When the COVID-19 pandemic hit, most companies across the globe were affected. Supply chain issues kept worsening, and it led to extreme management problems. Only 22% of companies have proactive, effective supply chain networks.
Many businesses don’t track or do not know how to track their supply chains. For a resilient supply chain, supply chain mapping is critical. In this guide, we’ll go over supply chain mapping and its importance.
What is Supply Chain Mapping?
Supply chain mapping (SCM) means knowing who are individuals and suppliers involved in a company’s supply chain network. Through this process, companies document all the information regarding their supply chain, and it helps them create a map of their network. This can be a global supply chain map.
All materials, goods, and shipments used are also mapped in a supply chain map. Then this map is used to find opportunities, mitigate risks, and manage suppliers in a supply chain. Using supply chain analytics, companies can easily trace and identify the origins of everything involved in a supply chain.
Why is Supply Chain Mapping Important?
Supply chain mapping is an essential tool that helps you choose the right strategies and put them in place to solve supply chain issues. For example, if a supplier is facing a shortage or if your order has been lost, you can easily map where the problem lies.
Whenever anything unexpected happens, you will have important knowledge needed to tackle the problem. With a deep understanding of your supply chain, including the timeframes, surrounding costs, and risks, you also gain a competitive advantage.
As businesses grow and expand, many disruptions can occur. Expansive supply chains mean intricate problems can occur, and each problem is time-sensitive. Mapping your supply chain goes beyond just your supplier’s location. It also helps you understand your supplier’s supplier.
Benefits of Supply Chain Mapping
Improved Visibility and Transparency
Supply chain mapping improves the visibility of your product or material’s origins. If there are any issues, you can figure out where the product quality or value is lost or added. Any quality issues or slow production can be traced.
Mitigate Risks
When you’re mapping your supply chain, you can determine potential risks from before and mitigate their impact. For example, how will your business be affected if your supplier fails to ship the materials in time? Or if a country you import raw materials from is always on the verge of natural disasters? You can have backup plans in place.
Strengthens Your Supply Chain
Supply chain mapping also helps you strengthen your supply chain network. When you understand each supplier or vendor’s business ecosystem better, you can easily communicate your goals and expectations with them and bolster relationships.
Streamlining and Speeding Up Processes
With supply chain analytics, you can gain valuable insight into the existing connections in your supply chain. You can analyze each connection between the various entities. In case of any delays, you can identify the origin and focus on solving the problems.
For example, if three of your suppliers are shipping you the same material, but only two of them have been able to fulfill the order, why is the third one slow? You can negotiate with them to speed up the process.
Cashflow Elements
You can also discover which elements affect your business’s cash flow. You can manage the supplier payment or credit terms. Some suppliers work on a credit basis, while some might want you to pay instantly.
Businesses often fail to pay for the goods and services, which slows down the entire supply chain. You can manage your expenses better and deal with late payments when you understand your supply chain better through supply chain analytics.
Competitive Advantage
Many competitors might also get their shipment from the same suppliers as you. With supply chain mapping, you can identify, acknowledge, and resolve any supply chain issues before they affect your production or delivery time.
If you’re looking for a supply chain mapping tool, reach out to PREDIK Data-Driven today. They are a research firm based in the US, and they offer a variety of data science solutions to companies in different sectors, including automotive and healthcare.
You can consult their experts and identify supplier-customer relations to visualize the tiers in your supply chain network. With supply chain analytics, you can improve the procedures in your supply chain.
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