For as long as there have been products to be sold and customers to buy them, there have been supply chains. defines a supply chain as an “entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer.” The computer, phone or tablet you’re reading this on is the result of a long string of transactions between the producers of raw materials, the manufacturers of the product and the freighting companies responsible for transporting these items.

Supply chains are made up of logisticians, freighting companies, storage providers, manufacturers, analysts and supply chain managers working together to ensure the production and delivery of products.

The Evolution of Supply Chain

While the core nature of supply chains has remained the same for centuries, the actual structure of supply chains has changed significantly over the years, thanks to technological innovations. SupplyChainDive contributor Edwin Lopez writes that the concept of supply chains is constantly changing, forcing supply chain professionals and the industry to adapt to the shifting definitions. He goes on to point out that the modern concept of supply chain wasn’t widely used until the 1970s.

Effective supply chain management is becoming more important as supply chains become more complex. Lopez writes, “The [supply chain] manager … must balance real needs with theoretical buyer, supplier and corporate demands.” Efficient supply chain management involves facilitating communication between all the moving pieces in the chain, as well as preparing for contingencies that might disrupt the timeline.

Although technological innovation has been the primary catalyst for the changes in modern supply chains, other factors are at play as well. There is presently a talent shortage in the industry. As new jobs come into existence to match the complexity of the supply chain industry, there is an increased demand for workers capable of managing these new systems.

The Impact of Globalization

Given the trend toward globalization in commerce over the last few decades, supply chains have grown in scope and complexity. However, they have also become much more efficient. The increased efficiency has had a tremendous impact on the economy, helping to slow inflation. According to Investopedia, “As globalization continues, supply chain efficiencies are becoming more and more optimized, which will keep pressure on input prices.”

In order to remain competitive, successful companies put a great deal of time and effort into the optimization of their supply chains, and in turn, manufacturers and freighting companies have also trended toward optimization to retain their clients. The manufacturing costs for many goods today are a fraction of what they used to be, which has helped spur economic growth for businesses and consumers alike.

Although supply chains, along with technological innovation, have changed and expanded over time, their purpose has remained the same. “That’s why it is so important to think of supply chains as a concept, rather than a set of actors or processes,” writes Lopez. Regardless of the kind of technological disruption that shapes the future of supply chains, they will be relevant as long as there are products to be made and consumers to buy them.

Learn more about University of Wisconsin-Parkside’s online MBA with a Concentration in Supply Chain Management program.


BusinessDictionary: Supply Chain

SupplyChainDive: What Is ‘Supply Chain’?

Investopedia: Supply Chain