Supply chain management is a lucrative industry, with many businesses worldwide implementing it into their daily operations.
Supply chain and logistics have evolved as more businesses realise the importance of creating links that take products from production to the end consumer.
REGENT offers supply chain management courses designed to equip you with all the skills you need to gain meaningful employment within the supply chain.
This article will discuss the evolution of supply chain management, why it is essential, how it has changed over the years, and how you can pursue a career in this industry.
What is supply chain management?
Supply chain management (SCM) manages the entire production flow of goods or services — from raw materials to the final product.
A company creates “links” in the supply chain that move the product from suppliers to production, all the way to companies that deal directly with customers.
There are five components to supply chain management systems:
- Planning: Managers must plan and manage the resources needed to meet customer demand for the company’s products or services.
- Sourcing: Managers must find suppliers to provide the necessary materials to create products. Furthermore, they need to manage and maintain relationships with suppliers.
- Manufacturing: They need to manage activities required to accept the materials, manufacture the products, test their quality, and pack and schedule for shipping.
- Delivering: They must manage customer orders, dispatch loads, invoice clients, and receive payments.
- Returning: Managers need to create a process to take back defective products and replace them with new ones.
The goal of supply chain management is ultimately to maximise the value clients receive so the company becomes the go-to in their industry. 57% of businesses believe supply chain management gives them a competitive advantage.
Why is supply chain management critical?
Supply chain management offers the following benefits to companies:
Better quality control
Supply chain management involves establishing strict quality control measures to ensure that the entire supply chain conducts evaluations to make sure that everything is up to standard.
Using technology, managers can implement and monitor performance and quality control systems.
Reduced inventory and overhead costs
An efficient supply chain management system can reduce the need for inventory management. Thus, this decreases overhead costs associated with security and storage.
That being said, a low inventory level can increase pressure on distribution, so companies need to pin down their optimal inventory level.
Better risk mitigation
The further down the line a supply chain issue is detected, the more expensive it is to fix. Since supply chain management offers chain visibility from beginning to end, it is easier to identify these problems early. As a result, businesses can avoid more risks and higher costs.
Lower logistics costs
With rising fuel costs, shipping prices continue to increase. A logistics and supply chain specialist planning routes and distribution channels can significantly decrease these costs. This way, businesses can maintain more substantial cash flow and profits.
The history of supply chain management and its evolution
The concepts of supply chain management have evolved over the last half-century. Research has studied these changes in chronological order.
The 1950s: The Transportation Era
During this decade, transportation was the main focus. Thus, courses offered during this time only included transportation information and omitted topics like logistics, supply chain, and physical sourcing. There was also not much discussion about the concept of the total cost.
The 1960s: Physical Distribution
The study of transportation evolved into the study of logistics during this decade. Transportation remained the most crucial function of logistics, and professional logistics managers came to exist.
The 1970s: Physical Supply, Deregulation, and Logistics
In the early 1970s, the physical supply of the logistics system was taken over. Later in the decade, physical distribution and delivery were combined.
During this decade, the logistics concept was developed, and articles were published in industrial management and carriers, physical distribution, regulation, logistics, and more.
The 1980s: Transportation Deregulation, Physical Distribution, and Business Logistics
In the 1980s, deregulation continued, and the government reduced the regulation of road freight rates and entry conditions.
The Staggers Rail Act of 1980 allowed the railways to operate with less supervision by the ICC. The term physical distribution also began to fade out and was replaced by logistics.
The 1990s: Business Logistics
During the 1990s, business logistics continued to be a vital element — making companies see it as an integral part of their business strategy.
Most companies realised it offered a significant opportunity for cost savings through the implementation of systems and negotiation with suppliers. During this decade, electronics and communication technologies were logistics’s main factors.
The 2000s: Logistics and Supply Chain Management
The early years of the 21st century saw a gradual evolution from logistics to supply chain management in business and academia.
Supply chain management has come to be seen as a chain consisting of all the activities involved in sourcing and converting raw materials into finished products.
The future of supply chain management
As technology evolves, so does supply chain management. Some of the biggest advancements in the supply chain include artificial intelligence and blockchain technology. Let us have a look at how these impact the supply chain.
Artificial intelligence for seamless processes
Artificial intelligence (AI) and machine learning (ML) are already transforming industries, and their impact on supply chain management is substantial.
These technologies excel at processing large amounts of data, which makes it possible to identify patterns and solve difficult problems quicker and more effectively than ever before.
AI plays a massive role in supply chain optimisation, identifying inefficiencies in logistics. Think about delivery routes — an AI system can process data from shipping schedules, road conditions, and even weather reports to suggest the fastest, most economical path.
It is like having a supercharged satnav for entire fleets. By reducing delivery times and fuel consumption, AI does not just help businesses. It supports sustainability goals as well.
AI and ML are turning supply chains into more intelligent, more responsive networks in a world reliant on speed and precision.
Blockchain for more transparency
Supply chains are often complex, involving multiple suppliers, manufacturers, and transportation providers across the globe. This complexity makes tracking goods from start to finish difficult.
Enter blockchain technology — a system that could revolutionise transparency and accountability within the supply chain. Blockchain creates a secure, tamper-proof record of every transaction and movement within a supply chain.
Each step, from sourcing raw materials to delivering the finished product, is recorded in digital blocks connected in a chain. Once a block is filed, it cannot be altered, ensuring the data remains accurate and trustworthy.
FAQ
How can I start my career in supply chain management?
You can take several steps to start a career in supply chain management.
- First, consider whether this career path suits your interests and aspirations.
- Next, you need to gain relevant education by pursuing a diploma or degree in supply chain management.
- You can also choose to gain experience while studying. REGENT offers distance learning so you are able to work while getting your qualification.
What qualifications and skills are needed for a supply chain career?
There are many different careers in the supply chain, from logistics to procurement, and each role calls for a combination of education, technical expertise, and skills. If you are interested in a career as a supply chain manager, a degree is your best option.
Chances are you will start in an entry-level position but can work your way up into a managerial role through work experience.
How has technology impacted supply chain operations?
Technology has transformed every aspect of supply chain operations, changing how businesses function fundamentally. From manufacturing to delivery, digital tools and advanced systems have enabled supply chains to become faster, more efficient, and more reliable.
Two of the most important technological advancements include artificial intelligence for more seamless processes and blockchain technology for security and transparency.
Study logistics and supply chain management with REGENT
The best way to get into or advance your career in supply chain and logistics is to pursue education. You can take several avenues based on your career goals and circumstances.
- A Higher Certificate in Supply Chain: This will teach you the fundamental skills you need to pursue a career in supply chain management. With the distance learning option, you can work while you study. Within a year, you will have built up knowledge and abilities to create your career within the supply chain industry.
- A Bachelor of Commerce in Supply Chain Management: This three-year course will teach you advanced knowledge and skills to gain high-level employment. With it, you will have everything you need to work towards a management position within the supply chain industry.
- A Postgraduate Diploma in Supply Chain Management: Upon completing a degree, students can pursue this one-year programme that will provide in-depth knowledge to transition into the supply chain.
Are you stuck between choosing a higher certificate or degree? Contact us today, and one of our consultants will reply.
