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Using SCOR Metrics for Supply Chain Integration: A Case StudyCobus Rossouw, CSCP

The Supply Chain Reference Model (“SCOR”) developed by the Supply Chain Council (“SCC”) is best knownas a leading process framework that delivers the concepts of business process reengineering, benchmarking,and best practices into a cross-functional framework. The standard processes of Plan, Source, Make, Deliver,Return and Enable has become important keys for supply chain design and improvement.

This framework has evolved to be much more than what the business process framework is famous for.Amongst the enhancements is the definition of standard metrics (being Perfect Delivery, Cash Cycle Time,Supply-Chain Cost, etc) and Standard practices (EDI, CPFR, Cross-Training, etc). Most importantly, theframework has pre-defined relationships between processes, metrics and practices.

The metrics framework is summarized below:

The Imperial Logsitics team used this metric reference successfully in the design of the end-to-end supplychain of Ellerines Holdings, the leading furniture and appliance retailer that owns Wetherlys, Geen &Richards, Dial-a-Bed, Furniture City, Beares, Ellerines and various other well-known brands. The value of thereference model is that it provides guidelines and insights, without being prescriptive.

The outcome of the Ellerines supply chain metrics is focus on:1. Customer service, ensuring focus on the availability of product as required by customers. The SCOR

Reliability and Responsiveness metrics were both included as Level 1 metrics.2. Total supply chain cost, ensuring effectiveness and competitiveness, without inappropriate focus on

local cost optimization. The various SCOR cost and assest metrics were applied, including the supplychain costs embedded in the cost of products.

3. Quality, being the quality of processes. The SCOR Agility metrics were applied in some way, butprimary focus was placed on Inventory Quality and various relevant process metrics (e.g. Returns andDamages as %s of Orders).

These measures in isolation are useful and only become powerful when the priorities are agreed. To assumethat the same priorities applies across the business (i.e. different divisions, processes, regions, etc.) would bea significant risk in over-simplification. The SCOR framework provides useful insights into the definition of various supply chains, allowing focus on these. The Imperial Logistics team used this to support the definitionof five different supply chains, each representing a specific cosumer behaviour (from “Buy and Take” to “Makeand Deliver”).

The Ellerines business furthermore has quite different supply chains for its core brands. Although these havedeveloped historically as part of seperate businesses, the cusotmer proposition of each remains unique. Thepriortiy for supply chain metrics should be aligned with these customer propositions. The SCOR frameworkprovides a mechanism to set competitive requirements by defining each attribute (and therefore its metric) asParity, Advanced or Superior. These were successfully applied to the Ellerines Brands, facilitating appropriate

depth of measurement in each area (i.e. up to level 3 metrics when superior requirements exist and only Level1 metric where a parity posiiton is acceptable).

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Biographical Information: Cobus Rossouw:

Cobus Rossouw obtained engineering and commerce qualifications from the University of Pretoria. With hisfocus on industrial & systems engineering and business logistics, his career was destined for Supply ChainManagement. Cobus also studied towards a MBA at UNISA and qualified as Certified Supply ChainProfessional through the Association for Operations Management, APICS.

After seven years Louis Heyl and Associates, Cobus joined the Board of Directors of Cadbury South Africa in1996, where he was responsible for operations planning, procurement and distribution. Cobus also led theimplementation of end-to-end enterprise systems and the development of value-based strategies.

In 2001 Cobus rejoined the professional services industry and is the CEO of Volition, the leading supply chainspecialists. Volition is the largest SCM consulting provider in South Africa and is active across the Africancontinent. Volition is a division of Imperial Logistics

Volition is a member of the Supply Chain Council and SAPICS, with Cobus a Board Member of the latter.

The Supply-Chain Operations Reference-model (SCOR) is a process reference model that has beendeveloped and endorsed by the Supply-Chain Council (SCC) as the cross-industry standard diagnostic toolfor supply-chain management. SCOR enables users to address, improve and communicate supply-chainmanagement practices within and between all interested parties.

SCOR is a management tool. It is a process reference model for supply-chain management, spanning fromthe supplier's supplier to the customer's customer. The SCOR-model has been developed to describe thebusiness activities associated with all phases of satisfying a customer's demand. By describing supply chainsusing process building blocks, the Model can be used to describe supply chains that are very simple or verycomplex using a common set of definitions. As a result, disparate industries can be linked to describe the

depth and breadth of virtually any supply chain. The Model has been able to successfully describe andprovide a basis for supply chain improvement for global projects as well as site-specific projects.