MT498 Unit 3 Current-State Network Map Example

Nine Nodes, Nine Lanes and a Loop That Doubles Back: An MT498 Unit 3 Current-State Network Map for Lowry Filter

[Student Name]

Purdue University Global

MT498: Bachelor's Capstone in Supply Chain Management

Unit 3 Current-State Network Map

[Instructor Name]

[Date]

Lowry Filter Company and every volume, rate and stock figure are composite; the sources cited are real.

How the Map Is Drawn

Suppliers sit at the left edge and customers at the right, following the direction money flows, from suppliers to customers, so any lane running against that grain stands out. Each lane is drawn at a width set by its annual loads, which makes the heaviest freight visible at a glance. Every lane label carries miles, transit days and cost per eastern case, and every node box carries days of stock on hand. Figures come from twelve months of freight invoices, the Columbus warehouse's bills and the plant's records; anything not taken from a document is marked as an estimate. Chopra and Meindl (2016) describe facilities, inventory and transportation as the drivers of network cost, and the map shows all three at once.

Nodes

The nine nodes inside the scope are the standard media mill in Hickory, North Carolina; the port of Baltimore, where premium media arrives; media storage at the Salina plant, holding about 14 days of supply; the six pleating lines at Salina; finished-goods staging at Salina, about 8 days; the leased Columbus warehouse, about 26 days; and the three eastern customer groups described in the scope. With 2 days in transit, roughly five weeks of eastern stock stand between the lines and a customer's dock.

Node Costs

The Columbus warehouse bills Lowry by the pallet stored and the case handled, which works out to about 55 cents per eastern case once receiving, storage and shipping are added. Conversion at Salina, the labor, energy and supervision needed to pleat and frame a case, runs about $7.42, and purchased materials, media, board and frame stock, about $18.40. Holding stock also costs money even when no bill arrives: at a 22 percent annual carrying rate, the five weeks of eastern pipeline stock tie up capital worth about 38 cents per case each year. Simchi-Levi et al. (2008) warn that network maps which show only freight hide these node costs, and the boxes on this map carry them so that the later model starts from the same figures.

Lanes

Standard media for eastern volume moves 1,070 miles from Hickory to Salina in about 77.6 truckloads a year. A media load reaches its weight limit before it fills with space, carrying enough for about 5,100 cases of filters. At a truckload rate of $2.40 a mile, each load costs about $2,568, or about 50 cents per eastern case.

Finished filters move 850 miles from Salina to Columbus in about 366.7 trailers a year, a little over seven a week. Each trailer holds about 1,080 cases and costs about $2,040, or $1.89 per case. From Columbus, deliveries to the home-center distribution centers, distributors and commercial accounts add about $1.64 per case, bringing outbound freight for an eastern case to $3.53.

Premium media arrives in ocean containers of about 9,800 cases' worth through Baltimore and travels by truck to Salina. It serves the 63,360 premium cases a year sold in the east, about 16 percent of eastern volume.

More than half of an eastern filter's 1,920 miles of road travel point away from its buyer.

The Loop

The material for an eastern filter travels 1,070 miles west to Kansas and then 850 miles back east to Ohio as a finished filter, 1,920 road miles to reach customers who sit, on average, about 450 miles from the mill. The westbound leg costs 50 cents a case and the eastbound trailer leg $1.89. The map does not yet say whether the loop is a problem, because the plant may have advantages that outweigh it; it only measures what the loop costs.

Trailers That Fill With Space

A trailer of 1,080 cases leaves Salina weighing about 8,748 pounds, around a fifth of a 44,000-pound payload. The trailer is full by volume and nearly empty by weight. Inbound media is the opposite: dense rolls of material reach the weight limit first. Freight is therefore paid on the outbound side mostly for space. Ballou (2004) notes that light, bulky products cost more to move per pound because carriers price the space they occupy, and these filters are a clear case.

Service by Customer Group

Eastern accounts received 93.1 percent of ordered cases complete and on time across the year, against 97.9 percent for western accounts served directly from Salina. Order cycle time, from order to delivery, averaged 4.2 days in the east and 3.1 days in the west. The home-center distribution centers, the largest eastern customers, recorded the lowest fill.

Findings Without a Fix

Three observations close the map. First, eastern product travels a loop, with more than half its miles pointing away from its buyers. Second, outbound trailers leave at a fifth of their weight capacity, so freight is paid for space. Third, eastern service trails western service by almost five points of fill rate despite five weeks of stock in the pipeline. The causes and any redesign belong to the problem statement and the alternatives analysis; the map is graded on accuracy, not on ideas.

References

Ballou, R. H. (2004). Business logistics/supply chain management (5th ed.). Pearson Prentice Hall.

Chopra, S., & Meindl, P. (2016). Supply chain management: Strategy, planning, and operation (6th ed.). Pearson.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and managing the supply chain: Concepts, strategies, and case studies (3rd ed.). McGraw-Hill/Irwin.