The evolution or History of Materials Management starts with the US and World War I. Before 1st World war, people were unaware about the importance of Materials Management, Inventory Control and Supply chain Management. The concept of Material Management was strengthen with the research papers published by Harvard University. The Abstract / summary of evolution of Materials management is given as below.
EVOLUTION OF MATERIALS MANAGEMENT
Slowly Evolved, Recent origin
Root of evolution – US Economy: World War I
Before World War I (Before 1914): Material Availability Large Qty.
World War I (From 1914 to 1918): Threat of materials shortage during war
1920-21: Heavy inventorying during the business collapse
1920: Control of materials management and the maintenance and repair of materials was the responsibility of purchasing managers in some industry.
1926-29: Profitless prosperity, prolonged depression, all contributed to a better understanding of the inventory problem
1930: Better understanding of Inventory Problems
Improved means of transportation and communications, recognition of unnecessary costs of excessive inventory, rapid technological changes in product and manufacturing
Impact of scientific management
1939-1945: Increase in military personnel and materials requirement in US Defence force, entered as a single largest buyer with increasing emphasis on quality standards
1945: After World War II: Shortage of Material
Increased Production , Population
Need of Material Management
Birth to an entirely new approach and idea in the management field i.e. Material Management
Extensive studies in industrial purchasing practices by Prof. Howard T. Lewis of the Harvard Business School
Prof. Howard Lewis made recommendations to many companies for the establishment of a new managerial position viz. the director of materials (including purchasing, inventory control, receiving, inspection, warehousing, traffic etc.)
1970: Significant changes
Full History of Materials Management
Material management as a discipline was rather slow to evolve as compared to production and marketing function. Some elements of the function practiced across organization all levels of but the birth of material management as a field of study and one of great relevance of business performance is of recent origin and had its root in the US economy.
In the past three centuries the human civilization developed from a supply constrained handicraft economy to today’s service economy. Over the years from the simple mechanism of exchange of goods and services. It has transformed into complex system of industrial production and commercial system. It was during and after the world war 1st that supply’s to many of the manufacturing organizations got disrupted. The shortage during the war and heavy inventories build up during the great depression of 1930’s. both contributed to a better realization of inventories problem. This only helped to understand the importance of material management with the advent of industrial revolution as a result of improved technology coupled with economic prosperity, the focus shifted to mass production and marketing. There was a premium on resources. The population explosion along with income revolution further fuelled the demand for a whole range of product. The 1970’s witnessed significant changes in the character of material management.
Evolution of Materials Management in India
Tisco Was the Ist Company to establish “Central Purchase Dept.” in corporate.
1922: An Indian stores department established
Information Technology Contribution
Competitive Edge: Innovation in Technology and Techniques, Virtual Reality, & Globalization
Understanding of Current as well as future global trends
Integrated Material Management, SCM & Logistics.
An Indian stores department established 1922, was the precursor was thrown into a global system D.G.S. and D (Directorate general of supplies and Disposals). In the corporate sector TISCO was the first one to establish a central purchase department.
With the liberalization and opening up of the economy our country was thrown into a global system from it’s traditionally insular and self-reliant stance. For the Indian corporate world it meant a totally different ball game, from a government protected system, it found itself in an environment where it had to content with market forces, large corporation with significant brand equity and also follows different sources strategies and practices.
Again with the new millennium, things looked extraordinary, exciting as well as daunting. Enabling technologies, especially information technology, have created a whole new realm of virtual reality, which has changed many paradigms of how business is conducted globally.
India also faces the of not only integrating itself with the rest of the world, but more importantly, of understanding future global trends to work towards finding a place among the leading economies. This would involve leveraging significant advantages, such a qualified manpower pool and natural resources to the fullest event. The competitive edge will come from a companies ability to innovate, create and used the entrepreneurial energies of its people.
The atmosphere is ripe for a professional approach towards material function.
Materials Management, A. K. Datta, 2nd edition, PHI
Material and logistics management, L C Jhamb, tenth edition, everest publishing house