Results Can Be Significantly Better for the Effort

Before proceeding to the specific models and solutions that are recommended, it is critical that we establish some points of importance. First, supply chain optimization is a concept that can only be approached. So much progress has been made and so many new innovations introduced that the end line becomes a moving target. Only a few firms come close to best practices across an entire extended enterprise. Nevertheless, the 

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Second, each level of progression requires time and patience to accomplish. The necessary understanding and requisite behavioral change (business transformation) is not easy and requires sustained executive endorsement. Experience schools that getting to Level 3 takes at least three years, and then only a few business units will move into that level. For some firms and industries, achievement of the most advanced levels could require a decade of effort. 

Fourth, companies in earlier stages (followers) will continue to see margin erosion while trying to catch the leaders, unless that is an acceptable level of progress for their business. The gap between leaders and followers shows a one- to two-year advantage. At the same time, very few firms have reached Level 5, although many are in pursuit of this position. Therefore, the opportunity exists to make supply chain progress and thereby close the gap and attain dominance. 

With the five-level framework as a guide to movement through the supply-chain evolution, it is possible to point out where progress has been made by firms across many industries, and to establish a format for calibration. By considering where others have advanced, a firm can determine if 

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