3 factors affecting procurement planning
Achilles’ Debbie Metcalfe LLM MSc MCIPS, Trainer and Advisor, shares
Supply chain mapping is important for businesses to realise their corporate social responsibility policies.
The Chartered Institute of Purchasing and Supplyconsiders corporate social responsibility (CSR) to be the “number one issue in its role in helping organisations to responsibly increase prosperity”. By bringing ethics into business, organisations are able to create benefits for the public, improve their image and help to eradicate negative behaviours.
Buyers are often those that engage with CSR the most and the majority of businesses have policies in place to prevent slavery in the supply chain, lower carbon footprint and promote sustainable sourcing.
However, to properly enforce CSR policies, buyers need to have a 360 degree view of their supplier networks beyond the first tier. Visibility and transparency are key, and one way to enact this is through supply chain mapping.
This functionality allows businesses to manage risk across global and complex supply chains, empowering companies with information relating to who they buy from and in turn who supplies their suppliers all the way down the chain.
Achilles’ supply chain mapping helps buyers understand their networks beyond level one and tier one suppliers. Businesses gain visibility of their supply chain by product code, with a range of search, filter and display tools helping them to manage the data.
The mapping function collects information on sub-suppliers and links relationships. Suppliers will be asked questions relating to their company, including relationships between the products they sell and those they buy.
Our solutions give clarity over who is in a buyer’s supply chain, highlights potential points of failure, gives information to support risk mitigation, improves awareness of how global events could cause disruption and reveals clear interdependencies in the supply chain.
Writing in Supply Management, Luis Olivie, global business development director at Achilles, explained there are a few tips companies can follow when it comes to supply chain mapping.
Firstly, businesses clearly need to recognise the risks, but then visibility needs to be created that spreads across networks. Research from Achilles showed 40 per cent of businesses buying only in the UK have no information on second-tier suppliers. What’s more, one in five companies have no information about their tier-two suppliers across the world. Organisations need to map their supply chain and then ensure policies are in place to support continued visibility.
According to Mr Olivie, the most successful supply chain maps are those that get the support of suppliers. This requires buyers to clearly explain their reasoning to partners and the benefits of increased transparency. Most will be attracted by the opportunity to gain insight into their own supply chains, which will in turn help them build resilience.
Of course, buyers could meet some resistance from suppliers, Mr Olivie explained. This is likely to be the case if there is sensitive information involved. Consequently, businesses need to make sure their partners can control who has access to information and can enjoy confidentiality.
Nevertheless, working collaboratively can make what feels like a big job much easier. Indeed, some industries share the same suppliers, so there are opportunities to work collectively.
Mr Olivie claims the best way to do this is through a collaborative community, where businesses work together to split costs and time.