Assessing Supply Chain Maturity with ifm Supply Chain

⇨ Accurately assessing the current state of supply chain maturity and performance is essential for transformation, with clear goal-setting and pathways for improvement.

⇨ The ifm Supply Chain maturity model outlines five stages of supply chain maturity—react, anticipate, integrate, collaborate, and orchestrate—each impacting operational effectiveness and technology adoption.

⇨ Companies should measure their supply chain maturity using key metrics such as inventory turnover rates, OTIF order fill rates, forecast accuracy, integration levels, and supplier collaboration to identify areas for improvement.

One of the foundational steps to achieving supply chain transformation is to accurately assess current state maturity and performance across the multiple dimensions of supply chain operations, followed by clearly defining a goal state across those same dimensions along with a path to get there.

ifm Supply Chain has designed a supply chain maturity model to help SAP customers assess their current process maturity, which directly impacts their ability to adopt and leverage new technology. According to the model, there are five maturity stages that apply to three operational areas. The maturity stages are react, anticipate, integrate, collaborate and orchestrate. And the operational areas are demand and inventory, capacity (equipment, labor and services), and materials supply.

At the React stage, businesses often find themselves constantly putting out fires. The supply chain is driven primarily by budget constraints and sales targets, with little to no predictive capabilities. Operations are highly reactive, relying heavily on historical consumption data to make purchasing decisions.

In the Anticipate stage, businesses start developing predictive capabilities. Demand forecasting begins to take shape, and periodic inventory analysis is conducted to better manage stock levels. Sales and Operations Planning (S&OP) is introduced, but it primarily serves as a reporting exercise without strong links to execution.

At the Integrate stage, businesses achieve higher coordination between supply chain functions. Planning and execution are integrated, enabling more accurate and efficient operations. Detailed capacity planning ensures that production schedules are optimized to meet demand without overextending resources.

Businesses at the Collaborate stage move beyond internal integration to external collaboration with suppliers and partners. This stage focuses on building strong relationships and sharing information across the supply chain network to optimize overall performance.

At the Orchestrate stage, businesses achieve the highest level of supply chain maturity. This stage is characterized by strategic planning and dynamic orchestration across the entire supply chain network, both internal and external. Advanced analytics and integrated processes enable businesses to continuously adapt and optimize their operations.

IFM’s maturity model assumes that as companies advance through the five stages, they see corresponding improvements in areas like increased efficiency and reduced costs, improved supply chain visibility and decision-making, enhanced collaboration and integration across the supply chain, and strategic advantages and long-term sustainability.

To accurately assess their own supply chain maturity across the three operational area, companies are advised to look at metrics such as inventory turnover rates (how quickly inventory is sold and replaced), On Time In Full (OTIF) order fill rates, forecast accuracy (the precision of demand forecasts), level of integration (the extent of system and process integration across the supply chain), and collaboration with suppliers (the depth and effectiveness of supplier partnerships).

ifm Supply Chain, formerly known as GIB, is a renowned SAP Solutions partner with a 25-year history of delivering innovative supply chain solutions. Headquartered in Germany and founded in 1992, the company has a rich legacy of streamlining demand planning, production scheduling, procurement, and inventory control. It seamlessly integrates its solutions into the SAP ecosystem, enhancing operational efficiency. The SAP systems and platforms it integrates with or supports are SAP ECC 6, SAP S/4HANA, SAP S/4HANA Private Cloud, and SAP BTP.

Learn more at www.ifmsupplychain.com.