Getting everything you need for a birthday party is relatively easy. You can grab a cake and snacks from the grocery store, decorations from the party supply store, and beverages from the wholesale liquor store. But a bunch of supplies a party does not make. You need to strike the right tone with the music, bring out the cake at the right time, and ensure everyone’s drinks are flowing all night. Anyone can host one great event, but hosting birthday parties that friends look forward to every year? That’s a skill.
Regularly shipping fantastic products to your customers can be a lot like hosting incredible parties. Sure, it’s never been easier to source whatever you need—be it raw materials, parts, or finished wholesale goods—but putting it all together (over and over again) is the real challenge. Luckily, supply chain mapping can help you get a grip on all the moving parts.
What is supply chain mapping?
Supply chain mapping is the process of gathering, organizing, and understanding the intricate business ecosystem of suppliers, your suppliers’ suppliers, and the many logistical mechanisms that need to function for products to reach your customers.
The supply chain map is a visual representation of all this information. Relevant data might include where suppliers are located, where their suppliers are located, and how long it takes for critical materials and components to reach their intended destinations. It can also include the costs associated with the many subparts of the sourcing process and the supply chain issues that can affect or delay the flow of goods.
“To me, supply chain mapping is about visually understanding each part of the process, from the moment the raw materials are sourced to the final delivery to customers,” says Steve Schwartz, the founder and master tea blender at Art of Tea, a subscription retailer of fine teas from all over the world. “It helps break down every step, so you can track how goods, information, and finances move through your system.”
Why is supply chain mapping important?
There’s value in any small business owner having a bird’s-eye view of their company’s supply chain operations. Being up to date on your supply chain map can help your ecommerce business in the following ways:
Operational efficiency
Supply chain mapping gives you a clear view of your entire supply network, helping you determine both efficiencies and bottlenecks in the process and quickly make adjustments. For example, by researching where your suppliers’ suppliers are located and the estimated time it takes for essential materials to travel from one place to the next, you can better estimate manufacturing and delivery times. With a clear picture, you can see where your supply chain might falter if one supplier experiences delays.
“The mapping process gives us insight into key areas like inventory levels, supplier performance, and potential delays,” Steve says. “It helps us spot challenges early, like delays in sourcing, so we can make adjustments and maintain a steady supply chain.”
Cost reduction
By identifying inefficiencies and opportunities for improvement, businesses can use supply chain mapping to save money. For instance, supply chain mapping can significantly reduce costs involved with inventory management and warehousing. By understanding how fast products move through your system, you can better forecast storage needs and avoid spending on excess space.
Risk management
Having a detailed map of your entire supply chain helps you anticipate potential risks to the flow of goods—things like natural disasters, changes in customer demand, political instability, or labor shortages. For example, if your map shows that you rely exclusively on one supplier for a critical component in one of your manufactured products and that supplier is located in a state frequently hit by hurricanes in the late summer and fall months, you can explore diversifying your sourcing for August through October.
Compliance
Buyers, sellers, importers, exporters, and manufacturers of goods are subject to a combination of complex laws and regulations at the local, state, and federal levels. Supply chain mapping is important for understanding how your sourcing may already comply with such rules, and what changes you may need to make to ensure compliance. This can help you avoid both costly fees and legal penalties that can grind business operations to a halt.
Transparency
Aside from regulatory concerns, there are ethical and environmental concerns to sourcing that—while not legally compulsory—can be important to your brand image. A lot of customers place a premium on sustainable and ethical supply chain practices. They also value knowing exactly where the products they’re buying came from. Understanding all the nooks and crannies of your supply chain map allows you to fully and honestly communicate your sourcing practices to your customers. Over time, this can substantially improve customer satisfaction.
“At Art of Tea, we focus on ensuring traceability and quality from the source,” Steve says. “We map out everything, from where our ingredients come from to how they’re processed, stored, and shipped. We document the whole journey to maintain transparency.”
How to map your supply chain
- Identify key stakeholders
- Understand stakeholder relationships
- Break out costs and timelines
- Visualize the supply chain
- Leverage technology
Your line of business, geographic scope of your sourcing, and customer delivery expectations all affect the complexity of your supply chain map. Although these variables differ from business to business, these guidelines offer a starting point for mapping your supply chain:
1. Identify key stakeholders
Know who you’re dealing with. Document all of your suppliers, wholesalers, distributors, and other companies that touch your production, storage, and distribution processes. Consider documenting their suppliers, sub-wholesalers, and sub-distributors if you’re able to obtain that information as well.
No need to connect all the dots just yet. “Keep things simple at the beginning,” Steve advises. “Just having a clear visual or spreadsheet of your key suppliers and timelines can be a game changer.”
