Supplier networks and the need to get insight

By Anneleen Veldhuizen | May 04, 2020

Companies are realizing more than ever that their supply chains are global and span multiple, often invisible tiers. This realization has become none more so apparent than during the unprecedented disruptions seen over the last weeks in numerous supply chains.

While companies know their first-tier suppliers well, transparency is often lost in a chain’s underlying tiers, meaning companies never really know the full picture of all the suppliers they truly depend upon. And recently, all too many supply chains have realized that this lack of insight can become a real problem.

It is therefore not a surprise that gaining broader insight into a chain’s supplier network can bring several advantages, starting with the ability to assess and mitigate risks. When companies gain insight into how their supply chain is really mapped out, they can start working on assessing risks, which in turn can lead to risk mitigation. For example, mapping out the dependencies in your supply chain may reveal that several suppliers depend on just one key supplier themselves. So, what has been revealed is a potential hotspot – a potential risk to your supplies, because if that single supplier cannot deliver, then neither can your suppliers deliver to you. By unearthing these sorts details before disruption happens, back-up plans can be made to ensure continued delivery. And even if some disruption has already occurred, It’s never too late to start.

Another advantage of gaining insight into your supplier network is that it gives you a better chance of understanding your social and sustainability impact. When you know the suppliers involved at deeper tiers of your chain, you can take steps to ensure that your social and environmental policies are implemented to the benefit of all suppliers in your chain.

How to get started?

One of the things we often hear from companies is that it’s not so much a matter of not wanting insight into their supplier network, but more that it’s a daunting task to get started. Managing a potentially large amount of information, understanding the links between those bits of information, and, above all, guaranteeing the security and access levels to that information are certainly challenges. In addition, convincing suppliers to share information about their own suppliers can be a particular challenge.

To move beyond scepticism, suppliers in your network need assurance that any information you gather will be treated confidentially and won’t be used to their disadvantage. Limiting the information you try to acquire to that which is strictly necessary (for example, not requiring details on pricing agreements, or making some questions optional) can also reduce resistance. Offering the suppliers in your network a robust and easy-to-use platform where they can confidently and safely register details about themselves and their suppliers is also key.

ChainPoint Supplier Insight

ChainPoint Supplier Insight is a platform specifically designed to help companies map out their supply chains and gather information from underlying tiers by asking simple questions. It’s easy to get started, and you can map out your supply chain step by step. Even better, ChainPoint Supplier Insight makes it easy for your suppliers to lend a hand, helping you gather the information you need by letting them cascade your questions to their own suppliers. You don’t have to do it all on your own. And because Supplier Insight is built on ChainPoint’s established supply chain security technology, you can absolutely give your suppliers the assurance that the information they supply won’t be misused or shared to their competitors without their authorisation.

You can start with a few simple questions and gradually add new information requests such as sustainability-related information or quality information. 

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Understanding the bigger picture

With the possibility to create an overview of the bigger picture, you will be able to bring more resilience to your supply chain. Understanding the potential risks and being able to have a back-up plan in times of disruption will give you the confidence to take considered risks. You can never be 100% sure about what the next hurdle will be or when it appears, but when you know you’ve done everything you can to be ready for it, it will give you the breathing space to continue your business in as stable a way as possible.

 

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