Historical Developments in Supply Chain Management

Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;

Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

Introduced in 1982 by Booz Allen Hamilton’s consultant Keith Oliver (Jacoby, 2009), the term ‘supply chain management’ has become one of the most broadly used in modern management theory and practice. The rapid evolution of this management branch combined with a continuously

One of the major features of globalization has been the mergence and increased importance of third party logistics providers and support industries for shipping and transport operations. As businesses become more global in their scope and supply chains grow ever wider in scope and more globally integrated, the complexities and considerations of achieving efficient and cost-effective transport and support services grows more difficult, and most manufacturing and distribution companies outsource these services to a variety of different companies specializing in specific aspects of supply chain management and operational assistance. Achieving success as such a specialized company can be easy if the company maintains proper and accurate analyses of capabilities and environments and has appropriate internal controls, however failure to ensure these components and processes are in place can be disastrous, especially when combined with an emphasis on rampant growth.

Supply chain management is a complex undertaking that must involve more than one organization’s efforts to succeed. A tremendous amount of skill, time, and money must be present to build and develop relationships, discover and implement a strategy, and use the capabilities of the chain to build quality at an efficient financial rate. Allowing for these requirements, it leaves one to wonder whether supply chain management is a viable option. The answer is yes, because an organization needs a strong supply chain to compete and be profitable in the marketplace. The key points for supply chain management should be to meet customer demand, produce excellent customer value, enhance responsiveness to change, build a network that can resist risk, and develop financial success.

Those firms that choose not to will suffer from both late to market costs, as well as increased costs to build their supply chain. Cost, Production, and Quality across the supply chain must be measureable. Maintaining the perspective of a global workforce remains a vital way of doing business, however,. it must continue and grow stronger through innovation to better meet the needs of the customer. Shortening supply chains and making them simpler yet more robust, is something that Ghemawat believes is a critical requirement.

The Supply-Chain Council defines supply chain management as “[m]anaging supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer” (Wisner, Leong & Tan 2005).

9) Growth of the supply-chain management perspective in operations management results from the advent of:

According to Hugos (2013), The term Supply chain management arose in the late 1980s, and prior to that time, many business used terms such as operation management and logistics, and supply Chain management can be defined as :” A supply chain consist of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and supplier, but also transporters, warehouses, retailers and customer themselves”

Supply chain management (SCM) is the supervision of materials, information, and finances as they move in a process from supplier to manufacturer to retailer to the cessation consumer. There are three crucial flows of the supply chain: The product flow, the information flow and the finances flow. SCM involves coordinating and integrating these flows both inside and between

Strategies through achieving a competitive advantage resulted in the existence of the terms `Globalisation` and supply chain management (SCM). Because in today`s emerging and industrialized environment companies seek to achieve competitive advantages and are no longer competing with their own expertise but with the talent in their entire global supply chain. [1]

Supply change management (SCM) is active in many organizations today. The purpose of SCM is to maximize the company value in order maintain a competitive advantage in the market place. As an Operational Managers (OM) it is essential to oversee the supply chain within an organization. The OM responsibility is to manage the supply chain flow, and to ensure the supply chain has a quality design in order to reduce cost and drive efficiency. (Reid & Sanders, 2010) An organization supply chain includes activities such as product development, sourcing, productions, logistics, material, and other information systems needed to coordinate the movement of goods from suppliers to manufactures, and to final customers.

Many complex and more diverse decisions confront supply chain managers on a regular basis: what would be more efficient to manufacture in-house or to outsource; what new channels to implement that it would benefit their customers and suppliers, or how all new technologies, platforms, and practices have to be aligned to enable real-time supply chains. Current information technology reduced outsourcing transaction costs drastically, enabled companies to an increased supervision and control over offsite work, and outsourcing services can deliver faster and more convenient, but technology alone is not the solution. If a company decides to embrace changes in business processes and business culture, those changes can support a long way toward delivering a better product for less money. Complex sphere of activities in many countries is not relevant anymore because a massive number of activities outsourced became commonplace, a new normal.

Supply Chain Management already exists for more than hundred years. It wasn’t defined as terminology for some period of time and it took years to develop it. It began with Fredrick Taylor’s “The Principles of Scientific Management” that was concentrated on improvement of manual loading processes all the way to Supply Chain Management we have now (Lamprecht, James; Page 180). Because Supply Chain Management spreading beyond location of production, everyone have different view on it. Many view Supply Chain Management from operational point of view where SCM is flow of materials. Others view SCM as an operational process. And others consider it as implementation of previously listed operational process in organization (Kotzab, Seuring, Muller and Reiner; Page 398). Here are some popular definitions of Supply Chain Management: