Understanding supply chain mapping
Supply chain mapping (SCM) refers to creating a global supply network map by documenting and recording information across the various entities and processes that play a part in a business’ supply chain. These may include partner organisations, suppliers, transporters, retailers, distributors, and customers.
Supply chain disruptions can be extremely expensive and can irreparably damage an organisation’s reputation. This is why it is important to have robust supply chain strategies to counter supply chain issues and mitigate disruption risks swiftly. Supply chain mapping tools guide the creation of these strategies by offering decision makers a visual representation of the flow of resources, materials, and processes through the supply chain, making it easier to identify potential risks and inefficiencies and highlight opportunities for supply chain optimisation.
Thorough supply chain mapping provides organisations with insights into what goes into the creation and distribution of their products and services. This includes detailed knowledge about timeframes, costs, and associated risks and information that can be leveraged to stay competitive in the face of unforeseen supply chain disruptions. Let’s take a closer look at the benefits of mapping your organisation’s supply chain.
Boost visibility and transparency
Supply chain mapping tools provide decision makers with details about where and how their products are manufactured, with an easy-to-interpret visual representation of the supply chain. This makes it extremely easy to identify gaps and inefficiencies in supply chain strategies and make the necessary adjustments and improvements.
Strengthen the supply chain
By fostering relationships among businesses in your supply chain and maintaining open lines of communication, you can better ensure that they are aware of your expectations and objectives as well as their place in the business ecosystem.
The supply chain mapping process offers a thorough analysis of the relationships between the various entities within the supply chain. This can help identify the causes of supply chain delays and disruptions and offer appropriate resolutions. An example of this is establishing which suppliers or vendors are the most prompt at fulfilling orders, as well as the ones that regularly lag behind. A resolution could be increasing the volume of orders to the faster suppliers while negotiating with the rest to speed things up.
Highlight cash flow risks
Suppliers with short payment terms combined with late-paying customers can adversely affect your business’ cash flow, causing supply chain disruptions. Having a supply chain mapping process in place can highlight when your cash flow is at risk, enabling you to take remedial measures.
Mapping your organisation’s supply chain
Supply chain mapping involves creating a visual representation of the various entities and processes that impact your supply chain and how they interact with your business and each other. The process of creating a supply chain map involves the following five stages.
- Identify stakeholders: Identifying and documenting all the businesses and individuals involved with your product’s production, storage, and distribution is important. Keep in mind that you may have completely different supply chains for different goods.
- Understand supplier relationships: Recognise the relationships between all the entities involved across the supply chain. Request your first-tier vendors and suppliers to take part in the mapping process, and in turn, have them extend this invitation to second and third-tier suppliers. Each organisation or entity documents what they buy and sell across the supply chain and to whom. This gives you a clearer picture of the potential bottlenecks and risks that could lead to supply chain disruptions.
- Establish costs and timeframes: It is important to work out the expenditure and timeframes involved in various parts of the supply chain. This will help you determine which functions and processes offer your business the greatest value.
- Acknowledge risks: Be aware of the various risks that could lead to supply chain disruptions. These could include a wide variety of issues across the various entities involved with your supply chain, including legal, economic, political, and environmental threats.
- Track data: Keep an eye on the flow of data and information through your organisation’s supply chain. The efficient and seamless transfer of data, including orders, shipments, and returns, is as important in controlling expenses as is the physical movement of materials.
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.
How can Infosys BPM help?
Infosys BPM offers in-depth supply chain optimisation services designed to transform the planning and execution of supply chain strategies. Reach out to learn more about how you can build a cost-effective and reliable supply chain with Infosys BPM.