Supply Chain CanvasEstimated Reading Time: just 4 min

Key Activities, Resources and Partners blocks are fundamental in the Business Model Canvas since they are what a company needs to deliver Value Propositions.

Supply Chain Canvas is a tool that helps a company to build a Supply Chain that is tailored to your Value Propositions by:

  • Defining Key Activities, Key Resources and Key Partners
  • Visualizing the synchronization of the activities of the network

Supply Chain Canvas

Synchronizing network activities is about all the processes created to manage a Supply Chain such as:

  1. Demand Management
  2. Supply Planning
  3. Matching Assets with Demand
  4. Analytics
  5. Available to Promise (ATP)
  6. Inventory Modeling and Policy

The Supply Chain Canvas focuses on synchronizing a company’s Supply Chain by splitting it into 4 sections:

  1. Deliver Value to the Customers
  2. Looking for Efficiency inside Operations
  3. Minimizing Costs while Maximizing Service Level
  4. Minimizing Fixed Assets, Inventory and Account Payable

To compile the Supply Chain Canvas, it is useful to use a process based on the steps below:

  1. Supply Chain Segmentation: the focus is on tailoring the Supply Chain to deliver Gains Creators and Pain Relievers to Customer Segments/Customer Segments.

Some useful questions for filling this section are:

  • What are the company’s products and services?
  • What are the Customer Segments? What are the Segmentation Attributes?
  • What do Customer Segments value? Efficiency or Responsiveness?
  1. Quality and Returns: the focus is on how the company creates value for Customer Segments by delivering Quality Products and by managing After Sales issues that may occur

Some useful questions for filling this section are:

  • What is the company’s differentiated Quality Process?
  • How is the company managing Complaints?
  • How is the company managing Supply Chain Risks?
  • How does the company minimize Returns impact?
  1. Warehousing: the focus is on how the company stocks and handles items

Some useful questions for filling this section are:

  • What storage systems are used?
  • What material is handled?
  • What putaway strategy is used?
  • Which order types are managed?
  • What is the removal strategy?
  • How is inventory controlled?
  1. Transportation: the focus is on how we move the items

Some useful questions for filling this section are:

  • What is the modal mix?
  • What is the packaging used? What is the right one?
  • Does the company have its own fleet? What is the right fleet size, equipment mix and location?
  • What is the number of carriers used? What is the right number?
  • How many routes are there? How many should the company have?
  1. Procurement & Sourcing the focus is on how the company manages to purchase and its costs

Some useful questions for filling this section are:

  • How do the company optimize the purchasing price?
  • How do the company optimize the operational costs?
  • How do the company optimize the transaction costs?
  • What is the classification of the company’s purchasing materials requirements?
  • What are the strategical positioning and the action plan?
  1. Manufacturing: the focus is on how the company manages production

Some useful questions for filling this section are:

  • What is the production environment for products? (i.e. MTS, MTO, ATO)
  • What is the company’s production strategy?
  1. Supply Chain Planning: the focus is on how the company manages planning activities

Some useful questions for filling this section are:

  • What is the Demand Plan? (Market Plan, Products/Brands Plan, Sales Plan, Sales Forecast, Promotions Plan)
  • What is the Production Plan? (Master Scheduling Plan, Capacity Plan, Resource Plan, Production Plan, Purchasing Plan)
  • What is the Distribution Plan? (Inventory Plan, Distribution Plan, Warehouse Plan, Transportation Plan)
  1. IT/ERP the focus is on the systems used to manage planning activities

Some useful questions for filling this section are:

  • Is there a Material Requirements Planning?
  • Is there a Warehouse Management System?
  • Is there a Labor Management System?
  • Is there a Transportation Management System?
  • Is there a Supply Chain Optimization software?
  • Is there a Supply Chain Analytics Software?
  1. Supply Chain Design: the focus is on the structure of the Supply Chain

Some useful questions for filling this section are:

  • How many warehouse and factories should the company have?
  • Where should they be located?
  • What size should they have?
  1. Supply Chain Analytics: the focus is on KPIs and performances of the Supply Chain

Some useful questions for filling this section are:

  • What are the required KPIs? What is their availability?
  • How is the company performing?
  • What does the company want to happen?
  • How can the company make it happen?
  1. Cost Improvements: the focus is on finding what costs can be reduced while giving the same Service to the customer

Some useful questions for filling this section are:

  • Are there some possible savings? (in terms of Procurement, Inventory Carrying Costs, Total Fulfilment Cost, Total Supply Chain Costs, Lean Waste Costs, Reverse Logistics Costs, Cost of Poor Quality)
  • What is the cost-to-serve?
  • What is the supply chain carbon footprint & GHG emissions?
  1. Service Level Improvements: the focus is on finding ways of giving better Service to the customer

Some useful questions for filling this section are:

  • How responsive is the Supply Chain?
  • How flexible is the Supply Chain?
  • How adaptable is the Supply Chain?
  1. Fixed Assets

Some useful questions for filling this section are:

  • What is the Assets Turnover?
  • What are the Bottlenecks Operations?
  • What is the Outsourcing Strategy?
  • What is the Capital Budget?
  • Should the company make a facility expansion?
  1. Inventory

Some useful questions for filling this section are:

  • What items have to be stocked? Where?
  • What is the optimal size of the Inventory?
  • Is the Supply Chain reliable and responsive?
  • How are the fill rates doing?
  • How is the Service Level doing?
  • Can the company exploit some Risk Pooling out of the stock strategy?
  1. Account Payable

Some useful questions for filling this section are:

  • What money is owed? What percentage is past due?
  • How quickly is the organization paying?
  • What percentage of accounts is not meeting terms? What is the value of overdue accounts?
  • Which vendors are problematic?
  • What is the average/weighted average days past due?

APPLICATIONS, ANALYSIS & NEXT STEPS

Supply Chain Canvas does a good job by helping the company figure out how to make their Value Propositions real for its Customer Segments/Customer Segments so that it will gain a competitive advantage by making informed decisions.

Anyway, the most core application of the Canvas is to be the baseline for a Brainstorming and to ask at least quarterly:

  • Does it make sense?
  • Could it be better?
  • Does the rest of my team understand and agree? Are there additional ideas?
  • Did the competitive environment change? Does the company have/maintain a long-term competitive advantage?

The output is a list of ideas/changes to be tested and implemented for a continuous improvement of the way a company delivers its Value Propositions.

Nicola Zaffonato Administrator

Business Strategy | Product Marketing | Executive Master eCommerce Management | Business Innovation Master | MSc

I am driven by my personal growth and of people/contexts that surround me.

I followed a professional path in Valentino Fashion Group and Luxottica during which, thanks to the ability to understand different businesses and interests, I was able to succeed in Operations, Merchandising and Retail.

These organizations have exploited my ability to mediate and translate needs/constraints into practice, assigning me to Project Management roles.

Luxottica relied on my ability to analyze, to anticipate things and to imagine/implement solutions by appointing me in Supply Chain Management department and assigning me to the Product Management of IoT solutions for Anti-counterfeiting and Retail digitalization.

During this professional path, I also developed my leadership by managing teams to build Processes, Organizations, Systems and Governance Tools.

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