In the early days of modern supply chains, businesses primarily focused on three key criteria when evaluating existing suppliers or selecting new ones: price, quality, and on-time delivery. These pillars formed the foundation of business partnerships, with organizations striving to offer competitive pricing, high-quality products, and reliable delivery schedules. However, while these factors remain important, the landscape has drastically shifted due to increasing competition and technological advancements.
The Evolution of Expectations
As competitors across industries began to increase productivity and overcome common quality challenges, meeting basic standards of competitive price and flawless product condition became the minimum expectation. The focus, instead, shifted to operational excellence—putting the aim of steady reduction of delivery time center stage. The ability to continuously shorten delivery cycles, firmly embedded in the "just-in-time" principle, became the hallmark of an efficient supplier. Companies began to invest heavily in streamlining their operations, leveraging everything from logistics networks to better demand forecasting techniques (such as Boeing in the aircraft manufacturing industry).
Fascinating Fact: Did you know that during the 1970s and 1980s, large corporations like Toyota revolutionized supply chain logistics with their Just-in-Time (JIT) inventory system? JIT drastically reduced inventory costs by ensuring that suppliers delivered parts exactly when needed, cutting out waste and ensuring more efficient production cycles. This approach was a game-changer that has shaped the modern supply chain structure.
In today's world, however, competitive advantage requires more than merely JIT inventory systems. It requires just in time execution within the shortest possible time span.
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