Vertical/Lateral Integration

Vertical integration or vertical supply chain management refers to the practice of bringing the supply chain inside one organization. i.e bringing many supply chain activities in-house and putting them under corporate management. it may be built by mergers and acquisitions to acquire more SC Capabilities

Henry Ford owned iron ore mines, steel mills, and a fleet of ships as well as the manufacturing plants and shown rooms that build and distributed the vehicles.

The benefit of integration is obviously control, but very challenging to be fully integrated end to end and company loses focus on its core competency, so Lateral Integration is best where Organizations specializes in its core competencies and relies on other specialists for the rest of supply chain.

Relying on a lateral supply chain will make you achieve economies of scale, improve the business focus and expertise and leveraging your production competency