Supply Chain Operations Reference Model (SCOR)
Ozgun C. Demirag
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
Supply Chain Operations Reference Model (SCOR)
SCOR:Integrates Business Process Reengineering, Benchmarking, and Process Measurement into a cross-functional framework.
Benchmarking Best Practices Analysis
Process Reference Model
Business Process Reengineering
Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results
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
Characterize the management practices and software solutions that result in “best-in-class” performance
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
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
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
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 advantages• Identify software tools best suited to their specific process
requirements
Supply Chain Operations Reference Model (SCOR): Boundaries
SCOR spans:• All customer interactions, from order entry through paid
invoice.• All product (physical material and service) transactions,
from supplier’s supplier to 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 orderSCOR does not attempt to describe every business process or activity, including:
• Sales and marketing (demand generation)• Research and technology development
• Product development• Some elements of post-delivery customer support
Supply Chain Operations Reference Model (SCOR):Basic Management
Processes
Plan-Source-Make-Deliver-Return
Supplier’sSupplier
Make DeliverSource Make DeliverMakeSourceDeliver SourceDeliverSource
Customer’s Customer
Plan
Supplier (Internal or External)
Your Company
Customer (Internal or External)
ReturnReturn ReturnReturn
ReturnReturn
Plan-Source-Make-Deliver-Return provide the organizational structure of the SCOR-model
Scopes of Basic Management 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 requirementsEstablish/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 actual demand)
Schedule productionDeliver (Processes that provide finished goods and services to meet planned or actual demand, typically including order management, transportation management, and distribution 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
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