**London**: In the wake of COVID-19, manufacturers face critical supply chain challenges. Mapping supply chains can provide vital insights into risks and opportunities, helping companies develop effective risk management strategies, even without dedicated teams or tools.
Since the onset of the COVID-19 pandemic, supply chain disruptions have frequently posed challenges for manufacturers, significantly impacting their operations. Companies are now faced with the task of assessing potential risks to their supply chains and developing strategies to manage these risks effectively. However, for many organisations lacking a dedicated supply chain team, robust tools, or adequate training, addressing these issues can be particularly daunting.
Despite such limitations, businesses can enhance their operational efficiency by mapping the supply chain of one of their key products. This approach offers valuable insights with a relatively modest investment, particularly when presented in a visual format instead of complex spreadsheets. Visual aids can assist companies in identifying where additional safety stock and inventory buffers may be essential, as well as highlight risks and opportunities, ultimately providing a roadmap for a more strategic risk management review.
To initiate the supply chain mapping process, companies should start by gathering pertinent data to create a visual representation that clearly outlines three main aspects:
- The sources of materials,
- The pathways through which suppliers procure their materials, and
- The logistics involved in shipping these materials.
The essential supplier information can further be summarised to build performance metrics, facilitating the identification of weaknesses, risks, and opportunities within the supply chain. This data-driven approach fosters a deeper understanding of the costs and interdependencies associated with suppliers, and it can be easily reviewed, shared, and updated on a regular basis. Compiling data on the geographical locations of suppliers, critical components and materials, and sourcing for high-volume products can significantly enhance visibility.
The initial steps for successful supply chain mapping include the following:
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Data Compilation: Businesses should pinpoint key supply chains—such as those for high-volume or critical products—and gather comprehensive details, including supplier data, part numbers, lead times, and associated costs. Organising this data by categorising parts allows for the identification of trends and potential areas for improvement.
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Supplier Relationship Analysis: Companies should extend their focus beyond direct suppliers to include Tier 2 and Tier 3 suppliers. Understanding these relationships is crucial for attaining a comprehensive view of the supply chain and unearthing vulnerabilities that could affect sourcing raw materials or components.
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Creation of a Visual Map: A visual representation of the supply chain should be crafted, illustrating the flow of materials and components from suppliers to manufacturing facilities. This map can disclose the transportation routes, revealing excess movements and potential risks related to weather disruptions or port congestion.
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Supplier Risk Index Development: By evaluating factors such as on-time delivery, responsiveness, quality consistency, and financial stability, companies can assess the risks associated with each supplier. A weighted risk score can be established for each supplier based on these criteria, forming a key component of the overall traditional risk review process.
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Ongoing Analysis and Action: It is imperative to regularly review the supply chain map and risk scores to pinpoint potential bottlenecks or sources of disruption. Companies should brainstorm various mitigation strategies—including alternative suppliers, adjusted order quantities, or increased safety stock—and develop a comprehensive plan to address identified risks.
Further tasks may involve categorising and segmenting purchased parts according to their susceptibility to external forces and the complexity of sourcing. Additionally, engaging with Tier 2 and 3 suppliers to gauge their relationship dynamics—determining whether they prefer a relational or transactional partnership—can enhance collaborative efforts.
Effective risk mitigation is vital in supply chain management, and understanding how to leverage the supply chain can expose opportunities for growth. The acquisition and analysis of extensive information are likely to contribute to increased success in navigating supply chain complexities.
Melissa Burant, a supply chain project manager and supplier scouting leader, alongside Marc Schneider, an industrial specialist and project manager at CIRAS, part of the MEP National Network, underscored that many manufacturers seek improvements in supply chain management yet lack direction on where to initiate such endeavours. Supply chain mapping represents a practical first step in this journey, enabling organisations to glean beneficial insights for more effective supplier performance reviews and to enhance their overarching risk management strategies.
Source: Noah Wire Services
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