Evolution Of Supply Chain Management

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Evolution Of Supply Chain Management

Supply chain network Management Strategy and Capabilities evolved from primitive to esoteric in the four decades since the mid-1970.

In the initial phase (pre-1950), there was no need of any strategy for supply chains. In the decade that followed, supply chain strategy focused only on the overall profitability of the business.

Supply Chain strategy came into real existence only after the Materials requirements Planning revolution of the 1980s.

Companies became aware of the growing material scarcity and started optimizing resources. Strategic activities were in the hands of a few key people in the organization.

Strategic planning was highly inefficient due to a lack of data in a standard format. Planning was done without addressing ground-level problems.

The MRP revolution evolved into Enterprise Resource Planning (ERP) during the 1980s and the 1990s.

The strategy was based on the “PUSH” model. Enterprise-wide supply chains were capable of collectively forecasting the supply and demand levels.

The 1990s and early 2000s’ ERP revolution led to a migration from a PUSH model to a PULL methodology (build-to demand).

Globalization and a search for cheaper locations led to manufacturing outsourcing. The introduction of Just-in-Time (JIT), Lean management manufacturing and Kanban by Japan, widely adopted in the west, led to flexibility in production.

Finally, businesses started to take an external view with the help of strategic partners and a focus on customers. Customer satisfaction became one of the criteria to decide supply chain success, leading to managing total cost and life cycle alliances.

Faster and more precise operational response provided the capability to meet customer demands (time and reliability).

During the 2000s and into the present decade, trading partners and suppliers collectively developed innovative ways to reach customers. This led to logistics outsourcing and evolution of 4PLs.

The supply system adopted organization alignment towards rapid innovation, and there was a quick introduction of new products. Emphasis on rapid decision making and fast response changed supply chains into supply network systems.

Vivek Sood: Sydney based managing director of Global Supply Chain Group, a strategy consultancy specializing in supply chains. More information on Vivek is available on www.linkedin.com/in/vivek and more information on Global Supply Chain Group is available www.globalscgroup.com 

Vivek is the Managing Director of Global Supply Chain Group, a boutique strategy consulting firm specialising in Supply Chain Strategies, and headquartered in Sydney, Australia . He has over 24 years of experience in strategic transformations and operational excellence within global supply chains. Prior to co-founding Global Supply Chain Group in January 2000, Vivek was a management consultant with top-tier strategy consulting firm Booz Allen & Hamilton.

Vivek provides strategic operations and supply chain advice to boards and senior management of global corporations, private equity groups and other stakeholders in a range of industries including FMCG, food, shipping, logistics, manufacturing, chemicals, mining, agribusiness, construction materials, explosives, airlines and electricity utilities.

Vivek has served world-wide corporations in nearly 500 small and large projects on all continents with a variety of clients in many different industries. Most of projects have involved diagnostic, conceptualisation and transformation of supply chains – releasing significant amount of value for the business. His project work in supply chain management has added cumulative value in excess of $500M incorporating projects in major supply chain infrastructure investment decisions, profitable growth driven by global supply chain realignment, supply chain systems, negotiations and all other aspects of global supply chains.

Vivek has written a number of path breaking articles and commentaries that are published in several respected journals and magazines. Vivek has spoken at several supply chain conference, forums and workshops in various parts of the world. He has also conducted several strategic workshops on various aspects of supply chain management. He received his MBA with Distinction from the Australian Graduate School of Management in 1996 and prior to these studies spent 11 years in the Merchant Navy, rising from a Cadet to Master Mariner.

More information on Vivek is available on www.linkedin.com/in/vivek  and more information on Global Supply Chain Group is available on www.globalscgroup.com

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