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S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGES OF SUPPLY CHAIN EXCELLENCEBuilding of bridges between current and desired performance

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

Dimensions / Critical Success Factors

1. CUSTOMER SERVICE

MANAGEMENT

2. STRATEGIC BUSINESS PLANNING

3. SUPPLY INTEGRATED

TO S&OP

4. WORKPLACE CULTURE &

LEADERSHIP

5. RELATIONSHIPS WITH SUPPLIERS

& SERVICE PROVIDERS

6. INFORMATION CAPABILITIES

7. FORECASTING

& DEMAND PLANNING

8. KPI MANAGEMENT

& MEASUREMEN

T

9. IMPROVEMENT FOCUS WITHIN

BUSINESS

10. INNOVATION

11. ORGANISATIO

NAL STRUCTURE

13. ELECTRONIC COMMERCE

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Handle each transaction seperately

Oil the squeaky wheel

Adhoc operational focus

1. CUSTOMER SERVICE MANAGEMENT

STAGE 2

All customers treated same

Focus on internally set goals

Limited service level appreciation

STAGE 3

Strategic customer get special treatment

Order, line, unit service level and customer’s first request understood

STAGE 4

Segmented customer service plans based on updated customer policy

Customers choose service level and pay

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Fragmented ad hoc informal planning

Removed from operations

2. STRATEGIC BUSINESS PLANNING

STAGE 2

Done infrequently but provides some Supply Chain direction

Functional scope

One year horizon

STAGE 3

Limited functional supply chain scope

1-3 year horizon

Formal process

Major decisions tested against plan

STAGE 4

Integrated SC Plans drive decisions and actions

Includes suppliers and customers

1-5 year horizon

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Focus on today and each transaction

No idata integrity

3. SUPPLY INTEGRATED TO S&OP

STAGE 2

Period (e.g. monthly)

Budget period based

Not Senior Management driven

No S&OP KPIs

STAGE 3

Annual deployment

Long lead time issues planned separately

Senior management driven & KPIs drive actions

STAGE 4

Rolling periods

Structured & Formal

Synchronized across and down business

Includes capacity planning 1 to 2 years out.

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Employees Vs Management

4. WORKPLACE CULTURE & LEADERSHIP

STAGE 2

Limited employee involvement & consultation

Management sees people as important but not vital

STAGE 3

Consultation but no real involvement in decision making

Understand culture

Some management by fact

STAGE 4

Management by fact, empowered high performance teams.

Shared goals & reward.

Sharing of valuable data given

KPIs aligned to goals

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Unmanaged

Crisis Driven

Adverserial

Cost Only

5. RELATIONSHIPS WITH SUPPLIERS & SERVICE PROVIDERS

STAGE 2

Price driven

Multiple sources

Competitive bid oriented

STAGE 3

Some strategic Alliances

LIfe cycle costing considered

Evaluation tools used

Some information sharing with suppliers & customers

STAGE 4

Supply & demand aligned strategically

Partnering joint planning & improvement programs

Long term relationships

Partner electronically linkedStrong collaboration

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Transaction Focus

Limited Data

No Analysis Capability

6. INFORMATION CAPABILITIES

STAGE 2

Report Period’s Financial Results

Fragmented Data

Limited Extraction & Analysis Capability

STAGE 3

Useful data

Capability to drill down

Analysis capability

STAGE 4

Real time, visible data across business

Electronically connected to other SCs

Flexible extraction and analysis

People trained to use it

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Gut Feel Or Naive Approach

Informal Forecast Of Little Use

Budget Cycle

7. FORECASTING & DEMAND PLANNING

STAGE 2

Some Forecasting

No Ownership

No Integration

Quarterly Cycle

STAGE 3

Some integration

Some analysis from forecast

Clear ownership

Limited focus on outcome

STAGE 4

Single universally used forecastOne version of the truth

Detailed analysis and accuracy

Appropriate techniques for SKU groups

Part of overall planning

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Financial Focus Only, Mostly Budget

Complaints Driven

No Data Available

8. KPI MANAGEMENT & MEASUREMENT

STAGE 2

Mostly Financial

Some Operational

Functional Focus

Some Data Available But Not Driving Business

STAGE 3

Cross functional, balanced KPIs

Service vs key customer requirements & cost KPIs

Longer range actual targets

STAGE 4

Balanced cross functional scorecard

Integrated across and down the business in real time to enable decision making

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Quick Fix ‘Stop The Bleeding’

Crisis Management

No Improvement Focus

9. IMPROVEMENT FOCUS WITHIN BUSINESS

STAGE 2

Cost Reduction

No Strategic Focus

No Alignment Across Business

Competitive KPI Benchmarking

STAGE 3

Seeking breakthrough change

Re-engineering

Structured approach

Some process focus

STAGE 4

Continuous improvement towards goals

process driven benchmarking

Projects aligned across business

Business is outcome driven

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Products do not match capability

Support required for successful introduction

10. INNOVATION (INCLUDING PRODUCT DEVELOPMENT & SERVICES

STAGE 2

R&D Activities

Problems In Manufacturing *Marketing

Long Lead Times

STAGE 3

R&D seen as driver but other functions not involved

No commitment

STAGE 4

Formal cross functional innovation driven by internal & customer research

Short development lead times

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

No Method To Determining Structure

Ad Hoc Changes

No alignemnt of roles & responsibilities

11. ORGANIZATIONAL STRUCTURE, ROLES & RESPONSIBILITIES

STAGE 2

Some Functional Planning Used

Limited Alignement Of Roles & Responsibilities

STAGE 3

Some cross functional planning used to determine structure

Consideration of external supply chain & customer

Alignemnt of roles & responsibilities

STAGE 4

Structure determined & implemented according to cross functional business requirements.

Alignment of roles & responsibilities

Customer included in analysis

S TA G E S O F S U P P LY C H A I N E X C E L L E N C E

STAGE 1

Limited Ecommerce

No Strategy & Deployment

12. ELECTRONIC COMMERCE (INCLUDES EDI)

STAGE 2

In Some Parts Of The Business

No Formal Overall Planning & Analysis Of Ecommerce Strategy

STAGE 3

Strategic Planning For Deployment Based On CBA

Ecommerce in many parts of the business

STAGE 4

Integrated strategy & deployment

Enables real time & management by exception

Cross functional processes are E enabled

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