--- title: What Is Supply Chain Analysis? A Comprehensive Guide --- # What Is Supply Chain Analysis? A Comprehensive Guide Last Reviewed: March 4, 2026 6 min read [1 comment](https://www.selecthub.com/supply-chain-management/supply-chain-analysis/#comments) [ ![Sylvia Marak](https://www.selecthub.com/wp-content/uploads/2021/09/Sylvia-Headshot-96x96.jpeg) ](https://www.selecthub.com/author/sylvia-marak/) [Written by Sylvia Marak](https://www.selecthub.com/author/sylvia-marak/) Technical Content Writer [ ![Hunter Lowe](https://www.selecthub.com/wp-content/uploads/2023/11/cropped-Hunter-Headshot-96x96.jpg) ](https://www.selecthub.com/author/hunter-lowe/) [Edited by Hunter Lowe](https://www.selecthub.com/author/hunter-lowe/) Content Editor Table of Contents * [Supply Chain Analysis](#Supply%5FChain%5FAnalysis) * [The Process](#The%5FProcess) * [Tools](#Tools) * [Primary Benefits](#Primary%5FBenefits) * [Boost Value](#Boost%5FValue) * [Eliminate Weak Links](#Eliminate%5FWeak%5FLinks) * [Strengthen Planning](#Strengthen%5FPlanning) * [Improve Forecasting](#Improve%5FForecasting) * [Possible Issues](#Possible%5FIssues) * [Financial](#Financial) * [Physical](#Physical) * [Best Practices](#Best%5FPractices) * [Strengthen Shortcomings](#Strengthen%5FShortcomings) * [Adopt the Latest Tools](#Adopt%5Fthe%5FLatest%5FTools) * [Improve Cash Flow](#Improve%5FCash%5FFlow) * [Manage Customer Expectations](#Manage%5FCustomer%5FExpectations) * [Negotiate Early Payment Discounts](#Negotiate%5FEarly%5FPayment%5FDiscounts) * [Engage a Logistics Expert](#Engage%5Fa%5FLogistics%5FExpert) * [Conclusion](#Conclusion) Supply chain disruptions happen, and optimizing your [supply chain management](https://www.selecthub.com/supply-chain-management-software/) systems and processes to deal with them requires rigorous analysis. The ideal way to deal with unexpected disruptions is by utilizing supply chain analysis methodologies. [Compare Top Supply Chain Management Software Leaders](https://pmo.selecthub.com/top-scm-software-site-vers/) ![What is Supply Chain Analysis?]() Supply chain analysis evaluates processes while delivering products to customers. Each process undergoes step-by-step evaluation, i.e., purchasing raw materials from suppliers and delivering the final product to the customer. It analyzes the estimated time to deliver products without compromising quality. Supply chain analysis works great with logistics management to identify suppliers you can bypass, improve forecasts, reduce inventory and more. ## Supply Chain Analysis Supply chain analysis, or supply chain optimization, maps production processes to assess product flows (physical and monetary) and evaluate the overall usage of time and resources. In return, this assessment allows supply chain managers to understand their current processes and make smarter decisions. It also enables companies to create value-added processes while removing supply chain redundancies. Businesses can predict strategic opportunities using information obtained from sustainability reporting and performance metrics. The supply chain analysis model assesses policies and economic activities to spot inflation, unemployment, market disruptions and so on. ### The Process So, what’s the best way to conduct a supply chain analysis? Let’s look at how using the following steps: 1. **Supply Chain Mapping:** Provides a supply chain overview, including chain actor position, product flows and the interaction between suppliers and customers. 2. **Develop Economic Accounts of Supply Chain Agents:** Quantifies agent activities and their contribution to the materials flow, both physically and monetarily. With this information, the analyst can determine weak areas and find solutions to issues. ### Tools Supply chain analysis provides visibility into transportation, logistics, product price availability, demand and more. But what tools are required? 1. **Predictive Analytics:** Fine-tune supply chains by forecasting future events. It uses past data to make predictions. 2. **Prescriptive Analytics:** Leverage [AI](https://builtin.com/artificial-intelligence) and [machine learning](https://www.spiceworks.com/tech/artificial-intelligence/articles/what-is-ml/) to understand historical data and recommend the next course of action. For instance, it can answer questions like “how can we make it happen?” or how to create the next supply chain model. It provides ideas to deal with unexpected events. 3. **Descriptive Analytics:** Display the organization’s current and past performance on dashboards as graphs or charts to answer complex questions. It uses statistical modeling and [business intelligence](https://www.selecthub.com/category/business-intelligence/) (BI) on existing data sources for analysis. 4. **Hybrid Performance Measurement:** Evaluate supply chain performance using a hybrid model, i.e., data envelopment analysis (DEA). This model uses [neural networks](https://www.investopedia.com/terms/n/neuralnetwork.asp) and [decision trees](https://www.geeksforgeeks.org/decision-tree/) approach to evaluate performance. 