What is the vertical integration of supply chain management?
A vertically integrated company owns or controls its suppliers or buyers. This allows control of the supply chain but may make the business less flexible than less-integrated competitors.DescriptionVertical integration is a style of business management in which a company owns its suppliers and/or buyers to have better control of product flow.HistorySteel tycoon Andrew Carnegie introduced the term in the late 1800s. Carnegie Steel Co. owned not only steel mills, but also the coal and iron mines, and ships and railroads that transported the materials.TypesBackward vertical integration refers to a company that owns or controls its suppliers. Forward vertical integration involves owning the buyers of the company’s products. For example, a clothing manufacturer would practice backward vertical integration by owning cotton farms and forward vertical integration by controlling clothing stores.BenefitsThe leading reason companies practice vertical integration is to control the supply chain, gu
