by Lori Pilla, Vice President, Custom Contracting and Supply Chain Consulting Solutions, Intalere
The maturity of your supply chain depends on many factors, including size of the organization, class of trade and available resources. The capabilities your organization possesses in terms of tactics, operations and strategy can offer a glimpse into where you are in terms of the maturity of your supply chain. Let’s take a look at the four stages of supply chain maturity to see where you might fall.
Stage 1: Ad-Hoc
At this stage, the focus is on today and fighting whatever fires may come up on a daily basis. There are limited controls and few metrics, with maybe something like comparison to prior year being the major benchmark. This stage is also typified by few formal policies and processes that have evolved to their current state without formal design. There is also limited data availability and limited functional coordination.
Stage 2: Controlled Enterprise
The focus in Stage 2 is on control and budgeting – basically the proverbial mantra of “making the numbers.” There is usually a formalized organizational structure and position descriptions as well. In terms of metrics, this stage utilizes more robust measures with comparison to budgets, industry and competitive analysis, and stronger product knowledge. Stage 2 also has productivity measures and substantial functional coordination, but is also marked by organizational silos.
Stage 3: Integrated Supply Chain
Stage 3 focuses on internal integration and a commitment to customer service that drives the organization. There is an emphasis on cross-functional coordination. Incentives are widely used and continuous improvement process is firmly entrenched in the culture. In terms of data, this stage features integrated databases and processes, benchmarking and targeting, and an overall goal to aspire to “world class” supply chain effectiveness. There is extensive functional coordination, i.e. “integrated logistics.”
Stage 4: Advanced Supply Chain
Finally, in the Stage 4, the functional organization gives way to process organization, which seeks out innovative approaches (best practices) for developing sourcing strategies and uses them to shape processes. The vision is on integration with the supplier and customers, and the use of advanced integration technologies. The advanced supply chain organization influences strategies and objectives of suppliers and customers to be more aligned with their own.
Whatever your size and aspirational level of supply chain maturity, there are things, that with a strategy and supportive organization and culture, you can do to improve your supply chain organization. Based on a foundation of performance management and technology, working to improve your processes in terms of inventory management, contract utilization, customer service and transactional procurement, are goals worth working towards.
Learn more about Intalere’s transformational supply chain solutions.