Antifragile Supply Chains 1 — The Evolution of Supply Chain Management
By: Jawad Khan
Tags: Trade, Technology, Supply Chain, Supply Chain Management

We have been trading for much of human history (as long as 150000 years ago — Peter Watson notes in Ideas: A History of Thought and Invention from Fire to Freud). Commodities and capital has been moving on trade routes for thousands of years and has played a major role in human civilization.

By Whole_world_-_land_and_oceans_12000.jpg: NASA/Goddard Space Flight Centerderivative work: Splette (talk) — Whole_world_-_land_and_oceans_12000.jpg, Public Domain, https://commons.wikimedia.org/w/index.php?curid=10449197

Fast Forward to today, our world is defined by consumer convenience. We, as consumers, have at our hands the ability literally at the tip of our fingers to browse from catalogs of products available from a number of suppliers globally and expect them to be delivered to our doorstep within a reasonable amount of time. Likewise, businesses engage with other businesses in transfers of goods and services virtually from anywhere to everywhere in the world. So when we order a batch of our favorite tea from an online store — under the hood are the workings of a complex supply chain network interlinking many local and international supply chains where information, people, products, modes of transports and even robots spring into action for us to enjoy the perfect cup of tea.

The modern consumer and industrial revolutions, mass production, and the degree of globalization in the modern world has had a proportional effect on the complexity of supply chains. Supply chains that serve us today are highly evolved complex systems that are a testament to human ingenuity and collaboration as businesses across national borders have partnered and arranged themselves in a way that serves our needs at the lowest possible cost. Where the end product should be produced, where the components should be sourced from and which partner engages in what specialized activity (assembling, distributing, retailing etc.) are subordinate strategic decisions under the overarching guiding principle of serving the customer at low costs.

The discipline of Supply Chain Management

In their book “Adaptive Supply Chain Management” Dmitry Ivanov and Boris Vladimirovich Sokolov describe the 1950s and 1960s as the era of mass production and economies of scale leading to a focus on quality management. Improved quality of products led to individualization of customer requirements launching the era of customer centeredness in the 1980s. Inventory management and reduction in production cycles was the focus of this period. The wide variety of products, the need to react to market changes with agility and cutting the time to market required businesses to optimize internal processes and increase collaboration with suppliers resulting in lean manufacturing and just in time paradigms. From then onwards, companies concentrated on competitive advantages, core competencies, outsourcing, innovation and collaboration fueled by rising globalization, information technology advances leading to the development of the supply chain management paradigm in the 1990s.

Ivanov, Dmitry & Sokolov, Boris. (2010). Evolution of Supply Chain Management (SCM)