Supply side logistics: Procurement and materials management
Introduction
As defined in chapter 1, business logistics is concerned with the efficient management of the flow of commodities from origin until consumption. In that wider chain of commodity flow is a smaller element concerned with the administration, planning and control of the various functions that permit the bringing together of various components that form the finished product. This, in essence, is materials management. The importance of materials management in the final output of the organisation is fundamental. Although the customer will not directly come into contact with the material management function, this is the process that determines the quality of the customer experience with the organisation. From the perspective of the organisation, the need to reduce costs and improve levels of customer service will continue to remain key in the competitive environment. Added to this is the growing internationalisation of operations, globalisation of customer base, increasingly shorter life cycles of products, lowering of inventories, development of increasingly probing and discerning management information systems (MIS), and tight focus on commercial success.
In this chapter, we will study materials management and the techniques used to plan, conduct and control the process.
Learning objectives
After completing the work for this chapter you should be able to:
- Identify and explore the activities of material management
- Detail various materials management techniques
- Explain the concept and importance of quality in operations.
