In today’s world, businesses operate in an increasingly dynamic and complex environment. As data and information flow more and more in complex systems, it can be challenging to analyze and understand the flow of information and resources. This is where Sankey charts can be a valuable tool for streamlining business operations and improving decision-making. In this article, we’ll explore how to create and apply Sankey charts in business settings.
What are Sankey charts?
Sankey charts, also known as flowcharts or directed acyclic graphs (DAGs), are a type of diagram used to visualize flow-based relationships. They are particularly useful in contexts where information flows through systems or processes, such as supply chains, information networks, and financial analysis.
Sankey charts are typically created using the following elements:
– A layout of nodes (points or symbols)
– Directed arrows connecting nodes
– Numerical values for each node
Sankey charts work by placing nodes at each point of flow within the system or process being analyzed. Each node is assigned a unique symbol, and directed arrows are drawn between nodes to indicate the direction of flow. Numerical values can be added to nodes to show the quantity of information or resources flowing through them.
Examples of Sankey chart applications
Sankey charts can be used in a variety of business contexts, including supply chain analysis, information flow analysis, and financial forecasting. Here are a few examples of how Sankey charts have been used in practice:
– Supply chain analysis: A supply chain analysis might involve mapping the flow of raw materials, parts, and finished goods through various stages of production and distribution. A Sankey chart can help visualize the flow of materials and resources, including the quantities and direction of flow between each stage of the process.
– Information flow analysis: In many business environments, information is often shared and exchanged between different departments, teams, or individuals. An information flow analysis could involve mapping this flow through different systems or processes. A Sankey chart helps visualize who is communicating with whom, and in what direction, and how this flow is changing over time.
– Financial analysis: In financial analysis, Sankey charts can be used to visualize the flow of capital and resources into and out of a business. It can be used to show where the company is putting money in versus where it is spending it, and how this flows through all departments or lines of business.
How to create a Sankey chart
Creating a Sankey chart is a relatively straightforward process, but there are a few steps to follow:
1. Determine the data: The first step is to gather the data that you want to visualize. This will typically involve data from various sources, such as spreadsheets, business systems, or databases.
2. Create the layout: Draw the layout of nodes and arrows on the chart. Choose the type of node symbol and arrows that best represent the relationships in your data.
3. Assign values: Assign numerical values to different nodes to show the quantity of information or resources flowing through them. You can represent these values in a variety of ways, such as using colors, symbols, or labels.
4. Add details: If you want to include additional information in your Sankey chart, such as node labels or numerical values for the total value of flows, you can add these details using annotations outside of the main chart area.
5. Customize the chart: Finally, customize the chart by adjusting the colors, symbols, and layout of the node and arrow elements. This will help make the chart more visually appealing and easier to read.
Benefits of using Sankey charts in business
There are several benefits to using Sankey charts in business. For example:
– They can help identify and analyze complex flow relationships in business and supply chain processes.
– They can help managers and decision-makers make more informed choices by clearly visualizing the flows of information and resources.
– They can be useful for planning and forecasting future movements in business processes and systems.
– They can be an effective tool for creating visual summaries of complex data sets or financial information.
In conclusion, Sankey charts can be a powerful tool for analyzing and understanding flow-based relationships in business and supply chain processes. By creating these graphs with accuracy, detailing, and customization, they can help managers and decision-makers make better decisions and identify opportunities for improvement in their organizations.

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