Distribution Maturity Model – Where do you stand?
In today's article, we go over the Distribution Maturity Model, what it is and how to integrate it in your organization to maximize results.
Table of Content
A few years ago, PwC created a Distribution Maturity Model that is universally used in the distribution industry to gauge the level of maturity at distribution firms. The Maturity Model is not limited to IT, planning or any specific area of the firm, but rather all areas within the business process.
This is a critical stage for all companies because it is the first stage in their business life cycle – start up mode. Companies in this stage are completely entrepreneurial, going after everything in sight. This is a bad stage to be at unless you are a start-up. In all honesty, a company has limited time to be at this stage of maturity and the only goal at this point is to get past it. Eventually, industry dynamics will eventually force them out of this stage – Survival of the Fittest: Business Edition!
All companies in this stage have some type of software solution. However, they are afflicted with the following issues:
The firm has made it past the startup stage! Now there are actual processes in place – not planned processes but necessary processes. These processes have grown from the need to sell, ship and invoice.
Now that they have experience and a budding reputation in the industry, they realize (sometimes to their surprise) that they have created and applied methods to their business:
In the Optimizing Stage, companies are hitting plateaus that require major decisions. We all know the saying – “If your business is not growing, then it is shrinking!”
This is the stage companies begin looking and understanding the need for industry best practices across the company to avoid conflicting goals and objectives between departments.
They now:
The business is now planning and executing for today – and tomorrow – while adjusting, as necessary, to its market needs. “Customer centric” and “market driven” are terms that are understood and being applied at across the organization.
This is the stage most firms believe they have achieved. The operative word is “believe”.
At the Leaders Stage, innovation is strong and processes are consistently being utilized since strategies have been aligned throughout the company.
In this stage:
The Maturity Model allows you to identify next steps in your firm’s development and provides areas your firm needs to improve on as your firm progresses through various life cycle stages. Not all firms achieve Level 4 of the Distribution Maturity Model. You can only achieve the 4th level of maturity – Leading – if you are a Modern Distributor. Once you have achieved this level of operation and process effectiveness within your firm you now have all the tools necessary to apply the Plan to Profit Model.
Most distributors reside between the practicing and optimizing stage – where do you fit?
SBS Group’s distribution solutions and industry experience can bring your firm to the 4th stage and make your firm a leader – a true modern distributor.
Click here to download the “5 Pillars of the Modern Distributor” white paper.
Dominic Telaro CFPIM, CIRM
Vice President Industry Solutions, SBS Group
Dominic Telaro brings over 35 years of Manufacturing, Distribution, Software and Consulting experience. Half of his professional career has been in Manufacturing and Distribution from shop floor and warehousing positions to management. During this time he implemented ERP, DRP and Logistics solutions as internal Project Leader. The second half of his career has been in consulting, product management, product development and both consulting and software sales. He has held positions as VP Of Industry Solutions, VP of Product Development, VP of Sales and Marketing and Global Practice Leader for companies like IBIS Inc., IBM, Janis Group, Metamor, Marcam Corp. and more. Presently he is responsible for Industry Product Vision for multiple ERP solutions at SBS Group USA.
APICS Fellow and Certified in Integrated Resource Management, Instructor at Universite de Montreal, Vanier College and Granby CEGEP for APICS certification; Lead instructor for internal APICS training at Bell Helicopter, Avon, Le Groupe Hamelin
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