Appendices
• Appendix A; The Pilot Study and Evaluation of Programme of Requirements o A1: Covering Letter
o A2: Questionnaire “Pilot Study”
• Appendix B: The Assessment Instrument o B1: Assessment Instrument Sheet
o B2: Questionnaire “Assessment Instrument”
o B3: Tables 1-5
• Appendix C: The Refined Assessment Instrument o C1: Operating Procedure
o C2: Refined Assessment Instrument
Appendix A1: Covering Letter
10 March, 2007
Dear Mr. Viljoen,
Many thanks for agreeing to provide some feedback on the instrument mentioned above.
The objective of my research is to enable Lumus to assess and select buyer organisations on their level of SCM development. This will enable Lumus to more effective and more efficient market the Lumus Standard and apply the accompanying consulting services. The assumption is that the higher the buyers’ level in SCM development is, the better the performance in this area and the better the chances are that the buyer succeeds in adopting a new supply chain practice like the Lumus Standard. Therefore, I have developed a “SCM Maturity Assessment Instrument” with which Lumus can get an indication of an organisation’s ability to implement the Standard properly.
A SCM maturity assessment works as follows. The buyer will be able to self-administer the assessment. A buyer receives a questionnaire, 5 tables, and a SCM maturity assessment sheet. Together these three components cover the assessment instrument. The tables can be used to answer the questions of the questionnaire. The numbers of the questions relate to the numbers of the relating indicators on the sheet. The answers can be filled in on the SCM maturity assessment sheet. Subsequently, an average of each criterion can be determined. The overall score is with the lowest average criterion, as the criteria should be in-alignment. The performance of the organisation in SCM is
therefore as high as the weakest criterion.
In order to improve the assessment instrument’s format, clarity, and intelligibility a pilot study will be performed. Your completion of the pilot study questionnaire (Enclosure 1) will contribute significantly to this goal.
Apart from the pilot study questionnaire, I enclosed the following documents for you to refer to:
• Enclosure 2: SCM Maturity Assessment Questionnaire
• Enclosure 3: SCM Maturity Assessment Sheet
• Enclosure 4: SCM Maturity Assessment Tables 1- 5
If possible, I would like to finalise the assessment instrument and my research end of March. Therefore, I would be grateful if you could complete the pilot study questionnaire, and return it by email or skype within one week. My email address is charlotte.plattel@gmail.com. Any responses, even if incomplete, would be highly appreciated.
I appreciate your time and assistance in my research process. Please feel free to contact me if you have any questions at +31-641054567, by email: charlotte.plattel@gmail.com, or by using skype.
Again, thank you very much.
Sincerely, Charlotte Plattel
What do you think of the enclosed SCM Maturity Assessment Instrument?
Appendix A2: Pilot Study Questions
Questionnaire
¾ If not, which questions you do not understand?
Tables
¾ Do you feel that the formulated characteristics of the indicators match the suggested maturity level?
Criteria and Indicators
¾ Would you like to drop one or more criteri(a)(on)?
¾ If not, would you like to drop one or more indicators?
Maturity Levels
¾ Would you change one or more descriptions of levels to make them more appropriate?
Overall Assessment Instrument
¾ Do you have a suggestion for an additional answer?
¾ Are the questions clear to you? (Language)
¾ If not, which questions are not clear?
¾ Are the questions intelligible to you? (Knowledge of indicators)
¾ Will indicators you are unfamiliar with become intelligible with the help of the tables?
¾ Which indicators are not understood after reading the tables?
¾ Are the indicators with which you already are familiar correctly characterised for each maturity level?
¾ Do you feel that the five criteria cover for the domain of SCM?
¾ Would you like to add one or more criteri(a)(on)?
¾ Do you feel that the indicators capture the domain of the criteria?
¾ If not, would you like to add one or more indicators?
¾ Do the five maturity levels capture the full spectrum of SCM development levels?
¾ If not, would you add or drop a level to have the full spectrum of maturity levels?
¾ To what extent do you view the complete assessment instrument (questionnaire, sheet, tables) as clear and intelligible?
¾ What do you think of the presentation of the complete assessment instrument?
