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SCOR Framework

Introducing all elements of


the Supply Chain reference
model: Standard processes,
metrics and best practices

This presentation is the exclusive property of the


Supply Chain Council. Copyright Supply Chain
Council. 2006. All rights reserved. The marks
SCOR, CCOR, DCOR and SCOR Roadmap are the
exclusive property of the Supply Chain Council.
SCOR Framework Workshop

Understand the History and Context of SCOR


Learn the Components of the SCOR Framework
Process Nomenclature
Process Metrics
Process Best Practices

Understand how to model a Supply-Chain


with SCOR
Understand how to characterize a Supply-
Chain with SCOR metrics
Apply the SCOR framework using a
simplified SCOR Project Roadmap

Copyright Supply Chain Council, 2008. All rights reserved 2


Supply-Chain Council

The SCC is an independent, not-for-profit, trade association


Membership open to all companies and organizations
Focus is on research, application and advancement and advancing
state-of-the-art supply chain management systems and practices
Developer and endorser of the Supply Chain Operations Reference
(SCOR) as a cross-industry standard for supply chain management
Offers Training, Certification, Benchmarking, Research, Team
Development, Coaching, and Cross-standard Integration focused on
the SCOR framework
Founded in 1996
Approaching 1000 Association Members
Chapters in North America, Europe, Japan, South Africa, Latin
America, Australia/New Zealand, South East Asia and Greater
China, with developing Chapters India and Middle East

Driving value through the use of SCOR


Copyright Supply Chain Council, 2008. All rights reserved 3
Supply-Chain

Product/Portfolio
Product/PortfolioManagement
Management

Customer
Customerprocesses
processes
Supplierprocesses

Product
ProductDesign
Design Sales
Sales&&Support
Support
DCOR CCOR

processes
DCOR CCOR
Supplier

Supply
SupplyChain
Chain
SCOR
SCOR

Copyright Supply Chain Council, 2008. All rights reserved 4


Supply-Chain

Supply
Supply Chain
Chain
processes

Customer
Customer processes
Supplier processes

Plan
Plan

Sourc
Sourc Deliv
Deliv

processes
Make
Make
Supplier

ee er
er

Return
Return Return
Return

Process, arrow indicates material flow direction

Process, no material flow Information flow

Copyright Supply Chain Council, 2008. All rights reserved 5


SCOR: A Process Framework

Process frameworks deliver the well-known


concepts of business process reengineering,
benchmarking, and best practices into a cross-
functional framework
Standard processes: Plan, Source, Make, Deliver,
Return, Enable
Standard metrics: Perfect Order Fulfillment, Cash-to-
Cash Cycle Time, Cost of Goods Sold, Order Fulfillment
Cycle Time, etcetera
Standard practices: EDI, CPFR, Cross-Training, Sales &
Operations Planning, etcetera

Pre-defined relationships between processes,


metrics and practices and inputs and outputs
Copyright Supply Chain Council, 2008. All rights reserved 6
Combines Best Techniques

Business Benchmarking Best Practices Process


Process Analysis Reference
Re-Engineering Framework
Capture the As-is Capture the As-is
business activity business activity
structure and derive structure and derive
the future To-be state the future To-be state
Quantify the Quantify the
operational operational
performance of similar performance of similar
companies and companies and
establish internal establish internal
targets based on best targets based on best
in class results in class results
Characterize the
Characterize the
management practices
management practices
and software solutions
and software solutions
that result in superior
that result in superior
performance
performance

3 techniques become 1 integrated approach

Copyright Supply Chain Council, 2008. All rights reserved 7


End-to-End Supply Chain

Plan

Plan Plan
Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source
Return Return Return Return Return Return
Return Return

Suppliers Supplier Your Company Customer Customers


Supplier Customer
Internal or External Internal or External

SCOR reference model

Whether from Cow to Cone or from Rock to Ring SCOR is


not limited by organizational boundaries

Copyright Supply Chain Council, 2008. All rights reserved 8


End-to-End Supply Chain

Components Sub assemblies Manufacturer Retailer Consumer

Sourc
Sourc Deliv
Deliv Sourc
Sourc Deliv
Deliv Sourc
Sourc Deliv
Deliv Sourc
Sourc
Make
Make Make
Make Make
Make Source
Source Deliver
Deliver
ee er
er ee er
er ee er
er ee

Suppliers Supplier Supplier MP3 Company Customer Customers Customer

Process, arrow indicates material flow direction

Copyright Supply Chain Council, 2008. All rights reserved 9


SCOR Hierarchy

Level 1 Level 2 Level 3 Level 4 Level 5


Configurati Transaction
Scope Activity Workflow
on s
S1 Source S1.2
S
Stocked Receive
Source
Differentiate Differentiate Names Tasks Sequences Links
Product Product
s Business s Complexity Steps Transactions
Defines Scope Differentiate Links, Job Details Details of
s Metrics, Automation
Capabilities Tasks and
Practices
Framework Framework Framework Industry or Technology
Language Language Language Company Specific
Language Language

Standard SCOR practices Company/Industry definitions

Copyright Supply Chain Council, 2008. All rights reserved 10


Organizational Hierarchy

Level 1 Level 2 Level 3 Level 4 Level 5


Configurati Transaction
Scope Activity Workflow
on s
S1 Source S1.2 EDI
S XML
Stocked Receive
Source
Differentiate Differentiate Names Tasks Sequences Links
Product Product
s Business s Complexity Steps Transactions
Defines Scope Differentiate Links, Job Details Details of
s Metrics, Automation
Capabilities Tasks and
Practices
CxO (COO, SVP VP Manager Team Lead
CIO) VP Director Team Lead Individuals
EVP Line Manager Programmer
SVP

