Vertically and Horizontally Integrated Supply Chains - Free Essay Example

Sample details Pages: 8 Words: 2483 Downloads: 7 Date added: 2017/06/26 Category Business Essay Type Compare and contrast essay Did you like this example? Introduction Vertically and horizontally integrated supply chains are supply chain management strategies adopted by companies to take advantage of synergies in their value chain to achieve more profits and competitive advantage (Naslund Willamson, 2010). Effective supply chains are critical to the success of organisations operating in global multifaceted environments as well as organisations seeking to achieve optimal efficiency and customer satisfaction (Lambert, 2008). An increasingly competitive and interconnected global environment means that successful performance depends on the collective decisions and actions of all members of a supply chain rather than that of a single member and competition is increasingly between supply chains rather than between individual firms (Naslund Willamson, 2010). Don’t waste time! Our writers will create an original "Vertically and Horizontally Integrated Supply Chains" essay for you Create order Hence, organisations are faced with the challenge of making decisions regarding appropriate supply chain strategies that will deliver their objectives based on their capabilities, needs and circumstances. Vertical and Horizontal supply chain integration are two such strategies that enable companies to manage their organisations and their relationships with other companies in the same supply chain/value chain (Hill Jones, 2012). From a supply chain management perspective, vertical and horizontal integration aim to achieve cost savings, higher profits, greater efficiency and customer satisfaction by improving supply chain processes and performance through value-adding investment and activities that benefit all supply chain members (Stonebraker Liao, 2003). For example, achieving cost reductions, improved performance and better target market access as a result of eliminating redundancies/duplications, lowering inventories, shorter lead times, greater control over supply and distrib ution, access to partner networks and lower fixed costs (Mentzer et al., 2008). This essay will discuss and analyse key similarities and differences between vertically and horizontally integrated supply chains, highlighting the key issues and the scope of organisational departments involved. Supply Chain Management (SCM) Simchi-Levi et al. (2008) defined SCM as integration strategies aimed at coordinating functions across suppliers, manufacturers, distributors and retailers to ensure that products and services are produced and distributed at the right volume, location and time with the aim of reducing operational costs, maximising profits and ensuring satisfaction across the supply chain.. Vertically and horizontally integrated supply chains are SCM strategies introduced in the early 1980s with roots in the logistics literature. Supply Chain Integration Strategies Supply chain integration strategies are network-based business models used by organisations to align strategic decisions and processes across the network from supplier/manufacturer end to the customer end in order to achieve competitive advantages, synergy and efficiency in their operations as well as to gain more control in the input and output of their operations (Hill Jones, 2012). Network-based business models are organisational structures that allow companies to operate as interconnected configurations across its value chain usually consisting of partnerships, collaborations and optimised cross-organizational activities (Mentzer, 2008). Vertical Integration Vertical integration is a coordination strategy in which a company owns its supply chain by incorporating supplier and/or distributor supply chains in its operations strategy or by expanding its operations to perform activities traditionally performed by suppliers and distributors (Hill Jones, 2012). This strategy helps organizations to ensure high levels of control and to avoid the hold up problem, a situation in which an organisations contract with another party in its supply chain results in delays and loss of profit due to delays, non-performance of contract or imbalance of bargaining power between the 2 parties (Hill Jones, 2012). The Ford River Rouge Complex, an automobile factory built by Henry Ford in 1927 is a good example of a vertically integrated supply chain providing economies of scale and ensuring high levels of control in the supply and production process Iron ore and coal from Ford owned mines arrived on Ford freighters to produce Ford steel. Ford also owned its timberlands, glass plants, rail lines and rubber plantation, which helped to