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Supply Chain
Operations Reference-model
(SCOR-model)
Asst.Prof.Dr.Wanchai RattanawongUniversity of Thai Chamber of Commerce
23/10/63 2
การเปล่ียนแปลงในเศรษฐกจิยคุใหม่
• ความต้องการของลูกค้า• หลากหลายของสินคา้• บริการท่ีดี• คุณภาพสูง• ราคาถูก• ความสะดวกสบาย• เสียเวลานอ้ย
3
Modern Importance of Quality
“The first job we have is to turn out
quality merchandise that consumers
will buy and keep on buying. If we
produce it efficiently and
economically, we will earn a profit, in
which you will share.”
- William Cooper Procter
น ้าใตดิ้นท่ีผา่นการกรองจากหินภูเขาไฟ แลว้ฝังตวั
ลึกลงไป 200 เมตร ราคาเบาะๆ 3,150 บาทต่อลิตร
น ้าขวดน้ีมาจากแคนาดามาจากธารน ้าแขง็โบราณท่ีกรีนแลนดแ์ตกตวัแลว้ลอยขา้มมหาสมุทรมาให้ทางแคนาดาละลายใส่ขวดครับ ธารน ้าแขง็แห่งน้ีอายุถึง 15,000 ปีครับ ราคา 1,890 บาทต่อลิตร
23/10/63 5
Airconditioner Oversea Standard : มาตรฐานต่างประเทศ
Label
(ความสามารถใน
การท าความเยน็)
Marking
(ความปลอดภยั)
Thai Hongkok Korea S’Pore Austrial
Supply Chain Operations Reference
(SCOR) Model and Performance
Measurement
Why focus on business process
What is SCM ,What is SCOR?
SCOR Model Best Practice & Case Study
SCOR overview Scope and value of the SCOR Model
the SCOR Business Processes and Improvement
How to apply Performance Management & benefit
SCOR processes at tactical & execution levels
ITL-SCBC& SCOR 2011
Challenges facing Petrochemicals Industry
Supply Chains
1. The Chemical Industry is facing exciting times,
requiring higher degrees of excellence in planning,
coordination and execution skills than ever before.
•Cost
•Quality
•Delivery
Introduction SCM in Petrochemicals Industry
Operations Management UTCC Page 8
suppliers distributors retailers/customersmanufacturers
MATERIALS MANAGEMENT/ SUPPLY MANAGEMENT
PHYSICAL DISTRIBUTION/ CHANNEL MANAGEMENT
source consumers/end users
Markets/customers
Physical
Distribution
Demand Management
กลยทุธท์างธรุกิจของพนัธมิตรหรือหุ้นส่วนทางการค้าในโซ่อปุทานท่ีร่วมมือกนั สร้างพนัธกิจในการท างานร่วมกนัอย่างใกล้ชิดเพ่ือสร้างคณุค่าให้แก่ลกูค้ามากขึน้ โดยใช้วิทยาการการจดัการแบบสมยัใหม่ และการใช้เทคโนโลยีประยกุตใ์ห้เหมาะสม เพ่ือเอื้อต่อการเพ่ิมประสิทธิภาพและประสิทธิผล เพ่ือลดต้นทุน ค่าใช้จ่ายและเวลาให้ต า่ท่ีสดุเท่าท่ีจะเป็นไปได้ในโซ่อปุทาน
Supply Chain Defined
ManufacturingPlanning &
Control
2. On one hand competitive pressures in traditional markets are increasing.
23/10/63 10
3. Customers expect higher levels of service and at the same time lower prices.
4. This demands streamlined processes, elimination of
waste & a need for excellence in all aspects of supply
chain operations.
5 PRINCIPLES OF
STREAMLINE PROCESS
1. Specify value :
Specify value from the standpoint of the
end customer by product family.
2. Identify the value stream :
Identify all the steps in the value stream
for each product family, eliminating whenever
possible those steps that do not create value
or identify all the steps along the process
chain.
