The basics: How
to use supply chain mapping to bring transparency to your supply chain
Multi-tier supply chain visibility is imperative for
taking pre-emptive action within your supplier network. This article describes
the basic characteristics of supply chain mapping.
The world, with its commercial
and organizational interdependencies, is drawing ever closer together.
Solutions and strategic approaches can no longer only be pursued on a regional
or national level. What's needed is a holistic view. But how can we get there?
As you know, highly complex
and intertwined supply networks have evolved over the last few years.
Structural changes to supply chains have become part of daily operations and
are increasing in pace and intensity. Agility turns into a decisive advantage.
Practice shows, however, that
one factor is missing in order to manage complex supply networks: TRANSPARENCY.
Knowing your direct suppliers
and managing your direct suppliers' processes alone is no longer sufficient. Multi-tier
supply chain visibility is imperative for taking pre-emptive action within your
supply network. Research shows that the best way to understand complex relationships
is through graphical representation. The problem up to know is to have a system
which is both current and complete. Enter supply chain mapping.
What
is Supply chain mapping?
A
supply chain map is a graphical representation of your supplier network (or
selected supply chains). Maps can either be geographical or an abstract network
design.
How does supply chain mapping work?
Supply chain mapping is a
living system that graphically represents your supplier network. It does
not mean building a model of your supply chain only once. Data
changes all the time. To handle this living system you need a database in the
backend. Every stakeholder should have access to this database so all users
have the same understanding of the supply chain.
The database holds master data
of suppliers (and sub-suppliers) and information about the relationships
between these companies. When you think about the supply chain, you immediately
think of a deliverable relationship. But in reality, the chain includes
financial relationships, partnerships, etc. The complexity of the supply chain
increases when you include attributes, such as products or transport concepts,
to deliverables relationships. When you have all this information you can
create a supply chain map like in the example image 1.
Image 1 shows a complex network. The red knot in the middle
is “your” company, the so called focal company.
As you can well imagine, the
supply network above is too complex to be of any real use. What is needed is a
way to filter out the information you need.
Next week I will show you, how to filter supply chains out of a complex network.
Stay tuned.
