Supply chain management can be seen as an approach to obtaining the benefits of Vertical Integration without ownership. Vertical Integration has the potential to offer benefits of increased control as well as cost reduction, but supply chain approaches can theoretically provide these same benefits through effective organisation. The concerns with supply chains are discussed under the headings of: innovation, competence and value added, investment flexibility, networks rather than single chains, proprietary design knowledge and dependence. The conclusion is that, where supply chains are identified (even within vertically integrated organisations), then an approach based on effective management of each of the customer‐supplier relationships is key to success. Reference is made to work and materials produced by the Supply Chain Management Group at the University of Glasgow Business School which emphasises the need to implement “best practice” at each point in each chain.
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