Pa
ge
15
suppliers distributors retailers/customersmanufacturers
MATERIALS MANAGEMENT/ SUPPLY MANAGEMENT
PHYSICAL DISTRIBUTION/ CHANNEL MANAGEMENT
source consumers/end users
Markets/customers
Physical
Distribution
Demand Management
กลยทุธท์างธรุกิจของพนัธมิตรหรือหุ้นส่วนทางการค้าในโซ่อปุทานท่ีร่วมมือกนั สร้างพนัธกิจในการท างานร่วมกนัอย่างใกล้ชิดเพ่ือสร้างคณุค่าให้แก่ลกูค้ามากขึน้ โดยใช้วิทยาการการจดัการแบบสมยัใหม่ และการใช้เทคโนโลยีประยกุตใ์ห้เหมาะสม เพ่ือเอื้อต่อการเพ่ิมประสิทธิภาพและประสิทธิผล เพ่ือลดต้นทุน ค่าใช้จ่ายและเวลาให้ต า่ท่ีสดุเท่าท่ีจะเป็นไปได้ในโซ่อปุทาน
Supply Chain Defined
ManufacturingPlanning &
Control
3. Create flow :
Make the value-creating steps occur in
tight sequence so the product will flow
smoothly toward the customer.
4. Let the customer pull product
through the value stream:
Make only what the customer has
ordered.
5 PRINCIPLES OF
STREAMLINE PROCESS
23/10/63 17
5. Seek perfection :
As value is specified, value streams are
identified, wasted steps are removed, and flow
and pull are introduced, begin the process again
and continue it until a state of perfection is
reached in which perfect value is created with no
waste.
5 PRINCIPLES OF
STREAMLINE PROCESS
Over Productionผลติเกนิความจ าเป็น
Inventoryสนิคา้คงคลงั
Excess Processingขัน้ตอนการผลติมากเกนิจ าเป็น
Motionการเคลือ่นไหว
Waitingการรอคอย
Defectของเสีย
Transportationการขนยา้ย
5. At the same time manufacturers are developing
production facilities in Thailand creating new logistics
challenges for raw materials and finished products, both locally as well as for export markets.
SCOR model is tool for
performance measurement and process control.
Superior Supply Chain Management (SCM)
has long been a source of competitive advantage
Source: PRTM/The Performance Measurement Group
% o
f R
eve
nu
e
Best-in-class Companies’ Outperform Their Median Competitors with a 50% Cost Advantage
23SCC & SCOR HRdergi Conference 2010
5.40% 5.30% 5.50%
4.20%4.80%
3.40% 3.50% 3.60%
9.20%
12.30%
10.70%10.00%
10.70%
9.10%
6.60%7.40%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Best-in-Class
Median
© Copyright 1998 Supply-Chain Council
3651MV—SCOR Overview 24
Cash-to-Cash Cycle Time
CalendarDays
2517
46
25
45
30
106
70
127
59
88 89
0
20
40
60
80
100
120
140
Computers Industrial Telecom Chemicals Packaged
Goods
Overall
Best-in-Class '97
Average '97
Source: PRTM’s 1997 Integrated Supply-Chain Benchmarking Study
Definition: Cash-to-cash cycle time is calculated as inventory days of supply + days sales outstanding - average payment period for materials
Why is supply-chain management so important?Leading companies have cash available 2 – 3 months faster
Leading companies have a 40% – 65% advantage in cash-to-cash cycle time
over average companies
25SCC & SCOR HRdergi Conference 2010
SCM is Paramount in Times of Economic Uncertainty
• In 2007, US business logistics costs rose to an all
time high of $1.4 trillion (10.1% of US nominal Gross
Domestic Product ) 3
• Supply-chain generally accounts for between 60%
and 90% of all company costs1
• A 2% improvement in process efficiency for supply-
chain processes has 3000% - 5000% the impact of a
2% improvement in efficiency for… IT… HR…
Finance1… Sales…
1 Exclusive of Financial Services companies
2 Source: Hoovers 2006 Financial Data, Supply-Chain Council 2006
SCM Benchmark data on SCM cost for discrete & process industries
3 CSCMP 19th Annual State of the Logistics Industry
Focused initiatives in Supply Chain Management can result in 30-35% cost reductions, liberation of working capital, and revenue increases of 3-5%!
Fortune-10
Company Supply-
Chain Cost as % of
Total Costs 2
GM 94%
Ford 93%
Conoco 90%
Wal-Mart 90%
Chevron 88%
IBM 77%
Exxon 75%
GE 63%
Citi1 0%
AIG1 0%
SCM Improvement Creates Shareholder Value
•Improve customer service and
response
•Optimize inventory flow,
utilization & productivity
• Best-in-class customer
relationships
• Differentiated service
capabilities
• Best-in-class strategic
supplier partnerships
• Leverage of outsourcing of
business processes
• Unique supply chain models
The Supply Chain Impacts . . .
& Shareholder Value
ImproveCapital
Efficiency
Increase
Profit
Increase
Shareholder Value
All Financial Metrics . . .
