Integration of key business processes. As mentioned earlier, SCM focuses on the integration of all key business processes across the supply chain (Xxxxxxx et al, 1997). Xxxxxxx and Xxxxxxxxx (2005) state that the goal of integrating operations between manufacturers, suppliers, and customers is to create and coordinate processes seamlessly across the supply chain in a way that is not easily matched by competitors. According to Xxxxxxx and Xxxxxx (2000), business process integration and supply chain integration involve collaborative work between buyers and suppliers, common systems, and shared information. Xxx (2006) further elaborates the supply chain integration concept by saying that this kind of integration can be achieved through efficiently linking the various supply chain activities, and having them subject to the effective construction and utilization of various supply chain practices for an integrated supply chain. In other words, an organization that is pursuing in SCM practices must pay attention to and attend in supply chain integration efforts. An organization does not operate in isolation, and to achieve the potential benefits of effective SCM, there is a need for internal cross-functional integration within an organization and external integration with suppliers and customers. The idea of a cross-functional team with staff from various departments and multiple organizations as integration efforts is also supported by Xxxxxxx (2004). He states that a cross-functional team should be responsible for the development of procedures and processes at a strategic level and the implementation of them. The team should also work with identifying how external partners can and should be integrated in the chain. Xxxx, Xxxxxxxx, and Xxxxx (2008) relate integration to such activities as vendor-managed inventories, packaging customization, joint planning and forecasting, dedicated planners, use of inter-organizational planning systems, and use of point of sale data. They argue that the more complex business activities, which usually is the case with effective SCM efforts, the more need for integration. They state that high level of integration typically requires close cooperation, daily communication and joint problem solving. While the researchers identify some barriers towards supply chain integration, like lack of coordination and information- sharing, they concur with Xxx (2006) who clearly states that the potential benefits of supply chain integration can no longer be ignored. This is also supp...
Integration of key business processes. Integrated behavior where operations between manufacturers, suppliers, and customers are integrated is one of the main ideas of SCM. Through efficiently linking the various key business processes within a supply chain, the overall goal is to have the operations coordinated and running seamlessly in ways that are not easily matched by competitors (Xxxxxxx & Xxxxxxxxx, 2005). The role of an IOS should thus be to enable or facilitate these integration efforts. IOS research points out inter-organizational BPR as a key success factor. At the minimum, inter-organizational BPR is efforts where the organizations establish smooth exchange of data and information between themselves. However, the goal of inter- organizational BPR is to achieve seamless integration of key processes between the business partners. Regarding IOS, inter-organizational BPR should include modification of current IS applications to interface with the new IOS and establish procedures and adjustments so to align internal business processes with the IOS. Thus, through inter-organizational BPR, key business processes should be integrated between the involved supply chain partners. It is obvious, however, that such radical redesign efforts of inter-organizational nature is easy to explain, but difficult to carry out, as it, among other barriers, requires a high level of trust between the partners, as well as the sharing of sensitive information (Xxxxx, 1994). Even though there are obstacles to such efforts, research within the IOS domain still holds inter- organizational BPR as a key factor (Xxxxx & Xxxxxxxx, 1996; Xxxx, 2003; Xx et al, 2006). TRV also underpins the importance of integration between business partners. Complementary resource endowments, where resources between the partners are combined, can be a source of a competitive advantage (Xxxx & Xxxxx, 1998). From the theoretical viewpoint of SET, integration of key business processes through inter-organizational BPR is more likely when the partners have a history of success. This concern is discussed in the following section.
Integration of key business processes. Xxxxxxx and Xxxxxxxxx (2005) conducted a study which aimed at testing how different forms of supply chain integration are related to organizational performance. The researchers argue that many of the theoretical arguments for integrating operations between supply chain partners stem from the process reengineering literature which goal is to create and coordinate processes seamlessly across the supply chain. Through a review of operations management related journals, about 30 articles were selected and examined to develop relevant hypothesis. It is proposed that information-sharing within a supply chain increases performance, and that internal and external integration across the supply chain increases the performance. The propositions are found to be supported through a literature review – information-sharing and integration of business processes is positively associated with performance. The conclusion is that the potential benefits of supply chain integration can no longer be ignored. The achievement of such integration, however, requires the recognition and proper handling of interrelationships between the supply chain partners. Through integrating key strategies with suppliers and customers, organizations can learn and continually adapt to changing market structures.
