Supply chain management is emerging as one of the decade’s most powerful business practices. It is transforming the way manufactures operate and work with partners ? even the way they think about business. Why all the sudden interest? Mere observation of industrial practice brings to light a simple truth; very few materials remain in the constant ownership of one person, persons or company from their source to the time they are sold to the end customer. Almost invariably, material flows through a series of ‘players’ whose role may be to transform (manufacturing plants), store (warehouses) or move (distributors) material. This results in the establishment of complex systems that industry has labeled supply chains or supply networks.
Supply chains are not new; they have been around as long as the market place. Historically, however, each supply chain link tended to regard its role as satisfying the demand of its immediate customer. A more holistic view point suggests that each is just a part of a wider supply chain system whose role is to satisfy end customer demand. This refocusing of the company roles in terms of end customer satisfaction is in line with a systems thinking approach to management. From a conceptual viewpoint, one could view the ideal supply chain as a pipeline with laminar flow.
Traditionally, most supply chains simply evolved rather than being designed. This fact makes supply chains susceptible to turbulence. Companies
are discovering that the vast majority of supply chains are logistically inefficient and therefore prone to poor supply chain dynamic behavior. Because of the huge success of a couple of retaliators, the concepts of supply chain design have come to the forefront. Supply chain is one of the big buzzwords, or in this case phrase, in the U.S. industry today.
What does all of this mean for the mom and pop stores? Probably not a whole lot for now. Those who are currently using the Internet may find it easier to order supplies or even distribute. For the middle size company, it could be a blessing or curse. Those who invest and use the new technology may rise to new heights; those who do not may be pushed into bankruptcy.
This paper will attempt to touch upon the history, the various new transpirations and developments in supply chain technology and project a direction for the future.
The subject of supply chain has been examined, studied and dissected by great scholars. Their works have been published and have been around since the 1950s. However, the technology that is now being used, or rather is beginning to be used, is not documented in any text. The industry of supply chain management technology is in such infancy stages, that not a lot of good periodical articles are in circulation.
As of February 1998, articles began appearing in magazines like Information Week, Computer World and Info World Magazine. The articles were basic and very vague. No real inside stories as to how any one particular firm’s Supply chain management system worked. At this point in the development, most of the detailed information is probably regarded as trade secrets.
The paper is put together from pieces of new clippings, magazine articles, news wire releases. Hardier sources of information came from Journal writings out of Europe, a few books about how import supply chain management is going to be and a handful of not so up-to-date textbooks.
A Brief History
As previously stated, the supply chain is not anything new, its been around for centuries. The farmer sold grain to the miller, who sold floor to the backer, how sold bread and pastries to an end customer. Such chains were based on gentleman’s agreements. Once the good changed hands, the former proprietor of the good, as far as he was concerned, was finished. Such supply chains have very dynamic properties. From the point of view of stocks it may result in alternating periods of high and low stocks with the possibility of obsolescence in the stock out. Alternatively it may manifest as periods of capacity expansion and contraction, with the possibility of increased cost due to over capacity and lost market opportunities through capacity cut-backs.
Much of the pioneering work into aspects