Liberate Working Capital
Reduce
Fixed Capital
IncreaseRevenue and
Margin
Optimize
Cost Model
Effective Supply Chain Management can increase a Return on Capital Employed by 30% and More!
26SCC & SCOR HRdergi Conference 2010
THE ROLE OF THE SCOR
MODEL IN OPTIMIZING SUPPLY
CHAIN PERFORMANCE
ITL-SCBC& SCOR 2011
What is a Supply Chain
What is a Supply Chain
Su
pp
lier p
ro
cesses
Product Design
DCOR™
Cu
sto
mer
pro
cesses
Supply Chain SCOR™
Sales & Support
CCOR™
Product Management
29
What is SCOR?
30
Custo
mer p
roce
ssesS
upplie
r pro
cess
es Supply Chain
Cu
stom
er p
roce
ssesS
up
pli
er
pro
cess
es
Supply Chain
Process, arrow indicates material flow direction
Process, no material flow Information flow
DeliverMakeSource
ReturnReturn
Plan
• SCOR is a supply chain
process reference model
containing over 200
process elements, 550
metrics, and 500 best
practices including risk
and environmental
management
• Organized around the
five primary
management processes
of Plan, Source, Make,
Deliver and Return
• Developed by the industry
for use as an industry
open standard - Any
interested organization
can participate in its
continual development30
SCC & SCOR HRdergi Conference 2010
SCOR Benefits Companies
SCOR can be used to describe supply chains that are
very simple or very complex using a common set of
definitions and enabling a common understanding
It helps companies:
•Form an integrated measured strategy which
translates overall business objectives clearly and
comprehensively to all operational business entities
•Create a common balanced scorecard by which
customers can measure their performance and by
which SCC members can measure suppliers’
performance32ITL-SCBC& SCOR 2011
• Compare the performance of supply chain and related
operations within their company or against other companies
• Determine what processes to improve and by how much
to improve them either eliminating waste, or by improving
process reliability
• Guide the consolidation of internal supply chains
(which results in significant cost reductions from eliminating
duplicative assets)
• Create standard processes and common information
systems across business units (which generates major cost
savings, cycle-time and quality improvements)
SCOR Benefits Companies
Supplier
Plan
CustomerCustomer’s
CustomerSuppliers’
Supplier
MakeDeliverSource Make DeliverMakeSourceDeliver SourceDeliver
Internal or External Internal or External
Your Company
Source
SCOR is structured around five distinct
management processes
SCOR Model
Return Return ReturnReturn Return Return
Return Return
Building Block Approach
Processes Metrics
Best Practice Technology
ITL-SCBC& SCOR 2011
SCOR Process Model
The SCOR model is built by a process reference
models
The process reference model integrates the
business process reengineering, benchmarking,
and process measurement into a cross-functional
framework.
Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results
Benchmarking
Characterize the management practices and software solutions that result in “best-in-class” performance
Best Practices Analysis
Process Reference Model
Capture the “as-is” state of a process and derive the desired “to-be” future state
Capture the “as-is” state of a process and derive the desired “to-be” future state
Business Process Reengineering
Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results
Characterize the management practices and software solutions that result in “best-in-class” performance
• Provide a balanced horizontal
(cross-process) and vertical
(hierarchical) view
• Designed to be (re)configurable
• Used to represent many different
configurations of a similar process
• Aggregate a series of hierarchical
process models
Classic process decomposition models
are strictly hierarchical
Process decomposition models are developed to address one
specific configuration of process elements
Process Reference Models accommodate a
number of constructs
Process Element
Level
1
2
3
4
Process
Process Element
Task
Activities
Task
Activities
Contains:
A process reference model differs from
classic process decomposition models
What is a process reference model?
• 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
• Software tools that enable best practices
A Process Reference Model describes
Why use a process reference model?
• A process reference model allows companies
to:– Communicate, using common terminology and standard descriptions of the
process elements
– Leverage metrics and benchmarking to determine performance goals, set priorities, and quantify the benefits of process changes
– Understand the best practices that yield the best performance
– Understand the overall SCM process and evaluate overall performance
– Identify the software tools best suited for their process requirements
• Once a business process has been “captured”
in a process reference model it can be:– Described unambiguously
– Communicated consistently
– (Re)designed to achieve competitive advantage
– Measured, managed, controlled, and refined to meet specific purposes
Supply Chain Operations
Reference-model : Scope
The boundaries of the model
SCOR boundaries (I) SCOR spans
–All customer interactions, from order entry
through paid invoice
–All physical material transactions, from your
supplier’s supplier to your 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 boundaries (II)
SCOR does not include
• Sales administration processes
• Technology development processes
• Product and process design and development processes
• Post-delivery customer support operations including technical support processes
Links to processes not included within the model’sscope, such as product development, are noted in SCOR
Scope of SCOR ProcessesPLAN Demand/Supply Planning and Management
Balance resources and requirements and
establish/communicate plans for whole supply chain,
including Return, and the execution processes of
Source, Make, and Deliver
Management of business rules, supply chain
performance, data collection, inventory, capital assets,
transportation, planning configuration, and regulatory
requirements and compliance
Align the supply chain unit plan with the financial
plan.
