China Restricts Supply of Components to Top U.S. Drone Maker

What Your Business Should Know about Supply Chain Mapping

July 5, 2024

Article

More than half (55%) of supply chain leaders say they have no visibility into their upstream supply chain, according to a recent McKinsey report. This alarming stat leaves these businesses at a higher risk of a supply chain disruption and regulatory noncompliance, among other threats.

To protect against this kind of exposure, businesses should adopt an ongoing discipline known as supply chain mapping.

Supply chain mapping is the process of understanding supplier and multiple sub-tier relationships in a supply network, as well as item-level sources. It involves mapping out how materials, goods and products move from one location to another. This helps to ensure that the supply chain runs with sustainability and that it meets regulatory requirements. It also satisfies the need compliance teams, corporations and governments have to ensure accurate tracking of their products.

[News: Exiger Leads Market in AI-Driven Multi-Tier Visibility with Versed AI Acquisition]

By understanding the flow of materials from procurement to finished goods within supply ecosystems, your organization can identify potential bottlenecks quickly and minimize any legal or financial liability that may arise due to regulatory noncompliance. Powerful technology from Exiger can also help simplify the complexities of coordination and monitoring that go with supply chain mapping.

How Supply Chain Mapping Works

Here’s a simple view: You have a supplier relationship when someone produces the product that your customer buys. This supplier is known as the Tier 1 supplier, and they buy parts to assemble the product from the lower tiers, down to the nth tier of suppliers. These lower tiers, for example, can provide materials such as metals, plastics and electronics.

But mapping the entire supply chain down n-tier suppliers often presents a challenge, as it can be difficult to find and access all necessary supplier data.

To start, an initial inventory of the company’s suppliers should be taken. This includes:

Any subcontractors who are used by existing direct suppliers
Any sub-suppliers of raw materials or components used by direct suppliers
Any other entities, like transit partners, related to the main supply chain

Such an inventory should be kept updated as often as possible (automation can help achieve this), as changes may occur at any point and could potentially impact the supply chain’s lead times. The second step is then to investigate each entity on the list, including detailed information on their practices, operations and business processes. This due diligence not only allows companies to gain a better understanding of supplier operations but can also help them identify any potential risks in their supply chains.

If you’re looking for deeper visibility into your supply chain, item-level mapping is a key layer. It involves tracking additional identifiers beyond what is typically included in the standard barcode, such as certifications and descriptions, for an accurate and granular view of each product in the supply chain. This level of detail can enable complete visibility into the movement and status of a product throughout the entire life cycle from start to finish.

Challenges Involved with Supply Chain Mapping

Mapping and gaining comprehensive visibility into the supply value chain can be a challenging process that requires careful planning, coordination and execution.

Lack of Coordinated Visibility
One of the primary challenges associated with supply chain mapping is the lack of visualization between the processes, systems and teams involved. For example, there can be a lack of alignment between production planning systems, inventory management systems, warehousing systems and logistics providers. This disconnect leads to discrepancies in data that can generally prevent full visibility into the supply chain.

Not Enough Real-Time Data
The lack of real-time data on supply chain operations is another challenge when it comes to mapping out a supply chain. This is because traditional manual methods such as paper-based reporting are still widely used in many cases to track materials at different stages along the production process. Even when electronic solutions are implemented, in many cases they still may not have sufficient data integration capabilities between different management systems.

Poor Communication
Poor communication between supply chain stakeholders is yet another issue that can hamper successful mapping efforts. Organizations often struggle to ensure everyone involved has access to the same level of information about materials being used or shipped as well as any changes made throughout each stage of production. Furthermore, unauthorized subcontracting or sourcing of raw materials by suppliers can make it even more difficult for organizations to properly map out their supply chains.

Raw Material Sourcing
Raw material and item-level sourcing can also make mapping difficult. But without specific details about the chain of custody of materials and item-level provenance, you run the risk of having counterfeit materials in the manufacturing process, as happened recently with counterfeit titanium in airplanes. Being able to track materials and their quality from an OEM to the part manufacturer, distributor, and the mill — down to the fourth, fifth, or nth tier of supply — gives you the visibility that’s necessary for supply chain mapping.

Why Supply Chain Mapping Is Important

Supply chain mapping is an essential tool for any organization looking to understand who, how and where their products or services are produced. A thorough map of the supply chain shows you where potential risks may exist, allows for the monitoring of its progress, and helps ensure compliance with laws and regulations. There may be foreign ownership risk with a third-party supplier, for example, or exposure to financial crime sanctions.

Mapping is particularly important for organizations producing or buying goods subject to increasingly stringent international laws, such as the Uyghur Forced Labor Prevention Act (UFLPA) or Russian Sanctions legislation. These laws put the responsibility on businesses to understand the entire supply chain process including materials used, production methods and labor sources in order to remain compliant.

At Exiger, we’re using our leading-edge technology to help organizations map and monitor their supply chains with visibility to nth-tier suppliers. Our tools identify and surface risks deep within your supply chains — including visibility into third-party ecosystems and item-level provenance — to keep your business running safely and ethically.

How Exiger Helps You Master Supply Chain Mapping

Exiger uses proprietary AI and machine learning technology to track nearly 17 million supply chains, and our extensive database aggregates 7 billion source records of supply chain installations and 1.3 billion contract records. These capabilities — along with our forced labor database, the largest in the world — give you the necessary visibility to monitor your supply ecosystem in real time, comply with sanctions, and achieve resilience in your supply chain.

The 1Exiger platform can deliver the precision required to identify suppliers, customers and other entities in your third-party ecosystem with potential exposure to sanctions, potential forced labor or climate change risks, whether through corporate ownership, key individuals, supplier relationships, climate change or other multi-tier connections.

Technology in the 1Exiger platform suite also offers end-to-end visibility down to the nth tier of suppliers, revealing risk insights at the item, part, and raw material levels of the supply chain. This visibility matters because supply chains are item-specific, and being able to track the provenance of all materials in the supplier ecosystem from end products to the hole in the ground builds resilience.

This solution can also help with cost savings through material demand aggregation and directed buy programs, smarter sourcing strategies, and improving multi-tier forecasting and strategic planning to ensure continuity of supply.

Exiger is helping businesses with the powerful, purpose-built tools and resources necessary to deliver effective and efficient supply chain mapping. Contact us for a product demo today.