SUPPLY CHAIN MATURITY - KEY TO FIND THE RIGHT APPROACH WHICH FITS BEST TO
YOUR COMPANY, YOUR CURRENT NEEDS, AND YOUR FUTURE ASPIRATIONS
Supply Chain maturity can be
seen in two different levels:
Company view: How well is
“Supply Chain Thinking”
embedded in your company -
in processes, orgazionation,
leadership, investment priorities,
and attitude towards
customers, suppliers, and
The visible implementation of
the “total flow” concept is key
to reach level 2 or higher. In
essence, the company is
structured around the supply
chain functions as the key
driver of revenue realisation.
Individual practices view: For
each of the functions in the
supply chain, and for key
supply chain practices, an
individual maturity exists.
A focused assessment shows
how well best practices are
established, in which areas
there is an improvement need,
and which areas can act as
leverage for higher
performance in the future,
using more advanced
practices in the supply chain.
Supply Chain Maturity Levels drive targeted, suitable solutions:
Before entering into individual “leading practices”, it is necessary to
determine the overall position and maturity of the company. All of the
“best practices” need particular pre-conditions to work properly, and
unfold their valuable contribution to supply chain delivery performance
A key insight over decades of using this assessment is that a company can
not jump a level: Each level needs to be established properly, with its own
mastery of this level’s practices. These form the foundation for the next level
of maturity. In particular, this addresses many areas, from processes, people
and their capabilities, IT systems, and use of particular tools and methods.
Each level shown here portrays a distinctly different level of internal
collaboration, and synchronization. Level 3 and 4 extend this perspective to
external collaboration. Level 2 is somewhat in between; it starts to practice
external collaboration and synchronization, but the internal capabilities are
not advanced enough to take full advantage of that. On that level, the
focus is still on mastering the internal challenges from executing customer
Level 3 and 4 are also levels, where supply chain principles drive how the
entire organization functions. On level 3, the supply chain itself is
embedded into clear tactical processes and tools (like SC operations
planning, inventory management, demand management, logistics
management), and also in a set of leadership instruments (like order
progress monitoring, performance management, SC organization, and
integrated business management using S&IOP).
Level 4 reflects a company concept which is acting in a more virtual
manner; going deeply into processes of customers and suppliers, but also
organizing its own operations based on the principle of “Best Capability
Leverage”. Service providers are managed to deliver best performance,
internal agility is key, and core competences are defined by “control over
supply chain performance”. An optimal cost position of often the result, but
not the real main driver for these companies.
Maturity levels 0 and lower indicate a lack of collaboration - each function
optimizes itself with best intentions, but there is no common set of targets
serving as a backbon for bundling and directing the internal energy.
Therefor every day a lot of lost energy is produced. On level “-1” internal
politics are more important than serving customers, and the own company.
Thus even more energy is destroyed for non-value adding purposes.
We have also seen level “-2” in economies who are just making their way to
western standards. When a purchase order is not a binding contract with
commitment to be fulfilled in the promised and confirmed way, or
inventory records follow other criteria than “goods entry”, our known supply
chain methods have no foundation to deliver any useful result. Therefore
these conditions need a very different approach.