Supply Chain Mapping: What it is & Why it's Important

Supply chain challenges surged into international focus during pandemic and new challenges continue today as a result of geopolitical disruptions. For many businesses, new challenges revealed that their supply chains were not as strong as they might have believed.

To enhance resilience and prepare for future disruptions, businesses must adopt a proactive approach to supply chain risk management. It is essential to integrate resilience from the outset, ensuring that comprehensive contingency plans are in place for any unforeseen interruptions or disasters - this is why supply chain mapping is important.

The British Standards Institution identified several common errors in supply chain management in the results of their research. Digital Freight Alliance thought our experts and members could offer practical advice to help companies strengthen and streamline their supply chain processes.

 

What is Supply Chain Mapping?

Supply chain mapping is the process of creating a visual representation of your entire supply network, from raw materials to the final product in your customer’s hands.

 

Definition of Supply chain Mapping

A supply chain map includes all the key players: suppliers, manufacturers, warehouses, distribution centers and retailers. It’s like Google Maps revealing the path your product takes to reach its destination. But it’s not just about drawing a diagram.

Understanding the supply chain mapping process is crucial for effective implementation. Mapping your supply chain gives freight forwarders a bird’s eye view of how everything fits together. You can see the relationships and dependencies between each component, and how they impact the overall flow of goods.

 

Importance of Supply Chain Mapping

So why make time and open a work stream for supply chain mapping? Because knowledge is power.

A comprehensive supply chain process map is like having a new AI prediction application that shows you potential risks and opportunities across the entire supply chain. You can use it to identify bottlenecks, optimise processes, mitigate risks and make sure you have the right suppliers in place.

It’s the foundation for building a resilient, agile, and sustainable supply chain.

 

Benefits of Supply Chain Mapping

The benefits of supply chain mapping are huge. First and foremost, a supply chain roadmap helps you reduce risks and manage supply chain disruptions. By mapping out your entire supply  network, you can spot potential disruptions before they happen and develop contingency plans. It also helps you improve efficiency and cut costs.

With a clear picture of the supply chain, companies can streamline processes, eliminate waste, and negotiate better deals with suppliers to find favorable freight rates. But perhaps the biggest benefit of supply chain mapping is the reassurance that comes with knowing exactly where products are coming from and how they are being manufactured. 

The consumers of today demand transparency and accountability. A comprehensive supply chain map shows that a business is committed to ethical and sustainable sourcing.

 

5 Key Steps in Supply Chain Mapping

1. Identifying suppliers and stakeholders

The first step is to identify all the key players in your supply chain. This includes not only your direct suppliers, but also their suppliers, and so on down the line. You’ll need to gather information about each supplier, including their location, capabilities, and performance history. When supplier mapping, don’t forget to involve internal stakeholders too, like your procurement, logistics, and quality control teams, to ensure strong supplier relationships.

 

2. Gathering data on supply chain processes

Next, you'll need to collect data on all the processes and flows in your supply chain. This includes information on:

• Raw materials and components
• Manufacturing processes
• Inventory levels and locations 
• Transportation routes and modes 
• Lead times and delivery schedules. 

The more detailed and accurate your data is, the more useful your supply chain map will be. Consider using  supply chain mapping software to automate data collection and keep everything up-to-date, thereby enhancing your supply chain operations.

3. Visualizing the supply chain

Once you have all your data, it's time to put it together in a visual format. There are lots of different ways to create a supply chain map, from simple flowcharts to interactive digital models. The key is to choose a format that's easy to understand and share with others. Use clear labels, colours, and icons to highlight important information and make the map intuitive to navigate.

 

4. Analyzing the supply chain map

With your supply chain map in hand, it's time to start analysing it for insights and opportunities. Look for patterns, trends, and anomalies that could indicate potential risks or areas for improvement. For example, you might discover that a particular supplier is consistently late with deliveries, or that you have too much inventory tied up in certain locations. Use these insights to develop targeted improvement plans and track progress over time.

 

5. Continuously updating and improving the map

Finally, remember that supply chain mapping is an ongoing process, not a one-time event. As your business evolves and your supply chain changes, you’ll need to continuously update and refine your map. Make it a regular part of your supply chain management process and involve your team in identifying new data sources and improvement opportunities. The more you use and update your supply chain map, the more valuable it will become for your overall supply chain strategy.

 

How Supply Chain Mapping Helps Identify Potential Risks

One of the biggest benefits of supply chain mapping is its ability to help you identify and mitigate potential risks within your company's supply chain. By providing a comprehensive view of your entire supply network, a supply chain map can reveal vulnerabilities and dependencies that might otherwise go unnoticed.

