Supply Chain Management: Risks and Benefits of Integration

This report delves into the risks and benefits associated with supply chain management. It explores the challenges of integrating supply chains, including difficulties in controlling suppliers, potential for product management issues, and the importance of government compliance. The report also contrasts these risks with the benefits, such as increased flexibility and efficient waste management. Furthermore, the report highlights the risks of non-integrated supply chains, such as failures in demand prediction and reduced profitability, providing a comprehensive overview of supply chain management considerations. The report references several key sources and provides a clear understanding of the critical aspects of effective supply chain management.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
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Author’s Note

1SUPPLY CHAIN MANAGEMENT
The risks of highly integrated supply chain are discussed below:
Difficulties in Controlling Suppliers: In the integrated supply chain process, business
organizations face hurdles to control the suppliers. As a result, there is a risk of missing the
taking care of various components of the outside suppliers (Christopher, 2016).
Identification of Key Suppliers: Both internal and external suppliers have their own business
model for operation. The integration process of them develops the risk of mix up of the resources
of suppliers that can cause delay in production process.
Product Problem Management: In integrated supply chain, there is a risk of breakdown in check
and balance system for monitoring the defects in raw materials and sales processes (Christopher,
2016).
Government Compliance: The adoption of the strategy of integrated supply chain can blur the
compliance of government regulation by the company as there is a chance of missing steps in
inspection process.
However, in case the companies do not integrate their supply chain, they also have to
face some major risks. They are mentioned below:
Failure in Demand Prediction: As there is not any integration in supply chain, the companies
literally fail to predict the demand of their products in market.
Lack of Flexibility: Integrated supply chain assists the companies in bringing flexibility in
business operations as they can respond quickly to external events. Not integration in supply
chain can cause lack of flexibility (Stadtler, 2015).

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Waste Elimination: Lack of integrated supply chain can cause loopholes in lean manufacturing
process and it leads to the risk of ineffective waste management.
Low Profitability: Lack of integrated supply chain can reduce the profitability of the
organizations due to the above-mentioned factors (Stadtler, 2015).

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References
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.