Supplier operational integration
• Primary objective of operational integration is to cut waste, reduce cost, and develop a relationship that allows both buyer and seller to achieve mutual improvements
• Integration can take many forms
– Buyer providing detailed sales information to supplier
– Buyers and suppliers working together to redesign linked processes
– Eliminating duplicated activities performed by both the buyer and supplier
• Can provide incremental savings of 5% to 25% over the benefits of volume consolidation