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How to Use Supply Chain Analysis

This article focuses on how to identify supply chains for a particular industry. Supply chain analysis can be used to find leakage in the economy, or where money is leaving the region that might otherwise be captured. It can also be used as an exploratory tool for deciding what businesses might be a good fit in your region.

In this example, we’ll examine the supply chain for Automobile Manufacturing in Greensburg, IN. Greensburg is home to a Honda Civic assembly plant, and the industry has grown by over 1,300 jobs since 2010. 

  • Start by clicking Input-Output from the left side menu on the homepage.
  • Click Industry Supply Chain
  • Under “Select an Industry” enter your desired industry. We’ll use Automobile Manufacturing in this example.
  • Under “Select a Region” enter in the region you’d like to view the analysis for. We’ll use Greensburg, IN MSA in the video below. 
  • IMPORTANT: Supply chain analysis is highly dependent on using a “functional economic area” as the region. MSAs are typically good proxies for these areas.
  • Click Run.

We now have the supply chain industries for Automobile Manufacturing, ranked by the amount of money spent on each. We can also see what percentage of that money is spent within the region, and what percentage leaves the region in the form of imports. Three industries near the top of this list show some promise for ways of cutting down on money leaving the region. The top three industries that Automobile Manufacturing purchases from are not found in Greensburg, and therefore the region is losing around $156 million to outside suppliers.

It’s not always feasible to bring in new businesses to a supply chain. Another approach would be to look for industries that already have a presence in the region, like Motor Vehicle Gasoline Engine & Engine Parts Manufacturing in Greensburg. Almost 30% of purchases for this industry are outside the region, which might indicate that expanding the businesses already in the area could help bring in more of the $16M spent on imports.

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Let us know what specific questions we can help you with (we may even add your question to our knowledge base).