Supply Chain Maturity Model for Capability Assessment

This article will show you supply chain maturity models that you can use to determine where you are and what you should do to improve supply chain operations.

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, the maturity model has been adopted by many disciplines. This article will present to you 5 types of maturity model as follows,

1. Process Maturity Model
There are so many supply chain maturity models produced by consulting or independent research firms. Anyway, the most widely cited maturity models is the work named "The development of a supply chain management process maturity model using the concepts of business process orientation" from McCormack and Lockamy III in 2004.

Process 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 a 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, the supply chain maturity model is like "KPI" but it's expressed qualitatively and you have to use it strategically.

2. Procurement Maturity Model
There are lots and lots of procurement professionals who can't really break away from "buy the cheapest things" mindset. There are so many things that we can do to strategically help company to 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 a best practice that you can implement.

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

NPD Maturity Model

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

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

Lean Maturity Model

The Lean Maturity Model is the work of the Lean Aerospace Initiative at MIT. It provides you with a 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 a higher level of adoption.

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

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

Related Article: What is Kraljic Matrix?