ITL-SCBC& SCOR 2011
• Demand/supply planning
– Assess supply resources, aggregate and
prioritize demand requirements, plan
inventory, distribution requirements,
production, material, and rough-cut capacity
for all products and all channels
• Manage planning infrastructure
– Make/buy decisions, supply-chain
configuration, long-term capacity and resource
planning, business planning, product phase-
in/phase-out, manufacturing ramp-up, end-of-
life management, product-line management
SOURCE Source Stocked, Make-to-Order,
and Engineer-to-Order Product
Schedule deliveries, receive, verify, and transfer
product; and authorize supplier payments. Identify
and select supply sources when not predetermined, as
for engineer to order product.
Manage business rules, assess supplier performance,
and maintain data
Manage inventory, capital assets, incoming product,
supplier network, import/export requirements, andsupplier agreements
Scope of SCOR Processes
ITL-SCBC& SCOR 2011
• Sourcing/material acquisition
– Obtain, receive, inspect, hold, and issue
material
• Manage sourcing infrastructure
– Vendor certification and feedback, sourcing
quality, in-bound freight, component
engineering, vendor contracts, initiate
vendor payments
Scope of SCOR Processes
MAKE Make-to-Stock, Make-to-Order, and
Engineer-to-Order Production Execution
Schedule production activities, issue product, produce
and test, package, stage product, and release product
to deliver.
Finalize engineering for engineer-to-order product.
Manage rules, performance, data, in-process products
(WIP),equipment, facilities, transportation, productionnetwork, and regulatory compliance for production.
ITL-SCBC& SCOR 2011
Production execution
– Request and receive material, manufacture and test product, package, hold and/or release product
Manage make infrastructure
– Engineering changes, facilities and equipment, production status, production quality, shop scheduling/sequencing, short-term capacity
Scope of SCOR Processes
DELIVER Order, Warehouse,
Transportation and Installation Management
for Stock, Make-to-Order, and Engineer-to-
Order Product
All order mgmt steps from processing customer
inquires and quotes to routing shipments and
selecting carriers.
Warehouse mgmt from receiving and picking product
to load and ship product.
ITL-SCBC& SCOR 2011
Receive and verify product at customer site and install, if
necessary.
Invoicing customer.
Manage Deliver business rules, performance,
information, finished product inventories, capital assets,
transportation, product life cycle, and import/export compliance.
Scope of SCOR Processes
DELIVER
Order management– Enter and maintain orders, generate quotations,
configure product, create and maintain customerdatabase, manage allocations, maintain product/pricedatabase, manage accounts receivable, credits,collections and invoicing
Warehouse management– Pick, pack and configure products, create customer
specific packaging/labeling, consolidate orders, ship products
Transportation and installation management– Manage traffic, manage freight, manage product
import/export– Schedule installation activities, perform installation,
verify performance
Manage deliver infrastructure– Manage channel business rules, order rules, manage
deliver inventories, manage deliver quality
Scope of SCOR Processes
RETURN Return of Raw Materials and
Receipt of Returns of Finished Goods
All Return Defective Product steps from source
All Return Maintenance, Repair, and Overhaul
product steps from source
All Return Excess Product steps from source
Manage Return business rules, performance, data
collection, returns inventory, capital assets,
transportation, network configuration, regulatoryrequirements and compliance.
ITL-SCBC& SCOR 2011
Each basic supply chain is a “chain” of Source,
Make, and Deliver Execution processes
Source Make Deliver. . .
