Vertically integrated or virtual organisation, Operation Management

Vertically Integrated or Virtual Organisation

An organisation might decide not to source goods or services externally but to own the supplier company itself. For instance a media company may also own or part own a publishing house or a paper mill or a distribution company. This is known as vertical integration. There are considerable difficulties with vertical integration as it expands the breadth of competencies required by an organisation. This is very much in the opposite direction to the business excellence - operational strategy.

The alternative is horizontal integration with chains of suppliers working in harmony to create a virtual organisation. This kind of organisation may manage to supply markets which individual companies working alone could probably not achieve. It can be a long- term relationship. However, the life cycle of virtual organisations may also be brief as they serve markets where change and fluidity are common features. Their alliances form and reform to adapt to changing market behaviour. This kind of organisation may be very efficient by achieving agile and lean performance with low capital investment. There is one further strategy which operates in Japan. Keiretsu is a coalition of vertical and horizontal integration as groups of companies operate in close co-operation. These groups often incorporate their own banks and distribution network. This approach however is limited to Japan.

Posted Date: 3/15/2013 1:36:55 AM | Location : United States

Related Discussions:- Vertically integrated or virtual organisation, Assignment Help, Ask Question on Vertically integrated or virtual organisation, Get Answer, Expert's Help, Vertically integrated or virtual organisation Discussions

Write discussion on Vertically integrated or virtual organisation
Your posts are moderated
Related Questions

in a 3-4 page paper answer the following: Q1. Describe the quality control implications of the major changes that have taken place in food chains today compared to the past. Q2. Wh

Which of the following is not a production activity report generated by MRP? a. Planning report b. Exception report c. Planned-order schedules d. Performance contro

Mark Gershon, owner of a musical instrument dis-tributorship, thinks that demand for guitars may be related to the number of television appearances by the popular group Maroon 5 du

The primary issue is that people want to be challenged. People want to be challenged, at least initially, in terms of their Assignments. They also want to be continuously challenge

If overachievement is acceptable, the appropriate di+ variable can be dropped from the objective function.

Ques: What do you consider to be the challenges facing operations managers today?  1. Interfacing with other managerial functions  2. Dealing with increased rates of change

A manufacturer concerned mainly with production efficiencies and reducing unit costs is known as Production oriented.

What is the cause of disputes and the contractual means used for resolving them?

Create a 10-12 slide presentation describing the data types. Include the following in your presentation? Introductory slide? Slide for each data type (containing a definition of th