What is a Supply Chain Maturity Model?
Supply chain managers often struggle with implementing the best practices and policies to help develop the functionality of their supply chain. Using various models to help with the supply chain network is the basis of the maturity model. And while there are several models which can be used, typically there are only 5 which are a standard in the industry.
Here is what you need to know…
What is the purpose of a maturity model?
Supply chain maturity models rely upon the 7 R’s of supply chain management, key performance indicators (KPIs), and objective key results. The goal of the supply chain maturity model is to help understand the value behind various parts of the company and its framework so that performance goals can be reached.
Supply chain models differ from capability maturity models, which are often misunderstood as being supply chain models, in that supply chain models focus on the key performance areas and reducing risks within the supply chain.
The difference between supply chains and capability supply chain models
Capability maturity models are based upon ad-hoc, defined, linked, integrated, and extended process development and optimization. This process seeks to understand the process of where a supply chain works currently. The models which rely upon the capability maturity models are those seeking to venture into new goal-driven fields by using definitive data of the present performance of the supply chain.
Supply chain maturity models rely upon planning, sourcing, making, delivering, and return. From the basic concepts of supply chain management, five models have been adopted as the basic maturity models for supply chains. These five models are:
The Process Maturity Model
This model focuses on the space between the existing performance and the intended goals. This helps you to measure the processes of your supply chain and to optimize the various parts of your supply chain. Process maturity models may suggest that you minimize your carriers to improve your LTL strategy, that you integrate new carriers when needed, that you look at the competition, and that you structure your facility to handle all functions efficiently.
Procurement Maturity Model
As the name suggests, this model is used to help in procurement (acquiring) new things. The model uses a four-step approach focusing on the quality of the items, the ad hoc supplier, the sourcing/distributing, and the global supply of the items.
NPD Maturity Model
NPD maturity model focuses on toning down costs and negativity, which could affect the overall fiscal yields. New Product Development (NPDs) looks at the mission plan of the supply chain and compares that to the market studies and guides on a particular product or process. The model then makes an organizational strategy that can be implemented in the short term. When using the NPD maturity model, it is important that you continue to future-proof your supply chain. NPD maturity models are often viewed as being a marketing model.
However, the NPD maturity model can help with the suppliers and the supply chain as they generate strategies and goals. Use NPD models alongside other maturity models to have the best results.
Lean Maturity Model
Lean implementation is the goal of the lean maturity model. It addresses the activities currently used within the supply chain and creates a general awareness of the effectiveness of these areas. Next, the supply chain model creates an analytical report on the various stages of the supply chain and offers suggestions on how to best optimize the processes.
Lastly, the model provides you with a plan in which to execute this plan across the various areas of your supply chain.
S&OP Maturity Model
Sales and Operation Planning maturity models (S&OP) are the most difficult maturity models in which to use consistently, as the data is not the same for all departments or for all functions. The data relies upon multiple variants and can become quite daunting.
However, if you stick to having the model focus on spreadsheet data, supply and APS data, external information analytics, and data collaboration, you can find the best solutions. S&OP maturity models work best with AI, as data mining, predictive supply chain analytics, and other such features work best with artificial intelligence integration.
These are but five of the models which are available. There are several variations of these models and supply chain managers should consider models based upon their needs.
Why are maturity supply chain models important?
Supply chain maturity models are important because they not only show the supply chain where they are currently, but they show the company where they can potentially be eventually. But the models do not present the future as an abstract concept. It is not a dream-based driven model.
Supply chain maturity models use data of the company, analytics, external data, and more to create realistic visions of the future, building plans, and overall optimization for the supply chain.