Customer & Supplier
A Supply Chain
Customer & SupplierCustomer & Supplier
Plan Plan PlanPlan
Each intersection of two execution processes (Source-Make-Deliver) is a “link” in the supply chain
Planning processes manage these customer-supplier links
SCOR Processes – Five Levels of
Decomposition
Level 1 Level 2 Level 3 Level 4 Level 5
Scope Configuration Activity Workflow Transactions
Differentiates
Business
Differentiates
Complexity
Names Tasks Sequences
Steps
Links
Transactions
Defines Scope Differentiates
Capabilities
Links,
Metrics, Tasks
and Practices
Job Details Details of
Automation
Sets Strategy First Tier
Diagnostics
Second Tier
Diagnostics
Industry or
Company
Specific
Technology
Specific
54
S1
Source
Stocked Product
Supply-Chain
SourceS1.2
Receive Product
Standard SCOR definitions Company/Industry definitions
EDI
XML
Material Flow
SCOR Level 1
Operations
Strategy
Analyze Basis
of
Competition
SCOR Level 2
Configure
supply chain
Align
Performance
Levels, Practices,
and Systems
Implement
supply chain
Processes and
Systems
SCOR Project Roadmap
•Competitive Performance Requirements
•Performance Metrics
•Supply Chain Scorecard
•Scorecard Gap Analysis
•Project Plan
•AS IS Geographic Map
•AS IS Thread Diagram
•Design Specifications
•TO BE Thread Diagram
•TO BE Geographic Map
Information
and Work Flow
•AS IS Level 2, 3, and 4 Maps
•Disconnects
•Design Specifications
•TO BE Level 2, 3, and 4 Maps
Develop,
Test, and Roll
Out
•Organization
•Technology
•Process
•People
SCOR Level 3
ITL-SCBC& SCOR 2011
SCOR contains three levels of process detail
#
Level
Schematic Comments
1
2
3
4
Configuration
Level
(Process
Categories)
Process
Element Level (Decompose
Processes)
Plan
DeliverMakeSource
A company’s supply chain can be “configured-to-
order” at Level 2 from approximately 19 core
“process categories.” Companies implement their
operations strategy through the configuration they
choose for their supply chain
Companies “fine tune” their Operations Strategy at Level 3
Level 3 defines a company’s 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
• Systems/tools by vendor
Implementation
Level (Decompose
Process
Elements)
Companies implement specific supply-chain management practices at this level
Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions
Su
pp
ly C
ha
in O
pe
rati
on
s R
efe
ren
ce
-mo
de
l
Top Level
(Process Types)
Level 1 defines the scope and content for the Supply
Chain Operations Reference-model
Here basis of competition performance targets are set
Not
in
Scope
Description
Balance Production Resources with Production Requirements
Establish Detailed Production Plans
Identify, Prioritize, and Aggregate Production Requirements
Identify, Assess, and Aggregate Production Resources
P3.1
P3.3 P3.4
P3.2
ReturnReturn
Cu
sto
me
rs
Su
pp
lie
rs
P1 Plan Supply ChainPlan
P2 Plan Source P3 Plan Make P4 Plan Deliver
Source Make Deliver
S1 Source Stocked Products M1 Make-to-Stock
M2 Make-to-Order
M3 Engineer-to-Order
D1 Deliver Stocked Products
D2 Deliver MTO Products
D3 Deliver ETO Products
S2 Source MTO Products
S3 Source ETO Products
Supply-Chain Operations Reference-model
Return
Source
P5 Plan Returns
Return
Deliver
Enable
D4 Deliver Retail Products
ITL-SCBC& SCOR 2011
SCOR Structure
ITL-SCBC& SCOR 2011
SCOR Level 1
SCOR Level 1 Performance Categories and Attributes
Performance Category Performance Attribute
Reliability 1. Delivery performance
2. Fill rates
3. Perfect order fulfillment
Responsiveness 1. Order fulfillment lead times
Flexibility 1. Supply chain response times
2. Production flexibility
Cost 1. Supply chain management cost
2. Cost of goods sold
3. Value-added productivity
4. Warranty cost or returns processing cost
Assets 1. Cast-to-cash cycle time
2. Inventory days of supply
3. Asset turns
ITL-SCBC& SCOR 2011
At Level 1, SCOR is based on five
core management processes
1
SCOR Definitions
Process
Plan
Processes that balance aggregate demand and supply to
develop a course of action which best meets the established business
rules
Source Processes that procure goods and services to meet planned or actual
demand
Make Processes that transform goods to a finished state to meet planned or
actual demand
Deliver
Processes that provide finished goods and services to meet planned or
actual demand, typically including order management,
transportation management, and distribution management
Return
Processes associated with returning or receiving returned products for
any reason. These processes extend into post-delivery
customer support
Linking Supply Chain Performance
Attributes and Level 1 Metrics
ITL-SCBC& SCOR 2011
Performance Attribute Performance Attribute Definition Level 1 Metric
Supply Chain Reliability
The performance of the supply chain in
delivering: the correct product, to the
correct place, at the correct time, in the
correct condition and packaging, in the
correct quantity, with the correct
documentation, to the correct customer.
