Supply Chain Operations Reference Model (SCOR)

Supply Chain Operations Reference Model (SCOR): Information about

(SCC)Developed by Supply Chain Council (SCC) SCC: Independent, not-for-profit corporation organized in 1996 by:

Global management-consulting firm, Pittiglio Rabin Todd & McGrath (PRTM) and Market research firm, Advanced Manufacturing Research (AMR) in Cambridge, Massachusetts.

Started with 69 voluntary companies; now close to 1000 members.SCC Objective: To develop a standard supply-chain process reference model enabling effective communication among the supply chain partners, by

Using standard terminology to better communicate and learn the supply chain issuesUsing standard metrics to compare and measure their performances

The Supply Chain Operations Reference (SCOR) model provides a unique

framework that links performance metrics, processes, best practices, and

people into a unified structure. The framework supports communication

between supply chain partners and enhances the effectiveness of supply

chain management, technology, and related supply chain improvement

activities.

Supply Chain Operational Reference (SCOR) model is the standard

reference process model developed by the Supply Chain Council (SCC)

that has become the cross-industry standard for supply chain

management.

The SCOR model depicts the basic supply chain, ranging from supplier's

supplier to customer's customer, as a series of linked Source Make

Deliver execution processes managed by a series of planning

processes

The SCOR model The SCOR model contains five core management processes:

Plan: Balance aggregate demand and supply to develop a course of action

that best meets sourcing, production, and delivery requirements.Source:

Procure goods and services to meet planned or actual demand. Make:

Transform a product into a finished state to meet planned or actual demand (DoD incorporates the Maintain/Repair process in the commercial Make process.)

Deliver:Provide finished goods and services to meet planned or actual

demand, typically including order management, transportation management, and distribution management.

Return:Return or receive returned products for any reason and extend into

post-delivery customer support. Note that the Return process was recently added to the model based largely on the efforts of the Aerospace and Defence Special Interest Group (SIG), which includes several DoD organizations, that convinced other members of the importance of return (or reverse, retrograde) logistics.

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 processesA framework of relationships among the standard processesStandard metrics to measure process performanceManagement practices that produce best-in-class performance

Enables the companies to:Evaluate and compare their performances with other companies effectively Identify and pursue specific competitive advantagesIdentify software tools best suited to their specific process requirements

Supply Chain Operations Reference Model (SCOR):Basic Management

Processes

Return

Level

Description Schematic Comments

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.Source Make Deliver

Plan1

#

Configuration Level (Process

Categories)

A company’s supply chain can be “configured-to-order” at Level 2 from the core “process categories.” Companies implement their operations strategy through the configuration they choose for their supply chain.

2

Process Element Level (Decompose

Processes)

Level 3 defines a company’s ability to compete successfully in its chosen markets, and consists of:Process element definitionsProcess element information inputs, and outputsProcess performance metricsBest practices, where applicableSystem capabilities required to support best practicesSystems/tools

3

P1.1Identify, Prioritize, and Aggregate

Supply-Chain Requirements

P1.2Identify, Assess, and Aggregate

Supply-Chain Requirements

P1.3Balance Production Resources with

Supply-Chain Requirements

P1.4Establish andCommunicate

Supply-Chain Plans

Implementation Level (Decompose Process Elements)

4

Not in Scope

Return

Three Levels of Process Detail

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.

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Customer-FacingLevel 1Performance Metrics

Assets

Supply Chain Reliability

Cost

Responsiveness

Delivery performance Fill rate Perfect order fulfillment Order fulfillment lead time Supply Chain Response Time Production flexibility Total SCM cost Cost of Goods Sold Value-added productivity Warranty cost or returns processing cost Cash-to-cash cycle time Inventory days of supply Asset turns

Internal-Facing

Flexibility

Performance Attributes

Level Metrics Facts

Level 1 Metrics are primary, high level measures that may cross multiple SCOR processes. They do not necessarily relate to a SCOR Level 1 process (Plan-Source-Make-Deliver-Return).There is hierarchy among the metrics in different levels.Level 1 Metrics are created from lower level calculations (Level 2 metrics)Level 2 Metrics:

Associated with a narrower subset of processes. Example:

Metric related with Delivery Performance: Total number of products delivered on time and in full based on a commit date. Metric related with Production: Ratio Of Actual To Theoretical Cycle Time

Level 2 Process Types and Definitions

Planning: A process that aligns expected resources to meet expected demand requirements.

