OPERATIONAL INTEGRATION

5.1 INTEGRATIVE MANAGEMENT VALUE PROPOSITION

• ECONOMIC VALUE

-Builds on economy of scale in operations as the source of efficiency

-Economy of scale seeks to fully utilize fixed overhead to achieve the lowest total landed cost

-Customer take away of economy value is high quality at a low price

-Use manufacturing strategy (MTO,ATO)

• MARKET VALUE

-Presenting an attractive assortment of product at the right time and place to realize effectiveness

-Focuses on achieving economy of scope in product /service presentation

-Customer take away of market value is convenient product / service assortment and choices

-Use Marketing stategy

• RELEVANCY VALUE

-Involve customization of value adding services of product

-Segmental diversity based on customer choices

-Customer take away in term of relevancy is a unique product/ service bundle

-Use supply chain strategy

5.1.1 SYSTEMS CONCEPT AND ANALYSIS

• SYSTEMS CONCEPT

-An analytical framework that seeks total integration of components essentials to achieve logistic objective and customer satisfaction .

• SYSTEMS ANALYSIS

-Its apply in logistic activity and supply chain activity

-The goal of system analysis is to create a whole integrated effort which is greater than the sum of the individual parts or function

5.2 LOGISTICAL INTEGRATION OBJECTIVES

• RESPONSIVENESS

-A firm ability to satisfy customer requirements in a timely manner

-It refer to multi customer demand about the product 

-To reduce inventories commited or deployed in anticipation of customer requirement 

• VARIANCE REDUCTION

-It means reduce the error/ zero error while the operation is on going

-To the extend that variance is minimized, logistical productivities will improved

• INVENTORY REDUCTION

-Inventories are critical to achieve economy of scale in manufacturing and procument 

-The objective is to reduce and manage inventory to the lowest possible level while simultaneously achieving performance objective

-The manufacturer produce the product when the customer order the product that can reduce the cost

• SHIPMENT CONSOLIDATION

-This objective is to reduce transportation cost

-The larger a shipment and the longer the distance it is transported, the lower is the cost per unit

• QUALITY

-This objective is to continuous the quality improvement due to maximize the customer service

-To achieve the customer satisfaction and increase the production of the product

• LIFE CYCLE SUPPORT

-Life cycle support requires cradle to cradle logistics.

-Cradle to cradle logistical support goes beyond reverse logistics and recycling to include the possibility aftermarket service , product recall and product disposal.

5.3 TYPE OF INTEGRATION

5.3.1 ENTERPRISE INTEGRATION

• ORGANIZATION

-The organization structure of a business can serve to stifle cross functional processes

-It seeks to align authority and responsibility based on functional works 

-Each organization has an operational responsibility which is reflected in its functional goals 

• MANAGEMENT AND REWARD SYSTEMS

-Rewards system are based on functional achievement

-To facilitate internal process integration, new measure,increasingly called balanced score- cards must be developed

• INVENTORY LEVERAGE

-To maintain sufficient inventory to protect against demand and operational uncertainty

-It due to manufacturing strategies

-Reduce the cost and avoid the product become waste

• INFOCRATIC STRUCTURE

-It provide the information to all members in the company by the department

• KNOWLEDGE HOARDING 

-Knowledge is power

-When it come to the brand's name , its already well known

5.3.2 DOMESTIC SUPPLY CHAIN INTEGRATION

         (ONLY FOR THE LOCAL PRODUCT)

• To drive for channel efficiency improvement and increase the competitiveness 

Example: Digi, Maxis, Celcom are from the different company but product the same product 

5.4 RISK, POWER AND LEADERSHIP

• RISK

-The enterprise that participates in supply chain arrangement must acknowledge they have responsibility for performing specific roles.

-The participants with most risk can be expected to assume active roles and shoulder greater responsibility for facilitating collaboration

• POWER

-Its related to knowledge hoarding which is the brand power of the product

-How far the product is being known by the customers.

• LEADERSHIP

-Its due to the organization structure.

-The role also require problem-saving negotiation,medication of risk and reward sharing.