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This factor comprises two elements — time and location. Time determines how quickly logistics solutions have to be in place and can be broken down into further elements such as research and development (R&D), production, testing, and deployment. Sufficient allocation of time for the item manager to perform reliability and maintainability analysis, comparative analysis with existing products or systems, and coordination of the distribution and information networks will create opportunities for major TCO savings throughout the rest of the operational life cycle. Additional information on TCO can be found in Section 1-7, Develop Preliminary TCO Estimates.
Location can be broken down into production and operational locations. If a supplier has multiple potential production locations, there are opportunities for reducing distribution costs by analyzing routing costs between the production locations and operational sites. For example; if a supplier has production capabilities in New Jersey, Illinois, and California and the major operational sites are on the West Coast, production in California would be encouraged to reduce transportation costs. Matching this knowledge with the expected demand patterns for replacement or sustaining products (parts or consumables) enables a distribution plan to be developed — direct from supplier or to one or more distribution facilities.
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