Perfect Order Fulfillment
Supply Chain
Responsiveness
The speed at which a supply chain
provides products to the customer.
Order Fulfillment Cycle
Time
Supply Chain Flexibility
The agility of a supply chain in
responding to marketplace changes to
gain or maintain competitive
advantage.
Upside Supply Chain
Flexibility
Upside Supply Chain
Adaptability
Downside Supply Chain
Adaptability
Supply Chain CostsThe costs associated with operating the
supply chain.
Supply Chain Management
Cost
Cost of Goods Sold
Supply Chain Asset
Management
The effectiveness of an organization in
managing assets to support demand
satisfaction. This includes the
management of all assets: fixed and
working capital.
Cash-to-Cash Cycle Time
Return on Supply Chain
Fixed Assets
SCOR Level 1Supply-Chain Management
MetricsAssetsDelivery
Performance/Quality
CostFlexibility &
Responsiveness
Delivery performance
Order fulfillment performance
• Fill rate (Make-to-stock)
• Order fulfillment lead time (ETO, MTO, CTO)
Perfect order fulfillment
Supply-chain response time
Production flexibility
Total supply-chain management cost
Value-added productivity
Warranty cost or returns processing cost
Cash-to-cash cycle time
Inventory days of supply
Asset turns
Customer-Facing Internal-Facing
SCOR Level 1 metrics characterize performance
from customer-facing and internal-facing
perspectives
1
Supply Chain Scorecard v. 3.0 Performance Versus Competitive Population
Overview
Metrics
SCOR Level 1 Actual Parity AdvantageSuperior
Delivery Perform-
ance to Commit Date
50% 85% 90% 95%
Fill Rates 63% 94% 96% 98%
EX
TE
RN
AL
Delivery
Performance/
Quality
Perfect Order
Fulfillment 0% 80% 85% 90%
Order Fulfillment
Lead times 7 days 7 days 5 days 3 days
Flexibility & ResponsivenessProduction Flexibility45 days 30 days 25 days 20 days
Total Logistics
Management Costs19% 13% 8% 3%
INT
ER
NA
L
CostWarranty Cost NA NA NA NA
Value Added
Employee Productivity$122K $156K $306K $460K
Inventory Days
of Supply 119 days 55 days 38 days 22 days
Assets
Cash-to-Cash
Cycle Time
196 days 80 days 46 days 28 days
Net Asset Turns
(Working Capital)2.2 turns 8 turns 12 turns 19 turns
Analyze Basis of Competition
Supply Chain Scorecard - Representative
Supply Chain Scorecard & Gap Analysis
NEW Product Line - Representative of All Scorecards
Supply Chain SCORcard v. 7.0 Performance Versus Competitive Population
Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements
EX
TE
RN
AL
Perfect Order
Fulfillment 80% 85% 90%
Order Fulfillment
Cycle Time 7 days 5 days 3 days
Flexibility
Responsiveness
Upside Supply
Chain Adaptability
Total SCM
Management Cost
19% 13% 8% 3%
INT
ER
NA
L
Cost
Assets
Cash-to-Cash Cycle Time 196 days 80 days 46 days 28 days
Return on SC Fixed
Assets
Upside Supply
Chain Flexibility 82 days 55 days 13 days
Supply
Chain
Reliability
Downside Supply
Chain Adaptability
Cost of Good Sold
0% $30M Revenue
$30M Revenue
Key enabler to cost
and asset
improvements
$30M Indirect Cost
$7 M Capital Charge
35 days
97 days
0%
54%
N/A
50%
ITL-SCBC& SCOR 2011
SCOR Level 2SCOR Level 2 Process Type and Categories
SCOR
Process
Type Characteristics Process Category
Planning Processes that align expected resources P1: Plan supply chain
to meet expected demand requirements. P2: Plan source
P3: Plan make
P4: Plan deliver
P5: Plan return
Execution Processes triggered by planned or actual S1: Source stocked product D1: Deliver stocked product
demand that changes the state of S2: Source MTO product D2: Deliver MTO product
material goods. These are source (S1-3), S3: Source ETO product D3: Deliver ETO product
make (M1-3), deliver (D1-3), and return M1: Make-to-stock R1: Return defective
product
(R1-3) processes. M2: Make-to-order R2: Return MRO product
M3: Engineer-to-order R3: Return excess product
Enable Processes that prepare, maintain, or EX1: Establish and manage rules
manage information or relationships on EX2: Assess performance
which planning and execution processes EX3: Manage data
rely. EX4: Manage inventory
EX5: Manage capital assets
EX6: Manage transportation
EX7: Manage supply chain configuration
EX8: Manage regulatory compliance
EX9: Process specific elements (align SC/financials,
supplier agreements
(Note: X = P,S,M,D,R)ITL-SCBC& SCOR 2011
At Level 2, SCOR provides a “toolkit” of 21
process categories
At Level 2, each SCOR process can be
further described by process type
For each “SCOR Process,” Level 2 “Process
Categories” represent supply-chain variations
Type SCOR
Process
Process Category Characteristics
Planning Plan Which execution process is being planned(Source, Make, Deliver, Supply Chain)?