Appendix B1: SCM Maturity Assessment Sheet
Maturity Level Indicators Maturity Criteria Indicators
1 2 3 4 5
Average Criteria
Score
1
Vision on supply chain2
Management support3
SCM’s role incorporate strategy
4
The prioritization of SCMprojects
5
Strategy framingCollaborative Enterprise
6
Strategy towards suppliers7
Process structures8
Management of the SCM-organisation relationship
9
Continuous processimprovement
Operations Management &
Business Process Management
10
Business Process Management discipline11
Cultural support12
Attitude13
Change readiness14
Organisational structureOrganisational Behaviour
15
SCM jobs16
Information policies17
Primary systems18
Standards19
Architectural integrationInformation & Communication
Management
20
Management of the IT- SCM-organisation21
Scope of measures22
Process measures23
Measurement andmanagement of suppliers
24
Benchmarking of bestpractices
Performance
Measurement/Management &
Decision Support
25
Facilitation of decision makingOverall SCM Maturity Score:
Appendix B2: Questionnaire SCM Maturity Assessment Instrument
The following 25 questions relate to 25 indicators with which SCM Maturity can be assessed. For each indicator a certain maturity level should be determined. There are 5 possible maturity levels that can be chosen. These maturity levels will be described now.
Maturity Level 1 or Ad-Hoc
Processes are unstructured and ill-defined. Process measures are not in place and the jobs and organizational structures are based upon the traditional functions, not horizontal processes.
Individual heroics and ‘working around the system’ are what makes things happen.
Maturity Level 2 or Defined
Basic procedures are defined and documented. Changes to these processes must now go through a formal procedure. Jobs and organizational structures include a process aspect, but remain traditional. Representatives from functions meet regularly to coordinate with each other concerning process activities, but only as representatives of their traditional functions.
Maturity Level 3 or Linked
The breakthrough level. Managers employ process management with strategic intent. Broad process jobs and structures are put in place outside of traditional functions. Cooperation between intra-company functions, vendors and customers takes the form of teams that share common process measures and goals.
Maturity Level 4 or Integrated
The company, its vendors and suppliers, take cooperation to the process level. Organizational structures and jobs are based on process, and traditional functions, as they relate to the supply chain, begin to disappear altogether. Process measures and management systems are deeply embedded in the organisation. Advanced process management practices take shape.
Maturity Level 5 or Extended
Competition is based upon multi-firm networks. Collaboration between legal entities is routine to the point where advanced process practices that allow transfer of responsibility without legal ownership are in place. Trust and mutual dependency are the glue holding the extended network together. A horizontal, customer-focused, collaborative culture is firmly in place.
The answers on the questions can be filled in on the SCM Maturity Assessment Sheet. As can be
seen in the sheet, the answers should be either 1, 2, 3, 4,or 5, corresponding to the described
maturity levels above. To help you identify the maturity level for each indicator, the enclosed
tables 1-5 describe the characteristics of each maturity level for each indicator. For example,
question 1 relates to question 1, vison on supply chain and can be identified with the help of
Table 1: The Collaborative Enterprise. Each table representing one criteria. Table 1 represents
criterion 1, table 2 represents criteria 2 and so on.
Enterprise Collaboration
1) Which level of maturity best describes visibility of the supply chain in your organisation?
2) Which level of maturity best describes managerial support in your organisation?
3) Which level of importance best describes your organisation regarding the role that SCM plays in planning the corporate strategy?
4) Which level of maturity best describes the prioritisation of SCM projects in your organisation?
5) What description of strategy framing best reflects the way the strategy in your organisation is framed?
6) Which level of strategy maturity towards suppliers’ best describes your organisation?
Operations Management & Business Process Management
7) Which level of maturity best describes the process structure in your organisation?
8) Which level of relationship maturity between SCM and senior management (or possible partners) best describes your organisation?
9) Which level of maturity best describes (continuous) process re-design activities in your organisation?
10) To what extent does your organisation use the concept of BPO/BPM in the process of re- engineering activities?
Organisational Behavior
11) Which level of maturity best describes the cultural support apparent in your organisation?
12) Which level of maturity in attitude towards suppliers’ best describes your organisation?
13) Which level of maturity best describes change readiness in your organisation, looking at the available HRM tools?
