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SCOR Model(Supply Chain Operations Reference)

Aug 2010

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SCOR - Developed by Supply Chain Council (SCC)

SCC: Organized in 1996 by Global management-consulting firm, Pittiglio Rabin Todd &

McGrath (PRTM) and

Market research firm, Advanced Manufacturing Research (AMR) inCambridge, Massachusetts.

Started with 69 voluntary companies

SCC Objective To develop a standard supply-chain Process Reference Model

enabling effective communication among the supply chainpartners, by Using standard terminology to better communicate and

learn the supply chain issues Using standard metrics to compare and measure their

performances

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The SCC is an independent, not-for-profit, globalcorporation with membership open to any organization...

About 1000 Company Members

Cross-industry representation

The Supply-Chain Council (SCC) has developedand endorsed the Supply Chain OperationsReference-model (SCOR)

Process Reference Model

Cross-industry standard for supply chainmanagement

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What is aProcess Reference Model?

SCOR describes processes not functions. Inother words, the Model focuses on the activityinvolved, not the person or organizational

element that performs the activity.

Process Reference Model integrates the well-known concepts of business process

reengineering, benchmarking, and processmeasurement (metrics) into a cross-functionalframework

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Quantify theoperationalperformance ofsimilar companiesand establishinternal targetsbased on best-in-

class results

Benchmarking

Characterize themanagementpractices andsoftware solutionsthat result in best-in-classperformance

Best PracticesAnalysis

Process ReferenceModel

Capture the as-isstate of a processand derive thedesired to-befuture state

Business ProcessReengineering

Capture the as-is state

of a process and derivethe desired to-be futurestate

Quantify the operationalperformance of similarcompanies and establishinternal targets based onbest-in-class results

Characterize themanagementpractices andsoftware solutionsthat result in best-in-class performance

SCOR - Process Reference Model

Integrates Business Process Reengineering, Benchmarking, and

Process Measurement into a cross-functional framework.

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Personal Computer E.g.

ACMETaiwan (D)

DesktopProduction

(S, M, D)

LaptopDistributor

(S, D)

Semiconductor

Distributor(S, D)

LaptopProduction(S, M , D)

DesktopRetailer(S, D)

LaptopRetailers

(S, D)

SemiconductorManufacturer

(S, M, D)

MonitorProduction (S, M, D)

Plan

Source Make Deliver

Original SCOR

Processes

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EvolvedSCOR Processes

Supplier

Plan

Customer CustomersCustomer

Suppliers

Supplier

Deliver SourceMakeMake DeliverMakeSourceDeliver

Internal or External Internal or External

Your Company

Source

SCOR Model

Return Return Return

Return Return

Return Return

Building Block Approach

Source

Return

Deliver

Best Practice

MetricsProcesses

Plan-Source-Make-Deliver-Return provide the structure of the SCOR-model

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SCOR Process Modeling

S1

D1

M2S2 D2

M1 D1 S1

S2

D1M1

EuropeanSupplier

Key OtherRM

Suppliers

Warehouse

S1

RM Supplier Distributors

ManufacturingCompany

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SCOR Processes Plan (Processes that balance aggregate demand and supply to develop a course of

action which best meets sourcing, production and delivery requirements)

Balance resources with requirements

Establish/communicate plans for the whole supply chain

Source (Processes that procure goods and services to meet planned oractual demand)

Schedule deliveries (receive, verify, transfer)

Make (Processes that transform product to a finished state to meet planned or actualdemand) Schedule production

Deliver (Processes that provide finished goods and services to meet planned or

actual demand, typically including order management, transportation management, anddistribution management) Warehouse management from receiving and picking product to load and ship

product.

