What is the measure of how much supply chain is owned or operated by the manufacturer?

Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. It is a corporate strategy where a company owns or controls its suppliers, distributors, or retail locations to control its value or supply chain. A high degree of vertical integration means the manufacturer owns and operates a significant portion of the supply chain, from raw materials to final distribution.

B. Horizontal integration involves acquiring competitors at the same level of the supply chain, not owning different stages of it.

C. Insource integration is not a standard industry term; insourcing is the act of bringing a process in-house, a component of vertical integration.

D. Outsource integration is not a standard term; outsourcing is the opposite of owning and operating a supply chain function.

1. Harrigan, K. R. (1985). Vertical Integration and Corporate Strategy. Academy of Management Journal, 28(2), 397–425. https://doi.org/10.2307/256208. This paper defines and analyzes vertical integration as a key corporate strategy related to supply chain ownership.

2. Heizer, J., Render, B., & Munson, C. (2020). Operations Management: Sustainability and Supply Chain Management (13th ed.). Pearson. Chapter 11, "Supply Chain Management," defines vertical integration as developing the ability to produce goods or services previously purchased (p. 445).

3. Stanford Graduate School of Business. (n.d.). Vertical Integration. Stanford Business Glossary. Defines vertical integration as "The merger of companies that are in the same business but in different stages of production or distribution."