How to Map a Supply Chain: Tools and Techniques
Understanding every tier in your supply chain is a strategic necessity in today’s global markets. However, mapping your supply chain is a complex undertaking.
This guide will break down the process of supply chain mapping by explaining the essential steps and resources that simplify this task.
The Benefits of Supply Chain Mapping
A supply chain map is more than a logistical exercise; it's a strategic tool that drives business success through transparency and comprehensive oversight. A supply chain map provides a clear view of your entire supply chain, visualizing the flow of commerce, including:
Material sourcing
Refinement
Production
Packaging
Distribution
By understanding the systems that make up your company’s network, supply chain managers can make better-informed decisions, improve efficiency, mitigate risks, and identify areas for improvement within their system.
Below, we list the steps to mapping a supply chain and give you the tools you need to make sure you map every tier of your network.
Steps to Create a Supply Chain Map
Creating a supply chain map involves a deep dive into the inner workings of your suppliers and their operations. This process can be a complex undertaking, with many different suppliers and factors to account for. Understanding the key steps of supply chain mapping will help you develop a comprehensive map of your network and give you valuable insight to the inner workings of your business.
1. Initial Supplier Assessment and Contact Information
Conducting an initial supplier assessment helps you understand the scope of your supply chain. You’ll be able to identify your suppliers and their primary representatives, and have a preliminary understanding of their operations.
Benefits of initial assessments: A preliminary assessment of your supply chain will identify the various nodes of your network and give you direct access to your suppliers. This will provide an initial assessment of your suppliers’ operations, as well as open up communication networks that will help you manage emergencies and disruptions should they occur.
Ensuring your assessment is complete: One of the primary challenges in supply chain mapping is making sure you have a comprehensive list of your suppliers and your suppliers’ suppliers.
Tools for an initial assessment:
Begin with a list of all suppliers, including direct and indirect suppliers, and collect comprehensive contact details for each. This should include their address, key contacts, and communication channels.
A lifecycle map of your products, from raw materials to end-of-life, will identify all stages of the supply chain and give you broad information on your suppliers.
Conduct supplier self-assessment questionnaires (SAQs) to obtain direct feedback from your suppliers regarding their operations, sub-contractors, compliance strategies, and more. This will give you an initial overview of your suppliers’ practices, and potentially identify areas of concern.
2. Assess Business Priorities
Determining your business priorities will inform your supply chain decision-making and help you make the necessary adjustments to your operations.
Benefits of assessing priorities: Evaluating your business’s priorities helps you understand why you choose your suppliers, and helps you assess whether suppliers in your network are a good fit for the company. Knowing your environmental, social, and governance (ESG) goals is key in ensuring your suppliers are maintaining continuity with company values.
Align with stakeholder expectations: Your company’s priorities are typically determined by stakeholder expectations. This can include a focus on sustainability, ethical sourcing, or quality assurance from your suppliers. Look at your suppliers’ operations and ask yourself if their practices align with company goals and stakeholder values.
Tools for conducting priority assessments:
Identify your company’s core values and long-term goals and create a list of the most important factors.
You may also list your key stakeholders, including customers, investors, and employees to determine their expectations for the company’s sourcing practices. Keep these priorities in mind when you’re mapping your supply chain, as these will highlight suppliers that may pose risks to your brand reputation.
3. Identify Risks
As you map your supply chain, identifying risks will provide you with deeper insights to the vulnerabilities within your network, and enable you to better respond to emergencies.
Benefits of risk assessment: Mapping your supply chain risks will help you make informed decisions about your sourcing strategies by uncovering where your supply chain is most vulnerable, and help you avoid disruptions.
Risk assessments will also point out any redundancies within your system. Redundancies may be necessary as they reduce dependence on a single supplier, but they can also be a source of unnecessary expenses.
Being comprehensive in your risk assessment: It’s important to analyze all risks within your network, both internal and external. This can include suppliers with a history of ESG compliance violations, market volatility, and supplier stability.
Tools for risk assessments:
Create a comprehensive supply chain risk map along with your standard supply chain map. This will help you dive into the main vulnerabilities in your chain and pinpoint the risks at every tier.
Risk mapping services by third-party experts will ensure you’re taking every issue into account, including indirect risks that often go overlooked.
4. Implement Tracking Systems at the Purchase Order Level
The ability to track your products from the purchase order (PO) level helps maintain full transparency for your stakeholders. This is important in supply chain mapping, as it provides tangible value to both you and your customers.
Benefits of PO tracking systems: By tracking your products and materials from the PO level, you’ll be able to pinpoint the exact origin and journey of each product. This will ensure that every item can be accounted for from the source to the end consumer.
PO traceability also shows your customers where their purchases come from. This is increasingly important as more customers are investing in sustainably- and ethically-made products. PO traceability ensures your sustainability claims are valid and your ESG values are being upheld.
Challenges in PO tracking: Full-scale traceability is difficult to achieve. With diverse and international supply chains, products may come from a variety of sources.
Tools for PO tracking:
Implementing supply chain management software can be key in full-scale PO tracking. Tools like IoT, AI, and blockchain can help provide you with live updates on your operations and give you greater insights into transparency.
5. Identify Compliance and Regulatory Requirements
One of the most important steps in mapping your supply chain is identifying the compliance and regulatory requirements that influence your ESG due diligence. While going above and beyond regulatory requirements is ideal for brand reputation, understanding the compliance standards of your international suppliers is key to maintaining smooth operations.
Benefits of understanding regulatory requirements: Businesses with international supply chains may not be bound to the regulations of their suppliers’ countries, but violations from their suppliers will still have major impacts. Failing to meet ESG compliance standards can result in fines, supply chain disruptions, or damage to brand reputation.
Understanding international requirements: The primary obstacle in identifying compliance and regulatory requirements is ensuring your international suppliers are meeting the legislative requirements of their country, as well as company values. Make sure you’re accounting for international laws, domestic laws, and your own business priorities.
Tools for meeting regulatory compliance:
Document all relevant local and international compliance regulations affecting your supply chain or work with a third-party compliance expert. By obtaining a greater understanding of the regulations overseeing your operations, you’ll be better equipped to meet standards and uphold ESG practices.
Evaluate each supplier's ability and history of compliance with ESG regulations. This will help you mitigate risk of compliance violation as well as identify suppliers that may pose a risk to your operations. Key performance indicator (KPI) dashboards are powerful tools that give you real-time analytics on your supply chain operations, letting you keep track of changes in quality trends, assess supplier ethics scores, and compare suppliers’ performances.
Regular auditing schedules will ensure adherence to company standards and regulatory compliance and will help you stay informed on your suppliers’ operations. Relying on ESG experts can significantly reduce the risk of compliance violations and provide you with assurance that all audits will be thorough and accurate every time.
Getting Help
Modern supply chains are increasingly complicated, with interconnected systems that are constantly changing. Supply chain mapping will give you a deep look into your company’s operations and the networks that drive it, and will provide you with real-time updates that help you ensure your supply chain aligns with your company values, goals, and growth.
QIMA offers a broad range of support in supply chain management, from our step-by-step supply chain mapping guide to our risk mapping services that help you identify and manage vulnerabilities in your network. By partnering with us, you can take the hassle out of supply chain mapping and ensure your company is operating at the highest level throughout the entire network.
For more information on how QIMA can help you map your supply chain, contact us today.
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