Return (Processes associated with returning or receiving returned products) Manage Return business rules

Plan-Source-Make-Deliver-Return

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Plan

Demand/supply planning

aggregate and prioritize demandrequirements, plan inventory,

plan distribution requirements Manage Planning

infrastructure

supply-chain configuration, long-

term capacity and resourceplanning, business planning,product phase-in/phase-out,end-of-life management


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Source

Sourcing/materialacquisition

Obtain, receive, inspect,

hold, andissue material

Manage sourcinginfrastructure

Vendor certification,sourcing quality, in-boundfreight, vendor contracts,initiate vendor payments


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Make

Production execution

Request and receivematerial, manufacture (repair)

and test product, package,hold and / or release product

Manage makeinfrastructure

Engineering changes,facilities and equipment,production status, productionquality, shop scheduling

*Source: The Supply Chain Council


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Deliver

Order management

Warehouse management

Transportation and

installation management

Manage deliverinfrastructure

Manage channel businessrules, order rules, managedeliver inventories, managedeliver quality


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Return

Handling of returns

Return Source Activities associated with returning

material to a supplier including thecommunication with the trading partner,the generation of documentation, and the

physical return / shipment of product.

Return Deliver Activities associated with receiving and

disposing of returned material from acustomer including the communicationwith the trading partner, the generation ofdocumentation, and the physical return /receipt and dispositioning of product.


Reverse Logistics

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SCOR is a hierarchical model

SCOR

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#

Level

Schematic Comments

1

2

3

4

ConfigurationLevel

(ProcessCategories)

ProcessElement Level

(DecomposeProcesses)

Plan

DeliverMakeSource

A companys supply chain can be configured-to-order at Level 2 from approximately30 core process

categories.

Companies implement their operations strategythrough their unique supply chain configuration.

Companies fine tune their Operations Strategy at

Level 3

Level 3 defines a companys ability to compete

successfully in its chosen markets and consists of:

Process element definitions Process element information inputs and outputs

Process performance metrics

Best practices, where applicable System capabilities required to support best

practices

ImplementationLevel

(DecomposeProcess

Elements)

Companies implement specific supply chainmanagement practices at this level

Level 4 defines practices to achieve competitiveadvantage and to adapt to changing businessconditions

Su

pplyChainOperations

Referencemodel

Top Level

(Process Types)

Level 1 defines the scope and content for the SupplyChain Operations Reference model

Here basis of competition performance targets are set

Notin

Scope

Description

Balance Production Resources withProduction Requirements

Establish DetailedProduction Plans

Identify, Prioritize, and AggregateProduction Requirements

Identify, Assess, and AggregateProduction Resources

P3.1

P3.3 P3.4

P3.2

ReturnReturn

SCOR Levels

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SCOR Level 1 Process

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SCOR Level 2 Process

Identify, Prioritize and Aggregate Supply Chain Requirements

Identify, Prioritize and Aggregate Supply-Chain Resources

Balance Supply Chain Resources with SC Requirements

Establish & Communicate Supply-Chain Plans

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SCOR Level 2

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SCOR - Level 3

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Supply Chain Operations Reference

Model (SCOR) The Primary Use of SCOR:

To describe, measure and evaluate supply chain configurations.

SCOR contains: Standard descriptions of management processes

A framework of relationships among the standard processes Standard metrics to measure process performance

Management practices that produce best-in-class performance

Enables the companies to:Evaluate and compare their performances with other companieseffectively

Identify and pursue specific competitive advantagesIdentify software tools best suited to their specific processrequirements

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SCOR Boundaries

SCOR applies to

All supplier / customer interactions Order entry through paid invoice

All physical material transactions From your suppliers supplier to your customers

customer, including equipment, supplies, spare parts,

bulk product, software, etc.

All market interactions

From the understanding of aggregate demand to thefulfillment of each order

Returns

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SCOR Boundaries

SCOR does not include:

Sales administration processes

Technology development processes

Product and process design and developmentprocesses

SCOR assumes but does not explicitly

address Training, Quality, Information Technology (IT)

administration (non-SCM)

Documents

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