SupplyChainOperationsReference-model

(SCOR)Overview

ScottStephensChiefTechnologyOfficerSupply-ChainCouncil,Inc.April1999-Version2.01

TheSCCisanindependent,not-for-profit,globalcorporationwithmembershipopentoallcompaniesandorganizationsinterestedinapplyingandadvancingstate-of-the-artsupplychainmanagementsystemsandpractices.Over750CompanyMembersCross-industryrepresentationChaptersinAustralia/NewZealand,Brazil,Europe,Japan,NorthAmerica,andSouthEastAsiawithpetitionsforadditionalchapterspending.TheSupply-ChainCouncil(SCC)hasdevelopedandendorsedtheSupplyChainOperationsReference-model(SCOR)asthecross-industrystandardforsupplychainmanagementSCCOrganization-ChaptersandStaffingAustralia/NewZealandChapterSydney,AustraliaOwensGlobalLogisticsSouthEastAsiaChapterSingaporeVentureInc.JapanChapterTokyo,JapanNECSCCGlobalHeadquartersPittsburgh,Pennsylvania,USAHPEuropeOslo,NorwayModusMediaSouthernAfricaJohannesburg,SouthAfricaUTiNorthAmericaChapterEffective7/1/03BrazilChapterEffective9/1/03SCCLeadershipTeamsAustralia/NewZealandOwensGlobalLogistics–CCaltexAusPetroleum–VCLexianSAPEXETechnologiesRMITUniversityMIServicesBHPQueenslandRailwayKPMGDeloitteEuropeModusMedia–CGist,Inc.–VCUPM-KymmeneOyjBASFDiverseyLeverAMRResearchJonkerAdiesSAPINSEADRhodiaSonocoProductsSouthEastAsiaVemturaCorporation–CPhillipsCFT–VCModusMediaDeloitteSingaporeInstituteofMfg.TechnologySCMInstituteAutoscanTechnologyPrecisionValveAsiaPacificBreweriesI2TechnologiesPerentisSdnBhdJapanNEC–CJBCCreate–VCMitsuiGlobalStrategicStudiesOlympusOpticalEXAChubuElectricPowerJ.D.EdwardsNihonUnisysHitachiHokkaidoUniversityMatsushitaElectricIndustrialYamahaBoardofDirectorsHP–CDisney–VCAMRDaimlerChryslerMOPARBusinessProcessTrainingCenterEuropePeopleSoftI2TechnologiesGeorgiaInstituteofTechnologyIBMSCELimitedICISupplyChainAlcatelAmericasPRTMIntelMembership750+SCCmembers,Composition40%:Practitioners25%:EnablingTechnologyProviders20%:Consultants15%:Universities,Associations,GovernmentOrganizationsCurrentTechnicalProjectsSupplyChainEventMgt.RetailOperations-1CollaborationProductDevelopmentC-TomPhelps–HPV–PaulSchiller–BPAmocoLtColScottKoster(USMC)ReturnsRetailOperations-2SteveMiller(Disney)MichaelMemmel–(R.Reed)TimMeester(BestBuy)MetricsMROReturnsJoeBurak(Boeing)SCORTechnicalDevelopmentSteeringCommitteeCasparHunsche(HP)KatieKasper–(DRKAssociates)SupplyChainOperationsReference-model(SCOR)OverviewQuantifytheoperationalperformanceofsimilarcompaniesandestablishinternaltargetsbasedon“best-in-class”resultsBenchmarkingCharacterizethemanagementpracticesandsoftwaresolutionsthatresultin“best-in-class”performanceBestPractices

AnalysisProcessReference

ModelCapturethe“as-is”stateofaprocessandderivethedesired“to-be”futurestateBusinessProcess

ReengineeringCapturethe“as-is”stateofaprocessandderivethedesired“to-be”futurestateQuantifytheoperationalperformanceofsimilarcompaniesandestablishinternaltargetsbasedon“best-in-class”resultsCharacterizethemanagementpracticesandsoftwaresolutionsthatresultin“best-in-class”performanceWhatisaprocessreferencemodel?Processreferencemodelsintegratethewell-knownconceptsofbusinessprocessreengineering,benchmarking,andprocessmeasurementintoacross-functionalframeworkSupplierPlanCustomerCustomer’s

CustomerSuppliers’

SupplierMakeDeliverSourceMakeDeliverMakeSourceDeliverSourceDeliverInternalorExternalInternalorExternalYourCompanySource

