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2 Boston-based consulting firms:
P i t t i g l i o R a b i n To d d & M c G r a t h & A M R R e s e a r c h
decided to develop a standard approach to analyzing and
describing all the aspects of supply chain processes.
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Rapid Assessment of Supply Chain Performance
• All product (physical material and service) transactions, from supplier’s supplier to customer’s customer, including
equipment, supplies, spare parts, bulk product, software, etc.
• All market interactions, from the understanding of aggregate demand to the fulfillment of each order
SCOR does not attempt to describe every business process or activity, including:
• Product development
process performance
• LEVEL 1 metrics are diagnostics for the overall health of the supply chain. These
metrics are also known as strategic metrics and key performance indicators (KPIs).
Benchmarking level 1 metrics helps establish realistic targets that support strategic
objectives.
• LEVEL 2 metrics serve as diagnostics for the level 1 metrics. The diagnostic
relationship helps to identify the root cause or causes of a performance gap for a level
1 metric.
Many metrics in the SCOR model are hierarchical, just as the process elements are
hierarchical. Decomposition helps identify the processes that need to be studied
further. (Processes are linked to level 1 and level 2 metrics.)
Supply Chain Council recommends that supply chain scorecards contain at least
one metric for each performance attribute to ensure balanced decision making and
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governance.
Relationship Between Attributes And Metrics
Performance Attributes
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Relationship Between Attributes And Metrics
Performance Attributes
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SCOR: PROCESSES
Level
Three Levels of Process Detail
# Description Schematic Comments
2
A company’s supply chain can be “configured-
Configuration Level to-order” at Level 2 from the core “process
(Process categories.” Companies implement their
Categories) operations strategy through the configuration
26 they choose for their supply chain.
practices
Systems/tools
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LEVEL 1 - KEY PROCESSES EXPLAINED…..
supply chain RETURN (R) (Processes associated with returning or receiving returned
products) – Reverse Logistics
Manage Return business rules 16
LEVEL 2 - PROCESS TYPES AND DEFINITIONS
PLANNING
A process that aligns expected resources to meet expected demand requirements.
Balance aggregated demand and supply
Consider consistent planning horizon
(Generally) occur at regular, periodic intervals
EXECUTION
A process triggered by planned or actual demand that changes the state of material goods.
Scheduling/sequencing
Transforming product
Moving product to the next process
ENABLE
A process that prepares, maintains, or manages information or relationships on which planning and
execution processes rely
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P1: Plan Supply Chain
P2-P5: Plan SCOR Process
S1: Source Stocked Product
S3: Source Engineer-to-Order Product Level 2 Process Categories
S2: Source Make-to-Order Product
M1: Make-to-Stock
M2: Make-to-Order
M3: Engineer-to-Order
D1: Deliver Stocked Product
D2: Deliver Make-to-Order Product
D3: Deliver Engineer-to-Order
Product
D4: Deliver Retail Product
SR1/DR1: Return Defective Product (Source Return/Deliver Return)
SR2: Source Return MRO Product (Maintenance, Repair and Overhaul)
DR2: Deliver Return MRO Product
SR3/DR3: Return Excess Product (Source Return/Deliver Return)
EP, ES, EM, ED, ER: Enable corresponding SCOR Processes 18
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SCOR: Best Practices
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1. SCOR Supply Chain Risk Management
The systematic identification, assessment, and mitigation of potential disruptions (both within and
outside the supply chain) in logistics networks with the objective to reduce their negative impact on the
logistics network’s performance.
SCOR: Best Practices
PROCESS
The Related
SCOR
Processes
E P. 9 , E S . 9 ,
EM.9, ED 22. 9
& ER.9
SCOR: Best Practices
2.
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SCOR: People
1. Novice
2. Experienced Beginner
3. Competent
4. Proficient
5. Expert
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WHY DOES IKEA USE SCOR MODEL?
Legitimacy & Common Terminology (Integration) in supply chain for better
communication
Designed by practitioners
Neutral
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IKEA Store
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IKEA INVENTORY PLANNING & FORECASTING
Cost-Per-Touch Inventory Tactic
In-Store Logistics
Maximum/Minimum Settings
As Proprietary System
Do-It-Yourself Assembly
Lowers Packaging Costs
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SOURCING AT IKEA
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SOURCING AT IKEA
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IKEA MANUFACTURING &
DISTRIBUTION NETWORK
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MANUFACTURING AT IKEA
Designs for furniture, lamps, kitchen
equipment and beds are logistically formed
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IKEA LOGISTICS - DELIVERY
IKEA products are transported by road, rail and sea between suppliers, distribution centers and IKEA
stores, and from the stores to customers.
IKEA transport service providers must comply with the requirements in the supplier code of conduct
IWAY, including industry-specific requirements.
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IKEA – RETURN POLICY
IKEA takes returned products seriously.
Offer solutions and know-how that help customers live a more sustainable life
Use natural resources in a sustainable manner within the entire supply chain ;
careful waste management
IKEA’s sustainability effort, successfully spans across all major supply chain
processes from Source to Make, Deliver and Return, which demonstrates long-term
management commitment.
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IKEA SUSTAINABILITY SCORECARD
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Rigorous safety alarm procedures
Values - IKEA embraces human rights and respect for the individual,
and the way we work is based on a strong and living company culture.
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IKEA MANAGING
PEOPLE
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IKEA MANAGING
PEOPLE
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IKEA MANAGING
PEOPLE
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IKEA MANAGING
PEOPLE
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SCOR could be extended into a complete business process architecture, or even into
a complete process-centric enterprise architecture (HOLISTIC/ SYSTEM VIEW)
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HOW DOES IT ALL COME TOGETHER AT
IKEA?
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