The Evolution of Supply Chain
Ever thought about how you get the goods that you see in the store or order online? Or what sort of process goes into creating something out of nothing, bringing an item from concept to reality? Since just about nothing that you can buy today simply springs into existence, most products require a supply chain. We take it for granted now, but supply chain is actually a relatively new concept. How new? Let’s delve into the history of supply chain and supply chain management a little bit, and see how it has evolved and changed over the years to become what it is now.
The first supply chain was arguably started in 1887 when a basic hand truck was developed—though the actual term “supply chain management” was not thought to be used until around 1982—but the concept really took hold in the more commercial forties and fifties, when pallets and forklifts started to be widely used in the United States. This dramatically improved the labor process and naturally sped things up in production. Warehouses started to crop up across the country, and transportation started to shift from rail to trucks (though railways remain an important shipping method to this day). During this period, warehouse dimensioning systems also started to evolve. Thanks to a shortage of materials like leather, canvas, and rubber during the Second World War, manufacturers started using synthetic polymers.
The biggest and most significant shift in supply chain, especially in terms of making it what it has become today, came with the digitizing of inventory. IBM developed the very first computerized inventory system in 1967, and it started to become industry standard practice by the mid-seventies, starting with the first real time Warehouse Management System at the J.C. Penney distribution center in Southern California.
Today, modern technology is integral to each stage of the supply chain, especially since the emergence of Enterprise Resource Planning (ERP) systems. It allows supply chain managers to record and interpret data, track output and demand, and make sure that make sure that demand is met without surplus, and every step of the process is accounted for—thus minimizing loss.
Direct to Consumer
One of the biggest ways in which technology has affected supply chain management is with the dawn of the internet age; and in particular, the emergence of a little site called Amazon. Amazon—and the slew of sites which sprung up afterwards—sparked a new era of online shopping, which allowed for a supply chain that led direct to the customer. This made supply chain managers more in deman