Independent vs. Collaborative vs. Vertically Integrated

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When considering the phenomenon of supply chain centralization, it is necessary to distinguish between at least two types of supply chains. One is the independent supply chain. The other is the collaborative supply chain. In principle, there is one more type of supply chain: the vertically integrated type. The vertically integrated type is one in which the supply chain is completed within a single company.

This vertical integration model has been eliminated in both the remove background image automobile and electronics industries. IBM once created a vertically integrated supply chain for large mainframes. The company also initially used a vertically integrated supply chain for the production of personal computers, but outsourcing progressed with core integrated circuits being made by Intel, core operating systems by Microsoft, and memory being made by Japanese manufacturers. As a result, a non-integrated supply chain was created. Henry Ford also created a vertically integrated supply chain in the early days of the automobile industry. He produced steel, the main raw material, in-house, and at one point even integrated an iron ore mining business.

Kagono Tadao: Born in Osaka Prefecture in 1947. Graduated from the Faculty of Business Administration at Kobe University in 1970. Completed his doctoral course at the same university's graduate school in 1975. Studied abroad at Harvard Business School from 1979 to 1980. Professor at the Graduate School of Business Administration at Kobe University until March 2011. Professor at Konan University since April 2011. Specializes in business strategy and business organization. His books include "Restoring Japanese-Style Management" and "Competitive Advantage Systems."