When it comes to visibility into their supply chains, brands and retailers have a lot of catching up to do. A McKinsey survey found that only 2% of companies have visibility into their supplier base beyond the second tier, meaning they don’t know the location and key risks facing most of their downstream suppliers. Businesses that haven’t mapped their supply chains yet are leaving themselves vulnerable to an array of supply chain risks, including material shortages, shipping delays, compliance risks, and legal penalties.
Supply chain mapping is the process of documenting the exact source of every material and all factories and suppliers involved in the transformation of raw materials into finished goods. The pandemic put into stark relief the strategic advantages that supply chain mapping creates. Businesses that had mapped their supplier bases ahead of the pandemic were able to more quickly and easily procure constrained materials and limit disruptions, since they could readily identify problem areas and sourcing alternatives.
There’s an even more pressing reason why businesses must map their supplier bases. Supply chain mapping is increasingly necessary to ensure compliance with recent regulations, including the United States’ Uyghur Forced Labor Protection Act (UFLPA) and the supply chain due diligence laws being proposed and enacted across Europe. Companies that haven’t mapped their supply chains are exposing themselves to enormous regulatory and reputational consequences, since the lowest rungs of the supply chain are often where the greatest social and environmental abuses occur.
Still, it’s no mystery why so many businesses have been slow to map their supply chains: It’s a lengthy process that requires buy-in from both internal stakeholders and outside partners. We’ve often heard from brands and retailers that they don’t know where to start. Thankfully, traceability software makes the difficult process manageable, especially for large enterprises that rely on thousands or even tens of thousands of suppliers.
Mapping your supplier base is a major undertaking, but consider it an investment in your business’s future. The value of a supply chain map far exceeds the time and resources required to create it, and its importance only grows each year.
Here’s how to do it.
Successfully mapping your supply chain requires motivating your suppliers to participate. The easiest way to get supplier participation, of course, is to make it a condition of your working relationship. But it also helps to remind your vendors of the value this exercise provides for them.
Some vendors might be hesitant to provide information, especially if they feel it may be sensitive. Assure them you’ll protect their commercial confidentiality and promise those suppliers control over who has access to their information. And share the information you collect with them: The insights your map generates will help them better be able to identify risks, which is in the interest of all parties.
Supplier assessments set the stage for your working relationship and provide opportunities for closer collaboration between buyers and suppliers.
TradeBeyond enables businesses to map their supply chain and extract actionable insights from the data, including gaps in their supply chain and opportunities to consolidate or scale, all while continually monitoring suppliers’ compliance.
TradeBeyond’s supplier relationship management module CBX Partner has industry-leading traceability features that allow you to map your supplier base and share the resulting insights across your entire organization. The platform’s supply chain maps illustrate the relationships between vendors and factories, and even visualize key performance and scorecard metrics such as audit results, certifications, and risk levels, so you can see at a glance any vulnerabilities in your supplier base. These scorecards can be customized based on your company’s priorities and internal standards.
The platform automatically syncs with factory and audit providers including Bureau Veritas, QIMA, SGS, TÜV Rheinland and sustainability platforms including amfori, Higg, and WRAP, making it easy to monitor and score your suppliers on a variety of compliance metrics.
TradeBeyond provides a comprehensive solution for ensuring brands and retailers stay ahead of their current and future sustainability targets. Contact us today to learn how TradeBeyond can help your company foster a more sustainable supply chain.
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