IndexDifference between Internal and External IntegrationStrategic Importance of IntegrationRequirements for Internal and External IntegrationThe concept of integration is broad and ambiguous, which inhibits efforts to learn from innovations. In general terms, Integration means that disparate elements are brought together. Integrated Research: Connecting Concepts in Environmental Science and Policy Lorraevan Kerkhoff. In business terms, how can integration have a definition when the parameters vary from one organization to another? How can the goal be the same when different departments with different goals are involved? Therefore, the answer may lie in pursuing a larger purpose/vision rather than an overarching goal as a team. Lambert, Garca-Dastugue, and Croxton (2005) explicitly emphasized that connection (i.e., connectivity) is the key to integrating processes in both an intra-firm and inter-firm context. It has been observed that organizations cannot be successful if they do not identify themselves as supply chain management as a whole. Therefore the focus should be on research on the intersection between internal and external integration. While we can delve deeper into each process by classifying internal and external separately, we may have already simplified it across integration providers by stating that the intersection of both is the definition of integration in a broader perspective. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The definition of integration will be more effective if we look at it from a bottom-up approach rather than a top-down approach. The integration process can be broken down from top to bottom a common goal into its successive parts, but the definition of integration should aim at how to achieve the larger common goal from different departments through integration. 2.1 Internal integration Internal integration consists of traditional cross-functional management practices according to Johnson and Filippini.[2009] The authors indicate that internal integration is mainly used when the focus is on new product development. For example, a manufacturing company may have the production department, sales department, and marketing departments using separate independent systems, and the overall performance of the company will largely depend on the coordination between these departments so that the marketing team can bring leads and the sales team can provide updated stock information to the production team which should be able to provide upon request. These processes would fall under the company boundary as internal integration. Lambert, Garca-Dastugue, and Croxton (2005) explicitly emphasized that connection (i.e., connectivity) is critical to integrating processes in both an intra-firm and inter-firm context. . They argue that connectivity is crucial regardless of whether the focus is on transactional efficiency or relationship management. Sales & Operation (S&OP) plays an important role in internal integration as S&OP can also be described as a form of internal collaboration, where a cross-functional team reaches consensus (Slone et al., 2013). S&OP is often enabled by enterprise resource planning (ERP) systems (Affonso et al., 2008) along with other advanced planning systems + (Jonsson et al., 2007) that are used as tools to coordinate the supply chain. Goh Stephen Eldridge [2015) haemphasized that S&OP should not be seen as a standardized tool but rather should be tailored to organizations' specific objectives, whether it is to reduce lead times or reduce inventories. Sales and operations planning (S&OP) and information systems (IS) would facilitate stable production, shorter lead times, higher forecast accuracy, lower inventory and distribution costs. Integration of internal processes via ERP systems. 2.2 External integration However, the complexity of business processes must be recognized. Business processes can vary significantly in terms of level (strategic or operational process) and scope (activities involved in a process). SCM itself, in fact, can be considered a business process. Therefore it is crucial to identify important processes without losing focus. Now, changes in service levels, safety stock settings, delivery times, transportation modes and order parameters can cause large swings in order patterns. Manufacturers need visibility into retail order strategy parameters to better predict future temporal orders coupled with store-level forecasting collaboration to move to a shelf-connected supply chain model. As pointed out by Fred Baumann[2010[5]] some of the most common identifiers of causes of out of stock include the following:-Phantom/phantom inventory where perpetual inventory found in the retailer's system is likely to be inaccurate-Phantom inventory parameters Inappropriate ordering - Inaccurate demand forecasts - Insufficient shelf space allocation due to promotions or seasonal demand - Shelf distribution driven by poor store execution Manufacturers able to identify these out-of-stock situations and dynamically adjust forecasting and replenishment parameters through collaboration with your retail partner. Here is the need for external integration. External integration will lead to the company's identity as a supply chain itself and will allow them to strongly support connectivity and simplification requirements across the supply chain because the goal is to maintain a common structure that is understandable to all through simplification . and also connectivity to be integrated in permissible ways for different entities that will help preserve connectivity without destroying privacy. Baumann also pointed out that companies today have exponentially more data that needs to be consolidated into a format that can be easily digested and used. Solutions need metadata management that includes common data mappings and definitions by business unit, product geography, etc., to facilitate this process. Additionally, with the increase in emerging market partners, companies must be able to consolidate data with varying degrees of sophistication and timescales. Difference between internal and external integration The crucial part is to understand the boundary between internal and external integration. To understand the difference between internal and external integration it is necessary to consider the areas of impact. External Process Integration: External supply chain that faces environmental factors that can directly and indirectly affect the supply chain. They can be due to political, economic, technological or geographical reasons (Kleindorfer & Saad, 2005). Criteria used for external supply chain include: supplier failure, supplier quality problems, oil crisis, IT system failure, accident (e.g.example fire), natural disaster. Internal process integration: Internal supply chain risk caused by problems in organizational boundaries includes machine failures or information technology issues (Rice & Caniato, 2003). The criteria used for the domestic supply chain are: machinery failure, import or export restrictions, transportation failure, delivery chain disruptions, increase in customs duties, change in customer demand, technological change, price increase of raw materials. [Shahram Gilaninia1, Hossein Ganjinia2, Batool Asadi Mahdikhanmahaleh3]. It has been observed that the impact of external integration has a greater effect than internal integration. If you can look at the integration process with a bottom-up approach, internal integration forms the basis of external integration which in turn forms the basis as a supply chain ensuring end-to-end process flow over time from supplier to customer. Therefore, both integrations may have different boundaries and impact areas, but to achieve the common goal both processes must reinforce each other. Strategic Importance of Integration Bose Corporation's successful process integration provides a prime example: a critical step is to focus on creating common policies, guidelines, and methods to expand improvement efforts within and across functional areas, at in order to obtain simplified processes (Segars, Harkness and Kettinger 2001). Supply chain simplification also manifests itself in other formats, such as planning and joint decision making. As a strategy, Bose Corporation has focused on transforming itself into a customer-focused organization, which essentially means that the company wants to create customer value through products made based on customer preferences. With measures such as the certificate of achievement module and the supplier performance system, the company has ensured that the objectives of all external stakeholders are aligned with its objectives of high levels of service, quality and technical innovation. Similarly, from Dell's direct model, it can be observed that it is not just about the fact that Dell sells directly, but also about its ability to forecast demand: it concerns both the design of the product and how information from the customer flows through production to suppliers. It is this type of information coordination that makes it easier for Dell to manage such a low level of inventory. The model is based on demand-side push rather than supply-side push, meaning not even a single computer is produced unless there is corresponding demand in the market. This avoids the huge inventory queues that usually sit idle inside retail stores, distributors and factories. Requirements for Internal and External Integration Internal and external integration will result in the formation of an integrated supply chain, in simple words a supply chain which is well integrated with suppliers as well as customers ensure smooth business flow. In the modern business scenario supply chain has become the backbone of every business organization. All supply chain partners are united in a corporate value delivery network where no one can achieve better results without the support of others. The ultimate goal of this cohesive relationship is to provide value to customers and achieve the desired state of customer satisfaction and loyalty for the organization. This requires integrating internal and external supply chain partners at different levels. The purpose of.