SCORisstructuredaroundfivedistinct

managementprocessesSCORModelReturnReturnReturnReturnReturnReturnReturnReturnBuildingBlockApproach Processes Metrics BestPractice TechnologyCustomersSuppliersP1PlanSupplyChainPlanP2PlanSourceP3PlanMakeP4PlanDeliverSourceMakeDeliverS1SourceStockedProductsM1Make-to-StockM2Make-to-OrderM3Engineer-to-OrderD1DeliverStockedProductsD2DeliverMTOProductsD3DeliverETOProductsS2SourceMTOProductsS3SourceETOProductsSupply-ChainOperationsReference-model(SCOR)5.0-ProcessesReturnSourceP5PlanReturnsReturnDeliverEnableSCORBoundariesSCORSpans:Allsupplier/customerinteractionsOrderentrythroughpaidinvoiceAllphysicalmaterialtransactionsFromyoursupplier’’ssuppliertoyourcustomer’’scustomer,includingequipment,supplies,spareparts,bulkproduct,software,etc.AllmarketinteractionsFromtheunderstandingofaggregatedemandtothefulfillmentofeachorderReturnsSCORBoundaries(cont’’d)SCORdoesnotinclude:SalesadministrationprocessesTechnologydevelopmentprocessesProductandprocessdesignanddevelopmentprocessesSomepost-deliverytechnicalsupportprocessesSCORassumesbutdoesnotexplicitlyaddressTrainingQualityInformationTechnology(IT)administration(non-SCM)MaterialFlowSCORLevel1OperationsStrategyAnalyzeBasisofCompetitionSCORLevel2ConfiguresupplychainAlignPerformanceLevels,Practices,andSystemsImplementsupplychainProcessesandSystemsSCORProjectRoadmapCompetitivePerformanceRequirementsPerformanceMetricsSupplyChainScorecardScorecardGapAnalysisProjectPlanASISGeographicMapASISThreadDiagramDesignSpecificationsTOBEThreadDiagramTOBEGeographicMapInformationandWorkFlowASISLevel2,3,and4MapsDisconnectsDesignSpecificationsTOBELevel2,3,and4MapsDevelop,Test,andRollOutOrganizationTechnologyProcessPeopleSCORLevel3MappingmaterialflowLatinAmericanSuppliers(D1)WarehouseOtherSuppliers(D1)ManufacturingEuropeanSupplier(S1)

(SR1,SR3)(S1,D1)(SR1,DR1,DR3)(D2)

(DR1)WarehouseWarehouseWarehouse(S1,D1)(SR1,DR3)(S1,D1)(SR1,DR1,DR3)(S1,D1)(SR1,DR1,DR3)(S1)

(SR1,SR3)(S1)

(SR1,SR3)(S1)

(SR1,SR3)(S1,S2,M1,D1)

(SR1,,DR1)MappingtheexecutionprocessesS1D1S1M2S2D2M1D1S1S2D1M1EuropeanRMSupplierKeyOtherRMSuppliersAlphaRegionalWarehousesS1DR1SR1DR1SR1DR1SR1DR3SR3RMSuppliersDistributorsALPHADR3SR3S1AmericasDistributorsSR1SR3IdentifyingPlanActivitiesConsumerP2P4P3P4S1D1S1P2P2P3P4M2S2D2M1D1S1S2D1M1EuropeanRMSupplierKeyOtherRMSuppliersS1AlphaRegionalWarehousesRMSuppliersDistributorsALPHAP1P1P1PerformanceAttributePerformanceAttributeDefinitionLevel1MetricSupplyChainDeliveryReliabilityTheperformanceofthesupplychainindelivering:thecorrectproduct,tothecorrectplace,atthecorrecttime,inthecorrectconditionandpackaging,inthecorrectquantity,withthecorrectdocumentation,tothecorrectcustomer.DeliveryPerformanceFillRatesPerfectOrderFulfillmentSupplyChainResponsivenessThevelocityatwhichaatwhichasupplychainprovidesproductstothecustomer.OrderFulfillmentLeadTimesSupplyChainFlexibilityTheagilityofasupplychaininrespondingtomarketplacechangestogainormaintaincompetitiveadvantage.SupplyChainResponseTimeProductionFlexibilitySupplyChainCostsThecostsassociatedwithoperatingthesupplychain.CostofGoodsSoldTotalSupplyChainManagementCostsValue-AddedProductivityWarranty/ReturnsProcessingCostsSupplyChainAssetManagementEfficiencyTheeffectivenessofanorganizationinmanagingassetstosupportdemandsatisfaction.Thisincludesthemanagementofallassets:fixedandworkingcapital.

