Three phases in the evolution of SCM
Pre 1970-era
- Supply chain was not considered as a competitive unit.
- Scientific methods like EOQ and SPC were applied.
- Companies attempted at Vertical integration – themselves.
1970-1980 era
- Holding inventory becomes key due to oil stock
- TQM and JIT practice become popular in japan
- Distribution is not yet the focus area
- MRP systems gain popularity in US and Europe
Post 1980 era
- Inventory drops dry up as inflation reigns in
- US manufacturers embrace JIT philosophy, JIT pushes inventory upstream
- Lower set up times, lower batch quantities result in reduction in lead times and drastic improvement in customer responsiveness.
- Suppliers and customers considered as part of the organization network
- MRP systems give way to MRP II systems, ERP and then to advanced supply chain systems involving optimizations.
Source: BSCM APICS certification course, study guide by IMRMI (india).
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