Common Sense Supply Chain Planning Part 2: The Maturity Model

The concept of maturity model was firstly introduced by Watts Humphrey of Carnegie Mellon University in 1987 with the goal to improve the performance of software development process. Since then, maturity model has been adopted by many disciplines. The purpose of this post is to introduce readers to Supply Chain Maturity Model so you can use it to determine where you are and what you should do to improve supply chain operations.

1) Process Maturity Model
There are so many supply chain maturity model produced by consulting or independent research firms. Anyway, the most widely cited maturity model is the work from McCormack and Lockamy III in 2004.

Supply Chain Maturity Model

In order to use the maturity model, you have to check which statement illustrates your current situation. After that, set your own target to higher level. Then you can determine the "gap" between your existing level and desired level and then change business practices to close the gap.

As you may notice, supply chain maturity model is like "KPI" but it's expressed qualitatively and you have to use it strategically rather than short-term.

2) Procurement Maturity Model
There are lots and lots of procurement professionals who can't really break away from "buy cheapest things" fallacy. There are so many things that we can do to strategically help company create value. Handfield and Straight provided a very useful maturity model for procurement function as below,

Procurement Maturity Model

This maturity model is so useful in the way that each description is actually one best practice that you can implement.

3) NPD Maturity Model
Modern supply chain strategy goes far beyond "cost reduction" or "service improvement". Many supply chain professionals take part in revenue generation project such as New Product Development "NPD".

NPD Maturity Model

Even though NPD initiative is often viewed as marketing thing, in reality, every company relies on innovation from its suppliers and supply chain professionals are important part of it. So we can actually lead NPD process and this maturity model will be useful to create good NPD strategy. Please note that market studies can also mean "supply market" so supply side information is also useful.

4) Lean Maturity Model
Every supply chain needs certain degree of lean capabilities. But, if you're not in automotive industry where lean practices are widely adopted, how you can develop lean roadmap within your organization?

Lean Maturity Model

Lean Maturity Model is the work from Lean Aerospace Initiative at MIT. It provides you with broad overview of lean implementation. What you need to do is to determine which lean practices can be applied in your industry and how you can achieve higher level of adoption.

5) S&OP Maturity Model
The last maturity model today is the work from Larry Lapide of MIT. S&OP has been widely implemented since its inception in 1980s but many companies still choose to incorporate some of S&OP practices into generic production meeting.

S&OP Maturity Model

From my experience, S&OP process is very difficult to get it done right because there is no "one size fits all" solution across every industry. S&OP expert in retail industry can be naive in certain types of heavy industries. From where I stand, this S&OP maturity model is the only reliable, unbiased diagnostic model that you can use.

6) Concluding Remark
There is no silver bullet solution for supply chain problems. Each technique produces different result. This article has demonstrated the usefulness of simple technique like supply chain maturity model and I hope you can incorporate this tool to diagnose your supply chain operations.

Common Sense Supply Chain Planning Part I (2x2 Matrix) is available here.