The history of supply chain management

By Sean Ashcroft
Ongoing disruption to supply chains has highlighted their importance to everyday life. We take a look at the history of supply chain management.

Supply Chains connect the world, and recent disruptions have been keenly felt across the globe. In this timeline we look at the history of supply chain management - the art of keeping everything running smoothly.

Pre-1900s: Local supply chains 

Prior to the first industrial revolution, supply chains were typically local and restricted to regions. As the use of railroads increased so did the distance that goods could be distributed.

1900-1950s: Supply chains continue to grow 

Between the 1900s and 1950s, global supply chains started to take shape, organisations such as UPS opened their doors. Industry leaders began to look at improving manual processes, researching the use of mechanisation, and demonstrating the benefits of analytics in military logistics following World War II. Leading up to the 1950s the concept ‘unit load’ became popular, later to be extended to transportation management.

1960s-70s: Physical distribution

By the 1960s, DHL joined the growing number of logistics providers, along with FedEx in the 1970s. In this time, time-dependent freight transportation transitioned to trucks, which led to organisations coining the concept ‘physical distribution’.

1963: Key breakthroughs 

The National Council of Physical Distribution Management was formed. meanwhile, IBM developed the first computerised inventory management and forecasting system.

1975: First real-time WMS

Home decor company JC Penney created the first real-time warehouse management system (WMS). This was a game changer. Updating stock inventory in real-time, Jit reduced time spent looking for stock and allowed the company to focus on growing the business.

1980s: inbound, outbound and reverse flows

With the development of personal computers, supply chains had better access to planning capabilities, including spreadsheets and map-based interfaces. By the mid-1980s supply chains were considered an expensive, important, and complex function. Reflecting this transition, the National Council of Physical Distribution Management changed its name to the Council of Logistics Management (CLM) to represent inbound, outbound and reverse flows. 

1982: Supply chain management coined

Keith Oliver coined the term ‘supply chain management, using the term in an interview with Arnold Kransdorff of the Financial Times, on 4 June 1982. Oliver is a British logistician. Oliver defined it thus: “Supply chain management is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. It spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.”

1990s-2000s: tech revolution and globalisation

This period saw the supply chain industry grow further, with solutions such as enterprise resource planning and advanced planning and scheduling, as well as the increase in global imports and exports. 

1996: First cobot is invented

A cobot, or collaborative robot, is a robot intended for human interaction. They were invented in 1996 by J Edward Colgate and Michael Peshkin, professors at Northwestern University. Their invention sprang from a 1994 General Motors initiative to find a way to make robots or robot-like equipment safe enough to team with people.

1997 Amazon goes public

Amazon founder and CEO Jeff Bezos opened the virtual doors of Amazon's online store in July 1995. It went public on May 15, 1997, with an IPO price of $18. It was the first Internet retailer to secure 1 million customers. 

2010-2020: Industry 4.0 

While the likes of AI, data, and the Internet of Things IoT have been around prior to 2010, the past decade has seen an exponential increase in their adoption, and supply chains have not been left out. Organisations around the world have been using Industry 4.0 tech to drive their digital transformation strategies.

2020: Covid-19 

The pandemic spread around the world, and supply chains grinded to a halt, leaving no one in any doubt as to the importance of these vital functions of business. The outbreak of Covid-19 spurred investment in localisation, and further investment in digitalisation, to mitigate the pandemic's impact. 

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