In its benchmarking and best practice studies of major companies around the world, The Hackett Group has identified distinct stages of supply chain strategy maturation. Most broadly, in top-performing companies, supply chain strategy has matured to the point where the procurement function and procurement leaders have significantly wider influence within the enterprise and deliver significantly more business value than do their counterparts at typical companies.

Supply Chain Strategy Maturation Stages

A company's procurement capabilities and supply chain strategy can be classified as being in one of four evolutionary stages: Reactive, Planned, Aligned, or Strategic. Influence within and value to the enterprise grow as the procurement function matures through the stages:

  • From reactive to planned. Here the key is a build-out of procurement function capabilities so that the function can raise its sites beyond a short-term focus on purchase order processing and "three bids and a buy." Investment in the function and development of appropriate skill sets are imperative if a procurement organization is to adopt a forward-looking view and grapple with issues of supply chain strategy, not just week-to-week tactics.
  • From planned to aligned. Here the challenge is for procurement to develop a supply chain strategy that's well aligned with overall business goals, the interests of key stakeholders, and volatile supply markets. Objectives here include supporting enterprise strategies such as globalization, mergers and acquisitions, or "going green;" ensuring that internal customers are getting what they need from the inbound supply chain; and collaborating with supply chain partners to minimize total costs.
  • From aligned to strategic. In the most advanced stage, the procurement function is a full partner in the strategic planning of the enterprise, helping the enterprise to sense and capitalize on changes and innovations in the supply markets. Prominent here is procurement taking a proactive role in advising senior management on issues of strategic sourcing, including insourcing vs. outsourcing, onshoring vs. offshoring, and so on.

The Hackett Group Can Elevate Your Supply Chain Strategy

The Hackett Group, a leading global strategy and operations consulting firm, offers benchmarking, advisory, and transformation consulting services that help procurement leaders to improve the performance of their organizations, elevate their supply chain strategy, and expand the influence and business value of procurement within the enterprise. The Hackett Group delivers deep experience and expertise, having worked with nearly 3,000 of the world's leading companies – including 97% of the Dow Jones Industrials and nearly three-quarters of both the Fortune 100 and the DAX 30 – on issues of performance optimization, business process engineering, and continuous process improvement, in procurement as well as other back-office functions such as finance and HR.

The Hackett Group's working capital group, REL, has more than 30 years experience across all facets of supply chain strategy. We can analyze your entire supply chain process from demand forecasting to order fulfillment, compare your process to proven best practices, identify and prioritize areas for improvement, and help you develop and execute an implementation roadmap. We also offer deep expertise in all aspects of fundamental procurement strategy, including options such as shared services and procurement outsourcing.

To learn more about how The Hackett Group can help you elevate your supply chain strategy, contact us.