Optimization occurs across all functional areas simultaneously. In cross-functional optimization every product produced by a manufacturer competes with every other product for production and logistic resources based on the individual products ability to generate a profit when the specific costs of production and distribution, as well as sales revenues, are considered. The production, transportation, and distribution time required for each source capable of satisfying a specific demand are also considered so that only feasible optimal solutions are developed. Using , the production, transportation, and distribution functions are evaluated and optimized as a single, interdependent profit-center.
Optimization occurs across all products, all eligible production facilities, and across time.
Sub-optimization through sequential processing is eliminated. Cross-functional analysis is appropriate for continuous, batch, and mixed processes.