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 service providers. • 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 orders. • 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.