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Supply Chain Management: Technology, Measurement, Relationship & Material Integration Video

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  • 0:05 Supply Chain Integration
  • 1:19 Relationship Integration
  • 2:10 Measurement &…
  • 4:02 Supplier & Internal…
  • 5:09 Customer Integration
  • 5:47 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Marketing managers realize how distribution can be costly if there is not an efficient plan in place. Supply chain management is a strategy that allows seamless integration of all pieces of the distribution chain.

Supply Chain Integration

Getting a product from Point A to Point B can be an extremely difficult task. Ninja Corp has a complicated web of distribution to get their Ninja products to consumers. Remember that place, or physical distribution, is one of the four Ps of the marketing mix: product, place, price, and promotion.

Ninja Corp is a business that relies on supply chain integration, which is when multiple firms in a supply chain coordinate their activities and processes to seamlessly satisfy the customer. This provides Ninja Corp with the ability to deliver excellent quality products, manage costs, increase productivity, and provide customer satisfaction. There are six types of integration that are needed to achieve proficient supply chain integration:

  • Relationship Integration
  • Measurement Integration
  • Technology/Planning Integration
  • Material and Service Supplier Integration
  • Internal Operations Integration
  • Customer Integration

Let's take a look at how Ninja Corp has built a reputation for being a top-tier logistics expert and how they deliver their Ninja Swords to customers.

Relationship Integration

Relationship integration is the first type of integration necessary for an effective overall systems approach in supply chain management. This type of integration is when two or more companies have social relationships that guide their interactions. For example, Ninja Corp is the supply chain leader and has specific followers, such as the company that creates the packaging and the middleman who stores the sword inventory. Ninja Corp ensures that the partners are aware of policies and rules concerning delivery of their product as well as quality issues.

They also have communicated what the reward will be for successful logistics. Ninja Corp hands out bonuses to their supply partners if target sales goals are reached and product is supplied when needed. Relationship integration hinges on excellent communication and the ability to work through any disagreements in getting the product to the customer.

Measurement Integration

Measurement integration is the second type of integration that occurs to ensure that each part of the supply chain is accountable for meeting its own goals. There must be explicit direction and clear expectations regarding what is required to meet the overall Ninja Corp goals. The supply chain members must have standards that can generate a report card on how each member is performing.

For example, Ninja Corp wants to know that their swords are making it to the retail stores without any damage and in a timely manner. Detailed requirements are communicated to the suppliers to ensure that they are aware of Ninja Corp's expectations.

Each member of the supply chain must be accountable for accomplishing goals.
Measurement Integration

Technology/Planning Integration

Another piece of the supply chain plan concerns technology/planning integration. Ninja Corp has a sophisticated computerized system that allows all members to stay informed about the status of the Ninja Swords. This is a type of informational system that connects managers across and through the firms in the supply chain. Important information such as inventory levels, shipments, and customer data must be easily accessible in real time for the members to be successful.

Ninja Corp's system works like this: A consumer shops for different swords and chooses the product for sale. The customer takes the sword to the counter and purchases it. The UPC tag is scanned for pricing and product information and it's placed into the information technology system cash register. Right away, the factory in Alamo receives notification that the 11-inch sword in black was purchased at The Self-Defense Store in Plano, Texas. The factory's next step is to make sure to order the supplies to make another sword to replace the one in Plano.

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