Brief History on Supply Chain Management for Interim Management Teams
Over the past 200 years, the way the supply chain works has changed dramatically thanks to interim management teams.
If you are on an interim management team, understanding how to manage your companies supply chain is a fundamental step in having a successful company. Supply chain management is basically how all the goods and resources your company requires, move through the various steps of production, before reaching the customer.
Here we will give you a crash course on the history of supply chain management, so you can better understand how it works today.
The 19th century saw the industrial revolution, in which people were leaving their rural homes to move into the cities to work in factories. How this affected the supply chain, was that this was the first time in which mass production was being used everywhere.
Items such as cars and clothes were now being made in huge batches. This led to the whole “chain” idea, where resources constantly had to be inputted into the factory, so production could continue. A downside to this was that the quality of goods significantly went down when compared to items such as clothes which were made in small shops.
The early 20th century was when we saw globalization becoming an integral factor in economics. This also complicated the supply chain for many companies, as the components for their products were now coming from multiple countries.
Due to this, there was a focus on efficient logistics, as companies were figuring out how to bring these inputs in quickly and cheaply. This created competition, which solved the issue of poor quality, since if a company wanted to be successful in the global stage, they needed good quality items made from good quality resources.
Outsourcing through interim management teams
With globalization came outsourcing in the late 20th century. Companies were trying to give their customers high-quality goods at the lowest price. The issue with this was that in the west, where a majority of the global companies were based in during this time, workers were unionized, which led to increased wages and benefits.
Obviously, this was not a good thing when companies were trying to lower prices. Therefore, organizations moved their factories to other countries. This move made manufacturing costs extremely low, which in turn lowered prices for customers.
This brief history leads us to the modern age, where we have all of the aspects of the supply chain from the past 200 years. Everything from dog food to pencils are being mass produced on large scales, but they aren’t being made in the countries where these companies are based in. Due to this, interim management teams have a tough job of trying to manage these global supply chains. If managed correctly, your company can be on the right track to success.