Supply Chain Mapping - Overview, Tools & Examples
In case this is the first time you are reading about supply chain mapping, its concept couldn't be simpler. The truth is that 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 supply chain mapping. After all, there are many different reasons for using a supply chain mapping. These are the most important ones:
- A supply chain mapping is easy to interpret. So, you can easily notice any inefficiencies that may be present.
- A supply chain mapping 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.
- A supply chain mapping is easy to distribute.
- A supply chain mapping 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.
- A supply chain mapping is a point of strategic advantage.
HOW TO MAP YOUR SUPPLY CHAIN?
To create your own supply chain map, you just need to follow the next steps:
Step-1: Organize the supplier team and the customer:
In 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 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 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 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, before you even define a supply chain mapping, you need to understand its importance, the role that the supply chain mapping has in your strategy, and all the inherent characteristics of supply chain maps.
SUPPLY CHAIN MAPPING EXAMPLES
If you look around, you can easily find three different supply chain mapping 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, their 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 of Tesla. The company has its own raw materials suppliers that are gathered on Tesla-owned manufacturing plants. The company builds their cars which are then delivered to the nearest service center for pickup by customers.
WHAT ARE SUPPLY CHAIN MAPPING TOOLS?
The truth is that there are many different supply chain mapping tools that you can use depending on your company and on 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. Our students learn to map supply chains, during the supply chain management certification and diploma in supply chain management programs, offered by AIMS.
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