Balance aggregated demand and supplyConsider 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/sequencingTransforming productMoving product to the next process

Enable: A process that prepares, maintains, or manages information or relationships on which planning and execution processes rely

Level 2 Process Categories

P1: Plan Supply ChainP2-P5: Plan SCOR ProcessS1: Source Stocked ProductS3: Source Engineer-to-Order ProductS2: Source Make-to-Order ProductM1: Make-to-StockM2: Make-to-OrderM3: Engineer-to-OrderD1: Deliver Stocked ProductD2: Deliver Make-to-Order ProductD3: Deliver Engineer-to-Order ProductD4: Deliver Retail Product (New in Version 6.0)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

Process Category: Source Stocked Product

Process Number: S1

Process Category Definition

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

Performance Attributes Metric

Reliability % Orders/lines processed complete

Responsiveness Total Source Cycle Time to Completion

Flexibility Time and Cost related to Expediting the Sourcing Processes of Procurement, Delivery, Receiving and Transfer.

Cost Product Acquisition Costs

Assets Inventory DOS

Best Practices Features

Joint Service AgreementsAlliance and Leverage agreements

None Identified

Example Continued

Process Element: Transfer Product

Process Element Number: S1.4

Process Element Definition

The transfer of accepted product to the appropriate stocking location within the supply chain. This includes all of the activities associated with repackaging, staging, transferring and stocking product. For service this is the transfer or application of service to the final customer or end user.

Performance Attributes Metric

Reliability % Product transferred damage free% Product transferred complete% Product transferred on-time to demand requirement % Product transferred without transaction errors

Responsiveness Transfer Cycle Time

Flexibility Time and Cost Reduction related to Expediting the Transfer Process.

Cost Transfer & Product storage costs as a % of Product Acquisition Costs

Assets Inventory DOS

Best Practices Features

Drive deliveries directly to stock or point-of-use in manufacturing to reduce costs and cycle time

Pay on receiptSpecify delivery location and time (to the minute) Specify delivery sequence

Capability Transfer to Organization None Identified

Example Continued

Inputs Plan Source Make Deliver

Product Pull Signals M D

Product Inventory Location ES.4

WIP Inventory Location EM

Finished Goods Inventory Location

ED

Outputs Plan Source Make Deliver

Inventory Availability P2.2 ES.4 M1.2, M2.2, M3.3

D1.8, D4.2

Daily Replenishment Requirements

D4.1

Loaded Cart D4.4

Example Continued

Some Graphical Tools: 1st Step in configuring a SC: Illustrate physical layout, material flow and place Level 2 execution process categories to describe activities at each location.

SCOR Process Maps2nd Step: Create the SCOR Process Maps: Place planning process categories, using dashed lines to show links with execution processes

Software Package for Modeling SCOR: ARIS EasySCOR

The ARIS Toolset and ARIS Easy Design are process modeling tools. The ARIS Toolset is a BPR tool, Easy Design is used for process capture.The EasySCOR Modeler is a software package that includes the ARIS Easy Design modeling kit and the SCOR model in ARIS format.ARIS EasySCOR consists of process models that describe the SCOR levels 1 to 3. Implementation level, level 4 is not included.

Suppliers Supplier

Suppliers Assemble/ Package Distribution Centers Geo Ports of Entry

Americas--->

Europe--->

Asia--->

Process Map Example created in ARIS EasySCOR

Observations

SCOR describes processes not functions. In other words, the Model focuses on the activity involved, not the person or organizational element that performs the activity.

Implementation level, Level 4, is not described in SCOR.

References

SCOR 6.0 Overview Booklet http://www.isye.gatech.edu/~lfm/8851/Sources/SCOR/SCOR%206.0%20OverviewBooklet.pdf

Supply-Chain Operations Reference-model (SCOR) 6.0 Introduction (in setup files)About ARIS: http://www.changeware.net/esitteet/scor-faq.pdf

About ARIS: http://www.changeware.net/esitteet/scor-faq.pdf