Strategic Supply Chain Management - Supply Chain Online

274 Strategic Supply Chain Management
This book draws on the results derived over the last three years, and
results referenced in Chapter 6 are derived from the same population cited
in the best-in-class company (BICC) research cited in Appendix A.
DEFINITION OF THE MODEL
Stage of maturity is derived from a qualitative practice assessment that
uses more than 270 questions that characterize supply chain practices in
four areas—plan, source, make, and deliver—as well as a number of questions
that address overall supply chain practices. These areas are further
broken down with specific questions and multiple-choice answers to cover
the following scope: planning strategy; demand planning; supply planning;
demand-supply balancing and decision making; sourcing strategy;
sourcing processes; supplier development/management; sourcing organization
and infrastructure; manufacturing strategy; production scheduling;
materials issue, movement, and tracking; manufacturing process control;
delivery enablement; order entry and scheduling; warehousing, transportation,
and delivery; invoicing and cash collection; overall supply
chain strategy; overall supply chain performance management; overall
supply chain processes; and overall supply chain organization.
Each answer choice is organized to denote that the practice is associated
with a specific stage of capability. Participating companies characterize
both their dominant and their emerging practices. Dominant
practices are those which are well established and are used across at least
75 percent of the organization. Emerging or future practices are those
which were defined but not fully implemented during 2001 but were anticipated
to be dominant by 2003.
Based on the company’s response in each of the 20 areas listed above,
PMG calculates its stage of process maturity. In order for a company to be
considered mature for a given stage, it must be effectively using a majority
of its practices from that stage. For example, a company with average
process maturity ranging from 1.5 to 1.9 is categorized as transitional
stage 2 due to a mix of stage 1 and stage 2 practices. A company in this
group has most of its practices fully established at stage 1 and also has
implemented some practices associated with internal integration, or stage 2.
Stage 1: Functional Focus
Functional departments within an organization focus on improving their
own process steps and use of resources. Managers typically focus on