14) Which level of maturity as regards organisational structure best describes your organisation?
15) Which level of maturity best describes the SCM jobs used in your organisation?
Information & Communication Management
16) Which level of maturity best describes the sharing of information in your organisation?
17) Which level of SCM maturity best matches the role of primary IT systems in your organisation?
18) Which level of maturity in architectural integration, looking at whom initiates alignment efforts and the reward system, best describes your organisation?
19) Which level of maturity best describes the Standards used in your organisation?
20) Which level of maturity best describes management of the relationship between SCM, IT, and the organisation in your organisation?
Performance Measurement/Management & Decision Support
21) Which level of maturity applies to the scope of measures used in your organisation?
22) Which level of maturity best describes the management of measurement results in your organisation?
23) Which level of maturity best describes the measurement and management of suppliers in your organisation?
24) Which level of maturity best describes the active benchmarking of best practices in your organisation?
25) Which level of maturity best describes the facilitation of decision making in your
organisation?
Appendix B3: Table 1 - The Collaborative Enterprise
Ad-Hoc Defined Linked Integrated Extended
Vision on supply chain
Blurred vision on supply chain,
focus on piecemeal implementation
The organisation forms a view of
the intra- company supply
chain.
Reasonable visibility of one tier up and down
the chain
Organisation forms a total view of the supply chain.
Vision that aims for total integration, exchange of vision on the supply chain with partners
Sharp focus on the ultimate
consumer, linkage with strategy and consequently
the need for measurable
goals to determine supply chain
efforts
Vision of competition based upon multi-firm networks
Management support
Ignorance. No apparent motivators.
Project management not considered
important
Insufficient motivation to take authority away from functional managers, little
support, willingness exists to address
internal issues
Organisation must undertake major important projects in order
to survive, projects are
linked to strategy
Project management
efficiently perceived to be closely linked to organisational success, centers
of excellence to pursue improvements
The organisational
strategy is heavily dependent on
projects.
Examples include new products, supply
chain design, capital investment
SCM’s role in
corporate strategy planning
Not involved Some SCM input and cross- functional planning.
Enables business processes
SCM and organisation jointly determine the SCM strategy
planning.
SCM drives business processes
The integrated organisation determines the
SCM strategy planning
Partners priorities are
considered
The prioritisation of
SCM projects
React to organisational or
SCM need
Determined by
SCM function Determined by
organisation Mutually
determined Partners priorities are
considered
Strategy framing
Strategies framed in terms
of functions
Strategies framed in terms
of integrated processes
Strategies framed around
core competences
Emphasis on relationships, extended processes/
outsourcing
Strategies framed in collaborative terms, value chain goals with
plans for achievement
Strategy
towards suppliers
Clerical and reactive
Commercial and elimination of
transactional activities
Savings and proactive and
top management
support
Supplier integration
Customer value and core competencies
based
Appendix B3: Table 2 - Operations Management and Business Process Management/
Engineering
Ad-Hoc Defined Linked Integrated Extended
Process structures
Functional supply chain
processes
Start with cross functional SC planning and source team
Basic process structure, discrete supply chain processes
are well understood and
documented
Integrated Companywide infrastructure Partners along the supply chain
start to collaborate,
common processes occur
Multicompany business
process alignment/
Outsourcing
Management of the SCM- organisation
relationship
SCM- organisation relationship is not managed/
Managed on an ad hoc basis
Processes exist but not always
followed
Processes exist and complied
with
Processes are continuously
improved
SCM processes are managed by organisation and
(multiple) partner(s)
Continuous process improvement
Heavy emphasis on lead time
mentality Customer satisfaction is
low
Basic SCM processes are
defined and documented.
Customer satisfaction has improved but is
still low
Continuous improvement
efforts take place focused on root cause elimination and
performance improvements.
Customers are included in
process improvement
efforts
Process improvement goals are set by
the teams and achieved with confidence.
Customer satisfaction
becomes a competitive advantage
Emphasis on responsiveness.
joint investments in
improving the system are shared, as are
the returns
Business Process Management
discipline
Occasional use of BPM methodology initiated at lower
levels
Concerted effort to use BPM.
