1.2.1 Materials management or supply-side logistics
The activities of sourcing, procuring and holding in readiness the raw materials, components, sub-assemblies and packaging materials used by manufacturing enterprises for production traditionally came under the control of the executive responsible for production. From the early 1950s through to the 1970s, production executives wielded considerable power and authority in western manufacturing enterprises. These enterprises focussed on economical production, which often involved long production runs of finished goods inventory.
In part, this was due to the difficulty of scheduling and controlling production with mainly manual or rudimentary computer systems. Also, a focus on lowest cost per unit of production dominated management thinking. Frequently, this resulted in the cost of holding large finished goods inventories being ignored or considered to be someone else's problem.
During the 1970s, improvements in mainframe computing power and the introduction of smaller and cheaper mini-computers made the production-planning task easier. Planning techniques such as Materials Requirements Planning (MRP) and later Manufacturing Resource Planning (MRPII) provided greater materials visibility to those charged with planning and control of the production process. It also provided a relatively efficient means of matching production requirements with finished goods inventories and forecasts of customer demand for finished goods.
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