Organization focused Activity focused

Copyright Supply Chain Council, 2008. All rights reserved 11


SCOR Process Codification

SCOR processes have unique identifiers:


1.One capital only are level 1 processes: P, S, M, D and R (5 in
total)
2.A capital plus a number are level 2: P1, S2, M3, D2, D4 (15 in
total)
Two groups of exceptions for level 2:
Enable: EP, ES, EM, ED and ER (5 in total) and
Return: SR1, DR1, SR2, DR2, SR3, DR3 (6 in total)
3.A capital plus a number, a period and a number are level 3
processes:
P1.1, P1.2, S2.1, M1.5, D3.12 (111 processes in total)
Two groups of exceptions for level 3:
Enable: EP.1, ES.3, EM.4, ED.8, ER.1 (47 in total)
Return: SR1.1, DR1.3, SR2.2, DR2.4, SR3.5, DR3.1 (27 in total)
X = level 1, Xn = level 2, Xn.m = level 3

Copyright Supply Chain Council, 2008. All rights reserved 12


Exercises: The Dinner Party

The supply chain used for the exercises is a


dinner party
You will host a party this weekend with 25-40 of your
dearest friends
You will serve them burgers from your grill (barbecue)
You are responsible for organizing the event,
ingredients, grill, tools and utensils and general
well-being of your guests
We will be using The750g
Dinner
minced Party
steak through the rest
1 onion (rings)
of today to exercise 1different modeling
tsp Worcestershire 4 sesame seed buns
sauce
characteristics
2 tbsp mustard 10 shredded lettuce
leaves
2 sliced tomatoes 2 sliced dill pickles
Ingredients of a burger:
10 thin slices Swiss Salt and pepper
cheese
Copyright Supply Chain Council, 2008. All rights reserved 13
Execution Processes

Supply
Supply Chain
Chain
processes

Customer
Customer processes
Supplier processes

Plan
Plan

Sourc
Sourc Deliv
Deliv

processes
Make
Make
Supplier

ee er
er

Return
Return Return
Return

Processes: Source, Make and Deliver


Objective: value-add, revenue generating
Copyright Supply Chain Council, 2008. All rights reserved 14
Capability Models

Level: Different capabilities


Stocked Product (S1, M1, D1)
Inventory Driven (Plan)
Standard Material Orders R1
S1 D1
M1 I1
D1

High Fill-rate, short turnaround

Make-to-Order (S2, M2, D2)


Customer Order Driven R2
S2 D2
M2 I2
D2

Configurable Materials
Longer turn-around times R1
S1

Engineer-to-Order (S3, M3, D3) R3


S3 D3
M3 I3
D3
Customer Requirements Driven
Sourcing New Materials R2
R1
S2
Longest long lead-times, low fill rates
R1
S1

Copyright Supply Chain Council, 2008. All rights reserved 15


Source (Process ID: S)

Objectives of this process:


The ordering, delivery, receipt and transfer of raw
material items, subassemblies, product and/or services.

Key processes comprehended:


Schedule product deliveries
Receive, inspect, and hold materials
Issue material to Make or Deliver processes
Supplier/Vendor Agreements
Vendor certification and feedback, sourcing quality
Manage Raw Materials inventories
Freight, import/export documentation

Hint: Receiving processes? Probably Source in


SCOR

Copyright Supply Chain Council, 2008. All rights reserved 16


Source Configurations

Configurations:
Source Stocked Product (Process ID: S1)
The ordering and receiving of existing products,
components and services from existing contracts, based
on requirement plans.

Source Make-to-Order (Process ID: S2)


The ordering and receiving of existing products,
components and services for a unique and identified
customer order.

Source Engineer-to-Order (Process ID: S3)


The selection, ordering and receiving of specialized
products or services that are designed and/or built
based on the requirements or specifications of a
particular customer order or contract.

Copyright Supply Chain Council, 2008. All rights reserved 17


Source Process Elements

Stocked Product (S1) Make-to-Order (S2) Engineer-to-Order


(S3)
S3.1 Identify Sources
of Supply
S3.2 Select Final
Supplier(s) and
Negotiate
S1.1 Schedule Product S2.1 Schedule Product S3.3 Schedule Product
Deliveries Deliveries Deliveries
S1.2 Receive Product S2.2 Receive Product S3.4 Receive Product

S1.3 Verify Product S2.3 Verify Product S3.5 Verify Product


S1.4 Transfer Product S2.4 Transfer Product S3.6 Transfer Product

S1.5 Authorize S2.5 Authorize S3.7 Authorize


Supplier Payment Supplier Payment Supplier Payment

Copyright Supply Chain Council, 2008. All rights reserved 18


Make (Process ID: M)

Objectives of this process:


The process of adding value to products through mixing,
separating, forming, machining, and chemical processes.

Key Processes Comprehended:


Schedule production, request and receive material from
Source and/or Make processes
Manufacture, assemble/disassemble and test product,
package, hold/release product
Managing product quality and engineering changes
Managing facilities and equipment, production status
workflow and capacity management
Manage Work-In-Process (WIP) inventories

Hint: Itemnumber change? Probably Make in SCOR


Copyright Supply Chain Council, 2008. All rights reserved 21
Make Configurations

Make-to-Stock (Process ID: M1)


The making of standard products and services. Planning
(Plan) processes determine what, how much and when to
make.