Cost and schedule controls are
used
Single, informal approach used on all types of
projects
Company looks outside for
upgrading management of
business processes
Changes are made to organisations
own BPM management
processes
Appendix B3: Table 3 - Organisational Behaviour
Ad-Hoc Defined Linked Integrated Extended
Cultural support
None.
Functional orientation.
Unaware of the need for management
support.
Awareness exists for need of management
support. Little senior management
support.
Willingness exists to address
internal issues.
Management culture is compliant to
SCM development
role.
Management teams are
active, accepting, participating.
Cultural barriers are eliminated.
Individuals are aware of the need
for improving SCM processes.
Project teams are formed to address inter- organisational
issues
Cultural compatibility
between supply partners.
Attitude towards buyers and
suppliers
Clerical or commercial oriented, buyer
& function oriented
Contract oriented on
buyer
Training and skills development &
sell procurement function in own
organisation
Buyer and planner coordination &
cross functional teams & career path development
programs
Customer service driven
Change readiness
Tend to resist change
Change readiness programs emerging/
Programs in place at functional level
Programs emerging at corporate level
Programs in place at corporate level
Leading organisations
invest in the skills of channel partners
Organisational structure
Teaming within functions rarely occur, functional
managers are obsessed with local optimums
Occasionally occur between
functions.
Senior management emphasizes the
need for cross- functional
teaming
Regularly occur for function management.
Emphasis in inter-firm relationships is on collaboration
Inter-functional teaming regularly occur at all levels throughout the organisation and
partner employees take
place in these teams as well
Teaming is regularly inter- organisational.
More formal commitments
between partners originate
SCM jobs
Jobs are not based on horizontal supply chainprocesses
Jobs and organisation basically remain
traditional
Broad SCM jobs are put in place
on top of traditional functions.
Personnel policies that stress resourcefulness
Multi-firm SCM jobs take
shape
Appendix B3: Table 4 - Information and Communication Management
Ad-Hoc Defined Linked Integrated Extended
Information policies
Information policies that feature strict
security
Unidirectional flow of information from buyer to supplier
Information policies that allow for information sharing with chain members.
Bidirectional information
flows.
Focus on exchanging- sharing data among partners.
Customers feedback is considered highly important
Policies that allow members
of the value chain to collaborate in the design and development of products and other forms of value chain
planning
Primary
systems
Cost of doing
business Becoming an
asset Enables future organisational
activity
Drives future organisational
activity
Partner with business in creating value
Architectural integration
IT takes all the risks, receives
no reward
IT takes most risks with little
reward
IT, SCM, organisation start sharing risks, rewards
Risks, rewards always shared
Managers incented to take
risks
Standards
Not involved Enables organisationalprocesses
Drives organisational
processes
Enables or drives organisational
strategy
IT, organisation adapt quickly to
change
Management of the IT-SCM- organisation relationship
SCM-IT- organisation relationship is not managed/
Managed on an ad hoc basis
Processes exist but not always
followed
Processes exist and are in
general complied with
Processes are complied with and shared
goals are stressed
Processes are continuously
improved
Appendix B3: Table 5 - Performance Measurement/ Management and Decision Support
Ad-Hoc Defined Linked Integrated Extended
Scope of measures
No metrics/
Individual metrics based
on functional areas.There is no evidence of the recognition
of the key business processes
Employs process-oriented
performance measures to ensure that
individual business activities and
tasks are co-ordinated effective and
efficient
Adopt measures that clarify critical value- added processes
across functional boundaries.
Adopt measures that truly promote collaboration.
Adopt measures that clarify critical value- added processes
across functional and organisational boundaries
(customer service, new
product introduction,
speed)
Evaluation of overall (chain)
performance and participating
members’
performance is possible
(overall examples are net profit, cash
flows, ROI, market growth,
market share)
Management
of measures
Process measures are
not in place.
Process performance is
unpredictable
Process performance is
more predictable.
Targets are defined but often missed
Continuous improvement
efforts take place focused on
performance improvements.
