The Greatest Advantage Occurs in Level

Actual signals for required replenishment are now matched with what has been removed from the network so the next data flow is to the warehouses holding goods for delivery. This warehousing could include regional distribution centers, such as those set up by Wal-Mart on a territory basis to ship loads to individual stores or Sam s Club outlets. It might also include a distributor s distribution center, such as those owned by Fleming 

The next demand signal is sent to the manufacturer or converter to establish what needs to be pulled into the system to keep the flow balanced. These manufacturers can respond with shipments to one of the DCs or directly to the stores and, in the case of cyber orders, directly to a home or business location. From these manufacturers, the next signal is sent to one or more of the suppliers — raw materials, subassemblies, outsourced contract manufacturers, and possibly energy providers. From there, the signal proceeds to the suppliers suppliers of such commodities as grain, ore, minerals, and dairy products. Inbound 

Together the partners view the model as an extended logistics value network and optimized conditions are the objective as each player sets aside the need for control and uses the most effective system from beginning to end of the supply chain, even when it means one player incurs an extra cost in the process. Balanced scorecards become the means of analysis and assignment and the technique for allocating costs across the extended enterprise. 

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