September 20, 2022
ebp’s Supply Chain Maturity Model
The Problem Statement
Any organisation goes through different stages of maturity over its life cycle. This is a natural way to develop the organisation, business processes, systems and data over time. Usually the level of maturity an organisation is adopting, will be highly depended on a number of factors:
- Industry maturity, or
- Competitive pressures, or
- Vision of the executive team, or
- Willingness of an organisation to invest in people, processes and systems, the last point is highly dependent on the margin pressure of a particular industry
In order to agree on the correct steps to improve key capabilities of an organisation, understanding the current state is a key step. Hence, mapping an organisation’s key capabilities on the maturity model is the first step. Not every organisation must or should attain the highest level of the maturity model. As important as understanding the current state is to determine the adequate next step on the maturity development as well as the correct end state. Again, this does not have to be the highest level of the maturity model.
The understanding of where an organisation is along the maturity model is vital. This is a key foundation for successfully adopting business processes or even running projects.
The Capability Dimensions of the Model
Before we review the various stages of the maturity model, let us first review the key capabilities. Those are:
- People, describing the skills and working practices of the people within an organisation;
- Data, describing the availability and usage of data and information;
- Metrics, describing the key metrics an organisation uses to drive its performance;
- Application/Systems, describing the usage, integration and scope of systems;
- Business Processes split by:
o Planning based Processes, describing the usage of planning methods and working practices;
o Execution based Processes, describing the usage of transactional methods and working practices
In addition, external and internal drivers are important as well:
- – Business Challenge, describing the market pressures exerting on an organisation representing the external drivers;
- – Change Driver, describing the internal drivers such as objectives or targets defined by the executive leadership
The Maturity Stages of the Model
The maturity of an organisation, which is dependent on internal and external factors, can be best described in a number of maturity stages:
- Functional Excellence, ensure functions can operate at a target level of excellence
- Internal Flow Integration, ensure functions are integrated and operate cross-functional
- External Collaboration, ensure external parties are will integrated into the internal functions
- Networked Single Channel, ensure the operations services each channel with high performance
- Networked Omni Channel, ensure that an omni channel setup can be serviced effectively and efficiently
Each maturity stage requires the attained of a defined level of performance for each capability. Moving too fast and skipping a stage can be dangerous for an organisation as the underlying foundation is not well build out. Evolving an organisation through the maturity stages requires a well laid out roadmap and can take multiple years. Before such as roadmap can by developed, understanding the organisation current deficiencies and capabilities is an important step to complete.
ebp’s Supply Chain Maturity Model*
The Maturity Model Impact on the Operating Model
In other articles we introduced the operating model as a comprehensive way to describe the operation of an organisation. Each stage of the above maturity model can be linked to the way the operating model is deployed and can be evolved. ebp Global uses heat-maps to develop the core structure of the roadmap and determines if functional areas need to be prepared first before integrated or networked approaches can be deployed.