Supply Chain Management (SCM) is an essential element of operational efficiency. SCM is critical to business operations, therefore it is clearly important for a company to know, understand and master the supply chain.
Supply chain’s evolution can be break down into three generations. That is an easy way for companies to understand how to be more efficient and maximize the benefits of a good supply chain. The three generations of supply chain go from supply chain 0.0 to supply chain 1.0, then to supply chain 2.0 and eventually reach supply chain 3.0.
Now, an important question should cross your mind: What are the differences between supply chain 0.0, 1.0, 2.0 and 3.0?
Supply chain evolution is quite logical. The generation 0.0 represents the absence of supply chain. Business act is then individualistic, each group is on its side working without or with very weak cross-functional communication and relationship. A company which is intending to be a well-established player in its field cannot stay at this stage.
The first main change brought by supply chain 1.0 is communication. Communication channels at horizontal level between different departments are created which is break down the silos. In order to be more efficient, people talk with each other across the departmental line and planning and scheduling become a team work. An ERP System is put into place to formalize communication.
But such a supply chain can become a little bit inflexible. If a company wants to overcome this difficulty, it has to expand its circle of collaborators. All the groups of the company have to take part in brainstorming and collaborate for the creation of a more structured planning environment. That is the aim of supply chain 2.0: Helping the finance to work together with operations and sales in order to establish a coherent set of integrated business plans to shape one single business outlook that can be agreed on and actionable by everybody.
The next step is to go beyond this to an attractive flexible and structured plan. How can we do it? It is time for the company to reach the supply chain 3.0 and stop taking its positions for granted. The solution is called the flywheel of supply chain 3.0: create collaboration with suppliers and customers in order to create products at lower cost and higher degree of matching with consumers’ expectations.