What is Supply Chain Mapping?
In case this is the first time you are reading about a supply chain map, however, its concept couldn’t be simpler. Supply chain mapping is simply a visual representation of information, goods, processes, and money flowing that occur within a supply chain. One of the main trends among companies all around the world is the use of SC mapping tools. After all, there are many different reasons for using it, and here we will be explaining it with the help of examples.
What is a Supply Chain Map?
A supply chain map is a diagram that illustrates the key steps involved in creating and managing a supply chain. In a typical supply chain process map, each step is represented by a box with arrows connecting the boxes.
- The boxes represent activities such as purchasing, production, transportation, and so on.
- Each arrow represents one step in the process and is typically labeled with an abbreviation for what it represents. For example, an arrow labeled “P” might represent the purchase of an item, while an arrow labeled “R” might represent the return of an item.
- Supply chain process maps can be used to visualize how all the stages of a supply chain work together to create a finished product such as a car or a smartphone.
- It can also be used to identify areas where bottlenecks may exist and to create action plans to reduce delays or increase efficiency.
Supply Chain Map Example
A simple example of a supply chain map comprises of following components:
- Raw Material Supplier: The first stage involves sourcing raw materials. For instance, a textile manufacturer depends on cotton suppliers.
- Manufacturer: Once the raw materials are obtained, they are sent to the manufacturing facility where they are processed into finished goods, such as clothing.
- Wholesaler/Distributor: After manufacturing, the finished products are transported to wholesalers or distributors. These entities aggregate the products from various manufacturers and distribute them to different retail channels.
- Retailer: Retailers purchase goods from wholesalers or distributors and sell them to the final consumers. Examples include clothing stores, department stores, and online marketplaces.
- Consumer: The final link in the supply chain is the consumer, who buys and uses the product.
How to Create a Supply Chain Map?
To create your supply chain map, you just need to follow the next steps:
Step-1: Organize the supplier team and the customer
At this stage, there should be a meeting between the supply chain directors and the management. The main goal is to not only discuss the current situation as well as to determine the main competencies of the supply chain.
Step-2: Draw the current value stream map
This is the stage where you will need to identify all the activities that are required in the transaction. You should then use boxes to represent transactional documents and entities. Make sure that you use arrows to show the flow of products and information as well as you should label the time that each step takes.
Step-3: Draw the future value stream map and the implementation plan
This is when you are going to discover the area where you can improve processes. So, you will need to prioritize each area based on the ease of implementation as well as on the potential benefits that it can bring.
Step-4: Execute the implementation plan
During this stage, you will start implementing the plan that you drew in the previous stage. You will need to begin with the most value-added changes first. You need to ensure that you keep track of all the changes in terms of cost and improvement.
Step-5: Repeat the process
Repeat the process for continuous improvement.
“In addition to all this, it is important to keep in mind that your supply chain map should link to the strategic planning process. This will make the evaluation of the supply chain easier and more efficient. With this in mind, you need to understand its importance, the role that supply chain map has in your strategy, and all the inherent characteristics of supply chain maps.”
Key Note!
Best 6 Supply Chain Mapping Tools and Software
The truth is that there are many different SCM mapping tools that you can use depending on your company and your goals. Some of the most used tools are data collection, histograms, check sheets, cause-and-effect diagrams, stratification, Pareto charts, cross-functional process mapping, flow charts, scatter plots, and control charts. Supply chain mapping software helps businesses keep track of all the activities that take place in their supply chain. SC mapping tools help them to trace the whereabouts of every product and control the inventory levels more accurately. This can be done by designing a network map of all the activities that take place at each location, from production to distribution.
Several tools and software solutions are designed to assist in mapping and optimizing supply chains:
- Microsoft Visio: This versatile diagramming tool helps businesses create detailed flowcharts and process maps, supporting supply chain visualization and analysis.
- Lucidchart: An intuitive, cloud-based application, Lucidchart provides templates and collaborative features to create and share supply chain maps effortlessly.
- Supply Chain Guru: Created by Llamasoft, this powerful software specializes in supply chain modeling, allowing users to analyze and optimize various supply chain scenarios.
- Tableau: Widely known for its data visualization capabilities, Tableau enables supply chain professionals to transform complex data into insightful visual analytics to track performance and identify bottlenecks.
- SAP Integrated Business Planning (IBP): This comprehensive solution combines sales and operations planning, forecasting, and inventory optimization, providing a holistic view of the supply chain.
- Oracle Supply Chain Planning Cloud: As part of Oracle’s comprehensive suite, this supply chain mapping tool offers advanced analytics and planning capabilities to improve decision-making and operational efficiency.
“Supply chain mapping software makes this task easy, including data visualization and report generation features. By using the software, businesses can reduce the risk of losing products and maintain accurate records throughout the process. They can also increase efficiency by reducing unnecessary costs and improving communication.”
Key Note!
Supply Chain Mapping Examples
If you look around, you can easily find three different examples:
First Example: Big Box Supply Chain
This is the case of Walmart, for example. As you probably know, the company carefully selects manufacturers and they then buy large quantities. This way, they can take advantage of economies of scale. The company then has strategically located distribution centers where it holds its inventory.
Second Example: eCommerce Platform Supply Chain
This is Amazon’s case. As you know, Amazon has its brand name suppliers, its goods, and independent sellers. They then have strategically located automated warehouses that guarantee the delivery of the products directly to consumers.
Third Example: Specialized Own Supply Chain
This is the case with Tesla. The company has its own raw materials suppliers that are gathered in Tesla-owned manufacturing plants. The company builds its cars which are then delivered to the nearest service center for pickup by customers.
4 Key Benefits of Supply Chain Mapping
1. Easy Interruption
A supply chain mapping is easy to interpret. So, you can easily notice any inefficiencies that may be present.
2. High Performance
It provides a methodology to analyze processes. This way, you will be able to determine if the process that is being used is showing signs of poor performance as well as you can also spot strategic places that need to be improved.
3. Distribution
A supply chain mapping is easy to distribute.
4. Increases Versatility
It can focus on many different aspects. It can focus on a particular user or use, on a specific theme, or even on the processes, organizations, flows, facilities, and geographic relationships. It is a point of strategic advantage.
Our students learn to map supply chains during CSCE (which is among the top supply chain management certifications) and MDSCM (the LEVEL 4 Diploma in logistics and supply chain management) programs offered by AIMS.
Strategic Approaches in Supply Chain Mapping
Implementing effective supply chain mapping requires strategic approaches that align with a company’s specific needs. Here are several key strategies:
- Data Integration and Centralization
- End-to-End Visibility
- Collaboration and Communication
- Risk Management and Contingency Planning
- Continuous Improvement
- Sustainable Practices
By employing these strategic approaches, businesses can create more robust, efficient, and agile supply chains, capable of adapting to changing market conditions and customer demands. The truth is that organizations’ supply and delivery systems are becoming increasingly complicated as they become global. So, besides the need to visualize the Supply Chain or Value Chain (for details, see Value Chain: Definition, Model, Analysis, and Example) itself, there is also a need to have a well-established process that allows you to build the map. This ensures that you can easily distribute knowledge among organizations and managers.