Vertical Integration Management

Posted in Operations and Supply Chain Terms, Total Reads: 1169

Definition: Vertical Integration Management

The degree to which the manufacturing units, supplier physical channel and the final consumer distribution centers are under the ownership of the company.


Reliance has its own set of suppliers (RNRL ) which provides raw material to reliance industries limited which supply gas at reliance gas stations/petrol pump. The  acquisition of channel partners is useful in  lowering production costs, creates economies of scale and controls entry barriers in the value chain.

Other factors such as technology ,raw materials  are taken into account before expansion. In startups the suppliers and distributors are subcontracted or outsourced.

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