How Supply Chain is (Still) Underappreciated


Supply chain management / General 254 Views

In 2015 I discussed the “Great Moderation” of the 1980s and 1990s and how the most prevalent view among economists is that sound monetary policy was to credit for the macroeconomic stability over that time period. Meanwhile, I learned that a handful of other economists suggest that technology driven inventory management improvements were the driver of this macroeconomic stability. Of course, the operations/supply chain view took the back seat to the financial/monetary view.

Supply chain advancements are credited with efficiency improvements within organizations but are often overlooked for their beneficial economic side-effects (benefit externalities in economics speak). In this case, greater economic stability is the beneficial side-effect of inventory management advancements. In general, I believe that economists tend to overvalue the role of financial and monetary contributions to the macroeconomic environment, while underappreciating the role of business operations, supply chain in particular.

Is Software Also Underappreciated?

In last week’s Logistics Viewpoints blog post titled “A Software Revolution that is Hard to See” ARC’s Harry Forbes explained his optimism about the positive developments occurring in the cloud software world and the productivity potential of these developments. However, he noted that his optimism is atypical due to the lack of physical presence to this software, rendering it largely unappreciated by the general population. I can relate to Harry’s viewpoint about the underappreciation of cloud software, as I believe the same holds true for supply chain software. In fact, .........