Supply Chain Consulting USA Assessment
A company’s global competitiveness lies in how effectively its supply chain works. A supply chain that is not performing at its peak can directly threaten a company’s profitability. This is why periodic assessments are vital in determining the supply chain’s strengths and weaknesses and identifying proposals for improvements in the management process. This is where employing the services of a supply chain consulting firm can prove invaluable. Although such assessments can be done internally, if an outside company does the assessment, it may be able to bring objectivity and an overview of the bigger picture that in-house professionals may not be able to bring to the job.
When selecting a supply chain consulting firm to do your assessment, one of the most important things to consider is what methodology they would use in their work. There are many tools available for doing supply chain assessments. But the best firms would focus on certain areas, such as the coordination between the different stages of the chain, effectiveness of planning, comparison of current supply chain operations to best practices and necessary changes in business processes and organizational structure to help achieve such practices. A new supply chain assessment tool uses the COBIT framework to identify weaknesses and determine priorities for improvement.
COBIT stands for Control Objectives for Information and Related Technology. COBIT is a framework of best practices for information technology management that was created in 1986 by the Information Systems Audit and Control Association (ISACA) and the IT Governance Institute (ITGI). It aims to create an authoritative, updated and generally accepted IT control framework that managers and auditors can use generate value from IT and while managing the risks associated with it. However, the COBIT framework is flexible enough that it can be adapted by supply chain consulting companies for use in assessing supply chains.
Supply chain consulting enterprises using COBIT for assessment use the COBIT 4.1 Generic Maturity Model. This model ranks the various supply chain functions such as sourcing, distribution and warehouse networking and transportation management based on how well these functions are being performed compared to the ideal. The lowest ranking (called a maturity level) is zero (“non-existent”), wherein there are no processes at all and the enterprise does not even acknowledge there is a problem, to a 5 maturity level (“optimized”), wherein operational processes have been refined through continuous improvements to a high level of best practice. Maturity levels are descriptions of current and possible future conditions, which are used to identify areas for improvement.
Supply Chain Consulting Use of COBIT Maturity Model
To illustrate how the COBIT Generic Maturity Model is used by a supply chain consultant for assessment, let’s say the supervisors of the transportation management stage of the chain have created standardized operating and management procedures which they have taught to the staff and made mandatory for them to adhere to. However, it does not monitor compliance with these processes. Hence, this stage would be ranked a three, for “defined processes”; however, since it does not gauge how closely the workers follow these processes, it does not achieve the higher ranking of four (“managed and measurable”).
In order to reach the highest ranking of five, the supply chain stage should have created and implemented a mechanism for constantly assessing the effectiveness of processes, identifying improvements and taking action to implement such improvements. A good supply chain consulting firm would not only identify weaknesses in the supply chain but also determine what needs to be done for the various processes to achieve the highest ranking or at least move up to the next highest rank. For example, a particular supply chain function may reach a higher ranking if it has drafted a long-term plan with measurable goals for improving productivity and efficiency.
In the context of the Supply Chain Consulting COBIT framework, what should the supply chain consultant deliver?
It should provide an overview of the current condition of the supply chain and a map showing what it should ideally be. Then, the assessor should identify improvements that can be made to help achieve this ideal state, both in the long-term and in the short-term. For example, something as simple as moving the time of a staff meeting can help improve coordination between parts of the supply firm which are located in different parts of the world.
At present, the use of the COBIT framework in assessing supply chains remains limited, since supply chain consulting companies are still in the process of learning how to use the framework in their operations. But as the usefulness of the model becomes evident, expect an increasing number of firms to adopt COBIT as the standard in supply chain assessment. These firms may eventually have an edge over their rivals as COBIT gains increasing acceptance, not only as a benchmark for best practices but also for controlling irresponsible practices of various subcontracted firms involved in the supply chain through the implementation of improved corporate governance practices and stricter controls.