Know your supply chain history

Supply chains have always been the lifeblood of organizations, bringing in new materials and ensuring that finished products are delivered to customers on time. The nature of supply chains has evolved over time, becoming an extremely complex series of moving parts that need to operate together effectively. How did we come to this point and what lies in store for the future of business processes? Let’s take a look at supply chain history and how businesses can prepare for where it’s headed.

Humble beginnings become building blocks

In 1911, Frederick Taylor wrote “The Principles of Scientific Management”, focusing on how to improve manual loading processes. The complex requirements of World War II served as an example of how analytics could solve military logistics problems. While industrial engineering and operations research were once thought of as separate fields, it was clear that organizations reaped the biggest successes when they were used in an integrated framework. By the 1940s and 50s, logistics research shifted to using mechanization to improve labor intensive processes and taking full advantage of available space.

These humble beginnings serve as the foundation for our supply chains today. Pallets and lifts are still widely used in manufacturing shops across the country. The Globalist noted that this generation of research and technological changes introduced the Ford production system and permanently altered the structure of global supply networks. Organizations started to adopt and expect quick manufacturing turnarounds as well as better inventory management to serve their needs.

Supply chain management software has markedly advanced. Supply chain management software has markedly advanced.

 

Tech revolution advances supply chain capabilities

The introduction of more developed technology changed everything for manufacturers. In the 1960s, time-dependent transportation started relying on trucks rather than rails. Around the same time, data computerization become more mainstream, opening an opportunity for logistics planners to optimize inventory and truck routing. Originally, all of these processes were done manually, making it difficult to keep up with transactions and project progress. Digitization was a critical move forward to more modern supply chain operations.

As time went on, the role of logistics in serving customers took a bigger role in businesses. However, the end of cheap oil in 2010 served as another major shift for supply chain network structures and how organizations met customer expectations, Supply Chain Quarterly reported. There was rising emphasis on reverse logistics, product stewardship, energy conservation and sustainability. Positioning these demands as a priority can make organizations more appealing to consumers and partners alike, but these changes can take considerable resources to implement.

What’s ahead for supply chains?

Businesses are reliant on each other to operate effectively and stay afloat. A manufacturing shop must order materials from suppliers to create products and then use a delivery service or its own drivers to send out the finished item. If anything goes wrong at any point between these assets, it could halt progress on projects and impact customer satisfaction. In many cases, organizations wouldn’t know about late or incorrect deliveries until the last minute, and it would be difficult to make up for these deficits. However, with the right information on hand, leaders can make quick decisions and accommodate any unexpected situations.

Supply chain management software has advanced to provide more visibility into the behaviors and practices of suppliers as well as progress across the shop floor. Quality Digest contributor Andrew Savini noted that this data will provide critical insights on risk, social accountability, security, environmental sustainability and market forces to improve efficiency of scale. In the past, inspections, audits and product testing yielded contextual information that was difficult to extrapolate data from. However, by quantifying the information, it can provide more granular and accessible reports to act on. Going forward, visibility, quick decision-making, data accessibility, automation and actionable insights will be primary goals for supply chain operations.

The supply chain has changed significantly over the years, becoming more complex with every link and asset in the chain. By understanding the history of the supply chain and where it’s headed, businesses can prepare their systems appropriately and create plans to optimize their processes. For more information about how to improve your supply chain and how it will evolve in the future, contact Inspirage today.

Navneet Goel

Navneet Goel | Key Contributor

Navneet Goel is a Managing Partner and Executive Vice President of Inspirage. He is responsible for managing and growing the Value Chain Practice. Navneet is a leading expert in the field of supply chain management with experience in design, development, implementation, and support of large-scale global supply chain solutions for Global Fortune 500 firms in various SCM areas.