Evolution of Materials Management

Period One: The Early Years (18301900)

Charles Babbages book On the economy of machinery and manufacturers, published in 1832, referred to the importance of the purchasing function. Babbage wrote that a central officer responsible for operating mines was a materials man who selects, purchases, receives, and delivers all articles required. An 1870 article said that judicious purchasing could save big bucks.

Period One: The Early Years (18301900)

Savings potential and profit-leverage effect of purchasing became popular. The railroads, which were probably the largest organizations in the United States at that time , recognized the crucial impact of purchasing. The late 1800s signaled the beginning of organizing purchasing as a separate corporate function requiring specialized expertise.

Period Two: Growth of Purchasing Fundamentals (1900-1939)

This era also witnessed the development of basic purchasing procedures and ideas. Proper specifications, supplier relations, organization of purchasing, started becoming popular. Purchasing gained importance during World War I because of its role in obtaining vital war materials.

Period Three: The War Years (1940-1946)

World War II introduced a new period in purchasing history. The emphasis on obtaining required (and scarce) materials during the war influenced a growth in purchasing interest. The membership of the National Association of Purchasing Agents increased from 3,400 in 1934 to 5,500 in 1940 to 9,400 in the autumn of 1945.

Period Four: The Quiet Years (1947-Mid-1960s )

The heightened awareness of purchasing that existed during World War II did not carry over to the postwar years. It was hard to visualize a company becoming more successful than its competitors because of its superior procurement. The postwar period saw the development of the value analysis technique, pioneered by General Electric in 1947

Period Five: Materials Management Comes of Age (Mid-1960s-Late 1970s)

The mid-1960s witnessed a dramatic growth of the materials management concept. The combined related functions such as purchasing, inventory control, receiving, and stores under the authority of one individual. The overall objective of materials management was to solve materials problems from a total system viewpoint rather than the viewpoint of individual functions or activities

Period Five: Materials Management Comes of Age (Mid-1960s-Late 1970s)

The various functions that might fall under the materials umbrella included material planning and control, inventory planning and control, materials and procurement research, purchasing, incoming traffic, receiving, incoming quality control, stores, materials movement, and scrap and surplus disposal.

Period Six: The Global Era (Late 1970s-1999)

Never in industrial history has competition become so intense so quickly. The spread and rate of technology change during this period was unprecedented, with product life cycles becoming shorter. This intensely competitive period witnessed the growth of supply chain management.

Period Seven: Integrated Supply Chain Management (Beyond 2000)

Now, more than ever, firms began to take a more coordinated view of managing the flow of goods, services, funds, and information from suppliers to end customers. Managers began to view supply chain management as a way to satisfy intense cost and other improvement pressures.