Elements of Supply Chain Connectivity and Integration
Supply chain integration (SCI) is the alignment of supply chain goals and policies along with the related information and physical linkages:
  • Alignment. Shared goals among the elements of the supply chain, often leaning at reducing their costs and improving their performance. This insures a consistency in the strategy pursued by the different actors involved.
  • Linkages. Concerns the information and physical flows between the elements of the supply chains, such as orders, tracking as well as the modes and terminals involved.
Connectivity usually relates to physical flows while integration usually relates to processes. The connectivity and integration of supply chains take place over several core dimensions:
  • Infrastructure connectivity. The physical connectivity and interoperability of hard infrastructure, such as the ability to move containers efficiently from ship to truck to rail. The transport terminal is the key infrastructure where the physical flows are reconciled with the requirements of supply-chain management.
  • Commercial integration. The development of commercial arrangements, including service-level agreements and performance targets and penalties as well as the management process, such as between railways and ports (or terminal operators). It includes the elements of cost, time, and reliability as commercial goals that are benchmarked and included in commercial supply-chain decisions. Because of the numerous actors in the freight distribution, each controlling different assets, the potential scale and scope of collaborative efforts becomes a complex matrix.
  • Work practices integration. Involves organizational (managing labor as a group) and supervisory (managing individual workers) competencies. Since supply-chain management relies on the timely processing of physical flows, labor issues play an important role in this process.
  • Information systems integration. The interconnectedness of information systems, including electronic data interchange, to improve management of supply chains. The setting of single window portals or port community systems is an example.
  • Regulatory integration. The structuring of regulations to promote a better integrated freight distribution system. Regulations should promote effective modal choice, avoid subsidized modal preferences, and favor the harmonization of regulation across jurisdictions.
  • Planning and funding integration. Freight transportation bottlenecks are a potentially significant hindrance to the integration of transport chains and to economic growth. It also recognizes the concerns of government and industry that established institutional and finance arrangements have not adequately responded to the demands imposed by growing volumes of freight and passenger traffic and to fundamental shifts in regional and global patterns of trade.
  • Customs and security integration. Customs integration aims at moving goods more efficiently across borders from one country to another, including prescreening and inspections. Security integration is the interconnectedness or harmonization of security procedures that protect cargo from theft, tempering or damage and protect the public from risks posed by dangerous cargo or threats posed by illicit cargo.