Supply Chain Management in America
Supply chain management and logistics has come a long way since it all began over 100 years ago. When these concepts evolved, the main focus was to improve simple yet hard labor processes and procedures to keep up to speed with the modern era.
Explaining the timeline of supply chain management in America along with the history shows just how far it has come in a very developing time.
Supply chain management and it’s history has changed the way we buy and sell all around the world.
The Beginning Of Supply Chain Management
It all started with the development of logistics. When it comes to industrial engineering and operations research, they both require logistics to ensure both run safely and securely. Father of industrial engineering Frank Taylor, heavily researched how to improve manual labor in 1911 and operation research was discovered when scientists showcased how valuable analytics was when studying the requirements from World War II.
Although these two functions are very seperate, the success of them both can be attributed to the supply chain and logistical issues, which have been addressed over time.
Early 1940-1980 Of Supply Chain Management
In the early stages of supply chain management, the research was mainly focused on the research around logistics and how to use mechanical operations to improve labor processes. Also, research was focused on how to better use space within a warehouse, including better design and racking for storage.
By 1950, the logistics research had expanded to transport management. The development of intermodal containers for ships, trains and trucks was produced to ensure all modes of transport could carry the containers.
As time went on, truck transportation was a more popular form of distribution. The shift to road transportation rather than rail led to the formation of the National Council of Physical Distribution Management in 1963 to focus on warehousing, material handling as well as physical distribution. This grew the research and education on supply chain management to workers so tasks were done more efficiently.
The game changed in the 1960s-1970s when computers came into play. Before this time, everything was manual, however, the use of computers allowed for a more seamless process when it came to data tracking, innovation in planning, storage, inventory and truck routes.
During this stage, there were still issues with the transition from theory to practice. As there were still issues with the transition from theory to practice, the early 1980s saw Georgia Tech of the Production and Distribution Research Center, the Material Handling Research Center, and the Computational Optimization Center formed to focus on what aspects new computer technology were useful.
The 1980’s – The Continued History Of Supply Chain Management
During the 1980s, the change in the core history of supply chain management occurred – the rollout of personal computers. As well as the access to better computers, these provided the ability to plan better as well as plan for the new environments.
The more technological advanced computers provided flexible spreadsheets and map-based interfaces, allowing for better execution of technology as well as better logistics planning.
All the different centers mentioned earlier developed different technological aspects to streamline and improve supply chain management. The Production and Distribution Research Center was an innovative leader when it came to combining map interfaces with supply chain design and distribution plans.
The Material Handling Research Center led the development of new technology for the automation of material handling, and the Computational Optimization Center provided large scale optimization algorithms, which solved scheduling issues with intractable airlines.
The 1980s was a critical time in the history of the supply chain industry as it was recognized as an essential but complex time as company executives understood the importance of supply chain management. They became more aware of logistics as an opportunity to improve the bottom line of production, which required investment in professionals as well as technology.
The year of 1985 saw the name change of National Council of Physical Distribution Management to Council of Logistics Management (CLM), which was actioned to reflect the integration of inbound and outbound as well as the reserve flow of products. So not just “distribution” anymore but an overall approach to supply chain management. Before the increased importance of logistics, it was mainly a term used only to support military movements.
From 1990 To Now – The Modern Era Of Supply Chain Management
Enterprise Resource Planning (ERP) systems pushed more of a rise in logistics and supply chain management during the 1990s. The system grew from the success of the Material Requirements Planning developed in the 1970s and 1980s, as well as the integration of multiple databases and concerns on being able to handle the era of the 2000s. Although there were many problems with the installation of ERP, by 2000 majority of the larger companies had the ERP system.
This system achieved great improvements in the availability and accuracy of data and increased the need for better planning.
The term “supply chain” was established as part of the globalization of manufacturing from the 1990s. As US imports from China grew, the focus on globalization highlighted the need for more logistic strategies to deal with the growth in manufacturing in China and around the world. From this time, logistics was a term used to describe tactical and operation issues, and supply chain refers to strategic issues.
According to the Council of Logistics Management (who changed their name to Council of Supply Chain Management Professionals) logistics is part of the supply chain process, which plans, implements and controls the flow of efficient and effective goods and services production.
The advancements in technology changed the way businesses operated when it comes to logistics and supply chain management from everything, including distribution, inventory management and data collection.
The history of supply chain management has been critical in the way businesses not only produce products but also who they sell to and where they can distribute.
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