The term “supply chain” was first used in the early 1980´s, but the very idea of supply chain would have never come into existence if it weren’t for the existence of the armed forces. When Napoleon set out to conquer Europe, industry could “re-supply” troops with weapons, food, and supplies directly to the frontlines thanks to mass production and advancements in transportation. This idea of “re-supply” and demand quickly spread across the Atlantic and by the mid-1800’s, the U.S. was following the lead of its European cousins in establishing a supply chain to propel the logistics of the Civil War. To supply these goods across the country, railroad lines were built at amazing speeds, creating a new era in shared factory suppliers and standardization.
Some experts claim that the birth of supply chain management, came in 1913 with the introduction of the Ford Model T assembly line, and that it reached one of its greatest peaks, in helping the Allies win World War II. The incredible speed at which the Allies´ supply chain was built makes it even greater. Many historians believe military success hinges more on logistics than strategic thinking. In fact, all the logistics planning that went into the war gave birth to a new field called operations research. And for this reason, during the world wars the United States created the Department of Defense and the materials industry. Military supply chain management is a cross-functional approach to procuring, producing and delivering products and services for military applications. The level of information gathered, processes, analyzed and used for decision making is the key aspect in supply chain management. An SCM-based organization handles and forecasts the factors affecting directly or indirectly their supplier or suppliers or on their client or clients. In military supply chains, due to the high costs of a stock-out (potentially placing lives in danger), keeping huge inventory is a more acceptable practice. Some examples of these are the ammunition dump and oil depot. That is why the concept of “just in time” is not supported. Military needs call for reliability of supply during peace and war, as compared to price and technology factors.
The Allies used supply chain management principles to move military supplies and armaments across the Pacific Ocean at strategic times. The U.S. shipped more than 17 million tons of cargo to the United Kingdom. Including 800,000 pints of blood plasma, 125 million maps, a replacement rail network, cigarettes, toothbrushes, and prefabricated harbors.
The Allies faced logistics concerns in every aspect of planning the invasion of Normandy (the largest amphibious invasion in history). In amassing supplies prior to the invasion, the Allies faced the challenge of inhospitable environmental conditions. Strong winds and heavy surf regularly interfered with landing operations. The construction of an artificial harbor on Omaha beach was a brilliant logistical solution. The harbor, known as Mulberry A, included a floating pier, breakwaters, and three causeways. World War II played a pivotal role in supply chain history, and the basics of successful supply chain management. By displaying its worth in contributing to the Allies’ success, supply chain management as a discipline proved that if it could win wars, it could certainly improve organizations.
The German re-armament focused on a fast build-up of arms and equipment. To achieve this, many different models were produced by a wide range of companies. The cost of maintenance and supply due to the wide range of different vehicles and weapons became a problem. In 1943 the US Army Air Force had 18 types of aircraft, whereas Germany had 50. This problem was prevalent in other areas too, like the armament of planes, to a certain degree due to the control of the arms industry by the Luftwaffe. Until 1944 as the only branch of the German Armed Forces, it controlled its own industry. Which was in contrast to the United States, where the industry delivered the units most suited for mass production to the military. Now, these circumstances were already problematic, but although German engineering is usually highly regarded throughout the world, the relationship of the military and engineering was complicated.
Many military officers had a lack of technical understanding and were fine with it, some were even blatantly ignorant, treating the engineers like mere servants. The primacy of the operational-tactical thinking clearly stated that the supply chain management acts as a servant to the operational and tactical command. This is again in contrast to the Allies, where it is stated that every operational commander had to be aware of the supply/logistical situation. The German army was well suited for small and short wars, but not for the war prolonged and turned into a war of attrition. To a certain degree, the Luftwaffe resembled very well the so called “Knights of the Skies”, yet in a time when the outcome of a war was mostly determined by “mere servants”, they needed to be more than that.
After World War II, Japan became the world leader in production management and supply chain management which includes how to design, manufacture, transport, store, deliver, and manage products. They faced various difficulties: Japan’s lack of cash made it difficult for industry to finance the big-batch, large inventory production methods common elsewhere. They also lacked space to build big factories loaded with inventory. The islands and are lacking in natural resources with which to build products. High unemployment, which meant that labor efficiency methods were not an obvious pathway to industrial success. But the way they overcame this was inspiring: The Japanese leaned out their processes, building smaller factories, housing in the factory only those materials on which work was currently being done. Inventory levels were kept low, investment in in-process inventories was at a minimum, and the investment in purchased natural resources was quickly turned around so that additional materials were purchased.