Achieving Supply Chain Integration
Connecting the Supply Chain Inside and Out for Competitive Advantage

• Master new best practices for integrating demand, supply, and partners worldwide
• Bridge key “integration gaps” to maximize customer value and profit
• Improve performance in areas ranging from resource availability to returns
• From leading supply chain integration experts at the University of Tennessee’s Haslam College of Business

In volatile, global environments, only well-integrated organizations can deliver superior customer outcomes and sustained profitability. Supply chain practitioners are on the frontlines of integration: they must bring together functions ranging from sales to logistics and a world of third-party suppliers. Integration is not easy, but proven solutions exist. In Achieving Supply Chain Integration, leading experts reveal what works and how to make it work.

The authors and contributors clarify what supply chain integration really means, and why it’s even more crucial than many companies realize. You’ll learn how to manage core conflicts that make integration difficult, so you can maximize value to both customers and your organization.

You’ll find example-based, research-driven insights for both internal and external integration, addressing issues ranging from culture to financial metrics. The authors share practical guidance on everything from building more innovative partner relationships to avoiding raw material shortages.

Whatever your supply chain or operations responsibilities, you need to integrate more effectively, and this guide will help you do it.

Supply chain integration can ensure a smoother, more efficient flow of products, and enable access to third-party resources and capabilities that would be costly or impossible to build internally. However, successful integration has proven challenging, especially as supply chains evolve to encompass even more external partners.

The Department of Marketing and Supply Chain Management at the University of Tennessee’s Haslam College of Business has focused extensively on researching successful integration across demand, supply, and inter-enterprise functions. Now, its pioneering researchers share indispensable new insights on making integration work throughout your supply chain.

Achieving Supply Chain Integration shows how to prioritize which processes and functions to integrate and select integration strategies likely to deliver the greatest performance benefits. Drawing on actual successes and failures, UT’s researchers illuminate best practices and common mistakes. They present proven approaches to integrating sales, marketing, core supply chain functions such as procurement and logistics, and widely diverse partner relationships.

Whether you’re a practitioner or student, this guide will help you approach integration projects with “eyes open”—so you can mitigate risks and maximize value.

• Understanding what integration is and isn’t, and why it matters so much
• Bridging the integration gap to maximize value creation
• Fully leveraging information in internal and external integration
• Driving more value by integrating purchasing and logistics
• Aligning market, environmental, social, and political strategies
• Achieving deeper demand/supply integration
• Reducing product returns through better internal integration
• Building more innovative, collaborative supplier relationships

Preface viii

Chapter 1: Integration: What It Is, What It Isn’t, and Why You Should Care 1

Integration and Supply Chain Management 4

What Factors Lead to Integration? 6

What Are Integration’s Performance Implications? 7

Solidifying Our Understanding of Integration 8

Toward Consensus on Cross-Functional Integration 10

Extending Previous Definitional Work on Integration 15

Planting the Seeds for Integration 18

Tools Available to Managers 21

Conclusion 24

Endnotes 25

Chapter 2: Bridging the Integration Gap 27

The Difficulty in Integrating 30

Interfunctional Bias 31

General Methods for Overcoming Conflict Within Integration 32

Interest-Based Problem Solving and Collaborative Communication 35

Conclusion 45

Endnotes 46

Chapter 3: Maximizing Organizational Value Creation Across the Great Divide 47

The Demand and Supply Integration Journey 50

Four Examples of the DSI Journey 53

Managerial Implications 68

Conclusions 75

About the Research 75

Endnotes 77

Chapter 4: The Role of Information in Internal and External Integration 79

The Importance of IT Infrastructure Integration to Supply Chain Effectiveness 80

The Role of Operating Models in Relation to Integration 82

Conclusions 85

Endnotes 88

Chapter 5: Bending the Chain: Deriving Value from Purchasing-Logistics Integration 89

The Surprising Challenge: Purchasing and Logistics Integration 93

Supply and Demand Disconnects 96

The Research: Linking Purchasing and Logistics Integration (PLi) to Improved Functional and Financial Performance 98