Process improvement goals are set by
the teams and achieved with
confidence
Process performance and reliability of
the extended system are
measured
Measurement and management
of suppliers
Control of purchase expenditure
Supplier base
management Contracting &
translation of corporate targets in procurement
targets
Performance based contracts
& define key performance indicators (KPI’s)
Service level agreements enterprise wide
& supplier his added value and risk evaluation &
customer service level agreements
Benchmarking
of best practices
Seldom or never Sometimes benchmark informally
May benchmark formally, seldom act to address
specific problems or weaknesses
Routinely benchmark,
usually act
Routinely benchmark, act on, and measure
results
Facilitation of decision
making
Basic SCM information practices (understanding
seasonality, buying patterns)
Basic information
systems, methods and
discipline) constructed for a
functional silo organisational
structure (performance measurement of
suppliers and buyers)
Advanced information
systems practices
Supplier and customer focused tools and techniques
(performance management of
suppliers and buyers)
Business Intelligence systems for analyzing information drawn from the
entire value chain
Appendix C1: Refined SCM Maturity Assessment Questionnaire
The following 25 questions relate to 25 indicators with which SCM Maturity can be assessed. For each indicator a certain maturity level should be determined. There are 5 possible maturity levels that can be chosen. These maturity levels will be described first.
Maturity Level 1 or Ad-Hoc
Processes are unstructured and ill-defined. Process measures are not in place and the jobs and organizational structures are based upon the traditional functions, not horizontal processes. Individual heroics and ‘working around the system’ are what makes things happen.
Maturity Level 2 or Defined
Basic procedures are defined and documented. Changes to these processes must now go through a formal procedure. Jobs and organizational structures include a process aspect, but remain traditional.
Representatives from functions meet regularly to coordinate with each other concerning process activities, but only as representatives of their traditional functions.
Maturity Level 3 or Linked
The breakthrough level. Managers employ process management with strategic intent. Broad process jobs and structures are put in place outside of traditional functions. Cooperation between intra-company functions, vendors and customers takes the form of teams that share common process measures and goals.
Maturity Level 4 or Integrated
The company, its vendors and suppliers, take cooperation to the process level. Organizational structures and jobs are based on process, and traditional functions, as they relate to the supply chain, begin to disappear altogether. Process measures and management systems are deeply embedded in the organisation. Advanced process management practices take shape.
Maturity Level 5 or Extended
Competition is based upon multi-firm networks. Collaboration between legal entities is routine to the point where advanced process practices that allow transfer of responsibility without legal ownership are in place.
Trust and mutual dependency are the glue holding the extended network together. A horizontal, customer- focused, collaborative culture is firmly in place.
The answers on the questions can be filled in on the SCM Maturity Assessment Sheet. As can be seen in the sheet, the answers should be either 1, 2, 3, 4,or 5, corresponding to the described maturity levels above. To help you identify the appropriate maturity level for each indicator, the characteristics of each indicator for each maturity level are included in the sheet as well.
For example, question 1, corresponds with indicator 1 (vision on the supply chain) in the SCM
Maturity Sheet. On this sheet, five different visions on the supply chain are described
corresponding to the five maturity levels described above. In the empty colomn on the right, you
write down the appropriate vision present in your organisation.
Enterprise Collaboration
1) Which level of SCM maturity best describes top managements vision on visibility of the supply chain in your organisation?
2) Which level of SCM maturity best describes the managerial support for SCM in your organisation?
3) Which level of SCM maturity, regarding the significance of the role of SCM in the formulation of corporate strategy best describes your organisation?
4) Which level of SCM maturity best describes the prioritisation of SCM projects in your organisation?
5) Which level of SCM maturity best describes the way the corporate strategy is phrased (framed)?
6) Which level of SCM maturity in strategy towards suppliers’ best describes your organisation?
Operations Management & Business Process Management
7) Which level of SCM maturity best describes the process structure in your organisation?
8) Which level of relationship maturity between SCM and top management (or possible partners) best describes your organisation?
9) Which level of SCM maturity best describes (continuous) process re-design activities in your organisation?
10) To what extent (which maturity level) does your organisation use the concept of BPO/BPM (Business Process Orientation/ Business Process Management) in the process of streamlining and re-designing the organisation?
Organisational Behavior
11) Which level of SCM maturity as regards a SCM supportive culture best describes the culture present in your organisation?
