Forward integration is one of three types of vertical integration, where companies in a supply chain are united through a common owner. This concept will help managers to differentiate between forward and backward integration and gain insights into its implementation steps and success measures.
Forward Integration Definition
Forward integration is the set of activities related to securing outputs, such as acquisition of distribution channels or transport undertakings. It is the opposite of backward integration which concerns securing inputs, such as raw materials by acquisition of supplies (Hill and Jones, 2010; Lysons and Farrington, 2006).
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Forward Integration References (4 of up to 20) *
- CIPS: Procurement’s Role in the Generation and Capture of Value in Supply Chains.
- Collier, D.A. and Evans, J.R. (2010) Operations Management. Cengage Learning: Mason, OH.
- Fleischmann, B., Ferber, S. and Henrich, P. (2006) Strategic Planning of BMW's Global. Production Network, Vol. 36(3), pp. 194-208.
- Gelderman, C.J. and van Weele, A. (2003) Handling Measurement Issues and Strategic Directions in Kraljic's Purchasing Portfolio Model. Journal of Purchasing and Supply Management, Vol. 9(5/6), pp. 207-216.
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