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 issues
Using 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







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
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



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
Supply Chain Operations Reference Model
(SCOR):Basic Management Processes
Plan-Source-Make-Deliver-Return

Suppliers
Supplier
Make Deliver Source Make Deliver Make Source Deliver Source Deliver Source
Customers
Customer
Plan
Supplier
(Internal or
External)
Your Company
Customer
(Internal or
External)
Return
Return Return
Return
Return
Return
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 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

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
Plan
1
#

Configuration Level
(Process
Categories)
A companys 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 companys ability to compete
successfully in its chosen markets, and consists
of:
Process element definitions
Process element information inputs, and outputs
Process performance metrics
Best practices, where applicable
System capabilities required to support best
practices
Systems/tools

3
P1.1
Identify, Prioritize, and Aggregate
Supply-Chain Requirements
P1.2
Identify, Assess, and Aggregate
Supply-Chain Requirements
P1.3
Balance Production Resources with
Supply-Chain Requirements
P1.4
Establish and
Communicate
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-Facing
Level 1
Performance 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 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

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


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 Agreements
Alliance 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 receipt
Specify 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:
1
st
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 Maps
2
nd
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