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
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:
- 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.
Infrastructure connectivity. The physical
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
including service-level agreements and performance targets and
penalties as well as the management process, such as between
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
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.