MODERN SUPPLY CHAINS the vision of consulting companies Bondareva E.

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“Supply Chain and Risk Management” PricewaterhouseCoopers Four levels of supply chain maturity

“Supply Chain and Risk Management”

PricewaterhouseCoopers
Four levels of supply chain maturity

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Level 1: Reactive supply chain management Low degree of integration and

Level 1: Reactive supply chain management

Low degree of integration and little

coordination between suppliers and partners
Minimal coordination between product design and supplier operations
Little visibility into source of supply chain risk
Unbalanced inventory leading to poor customer service
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Level 2: Internal supply chain integration with planned buffers Align performance

Level 2: Internal supply chain integration with planned buffers

Align performance objectives

and information across internal departments
Some visibility into emerging changes and patterns outside of the company
Changing demand patterns influence product design
Integration of internal risk management processes
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Level 3: Collaboration across extended supply chain network Extensive data and

Level 3: Collaboration across extended supply chain network

Extensive data and information

sharing produces high visibility
Integration of product design and inventory management across all supply chain partners
Visibility outside of the organization is exploited to predict change and variability
Monitor supply chain resilience levels and business continuity plan preparation
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Level 4: Dynamic supply chain adaptation and flexibility Align KPIs across

Level 4: Dynamic supply chain adaptation and flexibility

Align KPIs across the

entire ecosystem
Full flexibility to identify and respond to emerging value chain patterns
Real-time monitoring and data analytics
Quick responses shortens product, network, and process lead times
Segmented risk strategies based on supplier profiles and market-product combination characteristics
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“Building the supply chain of the future” Many global supply chains

“Building the supply chain of the future”

Many global supply chains are not

equipped to cope with the world we are entering.
Jim Owens, the former chairman and CEO of construction-equipment maker Caterpillar: “the competitor that’s best at managing the supply chain is probably going be the most successful competitor over time. It’s a condition of success”
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Challenges and sollutions More uncertain world Rising complexity Splintering traditional monolithic

Challenges and sollutions

More uncertain world

Rising complexity

Splintering traditional monolithic supply chains into

smaller and more flexible ones

Treating supply chains as dynamic hedges