Make-to-Order (Process ID: M2)


The making of standard or configurable products and
services for unique customer orders. Customer orders
determine what, how much and when to make. Customer
orders can be traced throughout the Make process.

Engineer-to-Order (Process ID: M3)


The making of specialized products or services that are
fully or partially designed and made based on the
unique requirements and specifications of a particular
customer order or contract. Customer orders and
specifications can be traced throughout the Make
Copyrightprocess.
Supply Chain Council, 2008. All rights reserved 22
Make Process Elements

Make-to-Stock (M1) Make-to-Order (M2) Engineer-to-Order


(M3)
M3.1 Finalize
Production
Engineering
M1.1 Schedule M2.1 Schedule M3.2 Schedule
Production Production Production
Activities Activities Activities
M1.2 Issue Material M2.2 Issue Sourced/In- M3.3 Issue Sourced/In-
Process Product Process Product
M1.3 Produce and Test M2.3 Produce and Test M3.4 Produce and Test
M1.4 Package M2.4 Package M3.5 Package
M1.5 Stage Product M2.5 Stage Finished M3.6 Stage Finished
Product Product
M1.6 Release Product M2.6 Release Finished M3.7 Release Product to
to Deliver Product to Deliver
Deliver
M1.7 Waste Disposal M2.7 Waste Disposal M3.8 Waste Disposal

Copyright Supply Chain Council, 2008. All rights reserved 23


Deliver (Process ID: D)

Objectives of this process:


Perform customer-facing order management and order
fulfillment activities including outbound logistics.

Key processes comprehended:


Product, service and price quotations
Order entry and maintenance
Order consolidation, picking, packing, labeling and shipping
Import/export documentation
Customer delivery and installation
Logistics and Freight Management
Manage Finished Goods inventories

Hint: Order taking or Shipping? Probably Deliver


in SCOR

Copyright Supply Chain Council, 2008. All rights reserved 25


Deliver Configurations

Deliver Stocked Product (Process ID: D1)


The delivery of standard products (and services) that are
maintained in a finished goods state prior to the receipt of a
customer order.

Deliver Make-to-Order Product (Process ID: D2)


The delivery of standard or configurable products and services
that are obtained (Source or Make) for a customer order.

Deliver Engineer-to-Order Product (Process ID: D3)


The delivery of specialized products and services that have
been fully or partially designed in negotiation and based on
requirements from a customer order and customer provided
specifications

Deliver Retail Product (Process ID: D4)


The delivery of standards goods in a retail store

Copyright Supply Chain Council, 2008. All rights reserved 26


Deliver Process Elements
(1/3)
Stocked Products Make-to-Order (D2) Engineer-to-Order
(D1) (D3)
D1.1 Process Inquiry & D2.1 Process Inquiry & D3.1 Obtain & Respond
Quote Quote to RFP/RFQ
D1.2 Receive, Enter & D2.2 Receive, D3.2 Negotiate &
Validate Order Configure, Enter & Receive Contract
Validate Order
D1.3 Reserve Inventory D2.3 Reserve Inventory D3.3 Enter Order,
& Determine & Determine Commit Resources
Delivery Date Delivery Date & Launch Program
D1.4 Consolidate D2.4 Consolidate Orders D3.4 Schedule
Orders Installation
D1.5 Build Loads D2.5 Build Loads D3.5 Build Loads
D1.6 Route Shipments D2.6 Route Shipments D3.6 Route Shipments
D1.7 Select Carriers & D2.7 Select Carriers & D3.7 Select Carriers &
Rate Shipments Rate Shipments Rate Shipments

RFP = Request for Proposal, RFQ = Request for Quote

Copyright Supply Chain Council, 2008. All rights reserved 27


Deliver Process Elements
(2/3)
Stocked Products Make-to-Order (D2) Engineer-to-Order
(D1) (D3)
D1.8 Receive Product D2.8 Receive Product D3.8 Receive Product
from Source or from Source or from Source or
Make Make Make
D1.9 Pick Product D2.9 Pick Product D3.9 Pick Product

D1.10 Pack Product D2.10 Pack Product D3.10 Pack Product

D1.11 Load Product & D2.11 Load Product & D3.11 Load Product &
Create Create Create
Documentation Documentation Documentation
D1.12 Ship Product D2.12 Ship Product D3.12 Ship Product

D1.13 Receive & Verify D1.13 Receive & Verify D1.13 Receive & Verify
Product by Product by Product by
Customer Customer Customer
D1.14 Install Product D2.14 Install Product D3.14 Install Product

D1.15 Invoice D2.15 Invoice D3.15 Invoice

Copyright Supply Chain Council, 2008. All rights reserved 28


Deliver Process Elements
(3/3)
Retail Products (D4) The Retail supply chain
D4.1 Generate Stocking
Schedule
model does not match up to
D4.2 Receive Product the Manufacturing supply
at Store
D4.3 Pick Product from
chain model, therefore
Backroom processes are quite
D4.4 Stock Shelf
different
D4.5 Fill Shopping
Cart

D4.6 Checkout

D4.7 Deliver and/or


Install

Copyright Supply Chain Council, 2008. All rights reserved 29


Control processes: Plan,
Enable
Plan and Enable processes prepare the supply-
chain to ensure smooth execution
Planning processes balance the need for
resources, materials, capacity, etc. with the
availability of these resources. This includes
prioritization if needed.
Enable processes address 8 control aspects for
the supply chain. They monitor compliance,
deliver information from other process areas and
highlight dependencies
on these other process areas. They also
support maintenance of relationships
with suppliers.

