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    2.SCM - Historical Developments

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    Wah Khaing
    The document discusses the historical development of supply chain management in 6 phases: 1) Creation era - SCM concepts emerged in the early 20th century with the assembly line but the term was coined in 1982. 2) Integration era - Developed from the 1960s with EDI and ERP systems integrating supply chain functions. 3) Globalization era - Began in the late 1980s as companies integrated global sources into their supply chains. 4) Specialization era phase 1 - In the 1990s, companies outsourced manufacturing and distribution to focus on core competencies. 5) Specialization era phase 2 - Specialization matured beyond logistics into supply planning and collaboration as a service. 6

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    2.SCM - Historical Developments

    Uploaded by

    Wah Khaing
    17 views2 pages
    The document discusses the historical development of supply chain management in 6 phases: 1) Creation era - SCM concepts emerged in the early 20th century with the assembly line but the term was coined in 1982. 2) Integration era - Developed from the 1960s with EDI and ERP systems integrating supply chain functions. 3) Globalization era - Began in the late 1980s as companies integrated global sources into their supply chains. 4) Specialization era phase 1 - In the 1990s, companies outsourced manufacturing and distribution to focus on core competencies. 5) Specialization era phase 2 - Specialization matured beyond logistics into supply planning and collaboration as a service. 6

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    supply chain management

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    The document discusses the historical development of supply chain management in 6 phases: 1) Creation era - SCM concepts emerged in the early 20th century with the assembly line but the term was coined in 1982. 2) Integration era - Developed from the 1960s with EDI and ERP systems integrating supply chain functions. 3) Globalization era - Began in the late 1980s as companies integrated global sources into their supply chains. 4) Specialization era phase 1 - In the 1990s, companies outsourced manufacturing and distribution to focus on core competencies. 5) Specialization era phase 2 - Specialization matured beyond logistics into supply planning and collaboration as a service. 6

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17 views2 pages

    2.SCM - Historical Developments

    Uploaded by

    Wah Khaing
    The document discusses the historical development of supply chain management in 6 phases: 1) Creation era - SCM concepts emerged in the early 20th century with the assembly line but the term was coined in 1982. 2) Integration era - Developed from the 1960s with EDI and ERP systems integrating supply chain functions. 3) Globalization era - Began in the late 1980s as companies integrated global sources into their supply chains. 4) Specialization era phase 1 - In the 1990s, companies outsourced manufacturing and distribution to focus on core competencies. 5) Specialization era phase 2 - Specialization matured beyond logistics into supply planning and collaboration as a service. 6

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    SCM - Historical developments

    Six major movements can be observed in the evolution of supply chain management studies: Creation, Integration, and
    Globalization (Movahedi et al., 2009), Specialization Phases One and Two, and SCM 2.0.

    Creation era
    The term supply chain management was first coined by Keith Oliver in 1982. However, the concept of a supply chain in
    management was of great importance long before, in the early 20th century, especially with the creation of the assembly
    line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering,
    downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.

    Integration era
    This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI)
    systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems.
    This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. This
    era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration.
    In fact a supply chain can be classified as a Stage 1, 2 or 3 network. In stage 1 type supply chain, various systems such as
    Make, Storage, Distribution, Material control, etc. are not linked and are independent of each other. In a stage 2 supply
    chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one in which vertical integration
    with the suppliers in upstream direction and customers in downstream direction is achieved. An example of this kind of
    supply chain is Tesco.

    Globalization era
    The third movement of supply chain management development, the globalization era, can be characterized by the attention
    given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other
    continents. Although the use of global sources in the supply chain of organizations can be traced back several decades
    (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate
    global sources into their core business. This era is characterized by the globalization of supply chain management in
    organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs through global
    sourcing. However it was not until the late 1980s that a considerable number of organizations started to integrate global
    sources into their core business.

    Specialization era (phase I): outsourced manufacturing and distribution


    In the 1990s, industries began to focus on “core competencies” and adopted a specialization model. Companies abandoned
    vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed
    management requirements by extending the supply chain well beyond company walls and distributing management across
    specialized supply chain partnerships.
    This transition also re-focused the fundamental perspectives of each respective organization. OEMs became brand owners
    that needed deep visibility into their supply base. They had to control the entire supply chain from above instead of from
    within. Contract manufacturers had to manage bills of material with different part numbering schemes from multiple OEMs
    and support customer requests for work -in-process visibility and vendor-managed inventory (VMI).

    Specialization era (phase II): supply chain management as a service


    Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse
    management, and non-asset-based carriers and has matured beyond transportation and logistics into aspects of supply
    planning, collaboration, execution and performance management.
    At any given moment, market forces could demand changes from suppliers, logistics providers, locations and customers,
    and from any number of these specialized participants as components of supply chain networks. This variability has
    significant effects on the supply chain infrastructure, from the foundation layers of establishing and managing the electronic
    communication between the trading partners to more complex requirements including the configuration of the processes
    and work flows that are essential to the management of the network itself.
    Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced
    manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of
    specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and
    efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and
    maintaining an entirely unique and complex competency in house is the leading reason why supply chain specialization is
    gaining popularity.
    Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in
    transportation and collaboration categories. This has progressed from the Application Service Provider (ASP) model from
    approximately 1998 through 2003 to the On-Demand model from approximately 2003-2006 to the Software as a Service
    (SaaS) model currently in focus today.

    Supply chain management 2.0 (SCM 2.0)


    Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the changes within the
    supply chain itself as well as the evolution of the processes, methods and tools that manage it in this new "era".
    Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity, information sharing,
    and collaboration among users. At its core, the common attribute that Web 2.0 brings is to help navigate the vast amount
    of information available on the Web in order to find what is being sought. It is the notion of a usable pathway. SCM 2.0
    follows this notion into supply chain operations. It is the pathway to SCM results, a combination of the processes,
    methodologies, tools and delivery options to guide companies to their results quickly as the complexity and speed of the
    supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil prices, short product life
    cycles, expanded specialization, near-/far- and off-shoring, and talent scarcity.
    SCM 2.0 leverages proven solutions designed to rapidly deliver results with the agility to quickly manage future change for
    continuous flexibility, value and success. This is delivered through competency networks composed of best-of-breed supply
    chain domain expertise to understand which elements, both operationally and organizationally, are the critical few that
    deliver the results as well as through intimate understanding of how to manage these elements to achieve desired results.
    Finally, the solutions are delivered in a variety of options, such as no-touch via business process outsourcing, mid-touch via
    managed services and software as a service (SaaS), or high touch in the traditional software deployment model.

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