‘The real challenge is to improve the capabilities across supply chains significantly in order to drive out cost and realize revenue benefits – fast’ (Gattorna 2003, p.4). This statement both demon-strates the importance for enterprises and emphasizes the complexity of the supply chain require-ments these days. In times of strong competition almost everywhere it is especially important to meet customer needs and thus ‘achieving high levels of service’ (Taylor 1997, p.3). But where does Supply Chain Management (SCM) have its roots and what stands behind it? The purpose of this essay is to critically evaluate the development of SCM. It will both include an explanation of the differences between logistics and SCM and its reasons as well as an explana-tion why supply chain managers are now part of the senior management group. Therefore, the history of physical distribution, logistics and SCM will be mentioned, these three central terms will be defined precisely and four academic strategic approaches will be introduced briefly.
Table of Contents
1. Introduction
2. Historical evolution and term definitions
3. Logistics versus SCM
4. Supply chain managers as part of the senior management group
5. Conclusion
6. Reference list
Objectives and Topics
The essay aims to critically evaluate the historical development of Supply Chain Management (SCM), explain the conceptual differences between logistics and SCM, and analyze the rising importance of supply chain managers within senior leadership teams.
- Historical evolution of physical distribution, logistics, and SCM
- Precise definition of central industry terminology
- Analysis of four strategic approaches to logistics versus SCM
- Strategic importance of supply chain management in global business
- Role and integration of supply chain managers in the senior management group
Excerpt from the Book
Historical evolution and term definitions
Although the focus is on the development of SCM over the last 30 years it is useful to mention briefly that logistics has its origin before the 1950s after the World War II (Bowersox 2008). Consequently it was primarily used in ‘military terms’ (Ballou 2007, p.333). During the ensuing years companies faced the situation that responsibilities within their departments such as Marketing, Finance and Production were fragmented to a certain extent. Logistics was considered as being less relevant. (Ballou 2007) According to Rushton et al. (2010, p.7) ‘in this period, distribution systems were unplanned and unformulated’. Thus, Gattorna and Walters (1996, p.1) reflect Peter Drucker’s words which examine ‘distribution as ‘the last dark continent’ for business to conquer’. Physical Distribution evolved originally within the 1970s and enhanced strongly onwards. Dr Drucker stated pragmatically that ‘physical distribution is simply another way of saying ‘the whole process of business’’ (cited in Bowersox 2008, p.338). In this era this term used to explain the physical transfer of a product from the production to the marketplace (Ballou 2007). This is intensified according to McKinnon’s definition of physical distribution as being ‘the collective term for the range of activities involved in the movement of goods from point of production to final point of sale’ (McKinnon 1988, p.133). The ambition was to save costs in processes and to provide improved services as information and control became more important (Rushton et al. 2010). In the years after, physical distribution developed quickly together with the term of material management and the focus turned to the orientation of logistics by looking upstream to suppliers and downstream to customers (Bowersox 2008). Due to globalisation it was necessary to generate efficiencies through all parts of an enterprise such as a decrease of cycle times as well as a reduction of inventory costs (Hesse and Rodrigue 2004).
Chapter Summary
1. Introduction: This chapter outlines the growing complexity of supply chains due to global competition and defines the essay's goal to evaluate the evolution and strategic role of SCM.
2. Historical evolution and term definitions: This section traces the shift from physical distribution to logistics and eventually to SCM, providing key definitions and historical context.
3. Logistics versus SCM: The chapter explores the relationship between logistics and SCM using the four perspectives of relabeling, traditionalist, unionist, and intersectionist.
4. Supply chain managers as part of the senior management group: This part examines why supply chain managers have become essential members of the senior management group to drive strategic cross-functional coordination.
5. Conclusion: This section summarizes the development of SCM, reiterating the drivers of change such as globalization and the necessity of high-level management integration.
6. Reference list: This section contains all academic sources and literature used in the composition of this essay.
Keywords
Supply Chain Management, Logistics, Physical Distribution, Globalisation, Strategic Management, Value Chain, Senior Management, Customer Value, Material Management, Coordination, Collaboration, Efficiency, Business Strategy, Competitive Advantage, Integration
Frequently Asked Questions
What is the primary focus of this work?
The work focuses on critically evaluating the historical development and conceptual evolution of Supply Chain Management (SCM) and its relationship with logistics.
What are the central themes discussed in this book?
The central themes include the historical transition from physical distribution to SCM, the distinction between logistics and SCM, and the strategic positioning of supply chain managers.
What is the main objective or research question?
The objective is to explain the differences between logistics and SCM and identify why supply chain managers are increasingly integrated into the senior management group.
Which scientific methodology is used?
The paper utilizes a qualitative analysis based on an extensive literature review of historical developments and established definitions in the field of supply chain management.
What is covered in the main body of the work?
The main body covers historical terminology, strategic classification models (traditionalist, unionist, etc.), and the managerial requirements for successful supply chain leadership.
Which keywords characterize this work?
Key terms include Supply Chain Management, Logistics, Strategic Management, Value Chain, and Senior Management.
What are the four perspectives used to differentiate logistics and SCM?
The work identifies them as the relabeling, traditionalist, unionist, and intersectionist perspectives.
Why is the role of a supply chain manager considered cross-functional?
It is cross-functional because it requires integrating disparate organizational departments—such as production and marketing—to effectively manage relationships across the entire value chain.
- Arbeit zitieren
- Christian Bernhardt (Autor:in), 2012, Critically evaluate the development of Supply Chain Management over the last 30 years from its roots in physical distribution into a strategic boardroom level business issue, München, GRIN Verlag, https://www.hausarbeiten.de/document/205248
