Supply Chain Innovation Milestones
Supply chain management is not a recent revelation; in fact, the supply chain strategy used 5,000 years ago would give modern supply chain managers a run for their money. In ancient times, transportation technology was basic so the cost of moving goods was the primary factor, so goods were put together close to the source of raw materials.
2700 BC: The earliest example of supply chain management can be seen during the construction of the ancient Egyptian Pyramids. These early supply chain managers had to procure thousands of 2.5 ton blocks of stone, transport them across the desert and arrive at the site in time for the various stages of construction. Next time you are at the beach, try to push or pull a cooler filled with ice and beer across the sand and you will quickly appreciate how incredible this feat was.
300 BC: The invention of Roman rowing vessels (ships) revolutionized logistics and was the origin of intercontinental trade. This capability to travel across the sea allowed Alexander the Great the ability to set up a wartime supply chain moving troops, equipment and weapons into India.
700 AD – 1500: Intercontinental shipping continued to evolve with the establishment of seaports in major cities around the world. The first postal service was implemented in Europe.
1800: Development of roadways and railroad systems added another dimension to trade and supply chain logistics including the first use of the steam engine and oil powered vehicles.
1913: Henry Ford invented the moving assembly line and begins the early implementation of JIT both internally and with suppliers.
1956: The sea container was invented in the port of New Jersey, significantly impacting the evolution of world trade and globalization.
1960: Electronic Data Exchange (EDI) was first used to transfer data and documents.
1961: The first Material Requirement Planning (MRP) system was developed in Racine Wisconsin, and a year later IBM used this to develop the first Bill of Material (BOM).
1970s: The first UPC and SKU bar code was used at Marsh’s Supermarket in Troy OH.
1980: MRP was expanded to include all facets of an organization via ERP (Enterprise Resource Planning).
1984: Michael Dell developed the first make-to-order direct order fulfillment model.
1985: FedEx reinvented their express shipment model by giving their drivers hand-held computers that provide real time shipment information.
1988: Walmart implemented a Cross Docking system that allowed them to track goods across all of their distribution centers and stores.
1990s: The Internet revolutionized supply chain management and collaboration with suppliers. The Toyota Production System pioneered by Toyota’s Taiichi Ohno started to gain widespread acceptance in the US to become the foundation for today’s lean manufacturing and supply chain practices.
1998: Amazon began to fulfill orders direct from manufacturers, eliminating the need for Amazon stores and distribution centers.
2000: MIT transformed inventory management with the development of RFID (radio frequency identification) allowing a synonymous track-and-trace methodology.
Today: Supply chain management is a term that has grown enormously in the last few decades. Companies have found that SCM is a crucial element of business today and one that provides a competitive advantage to expanding in global markets.