Execution Source
Is the sourced part standard or custom?
Is the sourced part stocked by suppliers, or not?
Execution Make
Is the manufacturing process discrete or process-based?
What triggers the “Make” signal?
Execution Deliver
Is the product standard or custom?
Is the product stocked in finished goods, or not?
• SCOR process categories reflect distinctions in how
products are planned, sourced, made, and delivered
2
Process categories are defined by the relationship
between a SCOR process and a process type
Practitioners select appropriate process categories from the SCOR
configuration toolkit to represent their supply-chain configuration(s)
“SCOR Configuration Toolkit”
Process
Type
Planning
Execution
Enable
Process
Category
P1 P2 P3 P4
S1 – S3 M1 – M3 D1 – D4
EP ES EM ED
2
Score Process
Plan Source Make Delivery Return
P5
SR1 –
SR4
DR1 –
DR3
Mapping the execution processes
S1
D1 S1
M2S2 D2
M1 D1 S1
S2
D1M1
European
RM Supplier
Key Other
RM
Suppliers
Alpha
Regional
Warehouses
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3
RM
Suppliers
DistributorsALPHA
DR3 SR3
S1
Americas
Distributors
SR1
SR3
ITL-SCBC& SCOR 2011
Mapping material flow
Latin American
Suppliers
(D1)
Warehouse
Other Suppliers(D1)
Manufacturing
European Supplier(S1)
(SR1,SR3)
Customer
Customer
Customer
Customer
(S1, D1)
(SR1,DR1,DR3)
(D2)
(DR1)
Warehouse
Warehouse
Warehouse
(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)
ITL-SCBC& SCOR 2011
Configure Supply Chain
Geographic Map - Sample
Identifying Plan Activities
Consumer
P2
P
4
P3
P
4
S1 D1 S1
P
2
P2
P
3
P
4
M2S2 D2
M1 D1 S1S2D1
M1
European
RM Supplier
Key Other
RM
Suppliers
S1
Alpha
Regional
WarehousesRM
Suppliers
DistributorsALPHA
P1 P1 P1
ITL-SCBC& SCOR 2011
Configure Supply Chain
Thread Diagram
Integrated Level 2 Metrics
Supplier On Time
Delivery
to 97%
Source Cycle Time
90 to 1 day
Material Acquisition
Cost
3.2% to 2.2%
$32M to $22M
RM Days of Supply
72 to 15 days
$107M to $22M
P1Schedule
Achievement
to 97%
Make Cycle Time
30 to 3 days
Unit Cost
WIP Days of
Supply
17 to 25 days
$26M to $37M
Faultless Invoices
to 97%
Order Management Cycle
Time
1 day
Order Management Cost
11.3% to 9.3%
$113M to $93M
Finished Good Inventory
30 to 15 days
$44M to $22M
Days Sales Outstanding
107 to 55 days
$292M to $151M
P2P4
P3
SCOR Level 3
SCOR Level 3 Performance Categories and Measures
Process Element: Schedule Process Deliveries
Performance Attribute Categories Measures
Reliability Percentage of schedules generated within supplier’s lead time
Percentage of schedules changer within supplier’s lead time
Responsive Average release cycle of changes
Flexibility Average days per schedule change
Average days per engineering change
Cost Product management and planning costs as a percentage of
product acquisitions costs
Assets None identified
ITL-SCBC& SCOR 2011
An example of SCOR Level 3 process
element logic flow
Inventory
Source Execution Data
Sourcing Plans
Replenishment Signals
Procurement Signal Material on Order
Purchased Materials
Material Pull Signals
Material Inventory Location
WIP Inventory Location
Finished Goods Inventory Location
Receipt Verification
Schedule
Material
Deliveries
S1.1
Receive &
Verify
Material
Transfer
Material
S1.3S1.2
Inputs
Process
Elements
Outputs
Level 3 Example — S1 Source Stocked Product
• Inputs, outputs, and basic logic flow of
process elements are captured
3
An example of a SCOR Level 3 standard process
element definition and standard performance metrics
Process Element:Schedule Material Deliveries
Process Number: S1.1
Process Element DefinitionScheduling and managing the execution of the individual deliveries of material against anexisting contract or purchase order. The requirements for material releases aredetermined based on the detailed sourcing plan or other types of material pull signals.
