Executive Briefings

The First Leg of the New 21st Century Supply Chain Maturity Model

Analyst Insight: IBM's recent Chief Supply Chain Officer Report - "The Smarter Supply Chain of the Future" - has pretty much validated our four-year informal polling premise that about 90 percent of all supply chains are not mapped out in any formal approach. IBM's respondents placed supply chain visibility among the Top 5 supply chain challenges. Seventy percent said supply chain visibility is one of their major keys to success - yet the majority of those responding have not addressed the issue! - Gregory L. Schlegel, Vice President, Business Development, SherTrack LLC, and Adjunct Professor, Supply Chain Risk Management, Lehigh University, Graduate Program

And therein lies our paradox. Supply chain visibility is a top-of-mind issue but not a top priority!

Some additional thoughts on supply chain visibility emerging from the IBM report are: visibility seems to be tied to higher company performance, sensors within the supply chain and being capable of sensing customer demand earlier than most seems to enhance supply chain performance, and real-time or near real-time supply visibility, including early warning disruption detection for the supply base, a la supplier risk assessments and risk heat map dashboards seem to provide an overwhelming lever for improved performance, relative to competitors.

With all these positive impacts to the bottom line, why then don't more companies focus their attention on supply chain visibility? A puzzlement! With that said, here's what we, SherTrack LLC and The Risk Consortium, see as imperative to develop in order to shore up this first leg of the new 21st Century Supply Chain Maturity Model.

"¢ Tools Development - As uncertainty, complexity and risk continue to plague global supply chains, we, as does IBM in their report, advocate that organizations begin to map out their entire supply chains, from suppliers through customers. We are beginning to work with partners to profile entire supply chains with corresponding volumes, dollars, etc, from node to node.  We are also advocating superimposing a risk factor over every path in the supply chain, through risk assessment techniques, resulting in a new Risk Assessment Dashboard - Red, Yellow & Green. With that completed, companies can then begin the process of risk mitigation and move through the new maturity model's next step"”predictability.

"¢ Techniques - In support of the tools development, we see new end-to-end supply chain techniques developing such as global S&OP, global and horizontal supply chain organizational restructuring, new risk assessment/indexing methods along with new metrics of success, such as value-at-risk calculations, time-to-recovery metrics and resiliency indexes for the entire global supply chain. With this enhanced end-to-end supply chain visibility we see organizations not only focusing on risk management but also able to leverage established collaborative techniques such as VMI and CPFR with their customers and stronger relationships with their supplier base, including supply chain financing. All in an effort to differentiate and strengthen their supply chain relative to their competitors.

                                        The Outlook

In 2013, look for more organizations embracing the tools and techniques above, and more, to enhance their end-to-end supply chain visibility. As we move forward, we're completely convinced the exemplars and leading-edge companies will continue to leverage these aspects of visibility in an effort to prepare to move through the new 21st Century supply chain maturity model covering visibility, predictability, resiliency and sustainability.


Keywords: supply chain management, enterprise visibility, forecast accuracy, risk assessment, demand planning, event management

And therein lies our paradox. Supply chain visibility is a top-of-mind issue but not a top priority!

Some additional thoughts on supply chain visibility emerging from the IBM report are: visibility seems to be tied to higher company performance, sensors within the supply chain and being capable of sensing customer demand earlier than most seems to enhance supply chain performance, and real-time or near real-time supply visibility, including early warning disruption detection for the supply base, a la supplier risk assessments and risk heat map dashboards seem to provide an overwhelming lever for improved performance, relative to competitors.

With all these positive impacts to the bottom line, why then don't more companies focus their attention on supply chain visibility? A puzzlement! With that said, here's what we, SherTrack LLC and The Risk Consortium, see as imperative to develop in order to shore up this first leg of the new 21st Century Supply Chain Maturity Model.

"¢ Tools Development - As uncertainty, complexity and risk continue to plague global supply chains, we, as does IBM in their report, advocate that organizations begin to map out their entire supply chains, from suppliers through customers. We are beginning to work with partners to profile entire supply chains with corresponding volumes, dollars, etc, from node to node.  We are also advocating superimposing a risk factor over every path in the supply chain, through risk assessment techniques, resulting in a new Risk Assessment Dashboard - Red, Yellow & Green. With that completed, companies can then begin the process of risk mitigation and move through the new maturity model's next step"”predictability.

"¢ Techniques - In support of the tools development, we see new end-to-end supply chain techniques developing such as global S&OP, global and horizontal supply chain organizational restructuring, new risk assessment/indexing methods along with new metrics of success, such as value-at-risk calculations, time-to-recovery metrics and resiliency indexes for the entire global supply chain. With this enhanced end-to-end supply chain visibility we see organizations not only focusing on risk management but also able to leverage established collaborative techniques such as VMI and CPFR with their customers and stronger relationships with their supplier base, including supply chain financing. All in an effort to differentiate and strengthen their supply chain relative to their competitors.

                                        The Outlook

In 2013, look for more organizations embracing the tools and techniques above, and more, to enhance their end-to-end supply chain visibility. As we move forward, we're completely convinced the exemplars and leading-edge companies will continue to leverage these aspects of visibility in an effort to prepare to move through the new 21st Century supply chain maturity model covering visibility, predictability, resiliency and sustainability.


Keywords: supply chain management, enterprise visibility, forecast accuracy, risk assessment, demand planning, event management