Supply Chain 2.0

The question was tossed out casually, almost as an aside, near the end of a focus group held just over a decade ago.

For nearly an hour, the participants—10 logistics, transportation, and distribution professionals—had answered questions about their daily jobs, the changes they'd seen, and the challenges they faced. Then, with just a few minutes left, the facilitator announced that he was switching to a word-recognition exercise. What he wanted to know, he told the participants, was whether they had heard of the terms he was about to list. They didn't have to be able to define them or explain their relevance. All he asked was that they raise their hands if they had heard the word or phrase before.

Together with the dot-com revolution, supply chain management has transformed business as we know it.

The facilitator started out by lobbing a few softballs: Less than truckload—everyone's hand went up. Profit-and-loss statements— ditto. After a few more, the critical moment arrived. The facilitator said "supply chain"; only one hand went up. The term fared even worse in two subsequent focus groups, where not a single participant indicated that he or she had heard of the "supply chain."

The publishing company that sponsored the focus groups had its answer: The term "supply chain" was clearly not part of the mainstream business lexicon in January 1996. It hadn't even caught on with those you'd expect to find at the forefront of the incipient supply chain revolution. But those publishing folks were undaunted. Roughly 18 months later, they launched the first magazine with "supply chain" in its title, and Supply Chain Management Review was born.

The road has been bumpy at times. For the dot-coms, the obstacles that emerged were largely financial. After six years of overheated growth, the sector collapsed when the investment bubble burst. The supply chain revolution, by contrast, was slow getting out of the gate, largely because of organizational barriers. For years, a frequent complaint was that "functional silos" inhibited information sharing and collaboration, making it all but impossible to integrate supply chain activities.

Ten years on, their faith in the concept has been vindicated. Contrary to the critics' predictions, "supply chain management" has proved to be more than just another buzzword. In business as we know it. Today, there chain management has transformed revolution, which took off at about ment. Together with the dot-com fact, the concept has turned out to be a game-changing developthe same time, the practice of supply are multiple magazines (including this one) with "supply chain" in their titles, and the term shows up regularly in mainstream publications like BusinessWeek.

But what a difference a decade makes. Today, the dot-com sector is on the upswing again, enjoying success with a business model dubbed Web 2.0. It's a similar story with supply chain management. By now, many companies have smashed the functional silos and moved on to the next phase: the full integration of activities not only within a company, but also with all of its supply chain partners. Call it Supply Chain 2.0.