ensure efficiency, availability of necessary components as well as control over inputs and outputs (Slywotzky, 1996). A vertical integrated supply chain can be implemented to varying degrees, broadly classified into 3 categories: Backward vertical integration, in which a company owns subsidiaries that produce the inputs/components used in production. For example, the Ford River Rouge Factory with its own timberland and glass making companies (Slywotzky, 1996). Forward vertical Integration in which a company owns or controls its distribution centres and/or retailers, thereby having direct contact with customers at the bottom of the value chain. For example, airlines performing the traditional roles of travel agents (Hill and Jones, 2012). Balanced vertical Integration in which a company implements both backward and forward integration by owning/controlling its supply, production, marketing and/or retail centres. Apple is a good example of a company implementing balanced vertical integration by owning their own data centres, manufacturing equipment to produce their own chips and other proprietary components, as well as their own marketing and retail stores, content platforms and support centres (Hill and Jones, 2012). As a strategic tool, a vertically integrated supply chain can provide companies with solutions to mitigate or remove the threat of powerful suppliers, decrease bargaining powers of suppliers, distributors and customers as well as reduce transaction costs. When properly implemented, a vertically integrated supply chain can help companies achieve competitive advantage and higher profits through economies of scale and scope (Fresard et al., 2014). Horizontal Integration Horizontal Integration is a single industry SCM strategy whereby companies seek to achieve competitive advantage and profitable growth through value creation activities that are focused on a single business or industry, for example, McDonalds with its focus on global fast-food business and Walmart, with its focus on global discount retailing (Hill Jones, 2012). A horizontally integrated supply chain is a business model whereby companies acquire or merge with industry competitors to achieve competitive advantage through economies of scale and scope (Fresard et al., 2014). For example, Boeing merged with McDonnell Douglas to create the worlds largest aerospace company, Pfizer acquired Warner-Lambert to become the largest pharmaceutical company (Hill and Jones, 2012) This SCM structure provides the advantage of focus and scope, particularly in fast growing, dynamic industries where companies are required to focus substantial resources and capabilities on competing in one area in o rder to achieve long term competitive advantage (Lambert, 2008). Technological advancements, changing customer needs, fierce competition and low levels of entry barriers are common features of horizontally integrated supply chains. Due to changing customer needs, new competition and the pace of change in such industries, companies often find it difficult to sustain competitive advantage without changing/adapting their business model (Juttner et al. 2010). For example, with the advent of wireless telephone service and the likes of SKYPE, companies like ATT had to quickly adapt their business model and join forces wireless companies that provided them with the capability to start offering broadband and wireless services. Its merger with Time Warner and Comcast enabled ATTs competitive positioning and its relevance in the changing world of telecommunications (Hill and Jones, 2012). A successfully implemented horizontal integration strategy can increase a companys profitability due t o reduction in cost structures as a result of (Hill and Jones, 2012): Economies of scale, particularly in industries with high fixed cost structures; Increased product differentiation due to the combined product lines from merger or acquisition which enables the company to be able to offer product bundles and innovative new products to customers at different price points; Replication of the business model due to the ability to leverage the increased product differentiation and lower cost structure achieved through horizontal integration to replicate the business model in new market segment, for example Walmart using its low-cost discount retail business model to enter into the warehouse and supermarket segments in the US as well replicating the model globally as by acquiring supermarket chains in several countries; Reduced industry rivalry, as excess capacity is eliminated in the industry through acquisition or merging of competitors which results in more stable price environments and the elimination/reduction of price wars; Increased bargaining power due to the consolidation of