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.
Supply Chain Process 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.
Advantages 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.
How to Create Supply Chain Maps?
To create your own 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 draw 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.
Strategic Approaches in Supply Chain Mapping:
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.
“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!
Supply Chain Mapping Tool:
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:
It helps businesses to keep track of all the activities that take place in their supply chain. It helps 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.
“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 they hold their inventory.
Second Example: eCommerce Platform Supply Chain:
This is Amazon’s case. As you know, Amazon has its own brand name suppliers, its own 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.