Copyright Supply Chain Council, 2008. All rights reserved 30


Planning Processes

Supply
Supply Chain
Chain
processes

Customer
Customer processes
Supplier processes

Plan
Plan

Sourc
Sourc Deliv
Deliv

processes
Make
Make
Supplier

ee er
er

Return
Return Return
Return

Processes: Plan
Objective: Drive/coordinate execution processes

Copyright Supply Chain Council, 2008. All rights reserved 31


Plan (Process ID: P)

Objectives of this process:


The process of determining requirements and corrective
actions to achieve supply chain objectives

Key Processes Comprehended:


Supply chain revenue planning/forecasting
Materials requirement planning
Factory, repair, maintenance facilities capacity
planning
Distribution requirements planning
Manage planning parameters

Hint: Forecasting, S&OP, MRP?


Probably Plan in SCOR

Copyright Supply Chain Council, 2008. All rights reserved 32


Plan Configurations (1/2)

Plan Supply Chain (Process ID: P1)


Planning overall supply chain targets. Plan Supply Chain
drives and coordinates P2, P3, P4 and P5 plans (Compare to
Revenue plan, or Budget in certain industries)

Plan Source (Process ID: P2)


Planning of material ordering and receiving activities. Plan
Source calculates which materials need to be available when
to support the production plan (P3) and/or the delivery plan
(P4). (Compare to Materials Requirements Plan)

Plan Make (Process ID: P3)


Planning of production and/or MRO activities. Plan Make
ensures the production resources (capacity) are in place as
needed and may generate production orders. (Compare to
Production Plan)

Copyright Supply Chain Council, 2008. All rights reserved 33


Plan Configurations (2/2)

Plan Deliver (Process ID: P4)


Planning of order management, material handling and
transportation activities. Plan Deliver ensures
resources are in
place as needed and may generate or recalculate
shipping dates based on material availability.
(Compare to Shipment Plan, Load Planning)

Plan Return (Process ID: P5)


Planning of the reverse logistics shipping and
material handling capacity. Note: This does not
include the maintenance, repair or overhaul activity
planning as those are Make processes.

Copyright Supply Chain Council, 2008. All rights reserved 34


Plan Processes

Planning is an iterative process:


1. The output of Plan Supply Chain is the input for Plan
Source, Plan Make, Plan Deliver and Plan Return
2. The output of Plan Source, Plan Make, Plan Deliver
and Plan Return are inputs for Plan Supply Chain; The
output of one cycle is the input for the next cycle

1 P3.1

P3.3 P3.4 2
P1.1 P3.2 P1.1
Plan Make
P1.3 P1.4 P1.3 P1.4

P1.2 P1.2
Plan Supply Chain P2.1 Plan Supply Chain
P2.3 P2.4
to P3.2
P2.2
Plan Source

end full cycle begin next cycle


Copyright Supply Chain Council, 2008. All rights reserved 35
Enable Processes

Supply
Supply Chain
Chain
processes

Customer
Customer processes
Supplier processes

Plan
Plan

Sourc
Sourc Deliv
Deliv

processes
Make
Make
Supplier

ee er
er

Return
Return Return
Return

Processes: Enable Plan, Enable Source, Enable Make,


Enable Deliver and Enable Return

Copyright Supply Chain Council, 2008. All rights reserved 36


Enable Processes

Objective:
The Enable processes are five groups of processes under Plan,
Source, Make , Deliver and Return with 3 distinct types of
objectives:
1.Manage process performance
2.Manage process control data
3.Manage process relationships

Key processes comprehended:


Managing business rules and monitoring adherence
Measuring supply chain performance and determine corrective
action
Managing risk and environmental impact
Managing the supply chain network and facilities

Hint: Equipment or plant maintenance? Probably Enable

Copyright Supply Chain Council, 2008. All rights reserved 37


Enable Categories

Enable Plan (Process ID: EP)


Performance, data and relationship management processes for all
types of planning processes: Plan Supply Chain, Plan Source,
Plan Make, Plan Deliver and Plan Return. Examples: maintain
planning cycles, monitor planning accuracy, manage supply chain
risks.

Enable Source (Process ID: ES)


Performance, data and relationship management processes for all
receiving activities and supplier related processes. Examples:
Monitor supplier performance, maintain what is sourced where.

Enable Make (Process ID: EM)


Enable management processes for manufacturing, repair and
overhaul type processes. Examples: BOM maintenance, preventive
equipment maintenance, monitoring capacity
utilization/shortage.

Copyright Supply Chain Council, 2008. All rights reserved 38


Enable Categories

Enable Deliver (Process ID: ED)


Performance, data and relationship management
processes for all order management, warehouse and
distribution activities and forwarder related
processes. Examples: Monitor order management and
forwarder performance, maintain a distribution
network, managing risk.