12) Which level of SCM maturity best describes your organisation’s attitude towards buyers and suppliers’?
13) Which level of SCM maturity best describes change readiness in your organisation, looking at the available HRM tools and historical change management practices?
14) Which level of SCM maturity regarding teamwork behaviour in the organisational structure best describes your organisation?
15) Which level of SCM maturity best describes the SCM positions designated in your
organisation?
Information & Communication Management
16) Which level of SCM maturity best describes the sharing of information in your organisation?
17) Which level of SCM maturity best matches the role of IT systems in your organisation?
18) Which level of SCM maturity best describes the use of standards (o.g. ISO 2001) in your organisation?
19) Which level of SCM maturity in architectural integration of IT systems, looking at whom initiates alignment and integration efforts and who receives the credits, best describes your organisation?
20) Which level of SCM maturity best characterises relationship management between SCM, IT, and top management in your organisation?
Performance Measurement/Management & Decision Support
21) Which level of SCM maturity relates to the scope of measures used in your organisation?
22) Which level of SCM maturity best describes the management of measurement results in your organisation?
23) Which level of SCM maturity best describes the measurement and management of suppliers by your organisation?
24) Which level of SCM maturity best describes the active benchmarking of best practices in SCM in your organisation?
25) Which level of SCM maturity best describes the facilitation of decision making in your
organisation?
Appendix C2: Refined SCM Maturity Assessment Sheet Maturity Level Indicators Maturity Criteria Indicators
Ad-Hoc (1)
Defined (2)
Linked (3)
Integrated (4)
Extended (5)
Score
(1 - 5)1
Vision on supply chainBlurred vision on supply chain, focus on
piecemeal implementation
The organisation forms a view of the intra- company supply chain.
Reasonable visibility of one tier up and down
the chain
Organisation forms a total view of the supply
chain. Vision that aims for total integration, exchange of vision on the supply chain with partners
Sharp focus on the ultimate consumer, linkage with strategy and consequently the need for measurable goals to determine supply chain efforts
Vision of competition based upon multi-firm
networks
…
2
Management supportIgnorance. No apparent motivators.
Project management not considered
important
Insufficient motivation to take authority away
from functional managers, little support, willingness
exists to address internal issues
Organisation must undertake major important projects in
order to survive, projects are linked to
strategy
Project management efficiently perceived to
be closely linked to organisational success, centers of excellence to pursue
improvements
The organisational strategy is heavily dependent on projects.
Examples include new products, supply chain
design, capital investment
…
3
SCM’s role in corporate strategyplanning
Not involved
Some SCM input and cross-functional planning. Enables business processes
SCM and organisation jointly determine the SCM strategy planning.
SCM drives business processes
The integrated organisation determines the SCM
strategy planning
Partners priorities are
considered
…
4
The prioritization of SCMprojects React to organisational
or SCM need Determined by SCM
function Determined by
organisation Mutually determined Partners priorities are
considered
…
5
Strategy phrasing Strategies framed in terms of functionsStrategies framed in terms of integrated
processes
Strategies framed around core competences
Emphasis on relationships, extended processes/
outsourcing
Strategies framed in collaborative terms, value chain goals with
plans for achievement
…
6
Strategy towardssuppliers Clerical and reactive Commercial and elimination of transactional activities
Savings and proactive and top management
support Supplier integration Customer value and core competencies
based
…
Collaborative
Enterprise
Maturity Level Indicators Maturity Criteria Indicators
Ad-Hoc (1)
Defined (2)
Linked (3)
Integrated (4)
Extended (5)
Score
(1 - 5)7
Process structure Supply chain processes within theSCM department
Start with cross functional SC planning
and source team
Basic process structure throughout
the organisation, discrete supply chain
processes are well understood and
documented
Integrated Companywide infrastructure Partners along the supply chain start to collaborate,
basic inter-firm processes occur
Multicompany business process
alignment/
Outsourcing
…
8
Management of the SCM-organisationrelationship
SCM-organisation relationship is not managed/ Managed
on an ad hoc basis
Processes exist but not
always followed Processes exist and
are complied with Processes are continuously improved
SCM processes are managed by organisation and
(multiple) partner(s)
…
9
Continuous process improvementHeavy emphasis on lead time mentality Focus on customer satisfaction is low
Basic SCM processes are defined and
documented.
