Companies are at various stages of supply chain operations. Startups may still be in their infancies deciding on the best ways to get their products to customers. Veteran companies may expand their operations to reach international customer destinations. After developing and implementing best practices throughout the enterprise, a company might use a supply chain maturity model to assess the performance of its logistical network.
Supply chain maturity focuses on how resilient, stable, and healthy a company’s supply chain is during all phases of operation. It signifies how strong the supply chain is when experiencing any type of risk to processes, and how quickly it can recover while suffering little loss in progress or profits. To evaluate the maturity of the supply chain, key performance indicators are used. A company may adopt different maturity assessment models based on what it wants to assess in its supply chain.
WHAT IS INVOLVED IN A SUPPLY CHAIN MATURITY MODEL?
Supply chain maturity models should not be confused with a capability maturity model. Maturity models for supply chains check the performance of processes to determine if they are meeting company goals and values as well as to help reduce risks to the supply chain. Capability maturity models focus on reviewing areas of the supply chain to further improve and streamline processes by evaluating current performance measurements.
There are several logistics maturity models to select from based on what key performance measurements you wish to perform on the supply chain. Each model has five typical elements of operations, also referred to as key performance areas. These elements are plan, source, make, deliver, and return.
Types of maturity models involve the following areas:
- Process maturity model: Process maturity models focus on measuring the current supply chain processes and reviewing how they compare to intended business goals. Then, the model defines any gaps that are discovered that could lead to operational risks. An example would be to discover a shipping contractor always providing late shipments that lead to missing deadline goals.
- Procurement maturity model: Procurement maturity models evaluate how procurement is accomplished in your supply chain while providing assessments regarding the quality of procured products, reviewing ad hoc suppliers, checking sourcing and distribution processes, and evaluating the global supply chain for the products.
- New product development (NPD) maturity model: The NPD maturity model looks at revenue goals for products moving through processes to create strategies and supply chain goals where costs may become reduced without negatively impacting operations.
- Lean maturity model: Lean maturity models allow a company to review performance of operations and help discover where lean practices may be implemented in the supply chain.
- Sales & operation planning (S&OP) maturity model: S&OP maturity models evaluate performance for sales and operation planning. They review data from various areas including APS data, spreadsheets, and supply data to determine the best strategies for the supply chain sales planning.
BENEFITS TO SUPPLY CHAIN MATURITY MODELS
Implementing a supply chain maturity assessment to a logistics network allows a company to evaluate how far its supply chain has evolved during the life of its company. It places a benchmark of where the supply chain operation is now in relation to established goals, and what higher level the supply chain could achieve if implementing certain strategies.
Additional benefits to a maturity model assessment may entail:
- Realistic future strategies: A maturity model gathers and uses actual data and measurements to show key performance indicators. With this data, a company has a better opportunity to create strategies that don’t stray far or have broad discrepancies from actual achievement goals.
- Improve market positioning: Obtaining performance indicators for supply chain performance allows a company to compare the figures to industry benchmarks. The company may determine how competitive it is when compared to other organizations as well as implement improvements to meet or exceed industry benchmarks.
- Refocus values and goals: A supply chain may have significantly strayed from the values and goals established by a company. The model may show how far operations have skewed from desired best practices and help to re-align the processes to meet goals.
- Promote stable operational strength: A supply chain may show inconsistent strength when dealing with certain operational risks. The maturity model may be used to create more stability within processes to remove such inconsistencies.
WSI LOGISTICAL SOLUTIONS
Gaining clarity and transparency into your supply chain operations is only one step in making the right improvements. You also need to understand how well or poorly a supply chain is performing to make the strategies that could streamline performances or find further cost savings.
A supply chain maturity model allows your company to continually track performance and compare the measurements to established supply chain benchmarks. Then, your company may continue using successful strategies to maintain its present operations, or refine its best practices to reach higher supply chain goals to stay competitive in your industry segment.
Here at WSI, we work with a wide range of industries and tailor our strategies to provide a host of advantages to streamline supply chain processes. Whether your company is looking to improve the procurement of products from suppliers to get shipments to warehouses, or provide order fulfillment to improve sales strategies, WSI has the outsourced resources to further enhance operations. In addition, WSI provides warehouse/inventory management services and real-time data reporting so companies gather the information they need for their maturity model processes.
For 3PL distribution, warehousing, and fulfillment services, contact WSI to learn more.