the industry resulting in companies that are a much larger buyer and hence wield a level of leverage or buyer power which can be used to drive down the price it pays to suppliers. Walmart is a good example of a horizontally integrated supply chain with bargaining power advantage. Horizontal integration has limitations that are worth noting and guarding against. Similar to vertical integration, horizontal integration is a complex and difficult strategy to implement. For example, it is difficult to successfully merge companies with very different corporate cultures and where the merge/acquisition is a hostile takeover, it often results in high staff turnover and loss of much needed talent and expertise hence resulting suboptimal benefits or downright failure. There is also the risk of failure or penalty due to antitrust laws when companies attempt to use horizontal integration to become a dominant industry player as these laws exist to ensure fair trading and prevent companies from using their market powers to prevent competition. Vertical and Horizontal Integration Key issues to consider: Similarities Vertically and horizontally integrated supply chains are usually complex and capital intensive to implement. Both are also similar in the sense that they are business models that are aimed at optimising value chain processes and performance in other to achieve competitive advantage through economies of scale and scope. However, organisations need to consider several factors to ascertain the right strategy and whether it will be a profitable investment, including (Fresard et al., 2014): Are there economies of scope to make it cheaper for the company to own or control subsidiaries involved in the supply and production of its inputs and outputs? Is there need to establish entry barrier in the industry or obtain monopoly power by controlling the value chain in order to have competitive advantage? Is it cheaper overall for the company to perform the role of suppliers and distributors than to conduct business with arms length suppliers and distributors? Differences Companies pursuing vertical integration may also pursue horizontal integration and in fact many do. However, the underlying principles and the operational implications of implementing both strategies have very clear differentiators. In a vertical integration, the company enters new industries to support the business model of its core industry, whereas in a horizontal integration, the company competes in a single industry but expands through mergers, acquisitions and strategic alliances/collaborations. Vertical integration is more closed/proprietary model compared to horizontal integration which is more open because of the involvement of partners and the need to cooperate/collaborate. The differences in the operational implications include (Hill and Jones, 2012): Vertical integration Horizontal integration More control through ownership of the value-adding stages. Less control due to dependence on others cooperation. The vertically integrated company reaps the higher benefit. Benefits are from the success of everyone in the value chain Efficiency over flexibility Flexibility over maximum efficiency Intensive capital required to create, produce, and distribute all components of the end product. Lower capital requirements due to shared ownership. Departmental Functions One of the challenges faced by organization in managing their supply chain is that of integrating internal functions as well as the entire supply chain (Christopher Juttner,2000). Understanding the supply chain begins with understanding internal processes as this directly impacts performance. From a supply chain perspective, key internal processes include (Pagell, 2004): Purchasing, responsible for buying process inputs Operations, responsible for the transformation of raw materials into final outputs Logistics, responsible for the management of processes involved in the production and delivery of outputs to customers The key task in managing these functions is to ensure a process of interaction and collaboration in which purchasing, operations and logistics work together to achieve the mutual objectives of the supply chain. Stakeholder Management In vertical integration, the proprietary nature of the investment creates a more closed/not very trusting approach in the interaction with partners as the organization will seek to protect its trade secrets/intellectual property. In horizontal integration however, companies adopt a more open and trusting approach with partners, as this is integral to the success of their business model (Hill and Jones, 2012). For example, Microsoft and Google have adopted a more open approach to working with partners in their values chain as the success is achieved