Plan for the evening

Supply Chain
Management:

From Vision to

Implementation
Chapter 7: Supply Chain
Mapping

Chapter 7: Learning
Objectives

Question

What is
Supply
Chain
Design?
4

Supply Chain Design

Question

What are the

consequence
s of not
engaging in
SC design?
6

Failure to be Proactive in
Design

What are some of the tools used to uncover

opportunities to improve SC design?

1. Process Mapping - creates visibility

of current and improved processes.
2. Value Stream Mapping - depicts
flow of information and materials
3. SC Mapping - displays the dynamics
that govern how a supply chain
works
8

What is Process Mapping ?

Process Mapping

10

Developing a Process Map

11

Process Analysis
Process analysis is used to identify non-value
added or redundant activities.
1.Begin process analysis by examining the
time, cost, resources, and people involved
in each step.
Identify the steps that consume the most time or
resources.
Identify processes that take too long or vary greatly in
time.
Identify points of delay.
Estimate the value added by each step and judge the
value against the cost.
Consider the reasons for problems and how to improve
specific activities or processes.
12

Process Analysis
2. Re-examine each decision symbol.
Determine if the decision is necessary and adds value?
Consider combining decisions or moving them to another point
in the process to create more value.

3. Check each rework loop. A rework loop involves

iterative processes, like repeatedly checking a cake
until it is done baking. Here, consider how rework can
be reduced, eliminated, or combined with another
step.
4. Finally, look at each process step again. Sometimes a
process is done out of habit without verifying its value.
Verify that the step adds more value than its cost.
Judge if the step is redundant.
Consider how steps could be recombined for greater efficiency.
13

Initial Process Map

14

Improved Process Map

15

Value Stream Mapping

16

Supply Chain Design

17

Traditional and SC Process

Focus
Process

Traditional

Supply Chain

Inventory Management
Approach

Only company-owned

Whole chains, high turns

Cost Management
Approach

Price focus

Total cost

Coordination of Sharing
and Monitoring in Chain

Limited

Long Horizon for

planning

Amount of Coordination
of Multiple Levels in the
Chain

Limited

Extensive

Planning in Supply Chain

None

Integrated with
information technology

Supplier Management

Arms-length and/or
adversarial

Close relationships with

key suppliers
18

Traditional and SC Process

Focus
Process

Traditional

Supply Chain

Leadership in Supply
Chain

None

Leadership roles defined

among players

Sharing of Risks and

Rewards

None

Defined with key players

Speed of Operations,
Information/Inventory
Flows

Slow, limited

Rapid, extensive

Information Technology

Not an issue; internal

focus in supply chain

Extensive improvements
and linkages

Team Process

None with customers or

suppliers

Joint teams with key

customers and suppliers

19

Approaches to Supply Chain

Design

Design Tools
1.
2.
3.
4.

SCOR Model
Supply Chain Double Helix
Nature of Product or Service
Product Life-Cycle

20

Supply Chain Processes

Planning
Sourcing
LO 3

Making

Delivering
Returning

SCOR Model

Steps in the SCOR model:

Analyze the basis for competition: what do

you need to do well in order to succeed? How
can you measure and monitor your progress
in these key areas?
Configure the supply chain as it is and as
you would like it to be. Include geographic
locations and flows.
Align performance levels, practices and
systems across information and work flows.
Implement SC processes and systems,
including people, processes, technology and
22
organization

Supply Chain Double Helix

Supply chains are constantly
evolving and changing as the
environment which they compete
changes.
The ability to design and redesign
supply chains proactively that
creates competitive advantage.
As a company designs and redesigns
its supply chains must take
advantage of designed for initiatives.
23

Supply Chain Double Helix

24

Nature of the Product or

Service
Supply chain should be structured
based on whether the product or
service they deliver is innovative or
functional in nature.
Innovative products have short life
cycles
Functional products fulfill basic needs

Insight generated from this design

strategy can complement the SCOR,
Double Helix, or product life-cycle
25

Innovative Product Supply

Chains
Innovative products have relatively:
high profit margins
unpredictable short-lived demand
high risk of obsolescence.

Supply chain should:

Seek to minimize inventory
Focus on speed and flexibility

Ideal supply chain: Responsive

26

Functional Products
Supply Chains
Functional products have relatively:
Predictable demand
Long life cycles
Large number of substitutes

Supply chain should:

Seek to minimize cost
Provide reliable and high service levels

Ideal supply chain: Efficient

27

Product Life-Cycle Issues

28

Supply Chain Mapping

Supply chain mapping generally
begins with a high level map to
identify major linkages and
bottleneck areas.
Supply chain maps should consider
linkages with customers and key
suppliers.
Tools like the pipeline map may
identify unnecessary complexity,
thereby leading to improvements to
the current competitive state of the
29

30