Materials management A systems approach

For decades the materials sector of an enterprise has been relatively un important, compared with the production and sales side, but it has gained in importance during the last 25-30 years. This is clearly indicated by the increas ing attachment of this sector to the commercial side of an enterprise, the delegation of materials-oriented tasks to highly qualified people, and -closely correlated -the integration of the materials sector with the key positions of a company's organizational hierarchy. The materials management area has become an interesting part of business life. Stimulating this development was the realization that an important part of company rationalization had been overlooked, namely, provision of ade quate supervision of the materials flow. This area was given particular atten tion, firstly, because the relatively high percentage of materials l:osts (the value of materials and cost of supervision) in the total production costs off ered the possibility of considerable cost reductions and liquidity improvem ents; and secondly, because effective supervision permits faster reactions to changes and reliable delivery times -essential considerations for a compe titive company. An important contribution to the realization of these possi bilities is found in an efficient organizational structure in combination with an integrated information system. Together, they provide coordinated super vision of the various control functions associated with the materials flow and a concentration of expertise.