What management approach unites supply chains through a single owner?

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Vertical integration occurs when one company owns or controls several stages of its supply chain—from raw materials to manufacturing to distribution. By bringing these stages under a single ownership and governance structure, decisions, schedules, and quality standards can be coordinated more tightly, and information can flow more smoothly from supplier to customer. This unity reduces reliance on external partners for critical steps, lowers transaction costs, and strengthens control over lead times and product availability, which helps create a more seamless and reliable supply chain under one owner.

The other approaches don’t achieve the same unification. Horizontal integration focuses on expanding at the same stage of the supply chain by acquiring or merging with competitors, not on owning multiple stages. Siloed operations describe departments working in isolation, which breaks coordination across the chain. Independent contracting relies on external firms for parts of the process, so the chain isn’t owned or controlled by a single entity.