collaboratively and through open source platforms. Apple on the other hand operates a proprietary model, which tightly protects its intellectual property through its vertically integrated supply chain (Pomfret Soh, 2010). Conclusion The decision between vertical or horizontal integration will determine an organisations operating strategy and the supply chain dynamics in terms of how functional departments and stakeholders interact. The challenge is to analyse how new emerging technologies will impact their business models, how and why these technologies might change customer needs and customer groups in the future, and what kinds of new distinctive competencies will be needed to respond to these changes (Hill and Jones, 2012). In the end it is all about what is right for the organisation in terms of its objectives, capabilities and customer value proposition and how that can be achieved efficiently and profitably. References Awad, A.H., and Nassar, M.O. (2010). Supply Chain Integration: Definition and Challenges. Proceedings of the International Multi Conference of Engineers and Computer Scientists Vol. 1. pp.17-19 Christopher, M. and Juttner, U. (2000). Developing Strategic Partnerships in the Supply Chain: A Practitioner Perspective. European Journal of Purchasing and Supply Management, Vol. 6 (2), pp. 117-27. Fresard, L., Hoberg, G., and Phillips, G., 2014, The incentives for vertical acquisitions and integration, Discussion paper Working Paper University of Maryland. Available from : https://www-bcf.usc.edu/~gordonph/Papers/vertical_integration.pdf Hill, C.W.L., and Jones, G.R. (2012) Strategic Management: An Integrated Approach (10th Edition). Mason, OH: South-Western Cengage Learning. Juttner,U., Christopher, M., and Godsell, J. (2010). A Strategic Framework for integrating Marketing and Supply Chain Strategies. The International Journal of Logistics Management Vol. 21, No. 1, pp. 104 -126. Lambert, D. (2008). An executive summary of Supply Chain Management: Process, Partnerships, Performance, Jacksonville: The Hartley Press, Inc. Mentzer, J., Stank, T. and Esper, T. (2008), Supply chain management and its relationship to logistics, marketing, production and operations management, Journal of Business Logistics, Vol. 29 (1), pp. 31-45. Mentzer, J., De Wett, W., James, K., Min, S., Nix, N., Smith, C. and Zacharia, Z. (2001), Defining supply chain management, Journal of Business Logistics, Vol. 22 (2), pp. 1-25. Naslund, D., and Williamson, S. (2010). What is Management in Supply Chain Management? A Critical Review of Definitions, Frameworks and Terminology. Journal of Management Policy and Practice Vol. 11(4). pp.11-28 Pagell, M. (2004) Understanding the Factors that Enable and Inhibit the Integration of Operations, Purchasing and Logistics. Journal of Operations Management Vol. 22 (5) pp. 459à ¢Ã¢â€š ¬Ã¢â‚¬Å"487. Pomfret, J., and Soh, K. (2010) For Apple Suppliers, Loose Lips Can Sink Contracts, [Online] available from www.reuters.com/assets/print?aid=USTRE61G3XA20100217 Slywotzky, Adrian J. (1996), Value Migration: How to Think Several Moves Ahead of the Competition, Boston: Harvard Business School Press. Simchi-Levi, D., Kaminsky, P., and Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Cases (3rd edition). New York: McGraw-Hill. Waters, D. (2008) Supply Chain Management: An Introduction to Logistics (2nd Edition). Basingstoke: Palgrave Macmillan.

Education and Technology Integration An Annotated...

Education and Technology Integration: An Annotated Bibliography Education is among the sectors that have benefited the most from the advent of modern technology, and especially information and communication technology (ICT). Traditional education systems faced many challenges and huge limitations at delivery, in practice, and in application. Tools of education such as chalk, blackboard, books, classrooms, laboratory items, and so on, were mostly manual and cumbersome. Even the structure of the traditional literature content, and pedagogy was a challenge to both the teacher and the learner. The advent of modern technology and its integration with the education systems has opened up many possibilities, and forced educational practitioners to rethink and restructure the content, pedagogical tools, and methods of delivery. As a result, the educational system has evolved continually, and at the same time opening up new and countless opportunities. This has definitely captured the imagination of many students, researchers, and professionals. The integration of technology with education has brought about phenomenal opportunities as well as radical changes to the educational sector. Examples include the use of digital pedagogy, computer-aided instruction (CAI), distance or open learning, virtual