Sankey charts are a type of flowchart that is used to visualize the flow of materials or data between different entities or groups. They are a powerful tool for understanding complex systems and identifying opportunities for improvement. In this article, we will explore how to create Sankey charts and the many ways in which they can be used to gain insights and improve decision-making.

What is a Sankey Chart?

A Sankey chart is a type of flowchart that is used to visualize the flow of materials or data between different entities or groups. It was originally developed by Swedish engineer Gotleif Sankey in the early 20th century as a way to visualize the distribution of materials in a manufacturing process.

The chart consists of a set of interconnected circles, with the ends of the arrows representing the flow of materials or data. The circles are typically labeled with the names of the entities or groups involved in the flow, and the arrows are directed from the source to the destination of the flow.

One of the key advantages of Sankey charts is their ability to easily show the relative amounts of flow between different entities or groups. This makes them particularly useful for analyzing processes or identifying bottlenecks or inefficiencies.

How to Create a Sankey Chart

Creating a Sankey chart is relatively straightforward, as most business intelligence tools and data visualization software programs have a built-in Sankey chart creator. Here are the basic steps for creating a Sankey chart:

1. Identify the source of the flow and the destination.
2. Identify the entities or groups involved in the flow.
3. Create a set of circles for each entity or group, labeled with its name.
4. Create arrows between the circles to represent the flow of materials or data.
5. Customize the chart as desired, such as adding filters or labels.

Some common data visualization software programs that include Sankey chart creators include Tableau, PowerBI, and Excel.

Applications of Sankey Charts

Sankey charts are a versatile tool that can be used in a variety of settings to gain insights and improve decision-making. Some common applications of Sankey charts include:

1. Process Analysis: Sankey charts can be used to visualize the flow of materials or data through a process, highlighting any bottlenecks or inefficiencies. This can help identify areas where improvements can be made.
2. Supply Chain Management: Sankey charts are particularly useful for analyzing the flow of materials or data through a supply chain, allowing manufacturers to identify and address bottlenecks or inefficiencies.
3. Financial Analysis: Sankey charts can be used to visualize the flow of income or expenses between different entities or groups, helping financial analysts identify areas where costs can be reduced or revenue can be increased.
4. Customer Analysis: Sankey charts can be used to visualize the flow of customers between different entities or groups, allowing marketers to identify the most valuable customer segments and tailor their marketing strategies accordingly.

Conclusion

Sankey charts are a powerful tool for visualizing the flow of materials or data between different entities or groups. They are easy to create and can be used in a wide range of applications, from process analysis to financial analysis and beyond. By gaining insights into the flow of materials or data, organizations can identify opportunities for improvement and make more informed decisions.

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