During our virtual Tomorrow Thought Stream in May, which focused on suppliers and supply chain challenges, root causes and the latest best practices for addressing them, QAD introduced the Integrated Supplier Management Diagnostic tool. The Diagnostic consists of 12 questions that assess an enterprise’s strategic, tactical and operational supply chain planning and execution. It evaluates where your company is and identifies how to best get to where you want to be.
You can still take advantage of this free enterprise assessment. We encourage you to first review this sample results report to better understand where an enterprise’s capabilities for supplier management may lie along the continuum of the Integrated Supplier Management Maturity Model.
Insights from the Integrated Supplier Management Diagnostic
Approximately 115 customers have gained valuable insights from taking the Integrated Supplier Management Diagnostic assessment thus far. The results identify which of four levels of supplier management companies fall, from low to high: Non-Functional Supplier Management, Semi-Functional Supplier Management, Effective Supplier Management and Integrated Supplier Management.
For this group of respondents, the overall average scores range from Semi-Functional Supplier Management to Effective Supplier Management.
- Semi-Functional generally means that the individual business functions operate well by themselves, but cross-functional processes are a struggle.
- Effective Supplier Management indicates effective cross-functional views and collaboration, but the challenge is to be truly adaptable. Processes work, but adapting processes is challenging.
Overall, only 2% of respondents identified their supplier management as “excellent” in all areas and rated themselves to be at the Integrated Supplier Management level across the board. For the other 98% of respondents, the results tell us there is room for improvement in one or more aspects of supplier management to become more adaptive as an enterprise. Solely working effectively is no longer enough; adaptability to change has become a more sought after requirement in order to drive competitiveness and business longevity.
We also found that for each of the main categories of Integrated Supplier Management – Plan, Execute, Monitor and Adapt – respondents ranged from Semi-Functional to Effective Supplier Management. On average, Planning was about 2% weaker than Execution and about 7% weaker than Monitor and Adapt.
These results make us wonder: if an enterprise is good at monitoring and adapting how the business flows but tracks weaker on planning and execution, how efficient is the enterprise? With poor planning and execution, there must be a lot more waste being produced in the business. Improvement of planning and execution processes should yield significant business value as an enterprise becomes truly more adaptable.
Diagnostic Results: Strongest Categories
We found that the strongest categories overall relate to the traditional core ERP functions. The table below provides additional information.
These processes seem to run effectively but agility is a challenge. Enterprises should evaluate whether they are running their processes in the most efficient way.
Diagnostic Results: Weakest Categories
According to our respondents, their weaker categories are those outside of the traditional core ERP functions. The table below provides additional information.
Between 10 and 31% of companies rated their very best examples of supplier management as integrated (i.e., level 4, excellent) in at least one category. So even for the best scoring area, 69% of respondents consider themselves not at the level of truly integrated supplier management. We see room for improvement in support of building an Adaptive Manufacturing Enterprise.
Consequences of Low Maturity in Supplier Management
Enterprises with lower maturity in supplier management face a variety of consequences. The table below provides additional information.
The Good News
QAD guides enterprises on their journey to becoming Adaptive Manufacturing Enterprises. We provide solutions in Integrated Supplier Management, which is one of the five critical capabilities of an Adaptive Manufacturing Enterprise, joining:
- Connected Supply Chain Management
- Effective Enterprise Management
- Optimized Digital Manufacturing
- Complete Customer Management
Our goal for manufacturers still stands true. We want all enterprises to achieve full Integrated Supplier Management, which reduces supply chain risk and improves business performance and efficiency. QAD is your partner in helping your business succeed and thrive. For more information on finding the path to improved and more integrated supplier management, check out our ebook: 7 Steps to a Resilient Supply Chain.
