History of Supply Chain Management

Since the beginning of trade, supply chains have existed, even though they were not referred to as such. Different periods introduced new technologies, tools and operating procedures which expanded our understanding of supply chains and how to manage them efficiently.

Pre-1900’s: Prior to the industrial revolutions, supply chains operated locally and were restricted mostly to regions. During the industrial revolution, as railroads were being laid, trade opened up, but was still mostly restricted to countries as international trade by ships were very inefficient with goods being stored loosely in the hulls of ships.

The Early 1900’s: In 1896 Gottlieb Daimler made the world’s first pickup truck. As trucks became more widely available in the 1900’s transport of goods by road became easier and more affordable. Storage of goods was revolutionised when pallets started to be used in 1925 to store and make goods handling more efficient.

1930’s to 1940’s – The war kicked off further research and development of supply chains from an engineering and operations perspective in order to improve storage and distribution efficiencies. Developments were made to improve loading, unloading and further handling of goods to ensure that supplies could reach troops in due time.

1950’s – Containerisation and standardisation. The introduction and standardisation of shipping containers increased cost and time efficiencies, making goods cheaper and easier to transfer from railroads to trucks to ships and vice versa.

1960’s to 1980’s: During this period distribution increasingly moved towards trucking and away from railroad systems. Computerisation brought digitised inventory and warehouse management systems to the supply chains of the world.

1980’s to 1990’s: In 1983 the term, “Supply Chain Management” was coined. During this time RFID technology was developed and used to track inventory and distributed goods in some supply chains around the world.

We will look at key developments in supply chain management from the early 2000’s until the present day in next week’s post.

Supply Chain Trends From 2021 and Their Continuation in 2022

In 2021 we saw three trends emerge that will have lasting effects on how we do business:

  1. Agility

The challenges of the last two years showed us that supply chains needed to be agile and sustainable in order to survive the uncertainties that come with unforeseen challenges. However, in order to thrive in these conditions, supply chains need to be equipped with the technology capable of accurately predicting and anticipating the needs of the various links in the chain.

  1. Technology

To make effective use of technology and increase supply chain efficiencies the data gathered from these technologies must be processed and analysed in order to understand how assets are used, how inventory and other resources are managed, where weaknesses in the chain occur, etc.

  1. Engagement / Communication

Today, engagement with clients, colleagues and key partners in the supply chain is more essential than ever. With more employees working from home we have become more adept at making use of various communication tools. Armed with the knowledge that technology can provide we are able to engage in meaningful ways and proactively work to prevent disruptions in the supply chain.

In 2022 we will see the continuation and development of these trends:

  1. The move towards evermore agile supply chains
  2. Supply chains that are increasingly equipped with technology
  3. Increased investment in digital supply chain infrastructures
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