Vertical Integration Case Study

Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

Reorders are placed at the time of review (T), and the safety stock that must be reordered is:

A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.

Supply chains manage the movement of products from the acquisition of raw materials through production and finally distribution to the end user. A properly designed supply chain can create many opportunities to drive down cost and increase revenue opportunities. In order to create a supply chain that is sustainable and flexible it is necessary to identify and align company goals and initiatives with the manufacturing and distribution of products.

Supply Chain Management (SCM) management is the success factor in fast fashion business. SCM deals with suppliers, with supplier’s suppliers, with customers and even customer’s customers (Galin, Zhelyazkov, 2011). Zara’s process focuses from raw materials basis to customer consumption. The supply chain productivities are a physical product, a combination of time, place, form and function of a product and service proposition. In the fashion world, where companies are competing on time the need of new abilities are rising.

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

Fierce competition, fluctuating market demand and rising customer requirements has led to customers becoming more demanding with increased preferences (Zhang and Cheng, 2006). In, the 21 st century, participating largely in globalization has created significant opportunities, and at the same time, put pressure on the automotive industry manufacturers to enhance quality, improve styling, increase organizational efficiencies and drive innovative features into their products in an effort to attract customers and expand into new markets (BCC, 2005). This paper explores the concept of supply chain management with a case study of one of the greatest motor brands BMW. We will look at the supply chain strategy of the company and how successfully it

Supply Chain strategies have become increasingly important in this highly competitive interconnected global economy. The customers have the ability to drive down cost, increase services,

Simchi, D., Kaminsky, P., Shankar, R. (2008). Designing and managing the supply chain: concepts, strategies, and case studies, 3, 384-385.

Vertical integration allows executives and management to control distribution costs that often involve multiple mark-up and re-selling stages. A single organization that manages their own distribution process will enjoy the ability to optimize resources and minimize waste. Vertical integration provides more direct control over the value chain. When retailers develop or acquire a manufacturer, they gain power over production aspects and distribution processes. When manufacturers engage in retailing, they can control how they present and market their products to

Commercial institutions try to combat the power of the BBC by becoming larger and creating vertical integration. This is where an institution has shares or owns each part of the production and distribution process. For example: Warner Bros Entertainment calls itself a fully integrated broad based entertainment company which owns film studios and the means to distribute the films as well as some of the cinemas in which they are shown. Warner Bros in itself is part of an even bigger conglomerate called Time Warner which is a huge media conglomerate institution which uses horizontal

The vertical integration is arrangement that tends to keep the supply chain of a company owned by the same company

Using the supply chain design, market orientation (vertical vs. horizontal) and industry clock speed, specifically fast ones, organizations may find an advantage in their ability to concurrently design products, processes and capabilities (Fine, 1998, p. 127). When companies do not consider supply chain design and engineering as a concurrent activity in product design, they are setting themselves up for future issues. The author points out a similar relationship between product

Supply Chain Management : The vertical integration in the supply chain led them to achieve shorter time frame of release and also helped them to

4. In a service supply chain, the (explicit) cost of information is higher than in a product