Customer satisfaction focus has improved
but is still low
Continuous improvement efforts take place focused on root cause elimination and performance
improvements.
Customers are included in process improvement efforts
Process improvement goals are set by the teams and achieved with confidence.
Customer satisfaction becomes a competitive
advantage
Emphasis on responsiveness. joint
investments in improving the system are shared, as are the
returns
…
10
Business Process Management disciplineOccasional use of BPM methodology initiated
at lower levels
Concerted effort to use BPM. Cost and schedule controls are
used
Single, informal approach used on all
types of projects
Company looks outside for upgrading management of business processes
Changes are made to organisations own BPM management
processes
…
Operations Management &
Business Process Management/
Engineering
Average Criterion Score …
Maturity Level Indicators Maturity Criteria Indicators
Ad-Hoc
(1) Defined
(2) Linked
(3) Integrated
(4) Extended
(5)
Score
(1 - 5)11
Cultural supportNone. Functional orientation. Unaware
of the need for top management support.
Awareness exists for need of top management support.
Little senior management support.
They are willing to address internal
issues.
Management culture regard SCM as
strateguically important.
Management teams are active, accepting,
participating.
Cultural barriers are eliminated.
Individuals are aware of the need for improving SCM processes. Project teams are formed to
address inter- organisational issues
Cultural compatibility between supply
partners.
…
12
Attitude towards buyersand suppliers Clerical or commercial
oriented Contract oriented on buyer and supplier
Training and skills development & sell procurement function
in own organisation
Buyer and supplier coordination & cross
functional teams &
career path development programs
Customer service driven, value chain
oriented
…
13
Change readiness (looking at HRM andhistorical practices)
Tend to resist change
Change readiness programs emerging/
Programs in place at functional level
Change programs emerge at corporate
level
Change programs in place at corporate
level
Leading organisations invest in the skills of
channel partners
…
14
Teamwork behaviourTeamwork within departments rarely
occur, functional managers are occupied with achievind local
optimums
Occasionally occur between departments.
Senior management emphasizes the need for cross-functional
teamwork
Regularly occur for function management.
Emphasis in inter-firm relationships is on
collaboration
Inter-functional teamwork regularly
occur at all levels throughout the organisation and partner employees participate in these teams as well
Teamwork is regularly inter-organisational.
More formal commitments between
partners originate
regarding coopeartion
…
15
SCM positions Positions are not based on horizontal supply chain processesPositions and organisation basically
remain traditional
Broad SCM positions are put in place on top of traditional functions.
Personnel policies stress the importance
of commemorate qualified and experience staff in the
respective SCM positions
Multi-firm SCM
functions take shape
…
Organisational Behaviour
Average Criterion Score …
Maturity Level Indicators Maturity Criteria Indicators
Ad-Hoc (1)
Defined (2)
Linked (3)
Integrated (4)
Extended (5)
Score
(1 - 5)16
Information policies Information policies that feature strictsecurity
Unidirectional flow of information from buyer
to supplier
Information policies that allow for information sharing with chain members.
Bidirectional information flows.
Focus on exchanging- sharing data among partners. Customers feedback is considered
highly important
Policies that allow members of the value chain to collaborate in
the design and development of products and other forms of value chain
planning
…
17
IT systems Cost of doing business Becoming an asset Geared to future operational improvementDrives future organisational transformation
Partner with business partners in creating
value
…
18
Architectural integrationof IT systems IT takes all the risks,
receives no reward IT takes most risks with little reward
IT, SCM, organisation start sharing risks,
rewards
Risks, rewards always
shared Managers incentivised
to take risks
…
19
Standards Not involved Documentsorganisational processes
Organisational processes are embedded in standards
Influences or drives
organisational strategy IT, organisation adapt
quickly to change
…
20
Management of the IT- SCM- top managementrelationship
SCM-IT-top management relationship is not managed/ Managed on an ad hoc basis by
the financial function
Processes exist but not always followed
Processes exist and are mostly complied
with
Processes are complied with and
shared goals are defined and communicated
Processes are continuously improved
upun through collaborative
measurement
…
Information &
Communication Management
Average Criterion Score …
Maturity Level Indicators Maturity Criteria Indicators
Ad-Hoc (1)
Defined (2)
Linked (3)
Integrated (4)
Extended (5)
Score
(1 - 5)21
Scope of performance measuresNo metrics/ Individual metrics based on functional areas. There
is no evidence of the recognition of the key business processes
Employ process- oriented performance
measures to ensure that individual business activities and tasks are co-ordinated effective, and efficient
Adopt measures that clarify critical value-
added processes across functional boundaries. Adopt measures that truly promote collaboration.
