THE HISTORY Of

SUPPLY CHAIN
Presented by : Catherine Terrones - Ysulat
Intended Learning Outcome

At the end of the module, the students should be able to:

1. Understand the history of the supply chain management;
2. Familiarize the evolution of the supply chain management;
3. Explain the importance of the supply chain in the business; and
4. Understand the role and structure of supply chains
 BEFORE 1900 • vast majority of supply chain were local in nature, and typically restricted to
Local and Regional regions.
Supply and • railroads were laid
Manufacturing • rudimentary hand trucks and other tools made it easier to handle goods

EARLY 20th
CENTURY • first semi-truck was invented at the very end of the 19th century.
Improvements to
Trucking and Warehouses

1930s TO 1940s • logistics became very important during World War II

Greater Mechanization • development of pallets, pallet handling and storage systems

1950s
Standardization and the • a way of using specialized intermodal container assets known as shipping
Introduction of containers
Containerization
rudimentary hand truck
Mack Truck
Pallet at war time
Pallet today
Plastic Pallet
Benefits of using shipping containers:

• Containers are loaded and unloaded using mechanized

equipment, cranes and automated systems. This is a
much quicker and more efficient process than
handling multiple pieces of irregularly-shaped
shipments or cargo.
• Containers are easily shipped over long distances by
truck, train or ocean vessel, with minimal time spent
transferring between different types of transport.
• Containers are transferred without being opened. This
significantly reduces the risk of tampering or theft.
• The rigid construction of containers protects the goods
inside from damage and environmental factors.
• Containers are tracked using unique codes, and
computerized systems, so supply chain managers The first shipping containers were invented
know where specific goods are in any part of the during the mid-1950s.
supply chain.
TYPES OF CONTAINER
UNITS AND DESIGNS
FOR SHIPPING CARGO
1. Dry storage container

• most commonly used shipping

containers
• used for shipping of dry
materials
• sizes: 20 ft, 40 ft, and 10 ft.
 2. Flat rack container 3. Open top container

• with collapsible sides

• with a convertible top that can be
• like a simple storage shipping containers completely removed to make an open –top
where the sides can be folded so as to make a so that materials of any height can be
flat rackn for shipping of a wide variety of shipped immediately.
goods
 4. Tunnel container
• with doors on both ends of the
container
• extremely helpful in quick
loading and unloading of
materials
5. Open side storage container
• with doors that can change into
completely open sides providing
a much wider room for loading
of materials.
 6. Double doors container 7. Refrigerated ISO containers

• provided double doors, making a wider • temperature regulated shipping containers

room for loading and unloading of that always have a carefully controlled low
materials temperature

• construction materials include steel, • exclusively used for shipment of perishable

iron, etc. in standardized sizes of 20 ft substances like fruits and vegetables over
and 40 ft. long distances
 8. Insulated or 9. Tanks
thermal containers

• shipping storage containers that come with • used mostly for transportation of liquid
a regulated temperature control allowing materials
them to maintain a higher temperature
• mostly made of strong steel or other anti-
• most suitable for long-distance corrosive materials providing them with
transportation of products long life and protection to the materials.
 10. Cargo storage roll
11. Half height containers
container
• foldable container • made mostly of steel
• made for purpose of transporting sets or stacks • half the height of full-sized containers
of materials • used especially for good like coal, stones, etc.
• made of thick and strong wire mesh along which need easy loading and unloading
with rollers that allows their easy movement
 12. Car carriers
• made especially for shipment of cars
over long distances
• they come with collapsible sides that
help a car fit snugly inside the containers
without the risk of being damaged or
moving from the spot
13. Intermediate bulk shift
containers
• made solely for the purpose of intermediate
shipping of goods
• designed to handle large amounts of materials
• made for the purpose of shipping materials to a
destination where they can be further packed and
sent off to final spot.
 14. Drums

• circular shipping containers

• made from a choice of materials like steel,

lightweight metals, fibre, hard plastic, etc.

• most suitable for bulk transport of liquid

materials

• smaller in size but due to their shape, may need

extra space
15. Special purpose container
• custom made for specialized purposes
• mostly used for high profile services like the
shipment of weapons and arson
• their construction and material composition depend
on the special purpose they need to cater to
16. Swap
bodies
• special kind of containers used mostly in Europe
• not made according to the ISO standards
• not standardized shipping container units but
extremely useful all the same
• provided with a strong bottom and a convertible
top making them suitable for shipping of many
types of products.
 1980s and 1990s
Further Effeciencies and the Shift to a Global
Model

• 1980s saw supply chain stakeholders, transportation manufacturers and more

building on their successes.

