| Organizations or companies that intend to use Supply | | | | strategic partnership. The approach is taken based on |
| Chain Management should focus on the need for | | | | mutual benefits and continuous improvement on both |
| integration of their supply chain. The effectiveness of | | | | sides. The approach is also less aggressive and |
| the company to deliver its goods to the end user is | | | | commands the respect of each supplier. Each |
| highly dependent on the integration of its linkages | | | | negotiation that occurs in this approach is done with |
| between their partners. A company can no longer | | | | focus on quality as the priority and follows by the |
| compete effectively on its own but with support and | | | | cost. |
| integration with its downstream partners also. Supply | | | | Example of a local Malaysian company that integrates |
| Chain integration is a process integration of upstream | | | | their supply chain is the Malaysian car automotive car |
| and also downstream activities through a medium or | | | | maker, Proton. After Proton suffers negative growth |
| platform interconnecting each other. With the rapid | | | | in the last few years, the new management of |
| development of ICT, the process of integration has | | | | Proton has decided to integrate its supply chain and |
| become much more easily compared to the past. | | | | reduce their vendor based from 260 vendors to only |
| In the past, in the buyer-supplier relationship, the | | | | 20 to 30 vendors only. Proton's logistic provider |
| buyer will usually reduce the cost of purchased | | | | companies have also been reduced from 14 |
| materials through aggressive negotiations. This usually | | | | companies to 3 companies only. The objective of the |
| bring to a win-lose situation whereby the supplier | | | | reducing was simply to cut waste and minimize the |
| profit margin have been reduced drastically to meet | | | | transaction that does not add value to the company. |
| the demands of the buyer. With supply chain | | | | Reducing the vendors has helped Proton to cut the |
| integration, this is no longer the case. In a win-win | | | | cost of the car they are selling and with higher |
| situation, the buyer and supplier are in the form of | | | | quality. |