SUPPLY CHAIN PERFORMANCE MEASUREMENT

1
SUPPLY CHAIN PERFORMANCE MEASUREMENT

• Week 13

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AGENDA

• INTRODUCTION
• Dimensions
• Overview
• PERFORMANCE
• Categories
• Quantification Pyramid

3
AGENDA

• SCC SCOR MODEL
• OLD FASHIONED
• SUMMARY AND CONCLUSIONS

4
AGENDA

• INTRODUCTION
• Dimensions
• Overview

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INTRODUCTION

• Dimensions
• Observations
• Get What Measure
• Dynamic

6
INTRODUCTION

• Dimensions
• Criteria
• Efficiency
• Effectiveness

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INTRODUCTION

• Dimensions
• Focus
• Activity
• Intra-functional, Intra-firm
• Inter-functional, Intra-firm
• Inter-functional, Inter-firm

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INTRODUCTION

• Overview
• Characteristics of Good Measures

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INTRODUCTION

• Other Guidelines
• Consistent with Corporate Strategy
• Customer Focus
• Prioritize
• Process, Not Function
• Prioritize
• Balance
• Precise
• Appropriate Technology

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INTRODUCTION

• Overview
• Characteristics of Good Measures

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AGENDA

• PERFORMANCE
• Categories
• Quantification Pyramid

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PERFORMANCE

• Categories
• Time
• On-time
• Order Cycle
• Order Cycle Variability
• Response
• Forecasting/Planning

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PERFORMANCE

• Categories
• Quality
• Customer Satisfaction
• Perfect Order
• Forecast Accuracy
• Planning Accuracy
• Schedule Adherence

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PERFORMANCE

• Categories
• Cost
• Turnover
• Average Age
• Payables
• Receivables
• Cash-to-Cash Cycle Time
• Total Delivered
• Capacity
• Excess
• Short

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PERFORMANCE

• Quantification Pyramid

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AGENDA

• SCC SCOR MODEL

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Overview PresentationSupply Chain Operations
Reference-model (SCOR)
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Supply Chain Operations Reference-model (SCOR)
Overview
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What is a process reference model?

• Process reference models integrate the well-known
  concepts of business process reengineering,
  benchmarking, and process measurement into a
  cross-functional framework

Best Practices Analysis
Process Reference Model
Business Process Reengineering
Benchmarking
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

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
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SCOR is structured around five distinct
management processes
Deliver
Make
Deliver
Make
Source
Source
Make
Deliver
Source
CustomersCustomer
Your Company
Supplier
Customer
SuppliersSupplier
Internal or External
Internal or External
SCOR Model
Building Block Approach Processes Metrics Be
st Practice Technology
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Supply-Chain Operations Reference-model (SCOR)
6.0 - Processes
Plan
P1 Plan Supply Chain
P4 Plan Deliver
P5 Plan Returns
P2 Plan Source
P3 Plan Make
Source
Make
Deliver
M1 Make-to-Stock
S1 Source Stocked Products
D1 Deliver Stocked Products
Suppliers
M2 Make-to-Order
S2 Source MTO Products
D2 Deliver MTO Products
Customers
M3 Engineer-to-Order
S3 Source ETO Products
D3 Deliver ETO Products
D4 Deliver Retail Products
Return Deliver
Return Source
Enable
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SCOR Boundaries

• SCOR Spans
• 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 the
  fulfillment of each order
• Returns

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SCOR Boundaries (contd)

• SCOR does not include
• Sales administration processes
• Technology development processes
• Product and process design and development
  processes
• Some post-delivery technical support processes
• SCOR assumes but does not explicitly address
• Training
• Quality
• Information Technology (IT) administration
  (non-SCM)

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SCOR Project Roadmap

• Competitive Performance Requirements
• Performance Metrics
• Supply Chain Scorecard
• Scorecard Gap Analysis
• Project Plan

Analyze Basis of Competition
Operations Strategy
SCOR Level 1

• AS IS Geographic Map
• AS IS Thread Diagram
• Design Specifications
• TO BE Thread Diagram
• TO BE Geographic Map

Configure supply chain
Material Flow
SCOR Level 2
Align Performance Levels, Practices, and Systems