universities, computer-based online testing, digital libraries, and so on. The benefits of integrating technology with education are phenomenal. The uptake of technology by manyShow MoreRelatedGeneral Movements Assessment ( An Annotated Bibliography1587 Words   |  7 Pages †¢ General Movements Assessment (Summer 2014) o As an innovative teaching practice, the student completed an annotated bibliography regarding the General Movements Assessment (see Artifact XI.F.vi.1). This annotated bibliography was subsequently utilized for development of the Institutional Review Board Application (submitted to Cleveland Clinic and Cleveland State University) as well as with faculty development of regional and national conference presentations (Using Prechtl’s Assessment of GeneralRead MoreAnnotated Bibliography1329 Words   |  6 Pagesï » ¿ Annotated Bibliography Galen College of Nursing Annotated Bibliography Mayo Clinic (2011). Personal health record: A tool for managing your health. Retrieved from http://www.mayoclinic.com/health/personal-health-record/MY00665 This source talks about how electronic health records makes it easy to gather and manage medical information in a secure location (Mayo Clinic, 2001, pg. 1). They explain what a health record is and what goes into it. The advantages and disadvantages toRead MoreResearch of Technology in the Classroom Essay1258 Words   |  6 PagesIn reviewing research regarding the use of technology in the classroom, there is a wealth of information available that varies from the extent of technology to the type of technology used in the classrooms. In order to identify and narrow the topic, it is important to look at the available research and the areas which need additional studies. The area of interest is specifically the use of technology with English Language Learners (ELL). However, in order to focus the research in that particularRead MoreResearch Based Strategies For Increasing Student Achievement821 Words   |  4 PagesAnnotated Bibliography Dean, C., Hubbell, E.R., Pitler, H., Stone, B. (2012). Classroom instruction that works: Research-based strategies for increasing student achievement. (2nd ed.). Denver, CO, 188 pp. Author Ceri B. Dean is vice president of field services at Midcontinent Research for Education and Learning (McREL). She holds multiple degrees in education, including a Ph.D. in Cirriculum and Instruction and an M.S. in Atmospheric Science. Elizabeth Ross Hubbell is a principal consultantRead MoreThe Class Room By William Wright G000516811318 Words   |  6 Pagesalike. 1. I enjoyed teaching and understanding how the school system operates 2. During the past few years I have notice a decline in the quality of education in schools in rural areas. . II. Orienting Material A. History shows that as far back as 1950 parents with kids with disabilities put pressure on legislatures which resulted in The Education for All Handicapped Children Act of 1975 (PL 94-142) B. The No Child Left Behind Act of 2002 focus is to make sure that all students are accounted forRead MoreImpact of Ict on Society2585 Words   |  11 PagesSISAT School of Information Systems Technology Faculty of Informatics ISIT900 Fundamentals of Contemporary Technologies Impact of ICT on Society Table of Contents PART A 1 1. Introduction 1 2. The annotations 1 2.1 Scholarly journal articles 1 2.2 Conference papers 1 2.3 Newspaper articles 1 2.4 Internet sources 1 3. Conclusion 2 Annotated Bibliographies 3 PART B (Endnote) 6 4. Introduction 6 5. The Endnote advantages 6 6. The Endnote disadvantages 7 7. The Recommendations 8Read MoreUnit 8 Writing Assignment6944 Words   |  28 PagesEssays and especially the research paper should be developed through a structured process. In addition to full drafts, such processes may involve students writing topic proposals, mini-drafts (e.g., a 3-page draft of a 10-page research paper), annotated bibliographies, short oral presentations that include textual supports (handouts, screen projections), genre variants (e.g., collage dialogues, narratives), in-progress reports and reflections, and so on. 4. Response papers are typically shorter papersRead MoreSkills and Competencies of a 21st Century Entrepreneur2580 Words   |  11 PagesContents INTRODUCTION 2 CRITICAL EVALUATION 3 PRE – START UP PLANNING AND PREPARATION 3 ENTREPRENEUR IN AN ORGANISATION 4 ENTREPRENEUR AS AN INDIVIDUAL 5 ENTREPRENEUR WITHIN THE SOCIETY 5 CONCLUSION 6 RECOMMENDATION 6 REFERENCES 7 ANNOTATED BIBILIOGRAPHY 8 APPENDIX 9 INTRODUCTION Various definitions have been given to the word entrepreneur, due to the changes and complexity of the world’s economic structure. Entrepreneurs have been cussed and discussed, declared to be social misfitsRead MoreSample Resume : Dublin City University Essay2132 Words   |  