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SCOR Framework

Introducing all elements of


the Supply Chain reference
model: Standard processes,
metrics and best practices

This presentation is the exclusive property of the


Supply Chain Council. Copyright Supply Chain
Council. 2006. All rights reserved. The marks
SCOR, CCOR, DCOR and SCOR Roadmap are the
exclusive property of the Supply Chain Council.

SCOR Framework Workshop


Understand the History and Context of SCOR
Learn the Components of the SCOR Framework
Process Nomenclature
Process Metrics
Process Best Practices

Understand how to model a Supply-Chain


with SCOR
Understand how to characterize a SupplyChain with SCOR metrics
Apply the SCOR framework using a
simplified SCOR Project Roadmap
Copyright Supply Chain Council, 2008. All rights reserved

Supply-Chain Council

The SCC is an independent, not-for-profit, trade association

Membership open to all companies and organizations

Focus is on research, application and advancement and advancing


state-of-the-art supply chain management systems and practices

Developer and endorser of the Supply Chain Operations Reference


(SCOR) as a cross-industry standard for supply chain management

Offers Training, Certification, Benchmarking, Research, Team


Development, Coaching, and Cross-standard Integration focused on
the SCOR framework

Founded in 1996

Approaching 1000 Association Members

Chapters in North America, Europe, Japan, South Africa, Latin


America, Australia/New Zealand, South East Asia and Greater
China, with developing Chapters India and Middle East

Driving value through the use of SCOR


Copyright Supply Chain Council, 2008. All rights reserved

Supply-Chain

Product
ProductDesign
Design
DCOR
DCOR

Sales
Sales&&Support
Support
CCOR
CCOR

processes
Customerprocesses
Customer

Supplierprocesses
processes
Supplier

Product/Portfolio
Product/PortfolioManagement
Management

Supply
SupplyChain
Chain
SCOR
SCOR

Copyright Supply Chain Council, 2008. All rights reserved

Supply-Chain

Plan
Plan

Sourc
Sourc
ee

Make
Make

Return
Return

Deliv
Deliv
er
er

processes
Customer processes
Customer

Supplier processes
processes
Supplier

Supply
Supply Chain
Chain

Return
Return

Process, arrow indicates material flow direction


Process, no material flow
Copyright Supply Chain Council, 2008. All rights reserved

Information flow

SCOR: A Process Framework


Process frameworks deliver the well-known
concepts of business process reengineering,
benchmarking, and best practices into a crossfunctional framework
Standard processes: Plan, Source, Make, Deliver,
Return, Enable
Standard metrics: Perfect Order Fulfillment, Cash-toCash Cycle Time, Cost of Goods Sold, Order Fulfillment
Cycle Time, etcetera
Standard practices: EDI, CPFR, Cross-Training, Sales &
Operations Planning, etcetera

Pre-defined relationships between processes,


metrics and practices and inputs and outputs
Copyright Supply Chain Council, 2008. All rights reserved

Combines Best Techniques


Business
Process
Re-Engineering
Capture the As-is
business activity
structure and derive
the future To-be state

Benchmarking

Best Practices
Analysis

Quantify the
operational
performance of similar
companies and
establish internal
targets based on best
in class results

Process
Reference
Framework
Capture the As-is
business activity
structure and derive
the future To-be 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 superior
performance

Characterize the
management practices
and software solutions
that result in superior
performance