• AS IS Level 2, 3, and 4 Maps
• Disconnects
• Design Specifications
• TO BE Level 2, 3, and 4 Maps

Information and Work Flow
SCOR Level 3
Implement supply chain Processes and Systems
Develop, Test, and Roll Out

• Organization
• Technology
• Process
• People

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Level 1 Performance Metrics
Customer-Facing
Internal-Facing
SCOR Level 1supply chain Management
Supply Chain Reliability
Responsiveness
Flexibility
Assets
Cost
Delivery performance
? Fill rate

? Perfect order fulfillment

? Order fulfillment lead time

? Supply Chain Response Time
? Production flexibility ? Total SCM
management 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 ?
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www.supply-chain.org

• info_at_supply-chain.org

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AGENDA

• OLD FASHIONED

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COST

• IMPORTANCE OF DATA
• MANAGE SYSTEMS
• MINIMIZE SYSTEM CONFLICTS
• INNOVATIONS
• ACTIVITY BASED MANAGEMENT
• ACTIVITY BASED COSTING

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COST

• TOTAL COST ANALYSIS
• RUDIMENTS
• SYSTEMS ANALYSIS
• COST TRADE-OFFS
• SUB-OPTIMIZATION

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COST

• TOTAL COST ANALYSIS
• RUDIMENTS

MARKETING
LOGISTICS
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COST

• TOTAL COST ANALYSIS
• DATA NEEDS
• CONTRIBUTION
• PRODUCT
• TERRITORY
• CUSTOMER
• SALESPERSON

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COST

• TOTAL COST ANALYSIS
• DATA NEEDS
• CUSTOMER SERVICE LEVEL
• RESPONSIVENESS
• REVENUE
• COST
• PROFIT

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COST

• TOTAL COST ANALYSIS
• DATA NEEDS
• NODES
• NUMBER
• LOCATION
• ASSIGNMENT

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COST

• TOTAL COST ANALYSIS
• DATA NEEDS
• TRANSPORT
• MODES
• CARRIERS

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COST

• TOTAL COST ANALYSIS
• DATA NEEDS
• OTHER
• PACKAGING
• MATERIALS HANDLING
• OP/IT/IS
• CHANNELS

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COST

• TOTAL COST ANALYSIS
• CONTROLLING ACTIVITIES
• NEED COST DATA
• NEED OPERATING DATA
• QUESTIONS
• WHAT SHOULD COSTS BE?
• WHAT IS GOOD PERFORMANCE?
• ARE ASSET LEVELS REASONABLE
• OTHER?

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COST

• TOTAL COST ANALYSIS
• CURRENT SYSTEMS
• DIFFERENT AUDIENCES
• HISTORICAL RECORDS
• COMMON AND INDIRECT COSTS
• NATURAL ACCOUNTS
• IGNORE CONTRIBUTION
• MASK FIXED COSTS

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COST

• TOTAL COST ANALYSIS
• CURRENT SYSTEMS

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COST

• PROBLEM SOLVING

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COST

• PROBLEM SOLVING
• STANDARD COST
• NORM
• GENERATED BY
• ACCOUNTING
• ENGINEERING
• MANAGE
• VARIANCES
• EXCEPTIONS

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COST

• PROBLEM SOLVING
• BUDGETS
• OPERATING
• MASTER
• FLEXIBLE
• VARIANCES
• INEFFECTIVE
• INEFFICIENT
• COST
• PRICE

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COST

• PROBLEM SOLVING
• PRODUCTIVITY
• GENERAL

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COST

• PROBLEM SOLVING
• PRODUCTIVITY
• WAREHOUSE

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COST

• PROBLEM SOLVING
• PRODUCTIVITY
• TRANSPORT

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COST

• PROBLEM SOLVING
• SPC P-CHART

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COST

• CORPORATE MIS
• TRANSACTION LEVEL DATA
• SOURCE DOCUMENTS
• PURCHASE ORDER
• SALES ORDER
• PICK ORDER
• BILL OF LADING
• INVOICE
• OTHER

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COST

• CORPORATE MIS

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COST

• CORPORATE MIS
• NEED
• CONTRIBUTION REPORTING
• SEGMENT REPORTING
• ERP
• IT/IS
• KBM

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SUMMARY AND CONCLUSIONS