The metamorphosis of supply chain management

Is your organisation’s supply chain a crawling caterpillar or has it morphed into a sprightly, soaring butterfly? MJ Schoemaker, president of SAPICS, The Professional Body for Supply Chain Management in Southern Africa, writes that supply chains have had to change dramatically in recent years.

This metamorphosis of supply chains has been accelerated by a variety of chaotic disruptions, ranging from the pandemic, wars, and climate catastrophes to the container shipping and energy crises. South African businesses have had to contend with riots and unrest, freight and port issues, the electricity crisis, and (most recently) water outages.

Supply chains and their management have been garnering more interest and attention than ever before. From a field that not many people understood or even knew much about, supply chain management became an important, in-demand profession when the Covid-19 crisis thrust it into the spotlight. More people started to understand that virtually everything we use from day to day reaches us through supply chains, and that they are about more than just moving goods from A to B. With subsequent disruptions, supply chain management has continued to make headlines, and it continues to evolve.

Going back to the start

The Independent newspaper in the UK is credited with using the term “supply chain” for the first time in 1905. From that era until the 1950s, global supply chains started to take shape. The 20^th century witnessed a shift towards integrated supply chain systems, particularly during World War II, when military logistics demanded precise coordination. Global post-war trade expansion fuelled the need for efficient supply chain management, leading to the development of concepts like just-in-time (JIT) and total quality management (TQM) in the latter half of the century.

“Supply chain management” was coined in 1982 by British logistician Keith Oliver in an interview with British daily The Financial Times. “Supply chain management 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,” said Oliver. “It spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.”

While it is still a relatively young field compared to many other professions, supply chain management has come a long way in the last four decades. Volatility and disruption are now the norm in supply chains. According to a report by the World Economic Forum, many chief executives now identify supply chain turmoil as the greatest threat to their companies’ growth and their countries’ economies.

The rise of the machines

This turmoil has fuelled the rise of supply chain machines, but unlike those in the third Terminator movie, the technology in today’s supply chains plays a critical, often life-saving role. Artificial intelligence (AI), analytics, big data, machine learning, and intelligent robotics are all part of the arsenal used by supply chain managers to handle and even predict disruptions, ensuring the uninterrupted movement of goods, including essential medicines.

Technology is enhancing supply chain visibility and enabling synchronised planning and execution, data-driven decision-making, predictability, and supply chain agility. Supply chain design now encompasses smart logistics solutions based on the Internet of Things (IoT) and next-generation robotics; mobile and stationary robots are assisting workers with warehousing, transportation, and last-mile delivery tasks.

While some of today’s supply chain technology may sound like science fiction, some aspects of supply chain management are going back to basics – to a time when transport and infrastructure limitations meant that supply chains were typically local and restricted to regions. Many organisations are moving their manufacturing closer to home to protect against supply chain disruptions; supplier diversification, localisation, and nearshoring are some of the key lessons delivered by the pandemic and other disruptions.

Unlike the transformation of a caterpillar into a butterfly, supply chain metamorphosis never ends. Supply chain disruptions are expected to continue in 2024 and beyond, with war, weather, and inflation cited by many experts as some of the causes. Change is the only constant that supply chain managers should count on, and it is vital to stay connected, informed, and up to date – to share knowledge, network, and build new skills and expertise.

The annual SAPICS Conference, the leading event in Africa for supply chain professionals, is the ideal place to do this. In 2024, the 46^th SAPICS Conference will be held under the theme of “Supply Chain Metamorphosis”. Hosted by SAPICS in association with the South African Association of Freight Forwarders (SAAFF) for the second consecutive year, it will explore the changes, challenges, best practices, and opportunities reshaping the world of supply chain management. All supply chain role players are urged to attend this important event, which takes place in Cape Town from 9 to 12 June. For more information, please call +27 (0) 10 013 3442 or email info@sapics.org.za.