This is Part 2 of a 9 Part Series on the History of ERP.
1950s: The First Business Computers
IBM was continuing to advance computer technology rapidly with the IBM 650 Magnetic Drum in 1954 and the IBM RAMAC 305 in 1956 which featured random access memory – a feature that was incredibly instrumental in the development of any and all computer applications to come.
In “The early road to material requirements planning” published in the Journal of Operations Management in 2006, Vincent A. Mabert writes:
“Paul Bacigalupo, an IBM systems engineer working with American Bosch Armor in Springfield, MA, coordinated a net-change installation for his client in 1959, employing the IBM RAMAC 305 disk-based computer.”
The IBM RAMAC (Random Access Method of Accounting and Control) computer had only been available for a few short years and was used sparingly in only the largest companies of the time due to it’s incredible cost.
In the early 1950s the only automation available for manufacturers relied on punch cards with tape-oriented computers. This really limited the ability to manage material plans with computers because it took too much effort to feed in cards containing all of the bills of material and there was such limited memory to store those bills in relation to where components were used across other bills of material.
Manufacturers all over the midwest and northeastern parts of the United States were testing the limits of computers of the time but none were able to do too much due to the severe limitations of data storage and memory. However, things were about to change – big time.
In a simple sense, inventory optimization is what you get when you strike a balance between having enough inventory to satisfy your customer service standards while stocking as little inventory as possible. Customer service standards involve meeting demand—but not past the point that you have too much. But inventory optimization gets complicated when supply and
To keep a close eye on cash flow, most companies opt for some form of accounting software. By tracking money coming in versus money going out, accounting departments use accounting solutions to spot trends, uncover losses and otherwise make necessary financial decisions and adjustments to not only remain in the black, but to stay open