If you base it in an economic development context, supply chain analysis is a tool that is used to identify the growth opportunities that is related to a specific industry within its region of operation because each industry is a part of a greater supply chain, the sequence of industries that are involved in the production and distribution of a good or a service, from the raw materials to the final products.
Considering that an industry purchases inputs such as raw materials, parts, as well as knowledge from certain industries, creates an output which then sells it to another industry thus there is a supply chain that is created while there is an additional value that is added to the output as it moves forward along with the supply chain until such time it reaches the final person on the list; the consumer or the buyer.
With the utilization of supply chain analysis, it will help a region to understand and analyze the significance of industry within its region which is connected to other industries that are located within and outside of the region which by understanding the way the industry operates into the overall supply chain and determine how it fits.
The region can start to create better strategic decisions of how other types of industries should be seeking to attract, as well as retain, and help expand their industries within the supply chain.
The supply chain analysis uses different tools and techniques in supply chain software in analyzing a region’s industry and how its service or product affects a supply chain positively and negatively.
- Supply chain mapping- One of the techniques that are first utilized in a supply chain analysis is to assess how the industry fits into its overall supply chain. Using this technique uncovers tons of information online that can be applied to any types of industry. Doing internet research is an essential way in utilizing this kind of technique by reading and understanding supply chain diagrams to learn the component industries which you can identify fairly and comprehensively especially if you do not have enough background knowledge of the industry that is needed to have supply chain analysis.
- Gap analysis- The purpose of the gap analysis in supply chain analysis is to come up with the location of the key supply chain industries and source their inputs regardless if it comes from within the region or not. This tool allows the analysts to input the interested industries and geography for the analysis. It will also tabulate the purchases that are made from other industries and the share of those purchases that are made within the region and out of the region.
- Market research- Researching within the market of the industry expands the identification of any potential industries that could be included in the supply chain and determine if will it be a good fit for the region given the existing market conditions and the industries that benefits from it and determine if it has the potential to expand nationally, globally where it can demand drivers and projections.