History of Change – Supply System
The evolution of the supply chain has highlighted that supply systems have undergone massive changes. An overview how supply system has gradually modified and enhanced and become modern supply chain system is presented below:
1970
In the ‘70s, the supply system was a star-shaped organization characterized by direct relationships between customer and suppliers. The literature was influenced by the growth poles theory. Three main typologies of supplying:
Capacity supplying
Specialization supplying
Supply-type supplying
1980
The transaction costs theory and cooperative game theory of the firm. Literature devote much of their attention to the Japanese industrial system, based on well-developed supply relationships. Supply systems evolved towards a pyramidal organization structure and mutual trust between customer and first-tier suppliers, which developed through shared knowledge and the exchange of information.
1990
Customer-supplier relationships was affected by the debate on strategic alliances Supply systems were characterized by an intense network of collaborative/competitive relationships between firms, which involved the entire supply system. Supply systems had a pyramidal organization coordinated by the customer (customer visible hand). Relationships could be represented by a variety of actions driven by the customer, which encouraged the circulation of knowledge within the system, eased the innovation process, and reduced the opportunism of individual suppliers.
2000
Supply systems were strongly influenced by the phenomenon of globalization. Influence was on extended enterprise and virtual enterprise and the impact of globalization on the supply chain. The importance of control factors influencing procurement, processing and distribution by means a suitable information system. Knowledge management was an increasingly critical factor in governing supply systems.
2010
Supply systems appeared to be affected by the debate on sustainability. New concepts such as the resilient supply system, the risk supply system, the green supply chain, the financial supply chain, and circular supply system began to spread, which highlighted that the supply chain is a complex circular process where a relevant role is played by the circulation of information and knowledge.
Today the supply chain is a multi-objective system (economic, productive, strategic, environmental, social, etc.) crossed by a variety of flows (financial, material, information, technology, etc.) In such a complex system, management of the processes of adoption, creation, storage, transfer, sharing and application of knowledge appears to be the necessary response to the new challenges posed (COVID 19) to the supply chain by globalization and sustainability issues.
Azhar Qadri
Supply Chain Expert | Operational Intelligence | Smart Manufacturing & Excellence | Supply Chain Optimization | Consultant and Trainer
MBA, BE, PE, CSSC, CPIA, CSCP CDDP, CSCM, CSCA
Trainer and Consultant - SMEDA
Executive Member - SCAP
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