• 1983 – “Supply Chain Management” was coined, and personal computing further
revolutionized the supply chain.

• New software like flexible spreadsheets, mapping, and route planning made it
easier to track costs and maximize profits

• MIT also developed RFID tags

LOGISTICS – the function responsible for the flow of
materials from suppliers into an organization, through
operations within the organization, and then out to customers.

MATERIALS – all things that an organization moves to

create its products. These materials can be both tangible (such
as raw materials) and intangible (such as information)
Every organisation delivers products to its customers. Traditionally we have described these
products as either goods or services.

Car House Bespoke Fastfood Health Sea

Education
Makers builder tailor restaurant service cruise

Spectrum of Products
Operations Creating Outputs
 Customers
p assed to create

Su pp ly o f D em an d fo r
pro du cts products

arran g e p assed to

Operations

Other outputs Other inputs

Cycle of Supply and Demand

The Role of Logistics
SUPPLY CHAIN – consists of the series of activities
and organizations that materials move through on their
journey from initial suppliers to final customers.

The supply chain describes the total journey of

materials as they move ‘from dirt to dirt’.

Sometimes, the supply chain goes beyond the final

customer to add recycling and re-use of materials.
Outline
of the
Supply
Chain
for
Paper
 Structure of the supply chain

◦ The simplest view of a supply chain has a single product moving

through a series of organizations, each of which somehow adds
value to the products.
◦ Taking one organization’s point of view, activities in front of it
– moving materials inwards – are called upstream; those after
the organization – moving materials outwards – are called
downstream.
 U pstre am activities D ow nstream activities

Initial Th ird Second First First tier Second Third Final

supplie r tier tier tier customer tier tier cu stom e r
sup plie r supplie r supplier custom er custom er

O R G AN IS AT IO N

Activities in a Supply Chain

Supply chain around a manufacturer
 Benefits of supply chain
◦ Supply chains exist to overcome the gaps created when suppliers are some distance away
from customers.
◦ Supply chain can also make movements a lot simpler.
Some other benefits of well-designed supply chains (where we use the terms
‘wholesaler’ and ‘retailer’ as a convenient label for intermediaries):

◦ Producers locate operations in the best locations, regardless of the locations of their
customers.

◦ By concentrating operations in large facilities, producers can get economies of scale.

◦ Producers do not keep large stocks of finished goods, as these are held further down the
supply chain nearer to customers.

◦ Wholesalers are near to retailer and have short lead times.

◦ Retailers carry less stock as wholesalers provide reliable deliveries.

◦ Retailers can have small operations, giving a responsive service near to customers

◦ Transport is simpler, with fewer, larger deliveries reducing costs.

◦ Organizations can develop expertise in specific types of operation.

 ACTIVITIES
OF LOGISTICS
Separate Activities
PROCUREMENT OR PURCHASING
The flow of materials through an organization is usually initiated when procurement
sends a purchase order to a supplier.

INWARD TRANSPORT OR TRAFFIC

actually moves materials from suppliers to the organization’s receiving area.

RECEIVING
makes sure that materials delivered correspond to the order, acknowledges
receipt, unloads delivery vehicles, inspects materials for damage, and sorts them.

WAREHOUSING OR STORES
moves materials into storage, and takes care of them until they are needed.
STOCK CONTROL
sets the policies for inventory

ORDER PICKING
finds and removes materials from stores

MATERIALS HANDLING
moves materials through the operations within an organization.

OUTWARD TRANSPORT
takes materials from the departure area and delivers them to customers (with
concerns that are similar to inward transport)
PHYSICAL DISTRIBUTION MANAGEMENT
activities that deliver finished goods to customers, including outward
transport.

RECYCLING, RETURNS AND WASTE DISPOSAL

Sometimes there are associated materials which are returned to suppliers for
reuse. Some materials are not reused, but are brought back for recycling. There are
materials that cannot be used again, but are brought back for safe disposal.

Activities that return materials back to an organization are called reverse logistics or reverse
distribution.

LOCATION
Some of the logistics activities can be done in different location.
COMMUNICATION
Alongside the physical flow of materials is the associated flow of
information.