Enable Return (Process ID: ER)


Enable management processes for all types of reverse
logistics processes: MRO returns, defective product
returns and excess inventory returns. Examples:
Maintain return approval rules, Maintain issue
tracking software, maintain a return distribution
network.
Copyright Supply Chain Council, 2008. All rights reserved 39
Reverse Processes

Supply
Supply Chain
Chain
processes

Customer
Customer processes
Supplier processes

Plan
Plan

Sourc
Sourc Deliv
Deliv

processes
Make
Make
Supplier

ee er
er

Return
Return Return
Return

Processes: Return (Source Return, Deliver Return)


Objective: reverse material flows

Copyright Supply Chain Council, 2008. All rights reserved 40


Return (Process ID: R)

Objective of this process:


Moving material from customer back through supply chain
to address defects in product, ordering, or
manufacturing, or to perform upkeep activities.

Key Processes Comprehended


Identification of the need to return a product or asset
Requesting and issuing return authorization
Inspection and disposition decision-making
Transfer/Disposition of product or asset
Managing return transportation capacity
Managing returned material inventories

Hint: Reverse material flow? Probably Return in


SCOR
Copyright Supply Chain Council, 2008. All rights reserved 41
Return Configurations

Return Defective Products (Process IDs: SR1 and DR1)


The return of products because the product is defective, the
wrong product was ordered or shipped.

Return Maintenance, Repair & Overhaul (IDs: SR2 and


DR2)
The return of products or assets to perform preventative
maintenance, (end-of-life) overhaul or repairs due to
breakage/aging with use

Return Excess Products (Process IDs SR3 and DR3)


The return of excess inventories and inventories of product
which will be retired (end-of-life excess). The product is new
and in original packaging.

SR = Source Return, DR = Deliver Return

Copyright Supply Chain Council, 2008. All rights reserved 42


Return Configurations

Positioning Source Return and Deliver Return


Consider the flow of goods; Notice the positions of Source
and Deliver
Supplier My Company Customer

Deliver Source Deliver Source

Now, notice the positions of Source Return and Deliver Return

Supplier My Company Customer

Deliver Source Deliver Source


Return Return Return Return

Copyright Supply Chain Council, 2008. All rights reserved 43


Modeling with SCOR

Drivers for modeling: Why do you model


Business opportunities:
Strategy Development
Merger, Acquisition or Divestiture (Companies or Supply
Chains)
Process optimization and Re-engineering
Standardization, Streamlining and Management alignment
New business start-up (Company and Supply Chain start-ups)
Benchmarking
Process Outsourcing

Technology services:
Software implementation (ERP, PLM, QC)
Workflow & Service Oriented Architecture

Copyright Supply Chain Council, 2008. All rights reserved 44


Different Model Types

SCOR recognizes different types of models. Each


serving a different purpose:
Business Scope diagram: Set the scope for a project or
organization
Geographic Map (a.k.a. Geo Map): Describes material flows in a
geographic context; Highlights node complexity or redundancy
Thread Diagram: Material flow diagram, focused on level 2
process connectivity; Describes high level process complexity
or redundancy
Workflow or Process Models: Information, material and work
flow diagram at level 3 (or beyond); Highlights information,
people and system interaction issues

) A node represents a logical or geographic entity in a supply chain.


Examples: Warehouse, Factory, Store

Copyright Supply Chain Council, 2008. All rights reserved 45


Creating a Scope Diagram

Steps to create a Business Scope Diagram


1.Create or open the business scope diagram template
2.Identify customers of your organization or project and
enter these in the customers column in the scope
diagram.
3.Identify and enter the key nodes within your
organization or project. A node represents a logical or
geographic entity in the supply chain. Consider:
Warehouse, Factory, Store, HQ etc.
4.Identify and enter the suppliers of your organization
or project
5.Optionally link the nodes to reflect material and/or
Material
information flows. Use a and information flow
different color and/or stroke
Information flow
differentiate material and information flows. Example:

Copyright Supply Chain Council, 2008. All rights reserved 46


Creating a Scope Diagram

Steps to create a Business Scope Diagram


Supplier My Organization Customer 1.Create or open the business scope
diagram template
2.Identify and enter the customers of
your project or organization
3.Identify and enter the key nodes within
your project or organization
4.Identify and enter the suppliers of
your project or organization
5.Optionally link the nodes to reflect
1 material and/or information flows
(using different color/stroke)

Supplier My Organization Customer Supplier My Organization Customer


Flash Inc. mp3 HQ Flash Inc. mp3 HQ
5 5

Battery ltd. Battery ltd.

Factory DC Retail Inc. Factory DC Retail Inc.

4
Comps 3 2 Comps

Copyright Supply Chain Council, 2008. All rights reserved 47


The Result: Scope Diagram

Suppliers
Flash Inc. mp3,
mp3Inc.
HQ Customers

Battery ltd. Factory Retail, Inc.

