Supply Chain Evolution: From Containerization to Computerization

More than 75 years later, supply chain calls for the next industry-wide standardization with the introduction of contactless delivery solutions. Brian Belcher, COO of Vector, looks at the advancements made in the supply chain to get us to this point of transformation and outlines tools to create an efficient and comprehensive supply network.

During times of massive upheaval, supply chain takes the greatest leaps forward. Over the course of the relatively short history of supply chain management, the industry has evolved from a simple, labor-intensive, and hyper-local process to a complex global network that thrives on technology. But, this evolution didn’t happen gradually; it occurred in short bursts, most frequently during times of disruption or war. 

Now, as the backbone of our world economy, supply chain management has just undergone a time of disruption due to the pandemic, and its evolution is rocketing forward. Before we look to the future of the industry, let’s reflect on its past:

Pre-1900: Before the industrial revolution, supply chains were predominantly local. For example, a farmer would grow grapes, send them to a winemaker who would ferment the grapes, and then sell the wine at a local market. Once railroads were built and semi-trucks created, goods were transported over longer distances, thus growing the supply chain.

Early 1900: Diesel engines were invented in the 1920s, and even forklifts were beginning to be designed. Other key influences include the introduction of assembly lines and mass production, championed by Ford. The ideology of creating consistency to increase efficiency laid the foundation for greater standardization in the supply chain. 

1940 and 1950: The mid-20th century brought the use of machines to reduce the labor-intensive jobs of material handling, creating supply chain workflow automation. Pallets, one of the great advances in supply chain management, helped not only mechanize but also standardize the industry. In addition, warehouse management began to take shape.

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Even more important than pallets, perhaps, was creating standardized containers that could be loaded onto trucks, trains, or ships purposefully built to this new standard. This meant that intermodal transportation became routine while containerization made goods faster and easier to transportOpens a new window , as well as cheaper for all parties. And so, global trade entered a new era where supply chains began to weave ever more complex networks.

1960-1980

• Although the physical components of the supply chain had become easier, until the 1960s, all record-keeping was done by hand. Electronically maintaining data became the next frontier for supply chain management. 
• In the mid-1970s, the first real-time warehouse management system was installed. Soon after, barcodes were adopted, identifying information but could be easily scanned. The barcode led to RFID tags, both paving the way for supply chain transformation through the Internet of Things.
• In the 1980s, computerization was advancing at such a speed that the supply chain industry could not keep up with the new possibilities this technology unlocked.

1990: Enterprise resource planning (ERP) systems were adopted, offering another stride forward in data planning and integration. Supply chain management could use ERPs to coordinate data from every side of the business, from finances to logistics to improve data accuracy and availability. 

Learn More: Does the Future of Trucking Lie in Combining AI With Cloud?

Present Day

As technology continues to evolve at a rapid pace, new tools and programs will dramatically alter how supply chains are managed. Artificial intelligence, augmented reality, and machine learning are three of the most noteworthy technologies transforming supply chains today. 

The data collected through the internet of things and the digitization outside of the four walls of the warehouse offer insightful predictive analytics that more accurate forecasting and creates process efficiencies — all in real-time. 

In addition, the 2020 global pandemic brought to light the need for increased supply chain resiliency and led the way to a contactless framework. Supply chains are no longer chains but complex ecosystems growing more rapidly than ever. Although individual retailers or shippers have gotten on board with contactless pickups and deliveries, we require an industry-wide standard for a truly contactless supply chain. 

Just like standard pallets and shipping containers allowed for intermodal transportation, the digital frontier now needs a global standardization. Across shippers, carriers, and retailers, the transition will not be easy but will quickly become the norm in the industry, just like standardization did in the physical space. Instead of standard pallets and shipping containers, we now need to look to the following three tools to create an efficient and comprehensive supply network:

• Electronic BOLs: Switching to electronic bills of lading (eBOL) will protect drivers while increasing the efficiency of pickups and deliveries by allowing drivers to stay in their cabs. 
• Digitizing driver workflow: Drivers are often still responsible for ensuring paperwork is accurate and complete at every stage of their journey. By digitizing this workflow and integrating it with tracking software, the burden is taken off the driver while making information streams available in real-time. 
• Mobile capture: Until contactless delivery becomes the industry-wide standard, mobile capture will bridge the gap. For the interim, scanning paper documents will save drivers time and allow data to be integrated more immediately. 

The last industry-wide standardization of the supply chain took place at the conclusion of World War II. At the time, standardization of the container reshaped the way the supply chain operated, making it more efficient for those involved. 

Now, more than 75 years later, the supply chain calls for the next industry-wide standardization with the introduction of contactless delivery solutions, moving away from in-person interactions and paper transfers. 

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