A strategy that companies implement to control their supply chain and reduce cost

 

 

 

 

A strategy that companies implement to control their supply chain and reduce cost is vertical integration. Vertical Integration is where a company owns and/or acquires most or all of its supply chain. For example, a concrete company that owns the material pits where the aggregate comes from, the trucks transport the material to the plant where all of the materials are mixed into concrete. They also own and operate the trucks to deliver the mixed concrete to the end-user. In addition typical they sell to their competitor’s raw materials, i.e. aggregate and cement power, which adds another dimension and advantage, so when we correlate this to lean, supply chain optimization, and the different business aspects what are the ramifications for the company?

 

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