Chapter 7:
Managing Material Flows
Process Management: Creating Value Along the Supply Chain
(1st edition)
Wisner and Stanley
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Chapter Outline
 Introduction
 Material Flow Mapping
 Material Flow Analysis
 Manufacturing Flexibility
 Layout Design
 Material Scheduling
 Warehouse Material Flow
 Summary
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Learning Objectives
After completing this chapter, you should be
able to:
 Understand the concepts of material flow
and why these are important to the firm.
 Describe the various types of flow analysis
and the impact that flow has on the
organization.
 Describe how the material flow analysis
techniques are conducted.
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Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Learning Objectives (cont.)
After completing this chapter, you should be
able to:
 Understand the Theory of Constraints and
how it is applied.
 Describe how plant layout and material
scheduling impacts material flow.
 Describe the different types of material
flow concerns in warehouses.
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Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Introduction
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Different types of flow occur in all organizations (EX):
Buyer initiates purchase order
The order flows to the supplying firm
The supplying firm accepts the order and produces the product
or service ordered
Meanwhile the customer waits in a line
Upon completion product or service is delivered to the customer
The customer provides payment to the supplier
This example includes material, customer and work, cash and
information flows
Essence of flow management: any non-value-adding element
that stops flow is a problem that must be identified and
managed or eliminated
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Material Flow Mapping
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Process mapping: mapping material flows within a process is the first step in
managing material flows.
Important for understanding material flows
Process map symbols
Start or end of process.
A process operation. Work is performed.
Delay or storage.
Decision.
Physical movement or transportation.
Information flow.
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Material Flow Mapping
 Process mapping helps company to
 Understand the material flows in a process,
 Identify the current sequence of activities
making up the process,
 Identify and evaluate or eliminate the
activities that are not adding value
 Improve the remaining process activities
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Material Flow Analysis
 Material flow analysis for process improvement: when the initial
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process map is complete, possible to know where inventories
are delayed or stored, the paths that inventories follow and the
sequence of activities
Then possible to measure travel distances and travel times, time
spent in storage and in processing, and time spent waiting on
materials and to identify better routes for people, machinery and
materials.
Typical process changes might include;
Decreasing process variability through use of automation
Synchronizing capacity with demand by increasing process
capacity
Cross-training workers
Using fewer, reliable suppliers
Revising process layouts to reduce material travel time
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The Theory of Constraints (TOC)
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One of the most successful material flow
analysis techniques
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Rather than balancing capacities, the flow
of product through the system should be
balanced
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Bottleneck: Any factor that limits system
performance and restricts its output.
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Where is the Bottleneck?
Customer
No
3. Check for
credit rating
(15 minutes)
1. Check loan
documents and
put them in
order
(10 minutes)
2.
Categorize
loans
(20
minutes)
Bottleneck
5. Is
loan
approved?
(5 min)
Yes
6. Complete
paperwork for
new loan
(10 minutes)
4. Enter loan
application data
into the system
(12 minutes)
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Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Material Flow Analysis (cont.)
 Drum, buffer, rope (DBR) concept
Machine 1
[70 units/day]
Machine 2
Machine 3
[100 units/day]
[50 units/day]
Machine 4
[75 units/day]
Buffer
Constraint (Drum)
Rope (50 units/day)
Figure 7.2
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Manufacturing Flexibility
 One objective of material flow management is increased flexibility
to alter production, product design, or delivery schedules.
 Flexible manufacturing system (FMS) is a highly automated
production system consisting of automated material handling and
transferring machines working together under a central computer
control system.
 Benefits of FMS implementation;
 Increased flexibility and product variety
 Improved responsiveness
 Increased machinery utilization
 Productivity improvement
 Reduction in manufacturing cost by lowering direct labor cost and
minimizing scrap, re-work, and material wastage
 Reduction in production lead time permitting manufacturers to respond
more quickly to the variability of market demand
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Manufacturing Flexibility
 Computer integrated manufacturing (CIM):
automated version of the manufacturing process
where the three major manufacturing functionsproduct and process design, planning and control
and the manufacturing process itself- are replaced
by the automated technologies.
 Computer numerically controlled (CNC) machines:
programmable machines
 Everything that an operator would be required to do
with conventional machine tools is programmable
with CNC machines.
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Layout Design
 Facility layout significantly impacts material flow
 Well-designed layouts reduce non-value-adding
movements and the overall distance traveled within
the facility
 Product-focused layouts
 Assembly line
 Cellular / group technology layouts: allocates
dissimilar machines into cells to work on products
that have similar shapes and processing
requirements
 Process-focused / intermittent process layouts
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Warehouse Material Flow
 Plant layout impacts material flow
 Acts as a buffer between the manufacturer and the customer
 Warehouse layout considerations
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U-shaped layout: inbound shipments arrive and are
unpacked at receiving, where items are either moved to the
storage or to the cross-docking process.
 Cross-docking: Cross docking means to take a finished
good from the manufacturing plant and deliver it directly
to the customer with little or no handling in between.
 Cross docking reduces handling and storage of
inventory, the step of filling a warehouse with inventory
before shipping it out is virtually eliminated
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Warehouse Material Flow
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Flow-through layout: designed to accommodate a large
volume of cross-docking while having some storage
capabilities for slow moving items
Modular-flow layout : separate segments are designed for
specific warehousing applications
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Warehouse Material Flow (cont.)
 Warehouse layout considerations
(cont.)
 Popularity
storage methodology
 Similarity storage methodology
 Size and shape storage methodology
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