Confusing State Of Supply Chain (SCM)

If you are confused about the SCM, you are not alone. Thousands of people around this world express frustration.

The easiest example of this confusion can be seen in SCM training and conferences. Some people run a SCM event entirely focused on logistics, while others run a SCM course or event almost entirely focused on procurement, or warehousing, or 3PL, or inventory.

This is not the only confusion about SCM. People at Director or VP level get frustrated when they have to sit through courses entirely focused on mundane operational aspects of SCM.

At the same time SCM analysts and managers sit through strategic courses they find too airy-fairy and vague. The problem was clearly that they chose the wrong event.

Similar confusion abounds among the various generations of supply chain management, as well as BAU and BT content.

All This Confusion Has A Long History Confusing State Of Supply Chain

Operations management and industrial engineering were the two early streams of study that were closely related to the supply chain management arena.

When our founder, Vivek Sood did MBA in 1995-96 from one of the best businesses schools in the world, there was not a single MBA level supply chain course in the entire world. We know because he wanted to specialise in SCM, and looked far and beyond for a suitable course.

But the Operations management and industrial engineering continued as two separate entities till the peak times of world war II. During this time the need for improvements in military logistics skyrocketed and the new branch of study was born integrating core values of operations management and industrial engineering.

In 1963 the National Council of Physical Distribution Management was formed and it was the predominant organisation in the field of managing the physical flow of goods though a chain, though the name supply chain management was not yet coined.

The Birth Of Confusing Supply Chain Management

When our senior partner Dr Wolfgang Partsch and his team coined the term supply chain management in 1978, they created the methodology to study the four flows (at that time fifth flow was - risk was not considered) of the supply chain.

For the first two decades of its existence, supply chain management field was largely ignored - both by the universities and the certification bodies.

Meanwhile, with outstanding real world results, savvy companies and their top consultants continued to progress the thought leadership in supply chains, and popularize the concept of five flows and integration / optimisation matrix.

Yet, I still remember in 2003 being asked on a golf course 'what kind of chains does your company (GLOBAL SUPPLY CHAIN GROUP) supply?'

Business Confusing State Of Supply Chain

Seeing the outstanding success of supply chain concepts, eventually most universities and business schools jumped on the bandwagons and created courses, or even entire degrees focused on supply chain management.

At the same time certification bodies who were formerly training inventory analysts, production planners, warehousemen, logisticians, and even truck drivers and purchasing officers started incorporating supply chain terminology in their course materials and nomenclature.

That is how we have arrived at the situation where we are today and that is one of the reasons for the confusion about the plethora of courses and their varying level of quality and coverage of key supply chain concepts.

A Rose By Any Other Name...

So, when you encounter a logistics manager, or a purchasing manager, or a production planner who is masquarading as a supply chain manager, learn to recognise him/her as such.

Similarly, when there is an advertised supply chain seminar, training, project, workshop, retreat or conference, be alert to the possibility that in reality it might turn out to just cover logistics, purchasing, production, or some other obscure part of supply chain.

Now that narrow aspect of supply chain might happen to be your entire focus - in which case it is an ideal event for you.

But, it is more than likely that you focus was something else, in which case you will end up feeling duped.

What's In A Name?

Everything - if it is accurate.

And, nothing - if it is not.

So, what can you do about all this information?

Firstly, it pays to be well informed. Understand the difference between shipping, logistics and supply chains. There are plenty of articles on this website to help you do so. Our books also cover the topic in great detail.

Secondly, understand that while they are related, in the same way as the study of nursing is related to the study of medicine, they are still two very different fields.

Thirdly, make a concious decision. All these endeavours - shipping, logistics, procurement, supply chain have a place in a modern economy.

But, a nurse cannot be expected to perform brain surgery.

Nor is a logistician expected to finely balance the five flows of supply chain management - s/he may only vaguely know what they are.

For more info on supply chain checkout our website

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