Components

Warehouse

Service Providers
Material and information flow

Information flow
Copyright Supply Chain Council, 2008. All rights reserved 48
Modeling with SCOR

Steps to create the Geographic Map:


1. Create geographic context (a.k.a. the map)
2. Draw and name your customers on the map
a. Identify the level 2 processes
b. List the level 2 processes in the customer on your map
3. Beginning with your customers, repeat this for every node on
the map:
a. Identify all supplying nodes (where does material come
from)
b. Draw and name these supplying nodes on the map
c. Identify the level 2 processes
d. list these in the node on your map
e. Draw the material flows (arrows connecting the nodes)
Repeat until you have included all your suppliers/nodes

Copyright Supply Chain Council, 2008. All rights reserved 49


Creating a Geographic Map
Steps to create the Geographic Map:
1.Create geographic context (a.k.a. the map)
2.Draw and name your customers on the map
a.Identify the level 2 processes
b.List the level 2 processes in the customer
node
3.Starting with your customers, repeat for each
node:
a.Identify all supplying nodes
b.Draw and name these supplying nodes
c.Identify the level 2 processes
d.List the level 2 processes in each node
1 e.Draw the material flows (connecting arrows)
Repeat until you have included all your suppliers

Drive Supplier
b
2 Retail, Inc 3 D1, P1, P4 d
S1, P2
UK b
Germany
China
e
France

India

Spain
MP3 Factory
b
S1, M1, D1
d
e
Copyright Supply Chain Council, 2008. All rights reserved 50
Result: The Geographic Map

Retail, Inc
S1, P2
Drive Supplier
Battery Supplier
HQ D1, P1, P4
D1, P1, P4
P1, P2, D2, S2

MP3 Factory
P3, S1, M1, D1

Question: No flow from HQ; Why?

Copyright Supply Chain Council, 2008. All rights reserved 51


Modeling with SCOR

Steps to establish SCOR process models (workflows)


1. Obtain generic descriptions (this is what people describe)
2. Map these generic descriptions to SCOR process IDs (normalize)
3. Create swimming lanes to reflect organizational boundaries
4. Create workflow with these SCOR processes
5. Add description to workflows to reflect inputs/outputs of the
processes
6. Optionally add other relevant information

1 2

1. Orders are faxed in and D2.2 Receive, Enter, Validate


entered in OMS Order
2. Every night the orders are D2.3 Reserve Inventory &
scheduled Determine
3. The orders are released to the Delivery Date
factory based on the delivery
date offset M2.1 Schedule Production
4. Factory
Copyright creates
Supply and schedules
Chain Council, 2008. All rights Activities
reserved 52
factory work orders in SFCS
Elements of a Business
Process
Process is defined by more than just activity

metrics not in SCOR


business rules

measurements best practices

inputs activity outputs

people technology

geography
skills interface

organization platform

Copyright Supply Chain Council, 2008. All rights reserved 53


Obtaining Generic
Descriptions
Staple-Yourself-To-An-Order;
Proven technique to obtain generic language process
descriptions:
Follow the logical flow of an order through the process.
Each level 1 process has an order (except Plan): Customer
order for Deliver, Production order for Make, Purchase order
for Source and Return Authorization for Return.
For each order start with the process of order creation and
follow the order and document each activity until the order is
completed/closed.
Similarly follow the steps of the planning cycles you
encounter.
Finally cover any process you have missed so far; Use your SCOR
list of processes as a check-list.
Hint: To obtain generic descriptions for an end-to-end supply
chain: Start with Plan, then Deliver, Make, Source.

Copyright Supply Chain Council, 2008. All rights reserved 54


Obtaining Generic
Descriptions
The purpose of capturing process is to understand
it and remove, adjust or repair it where needed
Recognize process characteristics:
'Measurements': It takes 30 minutes to build
'Business rule': The plan is updated weekly
'People': This is handled by Joanna on Thursdays
'Business rule': This is done to provide .. with .. data..
'Inputs' or 'triggers': When we receive the document..
'Outputs': We send them the document..
'Technology': We print the document from the .. system..
'Business rules': We need two copies of the form ..

Verify hearsay statements, to eliminate perception

Copyright Supply Chain Council, 2008. All rights reserved 55


SCOR Metrics

Definitions:
Performance Attribute: a characteristic to describe a
strategy. Performance attributes serve as
classification for KPIs and metrics
Key Performance Indicator (KPI): a metric that is
representative to measure the overall performance or
state-of-affairs
Metric: a standard for measurement
Measurement: an observation that reduces the
amount of uncertainty about the value of a quantity

SCOR metrics: Diagnostic metrics


Linked to business objectives
Highlight the gap in performance
Change over time is more valuable than a single sample

Copyright Supply Chain Council, 2008. All rights reserved 56


Performance Attributes

Attribute Strategy
Reliability Consistently getting the orders
(RL) right, product meets quality
Customer

requirements
Responsiveness The consistent speed of providing
(RS) products/services to customers
Agility (AG) The ability to respond to changes
in the market (external
influences)
Internal

Cost (CO) The cost associated with managing


and operating the supply chain
Assets (AM) The effectiveness in managing the
supply chains assets in support
of fulfillment
Question What is/are the most important attributes
: to achieve your supply chain strategy?

Copyright Supply Chain Council, 2008. All rights reserved 57


Levels in Metrics

Level 1: Strategic metrics a.k.a. Key Performance Indicators


Measure overall supply chain performance; health of the supply chain
Set the scope and objectives for a supply chain, project or
organization
Translate a business problem or strategy into something measurable
Establish the priority or priorities for organization

Level 2: Diagnostic metrics


Measure a part of the supply chain and/or a part of the strategic
metric
Provide direction to where problems originate
Caution: Level 2 metrics do not by definition add up to a level 1
metric

Beyond level 1 and 2: all metrics are called level 3


SCOR does not specify levels for metrics that are not level 1 or 2
These metrics serve as further diagnostic tools

Copyright Supply Chain Council, 2008. All rights reserved 58


SCOR Metrics Codification

SCOR metrics have unique identifiers:


