Michelin Supply Chain Integration Analysis

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Introduction

Michelin- Compagnie Générale des Établissements Michelin, Founded in Clermont-Ferrand in 1888 by the Michelin brothers, André and Édouard .Michelin is one of the world famous tires manufacturer with one hundred thousand employees. They not just produced all kind of vehicles tires they also publishing maps and guides, and operating specialist digital services. The Michelin man is made of tires and he is 100 plus years old originated from our world famous mascot the ‘Bibendum’. Michelin produced produce more than 150 million tires and they have 72 production facilities in 19 countries. Their marketing operational is in more than 170 countries. So what is their mission that made them so successful. Their mission is to contribute to progress in the mobility of goods and people and beyond this, to the development of society. Their broader goal is to satisfy the fundamental human need to socialize, exchange and discover. Michelin’s mission is to enhance mobility by putting into practice its core values of respect for customers, respect for people, respect for shareholders, respect for the environment and respect for facts.  Michelin believes that mobility is essential for human development, so they innovate passionately to make it safer, more efficient and environmentally friendly. Michelin offering  customers uncompromising quality. That is their main priority. Because Michelin believes in personal fulfilment, they want to make sure everyone do their best; They try to turn their differences into a valuable assets. Proud in their way, they are on the same way to build a better way for their customers.

Michelin Supply Chain Integration analysis

As we know supply chains have two types of integration strategies. One is vertical another one is horizontal. Vertical integration is a strategy of bringing the supply chain within a large one company owned structure. This is a structure of olden days manufacturing strategy. As for horizontal integration supply chain strategy is the mostly choice for the world nowadays for those products like groceries and staple products. Horizontal benefits focus on cost of savings and scalability. So for Michelin this kind if big manufacturer they will use vertical integration. They use vertical integration because they can get more control over the value chain. Like when retailer decide to develop manufacturing business they get more control over the production part of the distribution process this same goes to Michelin when they performs distributions or retailing activities, it has more control over the product that is presented and its prices that sold in the market. Cost control also will be carry out throughout the distribution process. So Michelin and avoid wasted costs and they can lower down transportation costs. By using this strategy Michelin also can take advantages over competitor by block competitor from gaining access to scare resources or important markets. They can enter distribution or retail to gain direct access to customers in a highly competitive market before its other competitor do so.  Vertical integrations give Michelin into more production inputs , distribution resources, process and retail channels. Each of  these give a chance for Michelin to distinguish itself from competitors through effective marketing. There will be also a leverage for vertical integration like when the end products is very successful the Michelin will reaps a higher benefits from the success of the products. I would recommend to try out horizontal integration because horizontal integration will get less control in all the other sector so they can just focus in manufacturing and innovating other products to satisfied their customers. But the other sector must make sure they all will play on their parts. Leverage for horizontal is they can gain benefits from the success of everyone in the value chain. Horizontal is mostly more flexible than efficiency. And the main thing is also lower capital requirement not like vertical integration need a lot of capital in order to create and produce distribution etc. Horizontal allowed other to hold assets of production and distribution.