adopted from Croxton, Keely & Lambert, Douglas & Garcia-Dastugue, Sebastian & Rogers, Dale. (2002). The Demand Management Process. International Journal of Logistics Management, The. 13. 58-59. 10.1108/09574090210806423.

Technology and information

Technology and information are necessary for creating a collaboration framework for supply chain participants. The framework ultimately becomes an information support system where stakeholders interact seamlessly. For example, suppliers and customers can exchange CAD files, product specs, and contracts administration over a collaboration platform (SAP, Oracle, etc) allowing both organizations to interact more quickly.

Figure 6. The use of technology in supply chain collaboration.

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