 

Types of risks in the supply chain

There are many different types of risks that can impact your supply chain, including: 

Supplier risks: financial instability, quality issues, capacity constraints

Transportation risks: delays, damage, theft - Inventory risks: stockouts, obsolescence, excess inventory

Compliance risks: regulatory violations, ethical breaches, reputational damage 

Each of these risks can have a significant impact on your ability to meet customer demand and maintain profitability. That's why it's so important to identify and address them proactively.

 

 

How Mapping Reveals Vulnerabilities

Supply chain mapping helps you identify potential risks by providing a clear picture of how your supply chain is structured and how each component is connected.

For example, let's say you have a single supplier for a critical component. If that supplier experiences a disruption, it could bring your entire production line to a halt. By mapping your supply chain, you can identify these single points of failure and develop contingency plans to mitigate the risk. 

Similarly, a supply chain heat map can reveal geographic concentrations of suppliers or transportation routes that could be vulnerable to natural disasters or geopolitical events. By diversifying your supplier base and transportation options, you can reduce your exposure to these risks.

 

Using Supply Chain Mapping to Improve Efficiency

In addition to helping you manage risks, supply chain mapping can also be a powerful tool for improving the efficiency and performance of your supply chain.

By providing a clear picture of how your supply chain operates, a comprehensive map can help you identify opportunities to streamline processes, reduce costs, and improve efficiency.

The Role of Technology in Supply Chain Mapping

As supply chains become more complex and global in nature, technology is playing an increasingly important role in supply chain mapping and management. From data collection and analysis to visualization and collaboration, there are a wide range of tools and platforms available to help companies create and maintain effective SCM maps.

 

Supply Chain Mapping Software

One of the most important tools in the supply chain mapping toolkit is specialized software designed specifically for this purpose, often provided through supply chain mapping services. Supply chain mapping software typically includes features like:

Data integration: The ability to pull data from multiple sources, including ERP systems, supplier portals, and transportation management systems.

Visualization: Tools for creating interactive maps and diagrams that show the flow of goods and information through the supply chain.

Collaboration: Features that allow multiple users to access and update the supply chain map in real-time, facilitating communication and coordination across the organization. 

Analytics: Built-in analytics and reporting capabilities that help users identify trends, patterns, and opportunities for improvement. By using supply chain mapping software, companies can automate many of the manual tasks involved in creating and maintaining a comprehensive supply chain map, saving time and reducing the risk of errors.

In addition to streamlining the mapping process, technology can also provide a range of other benefits for supply chain management, such as real-time visibility and predictive analytics. 

 

 

Integrating mapping technology with other supply chain systems

Of course, supply chain mapping software is just one piece of the larger supply chain management puzzle.

To truly optimise supply chain performance, it's important to integrate mapping technology with other key systems and processes. By integrating supply chain mapping software with ERP systems, companies can ensure that supply chain data is accurately reflected in financial and operational planning.

Ensuring synergy with your Transportation Management Systems (TMS) can help to optimise transportation routes and ensure that goods are delivered on time and at the lowest possible cost.

And by integrating supply chain mapping with supplier collaboration platforms, companies can facilitate communication and data sharing with key suppliers, improving visibility and reducing the risk of disruptions.

By taking a holistic approach to supply chain management and leveraging the latest technologies, companies can create a more agile, resilient, and efficient supply chain that delivers value to customers and stakeholders alike.

 

Communicating the value of mapping to stakeholders

To secure ongoing support and investment in supply chain mapping, you need to communicate its value to your key stakeholders.  This means developing compelling business cases that highlight the financial and operational benefits of mapping. It also means sharing success stories and case studies that demonstrate the tangible impact of mapping on supply chain performance. And it means engaging stakeholders through regular updates and performance reports that showcase the ongoing value of mapping.

By effectively communicating the value of supply chain mapping, you can build a culture of transparency, collaboration, and continuous improvement that drives long-term success.

 

Final Thoughts

Supply chain mapping is a powerful tool for driving optimisation and mitigating risks. By following the key steps and best practices we've covered, you can create a comprehensive map that provides invaluable insights.

DFA members can reach out to their personal account managers for support for optimising their supply chain. Keep in mind, supply chain mapping is a continuous cycle. Engage with your stakeholders to update your map frequently.

Use the actionable insights to drive strategic decisions that optimize your supply chain. Commit to ongoing enhancements, and you can further develop a supply chain that's more agile, cost-effective, and competitive in the long run.