Supply Chain Operations Reference Model (SCOR)

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Supply Chain Operations Reference Model (SCOR)

• Ozgun C. Demirag

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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 issues
• Using standard metrics to compare and measure
  their performances

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Supply Chain Operations Reference Model (SCOR)

• SCOR
• Integrates 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
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
Benchmarking
Best Practices Analysis
Process Reference Model
Business Process Reengineering
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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 processes
• A framework of relationships among the standard
  processes
• Standard metrics to measure process performance
• Management 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

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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 suppliers supplier to
  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
• SCOR 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

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Supply Chain Operations Reference Model
(SCOR)Basic Management Processes

• Plan-Source-Make-Deliver-Return

Plan
Deliver
Source
Make
Make
Deliver
Make
Source
Deliver
Source
Deliver
Source
Return
Return
Return
Return
Return
Return
SuppliersSupplier
Customers Customer
Customer (Internal or External)
Supplier (Internal or External)
Your Company
Plan-Source-Make-Deliver-Return provide the
organizational structure of the SCOR-model
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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 requirements
• Establish/communicate plans for the whole supply
  chain
• Source (Processes that procure goods and services
  to meet planned or
• actual demand)
• Schedule deliveries (receive, verify, transfer)
• Make (Processes that transform product to a
  finished state to meet planned or actual demand)
• Schedule production
• Deliver (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

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Three Levels of Process Detail
Supply Chain Operations Reference Model
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-Facing
Level 1 Performance Metrics
Internal-Facing
Supply Chain Reliability
Responsiveness
Flexibility
Assets
Cost
Performance Attributes
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 ?
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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

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Level 2 Process Types and Definitions

• Planning A process that aligns expected
  resources to meet expected demand requirements.
• Balance aggregated demand and supply
• Consider 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/sequencing
• Transforming product
• Moving product to the next process
• Enable A process that prepares, maintains, or
  manages information or relationships on which
  planning and execution processes rely

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Level 2 Process Categories

• P1 Plan Supply Chain
• P2-P5 Plan SCOR Process
• S1 Source Stocked Product
• S3 Source Engineer-to-Order Product
• S2 Source Make-to-Order Product
• M1 Make-to-Stock
• M2 Make-to-Order
• M3 Engineer-to-Order
• D1 Deliver Stocked Product
• D2 Deliver Make-to-Order Product
• D3 Deliver Engineer-to-Order Product
• D4 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

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Example Continued
Process Category Source Stocked Product Process Category Source Stocked Product Process Number S1
Process Category Definition Process Category Definition Process Category Definition
The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and or services. The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and or services. The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and or services.
Performance Attributes Metric Metric
Reliability Orders/lines processed complete Orders/lines processed complete
Responsiveness Total Source Cycle Time to Completion Total Source Cycle Time to Completion
Flexibility Time and Cost related to Expediting the Sourcing Processes of Procurement, Delivery, Receiving and Transfer. Time and Cost related to Expediting the Sourcing Processes of Procurement, Delivery, Receiving and Transfer.
Cost Product Acquisition Costs Product Acquisition Costs
Assets Inventory DOS Inventory DOS
Best Practices Features Features
Joint Service Agreements Alliance and Leverage agreements None Identified None Identified
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Example Continued
Process Element Transfer Product Process Element Transfer Product Process Element Number S1.4
Process Element Definition Process Element Definition 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. 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. 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 Metric
Reliability Product transferred damage free Product transferred complete Product transferred on-time to demand requirement Product transferred without transaction errors Product transferred damage free Product transferred complete Product transferred on-time to demand requirement Product transferred without transaction errors
Responsiveness Transfer Cycle Time Transfer Cycle Time
Flexibility Time and Cost Reduction related to Expediting the Transfer Process. Time and Cost Reduction related to Expediting the Transfer Process.
Cost Transfer Product storage costs as a of Product Acquisition Costs Transfer Product storage costs as a of Product Acquisition Costs
Assets Inventory DOS Inventory DOS
Best Practices Features Features
Drive deliveries directly to stock or point-of-use in manufacturing to reduce costs and cycle time Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence
Capability Transfer to Organization None Identified None Identified
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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
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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.

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SCOR Process Maps

• 2nd Step Create the SCOR Process Maps Place
  planning process categories, using dashed lines
  to show links with execution processes

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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.

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Process Map Example created in ARIS EasySCOR
Suppliers Supplier
Suppliers
Assemble/ Package
Distribution Centers
Geo Ports of Entry
Americas---gt
Europe---gt
Asia---gt
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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.

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References

• SCOR 6.0 Overview Booklet http//www.isye.gatech.e
  du/lfm/8851/Sources/SCOR/SCOR206.020OverviewBoo
  klet.pdf
• Supply-Chain Operations Reference-model (SCOR)
  6.0 Introduction (in setup files)
• About ARIS http//www.changeware.net/esitteet/sco
  r-faq.pdf
• About ARIS http//www.changeware.net/esitteet/sco
  r-faq.pdf