Effective Strategies for Supply Chain Mapping and Its Key Benefits
Exploring new and unknown frontiers is always a challenging task. The same can be said for starting a business. Even though others before you have ventured through this path, you find yourself to be quite a trailblazer. After all, you’re going to do things your way, so you might as well do it right.
And since you’re about to carve a new path, you may need a map. Navigating the online market and everything that revolves around running an eCommerce store requires proper orientation, among other things, of course. If we look at the bigger picture, a supply chain is the very foundation of every online or retail business.
Mapping it is, therefore, more important than ever before. However, supply chain mapping isn’t just about knowing where your goods are coming from and where they’re going. It is so much more, in fact. That said, how does someone map a supply chain, and more importantly, why? Well, let’s find out.
What is Supply Chain Mapping?
Simply put, supply chain mapping is the process of gathering data about your suppliers, manufacturers and any other third-party service provider your company relies on. The purpose of gathering this information is to help you create a data map and understand who supplies you with what and when, as well as how exactly these goods move through your supply chain.
Supply Chain Mapping Example
Now, to help you better understand what is supply chain mapping and how it actually works, it’s best to create an example that can make the entire picture clearer.
As mentioned before, the whole purpose of creating such a map is to help you understand how the goods you sell are sourced and by whom, as well as how they move through your supply chain until they reach your customers. So, let’s look at the example below:
- Sourcing Raw Materials: Every supply chain map begins with raw materials. It doesn’t matter if you are the one who assembles the final product or you just sell it. Knowing where the goods come from and how they’re processed later on is essential for your business. For instance, companies that create clothes depend on cotton suppliers, while tech manufacturers rely on copper suppliers and so on.
- Manufacturing Plants: After the raw materials are obtained, they are transported to manufacturing plants for assembly, i.e., copper is used in manufacturing circuit boards, cotton is used in creating fabrics etc.
- Wholesale and Distribution Centers: Once the products are finished, they are moved to wholesalers or distributors who gather products from various manufacturers and distribute them throughout different retailers.
- Retailers (You): Retailers and online shop owners purchase finished goods from wholesalers and distributors so that they can sell these products to consumers either via physical or online shops.
- Consumers or Customers: The final destination for products or the last link in the supply chain is the consumers themselves. They purchase goods from stores like yours and use the product.
As you can see, this is a pretty basic example of how a supply chain is mapped. Of course, there are more factors involved, like whether or not manufacturers use their own transportation or they outsource to a third-party shipping logistics provider.
Also, are you the one manufacturing products or do you simply purchase finished products from wholesalers? How about timelines? Are goods shipped out at specific times of day, week or month? These are all the things that can and will affect a supply chain map. The more detailed information you manage to obtain, the better understanding you’ll have of how to optimise your supply chain.
Why is Supply Chain Mapping Important?
Yeah, why would you need a map anyway? Well, if you want to know what exactly is happening with your business at any moment, you’d want to map the entire supply chain. This is actually a crucial step in your logistics plan, provided you have one, of course. If you don’t, it’s high time you make one.
But back to the matter at hand. The main reason mapping a supply chain is important is that it allows you to look at the entire picture, not just aspects of it. This will enable you to determine every strength and vulnerability of your supply chain so that you can continue to optimise it and ensure everything runs as smoothly as possible.
Look at it this way: if there’s an issue with your supply chain, your customers surely won’t wait for you to fix things once issues fester into much greater problems. They’ll simply jump ship and move on to the next business that manages to meet their needs and expectations while you sort out the mess that could’ve been avoided to begin with.
If you’re wondering why even your loyal customers are turning their back on you, it’s because they have more power over their decisions. Your store certainly isn’t the only one in the market, so why would customers wait when there are so many options for them to choose from? Since there’s no room for mistakes in the online retail industry, supply chain mapping can help you avoid mistakes and spot issues before they get out of hand.
The Benefits of Mapping the Supply Chain
Looking at eCommerce logistics as a well-oiled machine that keeps things operational, it’s of vital importance to ensure that everything is in its rightful place. Mapping a supply chain may not seem like that big of a deal, but underneath it all, there’s a complex system that enables your online store to prosper in almost every environment.
And as such things usually go, business owners prefer to see tangible results. So, if you map the supply chain, what kind of benefits can you expect from it? Let’s have a look at some of those benefits then, shall we?
- Supply Chain Transparency - Knowing where the goods come from and how they reach you and your customers is just a small fragment of the entire story. The transparency that mapping the supply chain reveals is much more beneficial than it meets the eye. That said, you’ll be able to spot potential problems, such as supply shortages, demand spikes and many other issues before the situation escalates.
In other words, you’ll be able to prevent the worst-case scenario before it actually happens. Other than that, you’ll be able to spot growth opportunities as well. For example, where to cut costs, how to shorten transit times, where to find cheaper materials and other things that can vastly improve not just the supply chain itself but also your business endeavours.
- Minimise Risks - Every business venture carries a certain amount of risk. You never know what tomorrow might bring, despite your best efforts to anticipate the situation. However, with a mapped supply chain, you can minimise these risks and the damage they might cause.
For instance, having a backup supplier in case your main one cannot deliver for whatever reason helps you avoid any supply chain disruptions that would result from the lack of supply.
- Compliance - Believe it or not, the vast majority of supply chain operations revolve around compliance. Different rules, laws and regulations dictate how you source, transport and supply goods to your customers.
