By Bryn Lowry
Organizations usually know that they need to improve their supply chain operations; however, often they find it difficult to identify which area to focus on first. Typically, the journey involves the development of several key capabilities in operations, but without a clear framework, it can be difficult to decide where to start. By understanding your current state of supply chain maturity, you will be in a much better position to map your journey to the next level of supply chain maturity, with a roadmap for reaching higher levels of maturity and increased business performance.
In Stage 2, companies are able to leverage their scale to achieve some level of organizational consistency, even though they are still focused on internal operations and serve constituent businesses. These units tend to be focused on containing costs while increasing both productivity and proficiency. If you’re in this Anticipate stage, you have some visibility into project and application-based status, alerts, and events. In this stage, visibility feeds more data into analysis to identify areas for improvement.
The Anticipate stage of supply chain maturity is characterized by the following:
- The centralization of the supply chain function is beginning to improve efficiency and productivity.
- There is a focus on creating standardized processes and methods to benefit from economies of scale and increased efficiency.
- Performance is internally focused on fulfillment percentage, productivity, costs and return on assets.
- Data collection challenges still loom large, with a reliance on large, legacy IT investments such as ERP systems, limiting an organization’s ability to collect new types of data, not just structured data.
- Supply chain activity and performance are captured and reported using an organization-wide model, enabling better anticipation of demand.
Many organizations today are moving from stage 1 to stage 2, with a roadmap to reaching stage 3. Now, with the availability of supply chain digital visibility platforms, it’s possible to reach both stage 4, where the objective is to improve the performance of the partners in your extended supply chain, and stage 5, where data comes from public and unstructured sources as well as IoT sources. In this final stage of the supply chain maturity, complex applications are focused on improving visibility, performance, value across the network.
As a review, to understand where your visibility gaps are, and to completely close your supply chain visibility gaps, follow this process:
Step 1: Understand volatility and its impact in the business—demand, supply, operations, and finance.
Step 2: Identify the critical problems (lost revenue, waste, costs, lost opportunities).
Step 3: Discover high-impact dark spots across the network and make them visible capabilities.
Step 4: Leverage analytics and a visibility platform to increase visibility and drive value.
Greater visibility delivers the potential for much greater accuracy in planning and monitoring systems, and enables you to use predictive analytics to anticipate and avoid issues. Companies have a tremendous opportunity to create new value by closing visibility gaps in the supply chain. Cost reduction is just the beginning.
Supply chain industry analyst Roddy Martin stresses that using a digital visibility platform is the key to reaching stages 4 and 5 of supply chain maturity. “Transformation and pivoting from traditional, functionally siloed supply-driven operations, (often reacting to supply chain events) to customer-driven operating models is a significant change journey. Enabling this new operation model powered by the Cloudleaf solution to provide a high visibility index will result in significant value creation and the potential for achieving Stage 4 and 5 level operations.”
To get started, download our whitepaper Supply Chain Visibility Index: The Definitive Guide.