Cash-to-CashCycleTimeInventoryDaysofSupplyAssetTurnsLinkingSupplyChainPerformanceAttributesandLevel1MetricsCustomer-FacingSCORLevel1supplychainManagementAssetsSupplyChainReliabilityCostResponsivenessDeliveryperformanceFillratePerfectorderfulfillmentOrderfulfillmentleadtimeSupplyChainResponseTimeProductionflexibilityTotalSCMmanagementcostCostofGoodsSoldValue-addedproductivityWarrantycostorreturnsprocessingcostCash-to-cashcycletimeInventorydaysofsupplyAssetturnsInternal-FacingLevel1PerformanceMetricsFlexibilitySupplyChainScorecard&GapAnalysis50%$30MRevenue$30MIndirectCost35days97days0%63%SupplyChainSCORcardPerformanceVersusCompetitivePopulationOverviewMetricsSCORLevel1MetricsActualParityAdvantageSuperiorValuefromImprovementsDeliveryPerformancetoCommitDate85%90%95%FillRates94%96%98%EXTERNALSupplyChainReliabilityPerfectOrderFulfillment80%85%90%OrderFulfillmentLeadtimes7days5days3daysFlexibilityResponsivenessProductionFlexibility30days25days20daysTotalSCMManagementCost19%13%8%3%INTERNALCostWarrantyCostNANANANANAValueAddedEmployeeProductivityNA$156K$306K$460KNAInventoryDaysofSupply119days55days38days22daysNAAssetsCash-to-CashCycleTime196days80days46days28daysNetAssetTurns(WorkingCapital)2.2turns8turns12turns19turnsNASupplyChainResponseTime82days55days13days45days$7MCapitalChargeKeyenablertocostandassetimprovements$30MRevenueS1D1S1M2S2D2M1D1S1S2D1M1S1CycleTimeScheduleAchievementPerfectOrderFulfillmentDeliveryPerformanceSupplierontimedeliveryPerfectOrderFulfillmentSupplierontimedeliveryPerfectOrderFulfillmentOnTimeInFullDocsDamageOnTimeInFullDocsDamageRevenueAccountsReceivableCashFlowDecomposingMetricsEuropeanRMSupplierKeyOtherRMSuppliersConsumerAlphaRegionalWarehousesRMSuppliersConsumerALPHAConsumerRMSuppliersS1D1S1M2S2D2M1D1S1S2D1M1S1CycleTimeScheduleAchievementPerfectOrderFulfillmentDeliveryPerformanceSupplierontimedeliveryPerfectOrderFulfillmentSupplierontimedeliveryPerfectOrderFulfillmentOnTimeInFullDocsDamageOnTimeInFullDocsDamageRevenueAccountsReceivableCashFlowPerfectOrderFulfillmentActual-85%PerfectOrderFulfillmentGoal––95%ScheduleAchievementActual––95%PerfectOrderFulfillmentActual––90%DeliveryPerformanceActual––99%SupplierontimedeliveryActual––85%MetricsConflictInventoryUnder-performanceProcessSystemsUnder-performanceProcessSystemsPerformanceMeasurementConsumerAlphaRegionalWarehousesRMSuppliersConsumerALPHAEuropeanRMSupplierKeyOtherRMSuppliersCascadingDependentMetricstoLevel2PerfectOrderFulfillmentOrderFulfillmentLeadTimeSupplyChainResponseTimeTotalSCMManagementCostCash-to-CashCycleScheduleAchievementMakeCycleTimeUnitCostWIPDaysofSupplySupplierOnTimeDeliverySourceCycleTimeMaterialAcquisitionCostRMDaysofSupplyDaysofPayablesFaultlessInvoicesOrderManagementCycleTimeOrderManagementCostFinishedGoodInventoryDaysSalesOutstandingP1P2P4P3D?S?M?ImplementationIssuesSCORImplementationsVaryinscopeandobjectiveGreenFieldDistributionanalysisPlanningImprovementsChangeManagement/COTS-ConsultantSelectionHowtoconductanROIevaluationSeniorManagementsupportvs.MiddleManagerresistanceProjecttimelinesBenchmarkingImplementationToolsATTWireless––FixedWirelessOperationsSuppliersSupplierSuppliersAss