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Supply Chain Management:
From Vision to Implementation
Chapter 7: Supply Chain Mapping
Chapter 7: Learning Objectives
1. Discuss the concept of SC design and its
importance.
2. Explain process mapping and describe
mapping’s role in SC design.
3. Describe several popular approaches for SC
design.
4. Map out a supply chain. Describe key
insights a manager can gain from a SC map.
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 2
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OBJECTIVE ONE: DISCUSS THE
CONCEPT OF SC DESIGN AND
ITS IMPORTANCE
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 3
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Supply Chain Management
SCM is the design of seamless value
added processes across organization
boundaries to meet the real needs of
the end customer.
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Supply Chain Management
SC design and improvement is assisted by:
1. Process Mapping - creates visibility of current
and improved processes.
2. Value Stream Mapping - depicts flow of
information and materials & focuses on waste
reduction.
3. SC Mapping - displays the dynamics that
govern how a supply chain works
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 5
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Supply Chain Management
What is supply chain
design?!
It creates a vision for where
the company would like its
supply chain to be.
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 6
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Failure to be Proactive in Design
Failure to proactively design a SC results in:
Poor coordination of effort
Incompatible information systems
Long cycle times
Communication problems
Customer service issues
Excessive waste and environmental degradation
Relatively high inventories for the level of customer
service achieved
Lower the optimal profit
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 7
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Visibility of the Supply Chain
The designer of the SC must make the chain
visible.
Managers must be able to see how processes
are conducted, how processes affect other
processes, who is doing what, where it is
being done, and why it is being done.
Visibility is critical to effective SC design and
management.
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 8
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OBJECTIVE TWO: EXPLAIN
PROCESS MAPPING AND
DESCRIBE MAPPING’S ROLE
IN SC DESIGN.
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 9
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Process Mapping
A process map is a graphic representation of
the system and contains a sequence of steps
that are performed to produce some desired
output.
The primary goal behind process mapping is
to make complex systems visible.
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Process Mapping
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Developing a Process Map
Determine the purpose of the process map
Establish level of detail
Establish system boundaries
Determine who has the required information or experience.
Analyze the process through observation and interviews,
document each step.
Draw the map
Have the people who are involved in the mapping process as
well as others (including those who actually perform the
process) review the map for clarity and completeness
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Process Map – Bake a Cake
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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.
2. Re-examine each decision symbol.
3. Check each rework loop.
4. Finally, look at each process step again.
Sometimes a process is done out of habit
without verifying its value
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Initial Process Map
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 15
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Improved Process Map
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Example on process mapping
Start or finishing point
Step or activity in the process
Decision point (typically requires a “yes” or “no”)
Input or output (typically data or materials)
Document created
Delay
Inspection
Move activity
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 17
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Example on Process Mapping at San
Diego DC
This DC has responsibility for supplying
products to dealers located within a 30 mile
radius.
Lately the DC has been receiving a lot of
complaints from dealers regarding lost orders
and the time required to process orders for items
that are already in stock at the DC.
© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036. Edited by
Dr. Sara Elzarka
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Example on Process Mapping at San
Diego DC
A process improvement team has decided to
study the process in more detail by tracing the flow of
a dealer order through the DC, starting from when the
dealer faxes in the order and ending with the order’s
delivery to the dealer.
The team has collected the following information:
© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN:
0131791036. Edited by Dr. Sara Elzarka
Facts of the Case
1) Dealer faxes order to DC. One out of 25 orders lost because of
paper jams.
2) Fax sits in “In Box” around 2 hours (up to 4) until internal mail
picks it up.
3) Internal mail takes about one hour (up to 1.5 hours) to deliver
to the picking area. One out of 100 faxes are delivered to the
wrong place.
4) Order sits in clerk’s in-box until it is processed (0 to 2 hours).
Processing time takes 5 minutes.
5) If item is in stock, worker picks and packs order (average = 20
minutes, but up to 45 minutes).
© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036. Edited by
Dr. Sara Elzarka
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Facts of the Case
5) Inspector takes 2 minutes to check
order. Still, one out of 200 orders are
completed incorrectly.
6) Transport firm delivers order (1 to 3
hours).
© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036. Edited by Dr.
