Global Versus Domestic Supply Chain Integration

Both domestic and global supply chain integration processes are a formidable challenge, but there is a significant difference between the challenges a manager would face during the process of supply chain integration at global and domestic levels. Though both domestic and global supply chains require the structuring and managing the combing and joint efforts of all the businesses involved in the supply chain. (Bowersox, Closs & Cooper, 2002)

Integration of domestic supply chain requires sharing of information, particularly regarding future plans, eliminate waste and duplicate efforts, technology driven collaborative practices, and acknowledging mutual dependency. In order to practically implement all this a supply chain integrative framework is required. The success depends on strategic alignment, operational fusion, financial linkage, and supplier management. The main obstacles regarding retailers are low-volume stock keeping units, resistance of manufacturers to change, information systems, and non-compatible data formats.

On the other hand challenges regarding manufacturers include lack of communication, trust level, non-compatible systems, understanding of technical issues, resistance of customers to change, and readiness of retailers. (Bowersox, Closs & Cooper, 2002) Integration of a supply chain on a global scale is much more difficult as compared to a domestic level integration. The logistic systems’ support in a global scale is not completely in a controlled environment as it is in a domestic level.

The cost and complexity is increased and there is more uncertainty and less ability to control, greater distances, longer lead times, and decreased market knowledge. Moreover there are variations in different parts of the world. Potential government interventions also make the task difficult to manage. All these challenges make the integration of supply chain at a global level a more formidable one. (Bowersox, Closs & Cooper, 2002) Reference Bowersox, Donald J. , Closs, David J. , Cooper M. Bixby. (2002). Supply Chain Logistics Management. McGraw-Hill Higher Education. ISBN 0-07-235100-4