PerformanceAttributes
Metric
Cycle Time Total Source Lead Time
% of EDI Transactions
Cost Materials Management as a % of Material Acquisition Costs
Service/Quality % defective
Assets Raw Material Days of Supply (DOS)
3
• % of order changes
• # of end devices/SKUs
• Production volume
• Inventory carrying cost
Level 3
Diagnostic Metrics
• Product volume by
channel
• # of channels
• Supply-chain
complexity, # of
S/M/D sites
• Planning cycle time
• Forecast accuracy
• Obsolete/end of life
inventory days of supply
• Replan cycle
• Order entry methods
• Order entry modes
Supply-Chain
Management
Practices
Measures
Level 2
Performance Metrics
Supply-Chain
Complexity
Measures
Supply-Chain
Configuration
Measures
• Material acquisition costs
• Source cycle time
• Raw material DOS
• Purchased material by
geography
• % of purchasing
spending by distance
• Supplier delivery
performance
• Payment period
• % part numbers received
with lead time < 8 weeks
• % unpenalized 30-day
decrease
• % purchasing spending
by distance
• # of suppliers
• Supply-chain finance and
planning costs
• Demand/supply planning costs
• Inventory days of supply
So
urc
eP
lan
AssetsDeliveryPerformance/
Quality
CostFlexibility &
Responsiveness
Levels 2 and 3 performance metrics and diagnostic
measures drive performance improvement3
2
•Value-add %
•% build-to-stock, %
build-to-order
•% of mfg. order changes
due to internal issues
•WIP & plant FG DOS
• # of devices/SKUs
• Upside production
flexibility
• # of orders, line
items & shipments
by channel
• % parts returned
• % re-returns
• Delivery locations by
geography
• # of channels
• Field & samples FG
DOS
• Published delivery
lead time
• # of faultless invoices
• Manufacturing
process steps by
geography
• Asset turns
• Fill rates
• Order management costs
• Order fulfillment lead time
• Forecast accuracy by channel
• # of returns/complaints
• Build order attainment
• Make cycle time
• Product quality
Level 3
Diagnostic Metrics
Supply-Chain
Management
Practices
Measures
Level 2
Performance Metrics
Supply-Chain
Complexity
Measures
Supply-Chain
Configuration
Measures
Deli
ver
Ma
ke
AssetsCostFlexibility &
Responsiveness
DeliveryPerformance/
Quality
Levels 2 and 3 performance metrics and diagnostic measures
drive performance improvement (continued)3
2
Implementation of supply-chain management
practices within the company occurs at Level 4
(and below)
• Below Level 3, each process element is described by classic
hierarchical process decomposition
D1 - Deliver Stocked Product
Level 4Process Element - D1.2
Activities
Tasks
1. Contact customer account rep.
2. Look up customer history
3. If necessary, account rep. calls sales
manager to authorize additional
credit
4a. Account rep clears credit issue
4b. Account rep refuses credit request
Task - D1.2.3
Activities
Enter Orde
r
Receive Order
Validate Price
Access Credit Screen
Check Credit Availability
Clear Order
Contact Accounting
Communicate Results to Customer
Check Credit
RouteShipments
D1.6
Plan & BuildLoads
D1.5
Reserve Inventory
&DetermineDelivery
Date
D1.3
Receive, Enter & Validate Order
D1.2
Process Inquiry &
Quote
D1.1
Receive Product
D1.8
Pick Product
D1.9
Load Vehicle
Generate Ship Docs
& Ship
D1.10
Receive & Verify Product
at Customer
Site
D1.11
Install Product
D1.12
Invoice & Receive
Payment
D1.13
Consolidate Orders
D1.4
Select Carriers &
Rate Shipments
D1.7
From Make
or Source
Level 5
Level 6
4
