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 money 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 Aerospace Product and Parts Manufacturing in Toronto. 

• 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 Aerospace Product and Parts Manufacturing in this example.
• Under “Select a Region” enter in the region you’d like to view the analysis for. We’ll use Toronto CMA in the video below. 
• IMPORTANT: Supply chain analysis is highly dependent on using a “functional economic area” as the region. CMAs are typically good proxies for these areas.
• Click Run.

We now have the supply chain industries for Aerospace Parts and Product 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. The top 4 industries shown below spend, 0n average, 92% of their total on in-region purchases, which helps to stimulate Toronto’s economy.

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 Other Fabricated Metal Product Manufacturing in Toronto. Almost 23% 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 $3.5M spent on imports.