If you’re not compliant with any legislation, you’re about to face massive delays and potential fines. No one needs to tell you just how bad that is for your supply chain.
That said, when you map the supply chain, you’ll know exactly what you need to comply with. Preparing paperwork in advance, obtaining licences and permits that may be required and generally planning ahead helps you avoid such inconveniences and allows you to stay on top of things at all times.
How to Map a Supply Chain?
As you might imagine, supply chain mapping requires a lot of effort and dedication, to put it mildly. That said, you’ll need some help if you want to do things the right way. Fortunately, all the help you’ll need can be found in using the right tools, hiring the right people and leveraging the right technology for the task ahead.
Once you have all you need, the process comes down to mapping each aspect of the supply chain one link at a time. Sounds easy enough, right? Not really. The fact of the matter is that you have to pay close attention to details.
The more detailed and thorough your analysis is, the more data you’ll have to work with. More data means more effective solutions for whatever issues you may find along the way. With that in mind, here are a few steps you should consider following if you want to properly map your supply chain.
- Identify every supplier, partner and service provided you work or wish to work with in the future.
- Collect data on every partner and potential partner, as well as any supplier and vendors your partners are working with.
- Evaluate your partners from the least to most efficient.
- Integrate data into your system and use visualisation to help make things more comprehensible.
- Identify any potential risks and areas where issues may or are likely to occur.
- Leverage automation and forecasting tools to help sort through the information you gather.
- Place focused KPIs to prioritise processes.
- Identify costs and get rid of any unnecessary processes and materials.
- Implement a customer-centric approach.
- Monitor and optimise your supply chain regularly.
It’s also worth mentioning that supply chain mapping isn’t set in stone. Over time, your priorities will shift, suppliers will change, and processes will adapt to the new market trends. That means that you’ll have to map things as they change so that you only work with the most recent and most accurate information.
This step is critical for your future business endeavours. After all, if you’re not up to date with market fluctuations or changes in consumer behaviour, the way your supply chain runs now may not be enough to meet the demand or meet customer expectations.
So, you see, the entire purpose of supply chain mapping is to prepare your business for anything that may or will likely happen along the way. With such a map at your disposal, you can easily adapt to anything that currently goes on in the market or the industry for that matter. As mentioned before, there isn’t any room for mistakes, especially considering just how competitive the online retail sector is.
In other words, you snooze, you lose. So don’t snooze. Keep at least one finger on the market’s pulse and you’ll be able to act as soon as you notice even a slight shift in the current. That’s how you make sure that your store will remain afloat and that’s also how you make sure that your business will remain successful.
Map Your Supply Chain the Right Way With Bezos
Depending on the scope of your eCommerce operations, mapping an entire supply chain can be quite difficult, to say the least. Looking for professional assistance in such cases isn’t something to be ashamed of.
As a matter of fact, it’s quite beneficial as it can elevate your business to a whole new level. Here at Bezos, we have everything you need to help you effectively map your supply chain.
We are the eCommerce fulfilment partner that you’ve been looking for. With a global fulfilment network and cutting-edge technological solutions, we can optimise every aspect of your supply chain and help your company reach new heights.
All you need to do is reach out to us, and we’ll create a unique plan tailored specifically to your business needs. So don’t hesitate to call us today and see for yourself how we can make things work in your favour.
Conclusion: Supply Chain Mapping - A Stepping Stone Towards Success
Running an eCommerce business is a complex environment filled with challenges and obstacles at every corner. If you don’t know what’s happening in your company’s supply chain, you’re more likely to run into trouble that can have disastrous effects. Fortunately, supply chain mapping can help you avoid such issues and also help you better optimise entire processes.
This not only means that your supply chain will operate at optimum levels but also that your eCommerce business will continue to grow and develop further. After all, identifying potential problems and creating effective solutions is one of the keys to business success. This is exactly what mapping your supply chain is designed to accomplish.
FAQ:
What do you mean by supply chain mapping?
Supply chain mapping means identifying every key player within the supply chain ranging from suppliers to manufacturers and all the way to customers. By doing so, business owners can create a data map that shows them exactly how the supply chain operates and how goods move through it.
How to create supply chain mapping?
The key to creating a supply chain map is to conduct a lot of research. Every detail matters, which is why businesses must identify every link in the chain and learn everything there is to know about everyone and everything that’s involved in the supply chain itself. Once the links are carefully mapped, businesses can identify strengths and weaknesses in the chain so that opportunities can be exploited and mistakes can be avoided.
What is chain mapping?
Chain mapping is basically analysing and mapping every link in the supply chain one step at a time. It allows companies to understand how, where, why and when goods are moved through the chain. For example, raw material suppliers, manufacturers, wholesalers, retailers and customers are all links in the supply chain and analysing each one of them individually is a part of the chain mapping process.
What are the three dimensions of supply chain mapping?
As you may already know, the very structure of a supply chain consists of many companies that are all individual structures linked among themselves. They all carry out value-adding activities that contribute to the specific output or common goal. When mapping such a structure, the most common approach is to use three structural dimensions:
- Horizontal Structure - Mapping tiers within the supply chain, with each tier representing a stage goods must pass through before they reach customers.
- Vertical Structure - Mapping the number of suppliers, manufacturers or third-party service providers represented in each tier.
Horizontal Position - Mapping out where your company is positioned within the supply chain. For example, closer to the raw material sourcing if your company manufactures products, or close to the customer if your company sells finished products directly to consumers, or somewhere in between those endpoints.