5. **Performance Metrics:** Focus on improving quality using metrics like the cost of goods sold, [cash to cash cycle time](https://www.profit.co/blog/kpis-library/supply-chain/cash-to-cash-cycle-time/), timely shipping rate, order measurement, perfect order rate, sales forecast and more. This information will help determine which metrics are most relevant. [Get our Supply Chain Management Software Requirements Template](https://pmo.selecthub.com/scm-requirements-site-vers/) ## Primary Benefits Now that we know which tools and methodologies to follow, we will discuss the advantages of supply chain analysis. ![Supply Chain Analysis Main Benefits]() ### Boost Value Improve productivity in the long run by evaluating software functions. Compare two different programs and select one with relevant features and functions. Choosing an expensive module that provides the desired functionality might be a favorable option over cheaper programs. Though this option is a bit pricey, it can help save huge amounts of money in the long term. ### Eliminate Weak Links Create diagrams by linking components throughout the production journey to detect weak points. For example, your component would be shipping costs if you’re running a shipping company. Analyzing specific aspects can help optimize costs. Supply chain analysis lets you see a series of links and if they bleed resources. ### Strengthen Planning Minimize negative impacts with backup plans during unexpected events or natural disasters. Strategic planning and supply chain analysis can help avert disasters. ### Improve Forecasting Minimize volatility and make accurate spending forecasts using historical data. Make predictions by analyzing costs that are likely to rise, become stable or fall during peak or holiday seasons. [Compare Top Supply Chain Management Software Leaders](https://pmo.selecthub.com/top-scm-software-site-vers/) ## Possible Issues With supply chain analysis, organizations can identify issues within ongoing operations. Most often, these problems are related to timing, performance and efficiency. Here are some major supply chain issues businesses face: ### Financial This issue is related to monetary transactions between suppliers who often deal with goods supply or services. The most common issues they face are: * Logistics costs * Incorrect deliveries * Lost sales due to incorrect delivery or delayed shipment * Overhead costs Financial supply chain problems impact the financial performance of the business. However, with supply chain analysis, companies can identify areas to improve by: * Collaborating with suppliers to reduce overhead costs. * Identifying ways to reduce shipping and transportation costs. * Addressing funding gaps using finance options. ### Physical The physical supply chain often refers to people and the activities they carry out within the supply chain and their system. These operations are likely to create the following issues: * Abrupt demand change * Delayed shipping * Stock quality and quantity * Incorrect items * Stock custom clearance While supply chain issues directly impact customer experiences, supply chain analysis helps fulfill customer expectations. It can answer questions such as: * Will delivery take place as expected? * Are your products and services available 24/7? * How quickly can you solve customer queries? [Get our Supply Chain Management Software Requirements Template](https://pmo.selecthub.com/scm-requirements-site-vers/) ## Best Practices Once you’ve identified supply chain issues, your next move is to explore and find the best solution to improve overall processes. Here are some best practices to follow. ![Supply Chain Analysis Best Practices]() ### Strengthen Shortcomings You should start looking for alternate arrangements if you detect weak links within your supply chain or suppliers. You must evaluate the business based on social, political and environmental conditions. This evaluation helps create an ideal alternative or a great backup plan. ### Adopt the Latest Tools Ensure you’re using the latest tools and software for [inventory management](https://www.selecthub.com/inventory-management-software/). Inaccurate data, lack of visibility and delays happen if you’re using outdated tools. Some market-leading solutions include names like [Fishbowl](https://www.selecthub.com/inventory-management-software/fishbowl-inventory/), [NetSuite](https://www.selecthub.com/erp-software/netsuite/), [Zoho Inventory](https://www.selecthub.com/inventory-management-software/zoho-inventory/) and more. ### Improve Cash Flow Strong cash flow signifies a resilient and powerful business entity. This key marker indicates that your business can provide access to funds whenever required. Such organizations tend to have flexible finance options to move their business forward. ### Manage Customer Expectations Close gaps between customer expectations and services delivered by providing efficient and effective customer service. Keep customers updated with the latest information about service delivery times, items in stock, product availability and ranges. ### Negotiate Early Payment Discounts Reduce costs by negotiating with the right suppliers. This tactic strengthens relationships between suppliers, customers and the entire supply chain. ### Engage a Logistics Expert Companies can always engage an expert if the situation gets out of hand. For example, if a business undergoes a dynamic change, it’s possible to find complexities during the operation. A logistics expert can help solve delayed shipping, transportation, delivery times and more. [Compare Top Supply Chain Management Software Leaders](https://pmo.selecthub.com/top-scm-software-site-vers/) ## Conclusion Supply chain analysis is key to holding a competitive advantage and is a significant part of your supply chain. You can use these insights to identify issues and create new opportunities to increase profits and enhance the customer experience. How effective is supply chain analysis for your business? 