It has been over 40 years since the term “Supply Chain Management” was coined. Over that time period, especially in the last few years, the term has served to create a general understanding of what the field involves.
But what “Supply Chain” has come to symbolize in the past may not be adequate to describe what it will need to mean in the future.
Has the time come to find a new name to describe this field? Has the time to come to rename and reinvent Supply Chain Management?
History
In 1982 Keith Oliver defined the Supply Chain concept as follows: “Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption”.
But the reality is that all of those functions existing long before the term was created. In fact they existed for many millennia.
Ancient civilizations created, deployed, and perpetuated techniques and processes for the planning and movement of materials, the management of inventories and the fabrication of goods, transportation routes and structures.
Coincidentally I also began my career in 1982. It was many years before I heard “Supply Chain” actually used and starting to appear on organization charts and in job titles.
For most of the 40 years since 1982 “Supply Chain Management” has been widely used, recognized and understand within companies and industries and associations. Within the last 10-20 years it has become more recognized and acknowledged in academia with universities and colleges now offering degreed programs in Supply Chain.
But it has only been since 2019 when the global Coronavirus pandemic impacted the world, that general society and humanity, including government leaders and politicians and the media, have been exposed to “Supply Chain Management”. Before the pandemic the average person would never have heard of the phrase.
This brings us to today where we are now at a major inflection point in the history of Supply Chain.
Antiquated views of what falls under this umbrella term, combined with a pending Renaissance of what this function will become, and a world that is largely new to the phrase in the first place, all suggest that now may be the time to reinvent and rename Supply Chain Management.
The Time
One of the problems that Supply Chain Management has always had is getting respect.
Supply Chain involves what have been traditionally considered lower value back office functions such as Purchasing, Warehousing, Logistics, and Material Handling. These functions have been view as being necessary but relatively unimportant as compared to higher profile functions such as Sales and Marketing or Research and Development.
The reality is that these functions are extremely important. If nothing else did it, it took a global pandemic that shut down the world to show everyone just how important Supply Chain was to the very survival and existence of any company, industry, or institution.
Still the baggage of traditional views of Supply Chain persist. Far too many companies don’t have executives who understand Supply Chain and represent it for the leadership function that it is.
The future also necessitates a rethink by everyone in this field. We are at the beginning of what will be the digitalization of every aspect of our lives, for decades to come. Core to that digitalization is the creation and deployment of the Digital Supply Chain.
The Digital Supply Chain brings together all of advanced technologies: Cloud Computing, Blockchain, Virtual Reality, Autonomous Vehicles, Predictive Analytics, Machine Learning, Big Data, Control Towers, Robotics, 3D Printing, and on and on.
The Digital Supply Chain requires the creation of an electronic connected end-to-end enterprise inclusive of every business process including all suppliers, operating entities, customers and functions. Only Supply Chain can lead and create this environment.
The digital future will demand dramatically different skills and talents from its leaders and practitioners. Even the current educational and professional certification programs are not keeping up with the quantum leap to skills that will be needed in the future.
This future is a dramatic departure from the traditionally limited view of what Supply Chain is. Given old and current baggage and antiquated view of what Supply Chain is, it seems obvious that using this term in the future will impede the progress that we need to make to realize a digital future.
The Need
A rose by any other name is still a rose. That much is true. But Supply Chain by any other name is no longer Supply Chain as it has been traditionally viewed. And that is a good thing.
Supply Chain has to shake off the old views of it being a lesser valued back office function. I would have thought that all of the Supply Chain disruptions experienced during and after the global pandemic would have changed these views. But they didn’t for many.
The problem is that once the pressures of the pandemic eased off too many people when back to their old ways of doing things and embraced their old paradigms once again.
The words in “Supply Chain Management” underscore the problem and in turn the need for a change.
“Supply” in itself is very limiting in terms of perception, ignoring the reality of the “Demand” half of the equation. Demand, supply, planning and the management of it all is a part of the work dynamic here.
“Chain” is also limiting. It implies a linear, serial sequencing of activities or players or processes. The reality is that Supply Chains are high complex with innumerable combinations and permutations of materials, processes, constituents, entities, logistics, metrics, systems and customers.
And “Management” also has a somewhat passive feel when thinking about the future. The future requires proactive and aggressive leadership, not just management. We aren’t going to manage ourselves into a digital future.
The future is about change. It always has been and it always will be. We are entering a long period of Supply Chain Renaissance. Making this change happens requires all of the support and confidence and resource and resolve that can be amassed.
Now it can also be argued that there is no need. Given that Supply Chain is now a phrase that has been heard by most people on the planet, even if they don’t completely understand it, it is both too late and unnecessary to make this change.
New Names for SCM
If you accept that it is both the time to rename Supply Chain, and the need exists, what names would you consider.
As stated previously I believe that “Supply” is too limiting. “Supply and Demand” are also too limiting. The future of this function requires the holistic end-to-end management of every aspect of any business or entity.
“Chain” also doesn’t do justice to the incredible complexity that professional need to keep running effectively and efficiently.
In light of this discussion we like to think about alternatives to “Supply Chain Management” such as:
- Enterprise Operations Management
- Digital Operations Leadership
- Digital Network Management
- Enterprise Network Management
- …
What ideas do you have as alternative names to “Supply Chain Management” as we work to reinvent Supply Chain?
Let’s Reinvent Supply Chain
I believe that the reality is that “Supply Chain Management” is the nomenclature that is here to stay. Any attempts at changing this name and expecting wide spread global adoption would take another 50 years for sure.
As such the reinvention of Supply Chain Management will instead require those in the profession to take the lead in getting their voices heard in terms of the importance of SCM, the leading role that it must play, and the dependence of a digital future and success on this most critical function.
Supply Chain is a great profession and career path. Now more than ever more of the world has some exposure to it and appreciates its importance. Let’s capitalize on this awareness and this momentum and leverage this to elevate Supply Chain Management now and in the future!
One way or another we must reinvent Supply Chain.
Excellent article about Supply Chain Management and just exactly “What it is?” Supply chains are the resources that generate revenue for the business! Demand planning belongs to Sales and Finance and drives the supply chains and spend. Enterprise Resource Planning?