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Chapter 8: Week Six: The AS IS Material Flow Performance Summary
Overview
Get a full understanding of material flow.
This week, the design team will look at supply chain material flow from two perspectives: common sense and fact. Supply chains that have evolved one supplier at a time and customer by customer tend to be less strategic and more events driven than those that have been engineered. Common sense and fact are necessary to help align supply chain strategy with material flow efficiency. Common sense looks at the macro issues of how supply chain material flows relate to strategy and practices. This is the fun part. Fact looks at the micro issues of how the company utilizes its transportation and inventory dollars to meet service levels. This part is data intensive.The amount of progress to be made this week depends on how easily transportation data can be assembled, the degree of financial sophistication of the inventory organizations, and the approach to inbound freight. For many design teams, assembling a geographic map or thread diagram (Chapter 7) is the company's first comprehensive look at the efficiency of how materials are moved from place to place. The material flow performance summary may be the first time value is assigned to the efficiency. Now is the time to cash in any outstanding favors with the transportation department and logistics service providers.