9 Pages15212972 Date: 13 November 2016 Programme: BA Humanities Module: History 2 Europe and the wider world? HIS2 Tutor: Dr Barry Whelan Content Assignment Report Form 3 Essay 4 ?What were the causes and motivations behind the ?Scramble for Africa 4 Bibliography 11 Assignment Report Form ASSIGNMENT REPORT FORM Student Name: Anita Hilderink Summary of Performance* Performance Components Bands Excellent (H1) Marks range: 70-100% Very Good (H2.1) Marks range: 60-69% Good (H2.2) Marks range:Read MoreEssay Elemica7043 Words   |  29 Pagesand some financial advises. Table of Contents EXECUTIVE SUMMARY i 1. ENVIRONMENTAL ANALYSIS 1 Company analysis 1 Value proposition 1 Core competencies 1 Market analysis and trends 2 Porter’s Competitive Forces Model 3 Information Technology (IT) challenges 4 2. BUSINESS CASE 6 Opportunities and objectives 6 Critical Success Factors (CSF) 7 Cost and benefits (ROI) 9 Risks 9 3. PROJECT PLANNING AND CHANGE MANAGEMENT 10 Project Planning 10 Change Management 10 4. ASSESSING

I Prefer to Live in Big Cities Than in Small Towns Free Essays

I Prefer to Live in Big Cities than in Small-towns In English, there is a well-known fairy story about a poor country boy, Dick Whittington, who goes to London because he believes that the streets of that city are â€Å"paved with gold†. The story is a tale of â€Å"from rags to riches†. Dick eventually becomes the Lord Mayor of London. We will write a custom essay sample on I Prefer to Live in Big Cities Than in Small Towns or any similar topic only for you Order Now Like the hero of that story, I love to take adventure in the cities. I grew up in a small town and then moved to a big city, so I have experienced the good and bad sides of both. I never thought that I would like living in a big city, but I was wrong. Cities contain a great assortment of people. Whenever I walk around a shopping precinct at midday on a weekend, I am fascinated by all the different types of people hurrying around the shops. Sometimes, I just sit on a public bench and simply watch the variegated streams of shoppers. Today, in the age of globe-trotting transport and communications, city life is more mixed than it has ever been. Capital cities are not cosmopolitan, and eager to attract foreign trade currency. There is a contemporary English joke which tells that â€Å"you can never find an Englishman in London†. The United States is made up of people of different races, religions, abilities, and interests. However, you seldom find such a variety of people in a smaller town. I think that living in an area where everyone was just like me would quickly become boring. Whether rightly or wrongly, I love the excitement of big cities. Small towns have a slow pace. Large cities mean you have to adapt to a variety of situations, like finding a new route to work or trying a new restaurant. I enjoy that challenge very much. Another pan of the excitement of city living is the variety of cultural activities available. There is a wide assortment of theatre, music and dance performances available in big cities. These things are rare in small ones. Governments and local authorities usually build public amenities in the big cities. Money is invested in transport, libraries, parks and museums. Often, countries will compete with each other for the best â€Å"show-case† building. Malaysia has built a skyscraper that is taller than is anything in New York. In large countries, region will compete against region: New York against Chicago, Shanghai against Hong Kong and Beijing. All of this is good for the citizen. The magic of the Dick Whittington story is rekindled in me when I enter a library in a magnificent building. If a person is at university studying art or music, a large city usually offers galleries and public performances. Even when I was a teenager, I appreciated the worth of living in a city because two or three times a year there was a rock concert by one of my favorite bands. There is one thing I want to talk is small-towns and big cities both have some problems in terms of transportation. In a small town, you have to own a car to ensure a comfortable living. You can’t get around without one because there isn’t any kind of public transportation. Big cities generally have heavy traffic and expensive parking, but there you have a choice of taking public transportation. It’s not free, but it’s often cheaper than driving when you consider gas and time. Especially if you don’t have a car, you’re better off in the city. And of course, security is a concern, and that’s one area where small towns are superior to big cities. Still, I would rather be a bit more cautious and live in a large city than to feel secure but bored. How to cite I Prefer to Live in Big Cities Than in Small Towns, Papers