The Business Case For Supply Chain Mapping
In order to effectively enact a sustainable supply chain program, a company must first map out from where it procures its goods, directly or indirectly, from raw materials to finished product. The successful outcome of a supply chain map is that a company knows where and how the inputs, raw materials, products, and services they buy are flowing around the world. A company should know who is involved in the creation of their product throughout its entire life cycle, where every material is sourced, and how every material is sourced, manufactured, processed, packaged, shipped, and stored.
This can be a daunting task. As previously mentioned, businesses often operate in such a way that is non-linear, and as such, a supply chain map is effectively a supply chain web. While an individual company might be very familiar with its first-tier supplier (a supplier from whom they directly purchase goods), it is often less familiar with second and third-tier suppliers (suppliers from whom their supplier purchases goods, etc.).
In order to create an accurate and effective supply chain map, collaboration is key. Companies should utilize shared data sources, coordinate with category managers, and ask suppliers directly. Because of the complexity of supply chains, it is critical for companies to focus their efforts on the areas in which they could have the strongest positive impact—that is, high risk areas. The weakest points in a company’s supply chain should be identified and carefully analyzed in order to create and implement changes. Thus, companies that source goods from a region that is known to have sustainability issues or human rights violations should focus there first. Similarly, if a company utilizes a supplier who is involved in a trade that is recognized as being high risk, the company should focus on that supplier.
Although ethics is certainly an important factor, the effects of a sustainable supply chain reach beyond social responsibility. A sustainable supply chain makes good business sense—sustainable practices help minimize risk and ensure operations run smoothly. Focusing on a sustainable supply chain is a comprehensive way for businesses to ensure the timely production and quality of goods, as well as the reliability of the suppliers with whom they work, and avoid any catastrophes.
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