Introduction
Over the past decades more and more attention has been given to the concept of supply
chain management (SCM). Steven (1989) looks at the supply chain as the connected series
of activities which is concerned with planning, coordinating and controlling materials,
parts and finish goods from suppliers up to the customers. This author extends the concept
of business logistics to other tiers in the supply chain. Cooper and Ellram (1993) who
present supply chain management as an integrative philosophy to manage the total flow of
a distribution channel from suppliers to the ultimate user.
Lately, there has been a lot of research conducted in the area of supply chain and logistic
management (Briscoe et al 2004; Kumaraswamy et al 2004; Wang and Xue 2004). Most of
these studies emphasized the importance of close collaboration with various project parties
in order to streamline the supply chain using e.g. partnership (Dey 2002), outsourcing
(Rabinovich, Windle, Dresner and Corsi (1999), agent-based system (Tah 2005; Xue
2005), constraint-based planning (Chua et al 2003) and etc.
In relation to the case scenario (Appendix 1) which indicate that, many organization
develop products or services in foreign countries and sell world wide. This strategy is
known as global sourcing and is defined by Monczka and Trent (1991) as the integration
and coordination of procurement requirements across worldwide business units, looking at
common items, processes, technologies, and suppliers. Hence, this project is to analyze the
role of materials management; function of logistics; inventory systems and JIY which
follow by the case scenario.
Materials Management
The objectives of materials logistics management which are to reduce inventories while
maintaining strategic stocks, improve product quality, minimize the total cost of operations
and procurement, ensure service levels to customers and minimize variance materials flow
(Naim and Towil 1994). Materials management was pointed out by Compton (1985) as
management of materials; storage, selection and issue; handling and distribution and stores
management. Johnson (1999) has defined the important role of materials management as
continues replenishment programs, vendor managed inventories programs, joint managed
inventories programs, and collaborative planning, forecasting and replenishment business
models. For that reason,most organization has re-developed and re-implemented planning
system, which allow organizations to manage procurement activities effectively in order to
meet customers needs and requirements (Stadtler and Kilger 2000).
Some of the important features of materials management system have been classified by
Sidwell (2005) as follows:
” Integrate front-office function (estimating and construction) and back office functions
(accounting and purchasing)
” Integrate cost control, project scheduling, and material quantities measurement functions
