Reading a supply chain diagram requires knowledge of the direction, notation, and scope of the diagram, which can vary. Once you understand the basics, the physical product and information flow in a supply chain are important facts to keep in mind when conducting an assessment. A supply chain diagram can provide information on product flow, information flow, and finance flow.
Diagrams usually show processes linearly or horizontally. Supply chains generally have one downstream and one upstream flow, which means that products and information can flow in multiple directions on the same diagram. The data that moves upstream goes to the company’s suppliers. The information that moves downstream is directed towards the customers.
Supply chains can cover all aspects of collection and distribution from manufacturing to inventory to customer service. Therefore, when reading a supply chain diagram, keep in mind the chosen scope of the diagram. The current supply chain can be from the very beginning with the collection of natural resources, moving through various channels and means of construction, up to distribution between small warehouses or retail stores. A supply chain diagram is often constructed to assess particular sections of the supply chain and may therefore be limited in scope.
The Supply Chain Operations Reference Model (SCOR) is the most commonly used variety of supply chain diagram management tools. It starts with the supplier of the supplier, rather than starting with the collection of natural resources and ends with the customer’s customer. SCOR uses process modeling, performance measurements, and best practice metrics to identify and diagnose problem areas in a supply chain.
The signs and symbols on the diagram must be understood when reading and evaluating a diagram. Supply chains do not have a fixed standard notation, such as the business process modeling notation. The software or people who create the diagram often use their own notation.
When reading a supply chain diagram, it helps to understand the metrics used in the diagram. Supply chain metrics are often included in a diagram to track performance. Metrics include, but are not limited to, inventory turns, cycle time and fill rate measurement. Becoming familiar with specific metrics, definitions, and methods of the harvesting diagram will help readers read a supply chain diagram more effectively. For example, while the definition for inventory shifts may be widely accepted, many metrics are industry or company defined.
Knowing if the supply chain is shown in real time is another important aspect of reading a supply chain diagram. Supply chain management software and applications have increased the speed of supply chain assessment. Some programs allow supply chain management information to be accessible to all parts of the supply chain, thereby greatly increasing the input of information.