1.Two capitals are performance attributes: RL, RS, AG, CO and
AM (5)
2.Two capitals, a period the number one (1) and a number are
strategic (a.k.a. level 1) metrics:
RL.1.1, RS.1.1, AG.1.1, CO.1.1, CO.1.2, AM.1.3 (10 in total)
3.Two capitals, a period the number two (2) and a number are
diagnostic (a.k.a. level 2) metrics:
RL.2.1, RS.2.1, AG.2.1, CO.2.1, CO.2.2, AM.2.7 (36 in total)
4.Two capitals, a period the number three (3) and a number are
diagnostic (or level 3) metrics:
RL.3.1, RS.3.1, AG.3.1, CO.3.149, CO.3.151, AM.3.44 (>500)

XX = performance attribute,
XX.1.n = level 1, XX.2.n = level 2, and so on

Copyright Supply Chain Council, 2008. All rights reserved 59


KPIs; Strategic Metrics

Measuring strategy: KPIs are strategic (level


1) metrics
Attribute Strategic metric
Reliability RL.1.1 Perfect Order Fulfillment
Responsivenes RS.1.1 Order Fulfillment Cycle Time
Customer

s
Agility AG.1.1 Upside Supply Chain Flexibility
AG.1.2 Supply Chain Upside
Adaptability
AG.1.3 Supply Chain Downside
Adaptability
Internal

Cost CO.1.1 Supply Chain Management Cost


CO.1.2 Cost of Goods Sold
Assets AM.1.1 Cash-to-Cash Cycle Time
AM.1.2 Return on Supply Chain Fixed
Copyright Supply Chain Council, Assets
2008. All rights reserved 60
Strategic Reliability
Metric
Metric: RL.1.1 Perfect Order Fulfillment
Definition The percentage of orders delivered on-time, in
: full. Components of perfect include all items
and quantities on-time, using the customers
definition of on-time, complete documentation
and in the right condition
Calculatio [Total Perfect Orders] / [Total Number of
n: Orders]
Diagnostic RL.2.1 % Orders Delivered in Full
Metrics: RL.2.4 Perfect Condition
(examples) RL.3.19 % Orders Received Defect Free
RL.3.24 % Orders Received Damage Free
Notes: An order is perfect only if all L2/L3 metrics
are perfect; An order must be: on-time AND in-
full AND right condition AND right
documentation
Copyright Supply Chain Council, 2008. All rights reserved 61
Strategic Responsiveness
Metric
Metric: RS.1.1 Order Fulfillment Cycle Time
Definition The average actual cycle time consistently
: achieved to fulfill customer orders. The
actual cycle time starts with the receipt of
the order and ends with the customer
acceptance of the delivery. The unit of
measure is days.
Calculatio [Sum Actual Cycle Times For All Orders
n: Delivered] / [Total Number Of Orders
Delivered]
Diagnostic RS.2.2 Make Cycle Time
Metrics: RS.2.3 Deliver Cycle Time
(examples) RS.3.96 Pick Product Cycle Time
Notes: Order Fulfillment Cycle Time includes dwell
time. Dwell time is the time no value add
activities are performed on the order or
Copyright Supply Chain Council, 2008. All rights reserved 62
product, imposed by customer requirements.
Strategic Agility Metrics

Metric: AG.1.1 Upside Supply Chain Flexibility


Definition The number of days required to achieve an
: unplanned sustainable 20% increase in
quantities delivered. Seasonality is not
considered unplanned/unforeseen. The unit of
measure for flexibility is calendar days.
Calculatio The larger of the number of days required to
n: achieve sustainable increase for Source, Make
and Deliver
Diagnostic AG.2.1 Upside Source Flexibility
Metrics: AG.2.2 Upside Make Flexibility
AG.2.3 Upside Deliver Flexibility
Notes: This metric may have more than one Source,
Make and Deliver Flexibility component
depending on the complexity of the supply
chain.
Copyright Supply Chain Council, 2008. All rights reserved 63
Strategic Asset Metrics

Metric: AM.1.1 Cash-to-Cash Cycle Time


Definition The time it takes for cash invested in
: materials to flow back into the company after
finished goods have been delivered to
customers. The unit of measure for Cash-to-
Cash Cycle Time is calendar days
Calculatio [Inventory Days of Supply] + [Days Sales
n: Outstanding] [Days Payable Outstanding]
Diagnostic AM.2.1 Days Sales Outstanding (DSO)
Metrics: AM.2.2 Inventory Days of Supply (IDOS)
AM.2.3 Days Payable Outstanding (DPO)
Notes: For services, the time between paying the
resources assigned to a service and receiving
payment for the service delivery.

