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Historical Developments in Supply Chain Management

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Historical Developments in Supply Chain Management

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  • April 2011
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Historical developments in supply chain management
Six major movements can be observed in the evolution of supply chain management studies: Creation, Integration, and Globalization (Movahedi et al., 2009), Specialization Phases One and Two, and SCM 2.0. 1. creation era

The term supply chain management was first coined by a U.S. industry consultant in the early 1980s. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management. 2. integration era

This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration. In fact a supply chain can be classified as a Stage 1, 2 or 3 network. In stage 1 type supply chain, various systems such as Make, Storage, Distribution, Material control, etc are not linked and are independent of each other. In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one in which vertical integration with the suppliers in upstream direction and customers in downstream direction is achieved. An example of this kind of supply chain is Tesco. 3. globalization era

The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of...