Evolution of Supply Chain Management: Ethical Issues for Leaders.

• Author: Soni, Ramesh G.

INTRODUCTION

Fredrick Taylor, who is considered the father of scientific management, started experimenting with process improvement in the late 19th century and wrote his seminal work, titled The Principal of Scientific Management in 1911 (Tompkins, 2005). That is when the field of Supply Chain Management took root. Over the years, the field has seen evolution and accompanying name change, from Industrial Management to Production Management to Operations Management, and to the present-day appellation of Supply Chain Management. The credit for coining the title Supply Chain Management in 1982 goes to Keith Oliver--a Booz Allen Hamilton consultant in the field of logistics (Heckmann, Shorten, & Engel, 2003).

Not only the name of SCM, but the scope of the field has evolved over time. Given the rapid growth in technological advances, it is predicted that the field will see more and more role of technology in the running of supply chain system, the need for human interventions will be declining, and therefore the opportunity for employment in the field will also see a substantial decline. This raises the concern about the societal need of employment vs. the need of businesses to cut costs and make profits. This is an ethical dilemma future business leaders will face.

The following section of this paper discusses the evolution of the field of supply chain management. The next section briefly explores the criticality of SCM for organizations. The subsequent section discusses the technological advances in SCM. Following which, a discussion of job losses to automation in SCM and the ensuing ethical dilemma for future leadership will be presented. The final section of the paper will present our conclusions.

HISTORICAL EVOLUTION SUPPLY CHAIN MANAGEMENT

The modern history of operations/industrial/production management started with the industrial revolution in the mid-18th century. It is well known that some of the often cited key innovations during the industrial revolution include: James Watt's steam engine; spinning jenny to create strong yarn; power looms for weaving cloth; internal combustion engine that powered the automobile, etc. However, the field of operations or industrial management started with the scientific management era.

Scientific Management: In the very early days of scientific management, the focus was mainly work productivity through efficiency. Of course, we cannot minimize the contribution of Adam Smith, who in his book titled The Wealth of Nations in 1776, proposed the concept of division of labor (Shafritz, Ott, & Jang, 2015), where "the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons (Encyclopedia Britannica.).

Nevertheless, it was not until the early 20th century when due to the intense focus on productivity improvement through experimentation and observation--hence the term scientific management, the field flourished and drew contributions from not only Taylor but many other prominent scholars and practitioners. Two of them who stand out are: 1) Frank and Lillian Gilbreth, who developed Motion Study technique that aims to eliminate wasteful body motions in a repetitive task environment (Tompkins, 2005); and 2) Henry Ford, who developed the concept of moving assembly line, which heavily relied on the concept of division of labor, interchangeable parts, and standardization. Incidentally, Schwab (2017) would perhaps classify this period as the start of the second industrial revolution.

Human Relations Movement: Slowly, the focus shifted to not just productivity through efficiency, but to softer issues such as motivation and enrichment. Elton Mayo's (and his protege Fritz Roethlisberger's) famous Hawthorne studies are considered to be the start of the human relations era. One of the key conclusions of Mayo and Rothlisberger was "that mental attitudes, proper supervision, and informal social relationships experienced in a group were key to productivity and job satisfaction" (Anteby & Khurana, https://www.library.hbs.edu/hc/hawthorne/06.html#six). Other prominent contributors included Maslow (Hierarchy of Needs), McGregor (Theory X vs Theory Y) and Herzberg's Two Factor Theory--Motivators vs. Hygiene Factors (Tompkins, 2005).

Quantitative Modeling and Applications: Barring Charles Babbage's work on transportation cost and mail sorting analysis in the 1830s (Chaffin, 2015), the application of mathematical modelling in the field of production management started in the early 20th century. However, the widespread development of mathematical modelling started only after the advent of early electronic computers in 1950 onwards. Some of the early mathematical modeling application in the field of operations management at the beginning of the 20th century included Erlang and Palm's 1906 application of probability distribution to represent the waiting line system at AT&T telephone congestion (Chaffin, 2015); the use of modern bar charts in Germany by 1912 that graphically show time and activities (Hyatt & Weaver, 2006); Economic Order Quantity (EOQ) model developed by Ford W. Harris in 2013 (Erlenkotter, 1990); statistical process control by Walter Shewhart in 1920s (Best & Neuhauser, 2006); statistical sampling inspection concepts by Harold Dodge and Harry Romig in 1920s, and later sampling inspection tables by them in the 1940s (Hill, 1962).

World War II, by its complex and global scope, posed enormous challenges to the military operations. Hence, a team of brilliant scientists and Nobel laureates were charged to develop mathematical analysis and solutions for the military operations (Chaffin, 2015). This led to the creation of a new disciple, called Operations Research (OR). Philip M. Morse, considered the father of Operations Research, started his applied OR work for the US Navy in 1942 and published his declassified book (co-authored with George Kimball) titled, "Method of Operations Research" in 1951 (Chaffin, 2015). He stared promoting the application of OR mathematical optimization application in non-military sectors in the 1950s (INFORMS Website). Another key development in the field of OR was the Simplex method, invented by George Dantzig in 1947, that aimed to solve linear programming optimization problems. Many other approaches and techniques continued to be developed in the 1950s and later that included, CPM/PERT method for project management, job assignment heuristics, Materials Requirement Planning and its extension Manufacturing Resource Planning, etc.

Quality Management and Leant: After World War II, the industrial policy of the government of Japan intensely focused on reviving itself from the ruins of war to become a global economic power. Some of the key policies, according toYoshioka and Kawasaki (2016), included "agricultural land reform, zaibatsu dissolution, labor democratization"...