Thursday, January 31, 2013

What is supply chain mapping?

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.

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