Why Is Supply Chain Integration Important to Organizations - Essay Example

Research indicates that organizations that integrate their supply chain activities enjoy numerous benefits. Some of those benefits include but not limited to; increase flexibility whereby, an organization can promptly respond to both internal and external factors affecting the organization. For example, proper supply chain integration enables an organization to effectively s meet customers' needs (Basu, 2014).             Moreover, supply chain integration helps to reduce costs and increase operational efficiency.

In addition, integration of supply chain activities enables an organization to manage its inventory more efficiently and effectively. This means that the problem of having obsolesced stock is eliminated and hence, the cost of managing inventories becomes minimized. Further, supply chain integration enables an organization to order and supply stocks that adequately meet customers ‘ demands. In addition, the supply chain integration helps to increase production efficiency (Lee & Katzorke, 2010).

Further, supply chain integration improves the relationship between the organization, its supplies, customers, and all the stakeholders is improved since it leads to an increase in partnership. Through proper supply chain integration, it becomes easier to make correct forecasts on the amount to produce and to ship. In addition, it helps to prepare relevant transportation and project execution schedules (Basu, 2014).