Vertically integrated supply chain

Zara represents a mainly vertically integrated supply chain with intense coordination between levels. Store managers pass along customer... 

Horizontal and vertical integration. Supply chain management processes are executed across functional domains within individual units, as well as across enterprises involved in the supply chain network. Sharing of data and processes should be supported at a level desirable for a particular decision-making problem. Its implementation should enable relatively simple replacement of components comprising the architecture of the supply chain information system. 

Thus, the vertically integrated supply chain makes 670 more than when the retailer makes... 

Supply chains that burst to many tier 1 customers/suppliers will strain corporate resources and limit the number of process links the focal company can integrate and closely manage beyond tier 1. In general, managers in companies with immediately wide vertical structures actively manage only a few tier 2 customers or suppliers. Some companies have transferred servicing small customers to distributors, thus moving the small customers farther down in the supply chain from the focal company. This principle, known as functional spin-off, is described in the channels literature (Stem et al. 1996) and can be applied to the focal company s network of suppliers as well as to its customers. 

Table 4.4 shows the four key areas covered in the VICS assessment and illustrates the increasing difficulty and benefits of progressing vertically through the processes of Collaboration to Integrated Planning and Forecastii to Replenishment and finally to Supply Chain Management. 

These thoughts call certain questions to mind with respect to the supply chain. Are not the eight areas applicable as much to a supply chain as they are to the manufacturing function at a link company Will not a structural decision on vertical integration depend on the availability of viable trading partners Does not the supply chain have to mesh with the business unit strategy — even if we must redefine the business unit as a chain or extended enterprise rather than a stand-alone company ... 

Superscripts I, T and D will denote vertically integrated, vertically disintegrated (traditional), and drop-shipping supply chains, correspondingly. Further, we will consider three drop-shipping models. In Model DW the wholesaler has channel power, in Model DR the retailer has channel power, and in Model DN the players have equal power. We also assume the following quite general form of the demand distribution ... 

A between (global or supply chain level) vertical integration within a tier (comprising all units) would be to implement common strategies and policies to achieve a common (global) objective across units in their tier. 

Results of the detailed review are cross-tabulated to identify focus areas of supply chain configuration research. Tables 3.3 and 3.4 report the cross-tabulation results according to horizontal and vertical extent dimensions, respectively. A majority of papers attempt to cover all supply chain tiers. Some of the papers focus on the supply or distribution sites having the manufacturing tier as an integrative stage. However, there are differences between papers focusing on the distribution and... 

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