The benefits of upstream and downstream integration of supply chain: a case of East African Breweries Ltd (EABL)

Abstract

In today’s constantly changing business environment, organizations cannot battle entirely as individual entities. Increasingly, they must rely on effective supply chain management (SCM) to successfully compete in the global market and networked economies. A firm positioned in a supply chain network must manage interactions in both upstream and downstream segments of this network. The firm's upstream network includes its suppliers and all of the suppliers' upstream partners, whereas the downstream network comprises the firm's customers as well as all of the customers' downstream stakeholders.

The objectives of the study were: to establish the benefits that East African Breweries Ltd (EABL) has achieved as a result of the upstream and downstream integration of supply chain; to establish the challenges faced by EABL as a result of upstream and downstream integration of supply chain and to establish the strategies employed by EABL in risk management as a result of upstream and downstream integration of supply chain.

The research findings revealed that EABL indeed has achieved numerous benefits as a result of successful integration of supply chain. It was also evident that the firm does face some challenges in the whole process of SCM and has put in place some strategies to manage the risks as a result of upstream and downstream integration of supply chain with its strategic partners. The research recommends that internal integration of all functions within the firm to be customer driven even before integrating the upstream and downstream of the supply chain as it will be vital to first create a good link within the firm’s function before moving a head to link the firm with other stakeholders within the supply chains and ensure that the benefits can be identified and communicated to all stakeholders in the supply chains.