INFORMATION SYSTEMS IN MANAGEMENT IV

all times, in the right quality and to the right price. As late as the early 1990’s theaverage time that a company needed to process and deliver goods to a customerfrom warehouse inventory ranged from 15 to 30 days [7 p.232]. Today, however,as customers are more demanding, firms must be able to manufacture to exactspecifications and rapidly deliver to customers anywhere around the globe. Customerorder and delivery of goods can be made in hours. Service failures that oftenoccurred in the past are no longer acceptable. Instead, perfect orders i.e. deliveringthe correct assortment and quantity of products to the right location on time, damagefree with correct invoice is what customers expect [2 p.3].In order to cope with these challenges in the new business environment it is essentialthat companies have, among many other things, a well-functioning materialmanagement, i.e. an efficient physical supply of materials throughout the supplychain. An efficient materials flow is crucial in order for firms to meet customerexpectations and thereby deliver the products at the right time, in the right qualityand quantity, at the right price and at the right place.As globalization of markets and of production is constantly growing, more andmore goods will be traded across the world, thus more goods need to be stored.This fact further strengthens the importance of conducting studies in the areas presentedin this paper.Logistics and Supply Chain Management have during the last centuries grownin popularity because of the firms’ needs to become more customer-oriented andcost effective. One of the factor that influence firm costs is holding inventory balancedbetween supply and demand. By holding inventory, cost reductions in otherbusiness areas can be made. For example, in purchasing where ordering large quantitieswill lead to lower per unit price but also increased inventory. This is a verydelicate balance that companies must consider, as holding inventory is very expensive.To achieve a well functioning materials flow companies must put muchemphasis on the different warehouse operations and inventory management, includingthe stratification of articles, product flow patterns and the layout of thestorage. Today control and communication in materials flow demands computerizedsystems. Information systems refer not only to computerized solutions but alsoto all communication and data processing connected to the materials flow.Thereby, the overall control of the entire materials flow can be viewed as one process,in order to see how the different parts are integrated and influence each other.2. LOGISTICSLogistics has gone from being a military matter to being one of the key businessissues today. The underlying factor to this situation is, in fact, that logistics isa cross-functional subject, cutting across functional boundaries. Logistics is the29