Short story of Supply Chain Management
When we hear „supply chain,” we think “Logistics”. For a non-professional, the whole concept might sound pretty simple. The truth is that supply chain management is a complex issue that started as a simple idea. This idea appeared over 100 years ago. The core of it was to implement mild changes to improve work. However, since its development, it has morphed into a more complex structure.
This method of management has its beginnings in the 1940s. The authors of this system tried to improve storage and product handling in warehouses. Back then a process of mechanisation started. Companies started using machines instead of a just power of muscles. Since such new technologies became available business owners tried to take as big advantage of them as possible. In 1950s precursors of supply chain management tried to bring changes to transportation management in order to increase productivity. Even in the 1950s, the world started to shrink and constant shipment between continents, countries and cities became everyday processes. Therefore people responsible for deliveries had to, not only arrange shipments at a competitive rate but also keep reasonable deadlines.
The next step
The 1960s brought a breakthrough in the supply chain processes in a shape of computerization. Before that time all administrative work was done manually. When computers appeared they became for practitioners a powerful tool for planning and optimising processes. As computers became more and more powerful companies could use them to not only plan transportation but also optimise inventory and perform an analysis.
Technology is the key
The evolving technology allowed further development and in the 1980s the term of supply chain management was used for the first time. The improved technologies certainly helped to optimise the management process of many aspects that fall under supply chain management. As globalisation started to take place, the importance of well-designed supply chain gained on significance. Not only companies became open to new markets, customers’ expectation grew. To be competitive the factories had to produce good quality items but those items also had to be delivered to the customer on time.
In the 1990s a development of ERP systems (Enterprise Resource Planning) caused further growth of supply chain management. The new system increased accuracy and availability of the data. It also allowed faster flow of information between different departments of the company.
Currently, there are many components of supply chain management. Some of them are planning and control, organisation structure, information flow facility structure or product flow facility structure. Of course, the components vary depending on nature of the business and the size of the company. As supply chain management is a live business organism, its structures and range of activity changes with time. With globalisation in full swing, companies face more than ever a pressure of dealing with complex networks involving multiple processes and countries. The Processes require a constant control, management and optimisation of company’s day to day operations.