Sara Elzarka
Process Mapping
Dealer Paper Order Sits Order Sits Clerk
Order Internal Mail
Faxes In Fax In Clerk’s Processes
Created Delivers Fax
Order In Box In Box Order
4% of 0 to 4 hours 0 to 2 hours 5 minutes
orders lost 2 hours on average 0.5 to 1.5 hours 1 hour on average
1 hour on average
1% of orders lost
10 to 45 minutes
20 minutes on average
Dealer Inspector Worker YES
Transport Firm Is Item
Receives Checks Picks
Delivers Order In Stock?
Order Order Order
NO
2 minutes
1 to 3 hours 0.5% of orders incorrect
2 hours on average Clerk Notifies
No history of lost, Dealer and
damaged, or incorrect
deliveries
Passes Order
On to Plant
© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036.
Edited by Dr. Sara Elzarka
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Value Stream Mapping
Specific application of process mapping based on
lean Manufacturing principles.
System boundaries typically defined at the macro
level.
Generally contains more information then typical
process maps:
Process time
Process performance characteristics
Information flows
Physical flows
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 23
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Value Stream Mapping
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OBJECTIVE THREE: DESCRIBE
SEVERAL POPULAR
APPROACHES FOR SC DESIGN
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Management: From Vision to Implementation. 25
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Supply Chain Design
1. Identify the chain’s end customer
2. Determine the Supply Chain’s value proposition
3. Analyze who possesses the power in the supply
chain: manufacturer, distributor, retailer, or
other party.
4. Isolate the major processes required to support
the supply chain’s value proposition
5. Establish what the ideal supply chain would
look like.
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Traditional and SC Process Focus
Process Traditional Supply Chain
Inventory Management Only company-owned Whole chains, high turns
Approach
Cost Management Approach Price focus Total cost
Coordination of Sharing and Limited Long Horizon for planning
Monitoring in Chain
Amount of Coordination of Limited Extensive
Multiple Levels in the Chain
Planning in Supply Chain None Integrated with information
technology
Supplier Management Arms-length and/or adversarial Close relationships with key
suppliers
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 27
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Traditional and SC Process Focus
Process Traditional Supply Chain
Leadership in Supply Chain None Leadership roles defined
among players
Sharing of Risks and None Defined with key players
Rewards
Speed of Operations, Slow, limited Rapid, extensive
Information/Inventory Flows
Information Technology Not an issue; internal focus in Extensive improvements and
supply chain linkages
Team Process None with customers or Joint teams with key customers
suppliers and suppliers
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Approaches to Supply Chain Design
Design Tools
1. SCOR Model
2. Supply Chain Double Helix
3. Nature of Product or Service
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 29
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1. SCOR Model
Supply chains are based on a series of linked,
planned-source-make-deliver-and-return processes.
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1. 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 organization
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 31
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2. 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.
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2. Supply Chain Double Helix
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 33
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2. Design for Initiatives - DFX
Design for initiatives attempt to create an
atmosphere where designers work with other key
players internally or externally to insure critical
issues are considered and integrated into design of
products and processes.
Design for Design for environment
manufacturability Design for supply
Design for distribution Design for the customer
Design for disassembly
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3. 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 models.
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 35
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3. 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
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 36
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3. 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
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 37
Edited by Dr. Sara Elzarka
OBJECTIVE FOUR: MAP OUT
A SUPPLY CHAIN. DESCRIBE
KEY INSIGHTS A MANAGER
CAN GAIN FROM A SC MAP.
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Management: From Vision to Implementation. 38
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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.
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Management: From Vision to Implementation. 39
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Pipeline Map - Example
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Pipeline Mapping Steps
1. Identify the item that you wish to map.
2. Identify all of the processes that occur on the
physical pipeline for that product, including supplier
processes.
3. Determine who performs each process in the chain.
4. Talk to each of the entities that performs a process,
determine how long the process takes; how much
inventory is present; how much inventory is in
transit and transit times for materials.
Inventory would include raw materials, components, and
output
Fawcett et al. (2007) Supply Chain
Management: From Vision to Implementation. 41
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Pipeline Mapping Steps
5. Draw the SC pipeline map from raw material to end
user as a series of horizontal and vertical lines.
6. Analyze the supply chain for opportunities.
7. Prioritize your ideas from step 6.
8. Analyze the new supply chain, revisiting step 6 until
satisfied with the improvement results or they are no
longer cost-beneficial.
9. Repeat the procedure with other supply chains.
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