The Evolution of Supply Chain Management

Supply chain management is a lucrative industry, with many businesses worldwide implementing it into their daily operations. 

Supply chain and logistics have evolved over the years 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 is the process of managing the entire production flow of goods or services — from raw materials to delivering 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: 

  1. Planning: Managers must plan and manage the resources needed to meet customer demand for the company’s products or services. 
  1. Sourcing: Managers need to find suppliers to provide the necessary materials to create products. Furthermore, they need to manage and maintain relationships with suppliers. 
  1. Manufacturing: They need to manage activities required to accept the materials, manufacture the products, test their quality, and pack and schedule for shipping. 
  1. Delivering: They must manage customer orders, dispatch loads, invoice clients, and receive payments. 
  1. 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 that 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

Working with suppliers makes the quality control process much more seamless. This is because quality control problems can be detected before reaching the client. As a result, companies can fix any issues early-on and maintain their reputations. 

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 — which is why 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 visibility of the chain 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 out routes and distribution channels can significantly decrease these costs. This way, businesses can maintain more substantial cash flow and profits.  

The evolution of supply chain management

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. Then, later in the decade, physical distribution and physical 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 1980s, 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 the two main factors affecting logistics.   

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. 

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’ll have everything you need to work your way up into a management position within the supply chain industry. 
  • A Postgraduate Diploma in Supply Chain Management: Upon completion of a degree, students can pursue this one-year programme that will provide in-depth knowledge to fulfill upper management positions.

Are you stuck between choosing a higher certificate or degree? Contact us today, and one of our consultants will get back to you.


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