'Supply Chain' Past, Present and Future

It's been a rough few years for the U.S. and the global economy, with supply chains large and small suffering a big blow. No need to repeat here what we already know ad nauseam about the recession and recovery.

The Great Comeback is happening, but not at the pace that we all want and need. It cannot happen quickly enough for me.

Thinking of the future, I can't help but reflect on the history of my country and how supply chains have changed over the past 200 or so years. (And no, contrary to malicious rumors, I was not there to see the first ones in action.) I also look with promise to what the future of supply chains will bring.

Before the Industrial Revolution, supply chains existed, but of course in a more simplified manner. The farmer to the horse cart to the market to the corn buyer - or the iron ore to the foundry to the metalsmith to the tool buyer - these were supply chains even if that term had not yet been coined.

Then with the advent of mass manufacturing, mechanization, transportation, etc., business began to resemble what we consider today as having true supply chains. And with the inventions of the internal combustion engine, electrical power generation and mass communication technologies, things really exploded and the inter-relationships became more complicated and large scale.

And then standard supply chain models, addressing both the upstream and downstream sides, were developed. These models often produced more questions than answers, but it advanced the concept of a "supply chain" and unifying all diverse activities that swirl around it. Six Sigma and lean supply chains were embraced by most organizations. Efficient, effective processes were the focus, and some amazing advances occurred.

In the 1980s, the term "Supply Chain Management" was conceived to express the need to integrate the key business processes, from end user through original suppliers. Over the next two decades, organizations began to focus more on inventory, customer demands, logistics, supplier relations, benchmarking and other key links in the chain. Outsourcing and global sourcing became more widespread during this time and before long, we were talking about "3PLs" and "4PLs" on a regular basis.

Next came the more enlightened term, "Supply Chain Excellence," which placed a greater focus on technology, real-time information, visibility and collaboration. In fact, I took this to a higher level in several books and presentations with the "Six Levels of Supply Chain Excellence." These still apply today.

So before you tire of this history lesson, I have to ask, where does this leave us now in 2010? I think "supply chain" is positioned as an agent to transform companies for profitable growth. It is no longer merely an element or a process - the supply chain is a global asset that is just as significant as financial and human capital. It is what drives a company to beat its competition in today's global economy. Supply chains are the game changers that will help finally turn the page to economic recovery.

Here's to transforming supply chains for profitable growth!

Jim
Tomkpins Associates