The Rising Needs of Supply Chain Management

Over the last three decades (since the 1980s), the concept and theory of business management have undergone profound changes and development. Many old ways of doing business have been challenged and many new ideas and approaches have been created, among them are business process re-engineering, strategic management, lean thinking, agile manufacturing, balanced scorecard, blue ocean strategy, and etc. just to name a few. Supply Chain Management is undoubtedly one of those new and well-grown management approaches emerged and rapidly developed across all industries around the world.

The early publications of supply chain management in the 1980s were mainly focused on purchasing activities and cost reduction related activities. It is therefore clear that supply chain management is not one of the legacy academics subjects existed for hundreds of years, but rather a young and even nascent subject. It is only recently the business world started making use of this concept. So, the question is "why now?" A convincing answer to this question is that our business environment has changed, which includes globalization, more severe competition, heightened customer expectation, technological impact, and geopolitical factors, and so on.

Under a renewed business environment, an organization focused management approach is no longer adequate to deliver the required competitiveness. Managers must, therefore, understand that their business is only part of the supply chain that they participated and it is the supply chain that wins or loses the competition.

Scope of SCM

Thus, the arena of competition is moving from "organization against organization" to "supply chain against supply chain". The survival of any business today is no longer solely dependent on its own ability to compete but rather on the ability to cooperate within the supply chain. The seemingly independent relation between the organizations within the supply chain becomes ever more interdependent. You "sink or swim with the supply chain". It is for this reason that gives rise to the need for supply chain management.

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