The network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product or service is called as the supply chain. There are six stages which can be observed in the development of the supply chain management, they are:
Creation Era:
The term supply chain management was first introduced in 1980’s by a U.S. industry consultant and the key characteristics of SCM in this era includes large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.
Integration Era:
In this era most important techniques are introduced in SCM like development of Electronic Data Interchange (EDI) systems in the 1960s and introduction of Enterprise Resource Planning (ERP) systems in 1990s. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration.
Globalization Era:
In this era companies gave recognized the importance of global systems of supplier relationships and expanded their supply chains to the other countries. 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.
Specialization Era: This Era is divided in to two phases
Phase – 1: In 1990’s the firms started to focus on the core competencies and they outsourced the non core functions to the other companies. The specialization model creates manufacturing and distribution networks composed of multiple, individual supply chains specific to products, suppliers, and customers who work together to design, manufacture, distribute, market, sell, and service a product. Outsourced technology hosting for supply chain solutions was introduced in the late 1990s and has taken root primarily in transportation and collaboration categories.
Phase – 2: Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers and matured in to aspects of supply planning, collaboration, execution and performance management. Supply chain specialization enables companies to improve their overall competencies.
Supply Chain Management 2.0:
SCM 2.0 is used to describe the changes in the supply chain and 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. SCM 2.0 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, and talent scarcity.
The above are the stages which shows the actual development of supply chain management.
