The value of integration in supply chain planning

As supply chains become more complex and globalized, logistic efficiency is essential for a firm to maintain its competitive strategy. It is well known that a lack of coordination and information sharing among facilities with conflicting objectives is a major cause of large logistic inefficiencies in a supply chain. Therefore, the literature emphasizes that a shift from the traditional approach of localized planning to a global, integrated solution is one way in which systemwide costs can be greatly reduced (Darvish et al., 2016; Guastaroba et al., 2017). Subsequently, a large body of research exists on integrated optimization problems in logistics and supply chain management (e.g. Coelho et al. (2014); Schmid et al. (2013)), and Table 1 summarizes some of the well-known problems that integrate up to three decisions of production, inventory, distribution and facility location.