Supply Chain Downloads

Lets take a walk down memory lane and meet some people and see some events that shaped supply chain thinking

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Unitisation of inventory  was used by Napolen

The metal can was invented to provide a way to bring safe, ample food supplies to Napoleon’s army on the battlefields.

Next time you reach for a can of chickpeas or tomatoes for the makings of a last-minute meal, pay a tribute to Nicolas François Appert.
He’s the French confectioner who responded to Emperor Napoleon Bonaparte’s offer of a cash reward to any inventor who came up with a safe and inexpensive means to preserve large amounts of food for malnourished and scurvy-suffering troops during the French Revolutionary wars.
In 1809 Appert developed a method of sealing food inside glass jars by submerging them in boiling water, thereby preventing bacteria from spoiling the contents.

Alexender The Great(336–323 BC)was a master SCM strategist
He was one of the most successful military commanders of all time and is presumed undefeated in battle. By the time of his death, he had conquered most of the world known to the ancient Greeks.

Alexander concluded that the trailing train of the supplies for his army was acting as constraint in achieving speed. He disaggregated the supply train and asked the soldiers to carry his supplies of 10 days equivalent requirement in backpacks. The movement of the army was synchronized with the harvest cycles. Alexander can be sighted as first user of concept of disaggregation to achieve flow.

The Present Context for SCM

Physical distribution management was the earliest formal logistics function. It had the scope limited to examining the physical and managerial aspects of the outbound and inbound logistics activity. With the electronics era at a later stage, providing electronic data processing capabilities, the informational subsystem gained in significance, for physical distribution management, and even became the driver of processes for this function.   

Leveraging on the capability of information handling systems, the scope of physical distribution management came to include some parts of the financial subsystem, wherein management of the cash and funds flow cycles also became a part of SCM.

SCM now has an impact on   service factors such as quality and product design. The Just-in-Time (JIT) philosophy has led to emphasis being laid on the linkages between streamlined logistics and quality control. The financial system facilitates the tying up of different activities across entities.

The physical scope of SCM is enlarged to look at the entire gamut of activities from vendor to customer. The SCM perspective looks at the stream of activities from raw material to consumption. The effectiveness of delivery to the customer has become the primary focus, taking into consideration the changing nature of demands and technologies.

The IT enabled supply Chain

The post-World War II supply chain was a set of linear, individualized processes that linked manufacturers, warehouses, wholesalers, retailers and consumers together in the form of a human/paper chain.

The 1960s saw the birth of the first inventory management software systems, which were typically customized, to aid inventory control in the manufacturing sector. In the 1970s, SCM innovations brought forth Material Requirements Planning (MRP) – a system that phases out the release of production and purchase orders to ensure that the flow of raw materials and in-process inventories matches the manufacturer’s production schedules for finished products. By the 1980s, Manufacturing Resources Planning (MRP-II) was developed, bringing with it systems that could be used for planning all manufacturing resources, including those related to operational planning, financial planning, business planning, capacity requirements planning, and master production scheduling. E.g SAP .It was MRP-II’s extension into the business enterprise that evolved into an entirely new information technology sector: Enterprise Resource Planning, or ERP.
SCM has taken on additional names, such as business-to-business or B2B. It’s processes and capabilities have also allowed for more focused, “one-on-one” extensions – namely exchanges. An exchange is a two-sided marketplace where buyers and suppliers negotiate prices and fulfill online transactions between one another and are either private or public. For example, a private exchange would involve Company A selling widgets to Company B, meeting together on a secure web site to place and fulfill orders exclusively and by invitation only; a public exchange is more of an auction or bidding place for pre-qualified subscribers or members.
 
However,However

Organisations still struggle with issues like:

1.Forecasting inaccuracy
2.Higher inventory
3.Shortages and surpluses
4.Unreliable supplies
5.Behaviour aspects of supply chain-Bullwhip effect,relationships, value of skus.

So what strategies do modern corportaes learn from these footprints on the sand of time ?

Batching  or consolidation in any process is a constraint to flow.
Where it was not possible to do away with batching, the flow was brought to as near as possible to continuous or piece flow.

In modern business, we deal with flow of material and flow of information.

Breaking of batching in information flow also leads to breaking of batching in material flow.

Prioritisation is based on protection of flow and no other consideration

In short, recognise the flow that you need to exploit. Know where to aggregate and where to disaggregate. Most importantly, recognise which flow to protect and which to destroy.

Happy Thinking