Best Practices 107

Seven Actions a Supply Chain Leader Can Take Today 118

How High Is Your PLi? 120

Endnotes 122

Chapter 6: Getting Aligned: The Benefits of Integrating Market, Environmental, Social, and Political Strategies Within the Organization 123

How Do Executives Engage in Strategic Management? 125

The Alignment Framework    127

Applying the Alignment Framework 129

Integrating Market and Nonmarket Strategies 136

Conclusion 144

Endnotes 144

Chapter 7: Achieving Demand and Supply Integration 147

The Idea Behind DSI 148

How DSI Is Different from S&OP 149

Signals That Demand and Supply Are Not Effectively Integrated 151

The Ideal Picture of Demand and Supply Integration 152

DSI Across the Supply Chain 157

Typical DSI Aberrations 160

DSI Core Principles 164

Critical Components of DSI 166

Characteristics of Successful DSI Implementations 172

DSI Summary 175

Endnotes 175

Chapter 8: Sell Right, Not More: Leveraging Internal Integration to Mitigate Product Returns 177

A Returns Management Overview: Inspiring Internal Integration 178

The Challenge of Managing Returns 190

Thoughts and Observations 200

Endnotes 201

Chapter 9: Supplier Integration via Vested Relationships 203

The Sourcing Continuum 204

Seven Sourcing Business Models 210

Supplier Integration via Vested Relationships 226

Conclusion 234

Endnotes 235

Chapter 10: Raw Material Feast or Famine: Integrating Supply Networks to Overcome Resource Scarcity 239

Supply Risk—It Is There, Whether You Manage It or Not 241

Understanding the Network of Risks 242

Managing the Network of Risks: Detection, Mitigation, and Recovery 243

Integration as an Enabler of Continuity and Resiliency 248

A Network Approach to Managing Supply Disruptions Through Integration 253

Natural Resource Scarcity and the Dynamic Global Supply Network 260

Conclusion 264

Endnotes 265

Chapter 11: Integrating Ideas and Environments: Blending Marketing Strategy with Context for Organizational Success 267

The Study: Integrating Marketing Strategy with a Firm’s Internal and External Conditions 273

Conclusion 293

Endnotes 294

Chapter 12: External Barriers to Integration: Tearing Down the Walls 297

Conceptualizing Integration 300

Defining the Types of Barriers 302

Concluding Thoughts 311

Endnotes 312

Index 313

Dr. Chad W. Autry is the William J. Taylor Professor of Supply Chain Management in the Haslam College of Business at the University of Tennessee. Dr. Autry’s professional background includes several years’ experience in retail and restaurant operations management. He has worked with and for numerous professional, civic, and governmental organizations related to supply chain process improvement, and has served in leadership positions for the Council of Supply Chain Management Professionals (CSCMP), on the national Board of Directors of the Warehouse Education and Research Council (WERC), and on the local board of the National Association of Purchasing Managers (NAPM).

Dr. Autry’s research focuses primarily on socially responsible and collaborative interfirm and interfunctional relationships, their integration within and across firms, and the technological and social issues that support connectivity across multiple organizations simultaneously. He is author of over 70 research studies published in academic and professional outlets including the Journal of Business Logistics, Journal of Operations Management, Journal of Retailing, Journal of Management, International Journal of Logistics Management, and Strategic Management Journal. He is a co-author of the recent book, Global Macrotrends and Their Impact on Supply Chain Management, published by Pearson/Financial Times Press.

Dr. Autry is Editor in Chief of the Journal of Supply Chain Management and serves as Associate Editor for the Journal of Business Logistics, Decision Sciences Journal, and Logistique’ Management, in addition to editorial board responsibilities for several other academic and managerial publications.

Dr. Mark A. Moon is an Associate Professor of Marketing at the University of Tennessee’s Haslam College of Business and former Head of the Department of Mar

• Master new best practices for integrating demand, supply, and partners worldwide
• Bridge key “integration gaps” to maximize customer value and profit
• Improve performance in areas ranging from resource availability to returns
• From leading supply chain integration experts at the University of Tennessee’s Haslam College of Business