Adopt measures that clarify critical value-
added processes across functional and
organisational boundaries (customer
service, new product introduction, speed)
Evaluation of overall (chain) performance and participating
members’
performance is possible (overall
measurement examples are net profit, cash flows, ROI)
…
22
Process measuresProcess measures are not in place. Process
performance is unpredictable
Process performance is more predictable.
Targets are defined but often missed
Continuous improvement efforts take place focused on
performance improvements.
Process improvement goals are set by the teams and pursued with confidence
Process performance and reliability of the extended system are
measured
…
23
Measurement and management ofsuppliers
Control of purchase expenditure
Supplier base is managed and
maintained
Contracting &
translation of corporate targets in procurement targets
Performance based contracts & define key performance indicators (KPI’s) in all supplier
contracts
Enterprise wide Service level agreements & supplier
added value and risk evaluation & customer
service level agreements in place
…
24
Benchmarking of bestSCM practices Seldom or never done Sometimes benchmark informally based on
sample quotes
May benchmark formally, seldom act to
address specific problems or weaknesses
Routinely benchmark, usually act
Routinely benchmark, act on, and measure
results
…
25
Facilitation of decision makingBasic SCM information practices (understanding seasonality, buying
patterns)
Basic information systems, methods and discipline) constructed for a functional silo
organisational structure (performance
measurement of suppliers and buyers)
Advanced information systems practices
Collaboration between supplier and buyer.
Supplier and customer focused tools and
techniques (performance management of suppliers and buyers)
Business Intelligence systems for analyzing information drawn from the entire value
chain. System integration with buyers
and suppliers
…
Performance Measurement/
Management &
Decision Support
Average Criterion Score …
Appendix D: List of Abbreviations and Glossary
BPO = Business Process Orientation BPM = Business Process Management cdm = conceptual diagnosis model SC = Supply Chain
SCM = Supply Chain Management
Business Process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. Business processes are for example customer relationship management, procurement, and product development (Romano: 2003: 120).
Business Process Orientation/ Managemement is the structural ability of managing extended processes within and beyond the single organisation’s boundaries with the objective to optimally design and manage these extended business processes in order to concurrently and seamlessly design, manufacture and deliver the products (eliminating waste).
Buyers are in practice not just the big organisations. Actually even a very small SME can have many suppliers and should be called a buyer. In this research, the definition of a buyer is set by the Lumus management and refers to buyer organisations and larger supplier organisations in target market segments.
Commonality is a shared feature or attribute.
Lumus Standard is the Lumus product in all its applications. In this research most likely the Lumus Standard is meant as a buyer application. The Standard belongs to the category of supply chain intelligence systems and can be used in the field of supply chain integration practices. Specifically in the procurement function.
Supply Chain Management Maturity is a level of development achieved in supply chain management. The assessment instrument measures this development level.
Supply Chain Collaboration is often defined as two or more chain members working together to create a competitive advantage through sharing information, making joint decisions, and sharing benefits which result from greater profitability of satisfying end customer needs than acting alone (Simatupang e.a., 2002)
Supply Chain Management is the collaborative effort of multiple channel members to design, implement, and manage seamless value-added processes to meet the real needs of the end customer. The development and integration of people and technological resources as well as the coordinated management of materials, information, and financial flows underlie successful supply chain integration.
Readiness means that a buyer has achieved an appropriate level in supply chain management. It indicates if an organisation is ready to commence the Lumus Standard initiative. In this research, readiness will be measured as the alignment between the minimum requirements of Lumus and maturity extend of the buyer.