2. Understand stakeholder relationships
Once you’ve organized the key players into a single spreadsheet, code them according to function, their relationship to your business, and their relationship to each other. For example, a direct-to-consumer (DTC) clothing company might organize its stakeholders into the following categories, with numbers to represent their position in the production process:
- Raw cotton suppliers (1)
- Fabric manufacturers (2)
- Garment makers (3)
- Distribution centers (4)
- Transportation nodes (5)
- Shipping companies (6)
3. Break out costs and timelines
Once you’ve populated your data platform with all of your stakeholders and detailed their relationships within the supply chain, you can start drilling down into the data. For example, document how long it takes for Supplier A to ship Component X to Manufacturer B, and how much money your business must front to keep that process going. These critical data points will inform how you visualize your supply chain.
4. Visualize the supply chain
Create a visual representation of your supply chain, either on paper or with computer graphics. It might look like a linear timeline or maybe a cycle. It could even be a literal map of all the locations where your materials and components are sourced, annotated with timelines, delivery routes, costs, and contingency plans to mitigate risks.
Given the complexity of this task, you might consider hiring an infographic designer or data visualization expert to help you effectively organize all of the data and present it in a readable, visually appealing manner.
5. Leverage technology
A variety of tools can help you digitize your supply chain maps. Digital software tools like Sourcemap and ecommerce apps like 8Data are interactive and adaptable, and they often offer a variety of features that permit real-time data collection, tracking, and analysis. “Today, we use technology to track everything in real time,” Steve says, “which helps us manage a larger and more dynamic supply chain.”
Steve notes there are likely to be major strides in supply chain mapping innovation as new technologies emerge and existing technologies are refined. “Technology, like AI and blockchain, will play a big role in the future of supply chains,” he says, “especially for improving transparency and real-time tracking.”
Common challenges of supply chain mapping
Building a workable supply chain map is possible for any ecommerce business owner. As noted above, you’ll need to put in some time and effort to collect, organize, and visualize the relevant data. However, many business owners face challenges when mapping their supply chains. Here are a few to keep in mind, as well as some solutions for getting around them:
Scattered supply chain management systems
Supply chains are complicated and involve a lot of different parties. Businesses sometimes have to rely on these different parties to accurately (and even manually) input the necessary supply chain data so it can be centralized and adequately assessed. Human error or delays in reporting can cause big problems here, but supply chain automation tools offer a solution. These tools automatically collect and record the necessary data from points on the entire chain, such as fulfillment data and shipping times.
Lack of transparency throughout the chain
Some of your suppliers may be unable or unwilling to share their own supplier data—an essential part of any comprehensive supply chain map. A lack of transparency in your suppliers’ supply chains might be a red flag that those suppliers are not sourcing raw materials or components ethically or sustainably. If a partner is consistently unable to provide the data you need to fully map out your supply chain, it may be time to seek out another supplier who can meet your data needs.
Poor communication within the chain
Supply chain visibility is only possible when all stakeholders are communicating with each other effectively. If a supplier consistently fails to provide timelines or doesn’t identify inefficiencies in the system, it can result in profit-killing supply chain disruptions and delays.
To avoid breakdowns or outdated data, regularly check in with your suppliers, distributors, and other supply chain partners to ask questions and seek feedback to identify areas for improvement. “Build strong relationships with your suppliers; this can give you flexibility when things don’t go as planned,” Steve says. “Human relationships and trust have helped us in our 20 years of business in the tea space and will for the next 20-plus years to come.”
Supply chain mapping FAQ
What is meant by supply chain mapping?
Mapping supply chains is the process of visually representing all the entities and processes involved in sourcing, transporting, storing, selling, and delivering a business’s products to its customers.
What is included in the supply chain mapping process?
Supply chain mapping includes identifying all of your supply chain partners and stakeholders, and representing their relationship to your business and to each other. It also includes the various costs and timelines involved at every stage of the supply chain, potential risks that can impede the process, and contingency plans to deal with them.
How does supply chain mapping benefit ecommerce businesses?
Supply chain mapping helps ecommerce businesses in several ways: It ensures regulatory compliance, streamlines processes, cultivates transparency, lowers costs, and helps identify risks.
What is an example of a supply chain map?
An example of a supply chain map might be a chart divided into columns representing each phase of a t-shirt’s manufacturing process. Each column organizes the supply chain partners involved in each stage, with lines connecting them to the partner from which they receive inputs and provide outputs. These lines are annotated with costs, timelines, and potential risk points. Lines may branch off into new sections depending on the contingency plans that have been developed to address potential risks.