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New technology, like robotic… ](https://www.selecthub.com/supply-chain-management/supply-chain-management-future-trends/) [ ![Sylvia Marak](https://www.selecthub.com/wp-content/uploads/2021/09/Sylvia-Headshot-96x96.jpeg) Sylvia Marak ](https://www.selecthub.com/author/sylvia-marak/) Mar 04, 2026 #### [Supply Chain Management](https://www.selecthub.com/category/supply-chain-management/) [The Top 10 Supply Chain Management (SCM) Features & Requirements](https://www.selecthub.com/supply-chain-management/supply-chain-management-software-features-requirements/) [Global supply chains are battling anxious economies, increased trade wars, environmental sustainability issues and an… ](https://www.selecthub.com/supply-chain-management/supply-chain-management-software-features-requirements/) [ ![Urnesha Bhattacharjee](https://www.selecthub.com/wp-content/uploads/2023/11/cropped-cropped-Urnesha-Headshot-2_Meet-the-Team-96x96.jpg) Urnesha Bhattacharjee ](https://www.selecthub.com/author/urnesha-bhattacharjee/) Mar 04, 2026 #### [EDI](https://www.selecthub.com/category/electronic-data-interchange/) [EDI vs API in the Supply Chain](https://www.selecthub.com/supply-chain-management/edi-and-api-supply-chain/) [It’s hard to imagine an effective supply chain management solution that doesn’t rely on EDI… ](https://www.selecthub.com/supply-chain-management/edi-and-api-supply-chain/) [ ![Kim O'Shaughnessy](https://secure.gravatar.com/avatar/aa3a61ac7e38580003de0d2fb4e71e8281ec6d7b9d0266351a38b2459e313e82?s=96&d=mm&r=g) Kim O'Shaughnessy ](https://www.selecthub.com/author/kim-oshaughnessy/) Mar 21, 2025 #### [Supply Chain Management](https://www.selecthub.com/category/supply-chain-management/) [5 KPIs for Supply Chain Analytics and the Tools to Find Them](https://www.selecthub.com/supply-chain-management/5-kpis-supply-chain-analytics-tools/) [Making sure a complex system such as supply chain management runs smoothly is a difficult… ](https://www.selecthub.com/supply-chain-management/5-kpis-supply-chain-analytics-tools/) [ ![SelectHub](https://www.selecthub.com/wp-content/uploads/2023/10/cropped-selecthub_logo-96x96.jpg) SelectHub ](https://www.selecthub.com/author/selecthub/) Aug 28, 2024 Originally published in September 2022 and last updated in March 2026\. Contributions from Sylvia Marak, and Hunter Lowe. ## About the Contributors The following team members helped research, create, and review this content. [ ](https://www.selecthub.com/author/sylvia-marak/) Written by [Sylvia Marak](https://www.selecthub.com/author/sylvia-marak/) Technical Content Writer Sylvia D. Marak is a technical content writer at SelectHub. Sylvia has more than four years of experience and expertise writing technical content related business intelligence and big data analytics. When not writing, she can be found traveling, baking, listening to music and drinking too much coffee. [See Full Bio](https://www.selecthub.com/author/sylvia-marak/) [ ](https://www.selecthub.com/author/hunter-lowe/) Edited by [Hunter Lowe](https://www.selecthub.com/author/hunter-lowe/) Content Editor Hunter Lowe is a Content Editor, Writer and Market Analyst at SelectHub. His team covers categories that range from ERP and business intelligence to transportation and supply chain management. Hunter is an avid reader and Dungeons and Dragons addict who studied English and Creative Writing through college. In his free time, you'll likely find him devising new dungeons for his players to explore, checking out the latest video games, writing his next horror story or running around with his daughter. [See Full Bio](https://www.selecthub.com/author/hunter-lowe/) SelectHub5 KPIs for Supply Chain Analytics and the Tools to Find Them * ‹ * › ### Conversation (1) ![Avatar](https://secure.gravatar.com/avatar/281d3616cf761f3582c0d76c23517846?s=32&d=mm&r=g) Write a response [Cancel reply](https://www.selecthub.com/supply-chain-management/supply-chain-analysis/#respond) Your message Your name \* Your email \* Website Save my name, email, and website in this browser for the next time I comment. * ![Avatar photo](https://secure.gravatar.com/avatar/a471eb39e46faf335d0398936c8ddb5bf8fbaee94932f3632fb2af8112ad6b6c?s=96&d=mm&r=g) #### **John** \- September 21, 2024 What is the difference between RIGHT TO AUDIT clause vs SUPPLY CHAIN ANALYSIS? **[Reply](#comment-194646)** Compare **Tier 1:** Fully/moderately supported out-of-the-box allowing for quick and easy deployment. Fully or moderately supported out-of-the-box with industry-leading capabilities and is immediately available after installation without needing any add-ons, integrations, or custom development. **Tier 2:** Supported with workarounds or add-ons that may require additional costs. Not directly available in the software, but can be accomplished using other built-in features, workarounds, or add-ons/products from the vendor with or without any additional cost. **Tier 3:** Requires partner integrations or custom development that is often at an additional cost. Requires additional integrations, plugins, marketplace applications from a third-party vendor, or custom development using the APIs, libraries, extensions, and development framework supported by the software, with or without any additional cost. 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