Supply Chain Mapping 101 for Businesses
Supply Chain Mapping
Over the past few years, major disruptions to global supply chains have caused major slowdowns and shortages that have had long-reaching effects. Supply chain mapping is one-way companies can plan ahead to avoid disruptions to their supply chain.
With the global nature of modern business, supply chains can be complex, relying on a variety of players in various countries. When one part of the supply chain is interrupted, the consequences are often widespread, causing a domino effect for many suppliers and manufacturers along the value chain. Regularly mapping your supply chain can help you create a more resilient business that won’t be devastated by disruption and slowdowns.
But what is supply chain mapping? Why is it so important? And how do you even get started? Read on to learn everything you need to know about the significance and strategy of the supply chain mapping process.
What is Supply Chain Mapping?
Essentially, supply chain mapping is gathering all the information about your company’s supply chain and using that data to make contingency plans. Rather than a one-time activity, supply chain mapping and analyses should be done regularly to have the most up-to-date, reliable information.
The information collected for supply chain mapping typically includes:
● Source of materials
● Supplier data
● Shipment data
● Transportation considerations
Once the supply chain is mapped, preferably from source to shelf, you can consistently monitor and analyze the data, looking for ways to mitigate risks to your supply chain.
Why is Supply Chain Mapping Important?
The nature of a global supply chain is complex. You may have suppliers in India and Africa, a manufacturer in Mexico or China, warehouses in North America, and customers around the world. It takes a lot of logistics to get goods and products to the right place at the right time.
When one part of your supply chain is interrupted–say your coffee supplier was hit with a bad storm–it can have far-reaching consequences. Suddenly, you can no longer get the raw materials you need to fulfill your orders, and now you’re scrambling.
Supply chain mapping can help you respond to the many unexpected disturbances that may occur as you conduct business. If you already have a plan B, you can act quickly and avoid or limit slowdowns. This also helps you better understand the timeframes and costs of running your business. With that information, you can consistently optimize your profit and loss.
Benefits of Supply Chain Mapping
Although it can be intimidating to start mapping your supply chain, there are several benefits that make it worthwhile. Here are some of the benefits of supply chain mapping:
● Create supply chain transparency: By mapping your entire supply chain, you have access to more data about where goods are manufactured and who is involved in the process, allowing you to be transparent with your business practices. Transparency helps you ensure quality, demonstrate compliance, as well as uphold your company’s CSR.
● Identify and prepare for risks: One event at a manufacturing facility can have major consequences across the supply chain. According to the Allianz Risk Barometer 2020, the most common causes of business interruptions include fires, storms, water damage, machinery breakdowns, and flooding. Knowing the risks ahead of time and preparing for the worst can help your business mitigate those risks.
● Improve relationships with members of the supply chain: In order to map out your supply chain, you’ll need to develop relationships with many of the players along the chain. Clear communication will build trusting relationships with others in the chain, which in turn can strengthen the entire supply chain.
● Increase efficiency: With all the information gathered through supply chain mapping, it’s easier to spot places where inefficiencies are slowing business down. With that knowledge, you can increase the efficiency of your supply chain, saving time and money in the process.
How to Use Supply Chain Mapping
Supply chain mapping is a process that involves collaboration from all supply chain entities. You can map out your supply chain in any way that makes sense to you – on paper, in a spreadsheet, etc. However, using a supply chain mapping software or partner can make the process a lot easier. If you’re looking to use supply chain mapping for your business, the following steps can help you get started.
- Invite your tier 1 suppliers to participate: Identify all of the key players in the production of your products. This includes suppliers and manufacturers as well as those in charge of storage and distribution. Document the business name as well as who your contact is. Keep assessment questions short to maximize the number of people participating.
- Move throughout the chain to tier 2 suppliers and beyond: You want to map out the source of raw materials. Eventually, you will create a map of all entities and relationships in the supply chains. Make sure you communicate often to ensure the supply chain is fully mapped. Sharing the data with your suppliers will likely encourage more participation.
- Analyze costs and time frames: Understanding what your costs are and how much time each step of the supply chain takes can help you determine what is adding value and what is not. You might make changes to processes to improve the efficiency of your supply chain.
- Identify the risks of each entity: Whether it’s political upheaval, environmental disasters, economic threats, or business regulations such as those in the EU, understanding the risks can help you prepare for disruptions ahead of time.
- Track the data: How does information flow through the supply chain? Smooth transferring of data, such as orders and shipments, makes the entire supply chain run more efficiently.
- Maximize the data: Once you have all of this data, make the most of it! Use it to forecast your supply ongoing to deliver demand. Leverage it to ensure the quality of supply is managed (and included in your forecast!). Let it help you monitor best practices to protect your supply chain and track and report on procurement and sustainability measures, both locally and globally. Use it to prove your sourcing compliance, and grow your business, sustainably!
How to Identify the Right Supply Chain Mapping Partner
If your supply chain is complex, you’ll likely need a supply chain mapping partner to help you keep track of all the moving parts and pieces of your map. Finding the right supply chain mapping partner will depend on the unique needs of your business. Here are some things to keep in mind when choosing a supply chain mapping partner:
Grade and useability
Finding a partner or software that is both enterprise-grade and user-friendly is key. Enterprise-grade service ensures you’re getting the most bang for your buck, while user-friendliness will be key in ensuring useability from the field to the boardroom and every step in between.
Often, companies are familiar with at least the first few tiers of their supply chain. Getting visibility and data all the way to the source – the farm, farmer, or plot of land – can be much tricker. Choosing a service that can help you achieve end-to-end visibility will help you develop more agile strategies.
In the past, companies have relied on third-party spot audits or high-level shipping/satellite data to generate supply chain traceability reporting. However, these tactics are quickly becoming insufficient for end-to-end, granular supply chain traceability needs. Partnering with a service that can provide you with real-time insights and reports from source to shelf is crucial to keeping up with rising supply chain demands.
Safety and security
Data safety and security are just as important as data integrity and granularity. As you evaluate a supply chain mapping partner, ensure that whatever tools they are using provide you and your data with the utmost safety and protection. Many tools these days are leaning on blockchain technology to provide strong data security. Choose a partner that has avoided data breach controversies and proven its ability to consciously provide security to its customers’ supply chain data.
Ongoing support and guidance
Supply chain mapping is an ongoing progress requiring the initial discovery along with continuous monitoring. Finding a supply chain partner that supports your initial mapping but also offers ongoing support, guidance, and best practices as you evaluate your findings and optimize your supply chain is an enormous benefit. Choose a partner with the expertise and bandwidth to provide such support.
BanQu’s powerful blockchain software can help you map your supply chain to reach business, sustainability, and compliance goals. With BanQu, you can trace your supply chain data all the way to the source, increase visibility, and eliminate blind spots. With real-time data and insights powered by BanQu, you can implement preventative and detective control throughout your entire value chain to ensure the utmost compliance and efficiency. The BanQu team is an experienced partner that provides ongoing support to multinational enterprises across the globe. Click here to schedule your free demo!