Copyright Supply Chain Council, 2008. All rights reserved 64


Strategic Asset Metrics

Metric: AM.1.2 Return on Supply Chain Fixed Assets


Definition The return an organization receives on its
: invested capital in supply chain fixed assets.
This includes the fixed assets used to Plan,
Source, Make, Deliver and Return. Examples of
fixed assets include land, buildings,
machinery, trucks
Calculatio ([Supply Chain Revenue] [COGS] [Supply
n: Chain Management Costs]) / [Supply Chain Fixed
Assets]
Diagnostic AM.3.11 Deliver Fixed Assets Value
Metrics: AM.3.18 Make Fixed Assets Value
AM.3.20 Plan Fixed Asset Value
AM.3.27 Source Fixed Assets Value
Notes: Supply-Chain Revenue is the operating revenue
generated from a supply chain. This does not
Copyright Supply Chain Council, 2008. All rights reserved 65
include non-operating revenue, such as
Metrics and Analysis

Levels in metrics help root cause performance issues


Strategic metrics (level 1) can be diagnosed by investigating
the level 2 metrics.
Different types of relationships exist between a metric (the
parent) and its diagnostic metrics (the children):
1. The parent is the sum of its children (e.g. time and cost)
2. The children are multiplied to calculate the parent (e.g.
yield)
3. The relationship is undefined (but can be statistically
observed)
Diagnostic metrics dont necessarily add up to their parents:

Order Fulfillment Cycle Time IS NOT the sum of Deliver Cycle


Time + Make Cycle Time + Source Cycle Time for most supply
chains

Copyright Supply Chain Council, 2008. All rights reserved 66


Metrics Data

Each company will need to develop a tool or


instructions where to source the data for the SCOR
metrics
There are two types of data:
Recorded data; obtain from transactional systems such as ERP
(Enterprise Resource Planning), WMS (Warehouse Management
System), financial systems, etc. For example: compare time-
stamps in these systems to calculate cycle times.
Observed data; obtain through interviews, error logs, audits
and/or time-studies. For example the observed percentage of
orders requiring additional customer setup in a system,
percentage of manual repackaging events on the shipping
dock.

There is no easy button

Copyright Supply Chain Council, 2008. All rights reserved 67


Scorecards and SCORcards

Definitions
Scorecard: A visual display of the most important
information needed to achieve one or more objectives,
consolidated and arranged in a single view
Balanced Scorecard: A scorecard providing metrics
related to four organizational strategies: financial,
customer, internal process, and employee learning and
growth
SCORcard: A scorecard providing metrics related to
five supply chain strategies: reliability,
responsiveness, Agility, cost and assets

Importance
Communicate supply chain priorities
Monitor all strategic areas, not just the top
priority
Copyright Supply Chain Council, 2008. All rights reserved 68
SCORcard Metrics Selection

SCORcard metric requirements:


Measurable and quantifiable
Avoid 'feel good' metrics like supplier satisfaction or
customer satisfaction, unless they are an aggregation of
well-defined detail metrics. Framework-based metrics
simplify the selection process.
Linkage to responsibility
Avoid metrics that have no impact on performance reviews
(supplier or employee), ensure the metric is linked to
the (right) process owner at the right level.
Ensure metric is well-defined
Multiple interpretations of a metric may lead to 'work-
arounds' and negation of the effort. SCOR metrics are
pre-defined; limiting the discussion on metric
definitions.

Copyright Supply Chain Council, 2008. All rights reserved 69


Metrics Selection

Interpreting the definitions


Customer facing metrics should be measured as close to the
customer experience as possible.
The moment of order submission instead of order entry
Delivered performance instead of shipping performance
Received quality instead of produced or shipped quality
Measure what makes sense: Dont have data; approximate the
missing component until you will be able to obtain the
data

Tip: It is not about how you think it should be measured,


ask your customer what is important to him/her
And: Internal focused metrics also have a customer

Copyright Supply Chain Council, 2008. All rights reserved 70


Benchmarking

Definitions
Benchmarking: Comparing an organizations performance,
products, practices, and/or services with those of other
organizations that operate in the same or comparable
industry
Parity: Being equal in performance; No real advantage over
others
Advantage: Being in a favorable position; In a stronger
position than
Superior: Being of high rank or quality; Leading

Usage
Establish Goals. Know where you are relative to others
(competitors or peers), and express where you're going.
Monitor Performance. Track relative progress you and
others (your competitors or peers) make.

Copyright Supply Chain Council, 2008. All rights reserved 71


Benchmark Requirements

Compare like for like


Using standard metrics
A numerical comparison of the performance of two
companies in the same industry may not have value when
the metric is different.
Measuring the same process/business model
Avoid comparing the performance of a make-to-stock
process to an engineer-to-order process. The purpose of
these processes is different, measure them accordingly.
Demographics
Make sure you understand the other organizations in the
benchmark. Regional differences, and differences in
product, or services may influence results.

Copyright Supply Chain Council, 2008. All rights reserved 72


Best Practices

Definitions:
Best practice: "A current, structured, proven and
repeatable method for making a positive impact on
desired operational results."
Current: Must not be emerging and can not be antiquated
Structured: Has clearly stated Goal, Scope, Process,
and Procedure
Proven: Success has been demonstrated in a working
environment and can be linked to key metrics
Repeatable: The practice has been proven in multiple
environments.

Importance
Alternatives to the way you do business
Equalize the competitive landscape

Copyright Supply Chain Council, 2008. All rights reserved 73


Types of Practices

Best practices are Current, structured,


proven and repeatable methods for making a
positive impact on desired operational
results.
Leading practices are innovations adopted by
single companies or industries which provide
dramatically improved performance in a
process, but because of proprietary
restrictions, or novelty, are not widely
known or adopted.
Worst practices or Poor practices: Practices
that are known to produce negative impacts on
operational results.
Copyright Supply Chain Council, 2008. All rights reserved 74
www.supply-chain.org
info@supply-chain.org

This presentation is the exclusive property of the


Supply Chain Council. Copyright Supply Chain
Council. 2006. All rights reserved. The marks
SCOR, CCOR, DCOR and SCOR Roadmap are the
exclusive property of the Supply Chain Council.

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