Supply Chain Mapping: the How-to Guide with Examples

In this article, supply chain mapping methodologies will be explained and a step-by-step demonstration of the most popular mapping method will be illustrated.

1. Supply Chain Mapping Methodologies
1.1 IDEF0 for Detailed Process Mapping
In the 1970s, US Air Force would like to enhance the communication between various parties so they could have a better understanding about the complex production system. Then, they invented a mapping method with the aim to demonstrate how "function" works, which is called IDEF. The word "IDEF" stands for "Icam DEFinition for Function Modeling" (Icam means Integrated Computer Aided Manufacturing).

According to IDEF0 approach, a "function" or "process" consists of 4 basic elements called ICOM,

I = Input
C = Control or metrics or performance measurement
O = Output
M = Mechanism or tools used to perform the action

IDEF0 is usually used to illustrate how existing processes work. Anyway, it doesn't say how the processes should be analyzed.

1.2 SCOR Model as Standardized Process Mapping
Mapping of business process takes a lot of time and resources. As a result, many supply chain practitioners turn to a mapping approach called "SCOR Model". 

The good point of SCOR Model is that you don't have to do a process mapping from scratch. They provide you with the "standardized" processes that can be applied to companies in different industries (Level 1-3). In case you would like to capture processes that are unique to your organization, you can start mapping the process at Level 4.

1.3 Geographical Supply Chain Mapping

IDEF0 and SCOR Model are very good for mapping the processes inside a particular company, but they fall short to capture how a supply chain network works.

2. Supply Chain Mapping Using VSM
VSM or Value Stream Mapping is a tool originated by Toyota as part of Toyota Production System, which is primarily used to improve performance in a shop floor environment. The concept is very practical then supply chain management professionals adapt VSM as a supply chain mapping method.

However, a major constraint for VSM is that it requires extensive data. Then, this article will explain how to simplify the analysis using an actual case study.

2.1 Select Product
This project is the example of retailer in the UK who offers skin care products. The product launch delay will cause lost sales, bad brand image and brand's switching. Then, product included in the analysis should be strategically important because too many products mean too many details on the map.

2.2 Identify Distribution Channel
From the first step, we already know who are the members of the supply chain at the upstream level. Then, we should know the distribution channel so we can add downstream members in the value stream.

2.3 Map Physical Location
At this stage we should be ready to put the physical locations in a value stream. After that, we should add the material flow into the map. Production cycle time can be added to the map here.

From the above example, every supplier sends raw materials to a manufacturer for final assembly.

2.4 Identify Information Flow
According to this map, each supplier needs to send the samples to a retailer for approval before the commercial production run. Information flow covers the order status, product testing and ordering info. There are 2 types of information flow (manual and electronic information). At this stage, it's called a Current State Map.

2.5 Develop Alternatives
At this point, a project team should try to identify 7 waste based on the Lean Principle. After that, a brainstorming session should be conducted to find the way to eliminate waste. More info for this example is as below,

2.5.1 Overproduction: producing one big batch can cause an idle time at downstream process. If raw material suppliers produce a smaller batch for assembling, a retailer in the UK will get some finished goods earlier.

2.5.2 Defects: the defects from an upstream process can cause a trouble to downstream process. Counting on an in-house inspection is not enough. It is useful to send a quality inspector to conduct an on site inspection to minimize defects and re-inspection at a downstream process.

2.5.3 Unnecessary Inventory: the cost of storage space in urban areas is very expensive. If retail stores reduce the ordering frequency from weekly to 2 times a week or even daily ordering, inventory holding costs and logistics cost will be significantly reduced.

2.5.4 Unnecessary Motion: retail stores usually have a limited storage space, then the pack size of the product is usually smaller. If the concept of store ready packaging is utilized, a merchandiser's warehouse doesn't have to break carton of 24 units into a carton of 6 units, this helps to save an unnecessary motion in pack process. 

2.5.5 Unnecessary Processing: also, a merchandiser's warehouse can make the drop shipping direct to retail stores. This eliminates Unnecessary Processing at a retailer's warehouse.

2.5.6 Unnecessary Transportation: many retailers in the UK uses suppliers in more than one country for similar products to spread supply risk. Anyway, suppliers in China and Thailand have to ship products via feeder vessel to a bigger port in Malaysia or Singapore for vessel to Europe. The consolidation of cargo at the only one port may help to increase the negotiation power with shipping lines. The result will be the possibility to use direct vessel (less transit time) and decrease a cargo shut off in case of low space availability. 

2.5.7 Waiting: retailer has to wait for the product samples from each supplier for approval, this usually causes a production delay. In order to reduce waiting time at retailer, communication should be done through centralized system (instead of communication between merchandiser and each supplier). Visibility to current project status will help a retailer to make a timely decision and each supplier will have to speed up the process to catch up with others.

3. Lesson Learned from Supply Chain Mapping Case Study
As you can see, you can discover ways to improve supply chain operations through supply chain mapping exercise without the need of any special software.

Many VSM books suggest that a production cycle time, inventory level, quality level, capacity, non value added activities should be in the map. This is pretty normal for the automobile industry, but it's difficult to do in other industries. Anyway, the mapping with lower levels of details can also yield good results.

Related Article: SCOR Model-the Implementation Guide