This presentation describes an assessment methodology, based on the Supply Chain Proficiency Model, that can be used to set realistic supply chain objectives. The assessment centers on a business model that identifies the logical stages of supply chain proficiency as measured against a comprehensive set of business characteristics. For each characteristic, an enterprise evolves from one stage to the next. The magnitude of change inherent in moving forward usually prohibits skipping stages. Although it is possible to be at different stages for each characteristic, it is usually desirable to maintain balance.
"As-is" and "to-be" versions of the Supply Chain Proficiency Model are developed to depict the current and desired states of the supply chain. A gap analysis identifies the needed supply chain improvements. Short- and long-term supply chain objectives are set by logically mapping the improvements to the Supply Chain Proficiency Model. Thus, this model provides a baseline for planning supply chain management initiatives.
Why is a supply chain assessment needed? Can't an organization just "make it happen" and reap the benefits of supply chain management? The answers to these questions lie in the many supply chain initiatives that produced less than desirable returns. The primary reason for failure is not having a road map that describes a starting point, a desired result, and the path to get there.
SUPPLY CHAIN PROFICIENCY MODEL
The supply chain describes the intra-enterprise and inter-enterprise activities related to materiel movement from the raw material supplier to the final consumer. It is a network of information, process, and product flows from a supply base, to an actioning organization and, finally, to a customer base. Supply chain management is the proactive synchronization of these flows from conceptualization of need to retirement— with the purpose of delivering enhanced value for customers, suppliers, and shareholders. It is the process by which an enterprise achieves its objectives to improve performance across the supply chain.
The Supply Chain Proficiency Model is shown in figure 1. It provides the basis for a supply chain management program. This model identifies four stages of supply chain proficiency:
At each stage of proficiency, the model analyzes four separate char- Stage I is the lowest acteristics of the enterprise:
• business environment
• customer and supplier relations
• supply chain communications
• information systems.
Each intersection between the stage and characteristic contains a state of proficiency. Sets of criteria define the states of proficiency. These criteria will be discussed in detail in later sections.
This characteristic describes the organization's culture and the way functional entities operate. Elements of the business environment include alignment, business processes, and efficiency measures.
Customer and Supplier Relations
As the name implies, this characteristic describes the culture for dealing with people outside the four walls of the enterprise. This, perhaps more than any other characteristic, defines an organization's ability to transcend to higher stages of proficiency. Customer and supplier relations' elements include interface, relationships, and requirements.
Supply Chain Communications
Critical components of this characteristic include the method, types, and quality of communications between supply chain participants. Collaboration, where necessary, is the goal. Elements of supply chain communications include media, frequency, and content.
Technology must be leveraged to enhance the ability of leaders to view and translate real-time information into meaningful decisions. At the highest stage of supply chain proficiency, questions still remain unanswered. However, trends indicate that robust information systems that share information across enterprises must be part of the answer.
To Be Continued
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