3 techniques become 1 integrated approach


Copyright Supply Chain Council, 2008. All rights reserved

End-to-End Supply Chain


Plan

Plan
Deliver

Source

Return

Return

Suppliers
Supplier

Make

Deliver
Return

Supplier

Source

Make

Return

Deliver
Return

Plan
Source
Return

Your Company

Internal or External

Make

Deliver

Source

Return

Return

Customer
Internal or External

Customers
Customer

SCOR reference model

Whether from Cow to Cone or from Rock to Ring SCOR is


not limited by organizational boundaries

Copyright Supply Chain Council, 2008. All rights reserved

End-to-End Supply Chain


Components

Sourc
Sourc
ee

Make
Make

Deliv
Deliv
er
er

Suppliers Supplier

Sub assemblies

Sourc
Sourc
ee

Make
Make

Supplier

Manufacturer

Deliv
Deliv
er
er

Sourc
Sourc
ee

Make
Make

Deliv
Deliv
er
er

MP3 Company

Retailer

Source
Source

Deliver
Deliver

Customer

Consumer

Sourc
Sourc
ee

Customers Customer

Process, arrow indicates material flow direction


Copyright Supply Chain Council, 2008. All rights reserved

SCOR Hierarchy
Level 1

Level 2

Level 3

Level 4

Level 5

Scope

Configurati
on

Activity

Workflow

Transaction
s

S
Source
Differentiate

S1 Source
Stocked
Differentiate
Product

S1.2
Receive
Names
Tasks
Product

s Business

s Complexity

Sequences
Steps

Links
Transactions

Defines Scope Differentiate Links,


s
Metrics,
Capabilities
Tasks and
Practices

Job Details

Details of
Automation

Framework
Language

Industry or
Company
Language

Technology
Specific
Language

Framework
Language

Framework
Language

Standard SCOR practices

Company/Industry definitions

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10

Organizational Hierarchy
Level 1

Level 2

Level 3

Level 4

Level 5

Scope

Configurati
on

Activity

Workflow

Transaction
s

S
Source
Differentiate

S1 Source
Stocked
Differentiate
Product

S1.2
Receive
Names
Tasks
Product

s Business

s Complexity

EDI
XML

Sequences
Steps

Links
Transactions

Defines Scope Differentiate Links,


s
Metrics,
Capabilities
Tasks and
Practices

Job Details

Details of
Automation

CxO (COO,
CIO)
EVP
SVP

Manager
Team Lead

Team Lead
Individuals
Programmer

SVP
VP

VP
Director
Line Manager

Organization focused
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Activity focused
11

SCOR Process Codification


SCOR processes have unique identifiers:
1.One capital only are level 1 processes: P, S, M, D and R (5 in

total)
2.A capital plus a number are level 2: P1, S2, M3, D2, D4 (15 in

total)
Two groups of exceptions for level 2:

Enable: EP, ES, EM, ED and ER (5 in total) and


Return: SR1, DR1, SR2, DR2, SR3, DR3 (6 in total)
3.A capital plus a number, a period and a number are level 3

processes:
P1.1, P1.2, S2.1, M1.5, D3.12 (111 processes in total)
Two groups of exceptions for level 3:

Enable: EP.1, ES.3, EM.4, ED.8, ER.1 (47 in total)


Return: SR1.1, DR1.3, SR2.2, DR2.4, SR3.5, DR3.1 (27 in total)

X = level 1, Xn = level 2, Xn.m = level 3


Copyright Supply Chain Council, 2008. All rights reserved

12

Exercises: The Dinner Party


The supply chain used for the exercises is a
dinner party
You will host a party this weekend with 25-40 of your
dearest friends
You will serve them burgers from your grill (barbecue)
You are responsible for organizing the event,
ingredients, grill, tools and utensils and general
well-being of your guests
We will be using The750g
Dinner
through
the rest
minced Party
steak
1 onion (rings)
of today to exercise 1different
modeling
tsp Worcestershire
4 sesame
characteristics

seed buns

sauce
2 tbsp mustard

10 shredded lettuce
leaves

2 sliced tomatoes

2 sliced dill pickles

10 thin slices Swiss


cheese

Salt and pepper

Ingredients of a burger:

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13

Execution Processes

Plan
Plan

Sourc
Sourc
ee

Make
Make

Return
Return

Deliv
Deliv
er
er

processes
Customer processes
Customer

Supplier processes
processes
Supplier

Supply
Supply Chain
Chain

Return
Return

Processes: Source, Make and Deliver


Objective: value-add, revenue generating
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14

Capability Models
Level: Different capabilities
Stocked Product (S1, M1, D1)
Inventory Driven (Plan)
Standard Material Orders
High Fill-rate, short turnaround
Make-to-Order (S2, M2, D2)
Customer Order Driven
Configurable Materials
Longer turn-around times

R1
S1

D1
M1

I1
D1

R2
S2

D2
M2

I2
D2

R1
S1

Engineer-to-Order (S3, M3, D3)


R3
S3
D3
M3
Customer Requirements Driven
Sourcing New Materials
R2
R1
S2
Longest long lead-times, low fill rates

I3
D3

R1
S1

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15

Source (Process ID: S)


Objectives of this process:
The ordering, delivery, receipt and transfer of raw
material items, subassemblies, product and/or services.

Key processes comprehended:


Schedule product deliveries
Receive, inspect, and hold materials
Issue material to Make or Deliver processes
Supplier/Vendor Agreements
Vendor certification and feedback, sourcing quality
Manage Raw Materials inventories
Freight, import/export documentation

Hint: Receiving processes? Probably Source in

SCOR

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16

Source Configurations
Configurations:
Source Stocked Product (Process ID: S1)
The ordering and receiving of existing products,
components and services from existing contracts, based
on requirement plans.

Source Make-to-Order (Process ID: S2)


The ordering and receiving of existing products,
components and services for a unique and identified
customer order.

Source Engineer-to-Order (Process ID: S3)


The selection, ordering and receiving of specialized
products or services that are designed and/or built
based on the requirements or specifications of a
particular customer order or contract.

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17

Source Process Elements


Stocked Product (S1)

Make-to-Order (S2)

Engineer-to-Order
(S3)
S3.1 Identify Sources
of Supply
S3.2 Select Final
Supplier(s) and
Negotiate

S1.1 Schedule Product


Deliveries

S2.1 Schedule Product


Deliveries

S3.3 Schedule Product


Deliveries

S1.2 Receive Product

S2.2 Receive Product

S3.4 Receive Product

S1.3 Verify Product

S2.3 Verify Product

S3.5 Verify Product

S1.4 Transfer Product

S2.4 Transfer Product

S3.6 Transfer Product

S1.5 Authorize
Supplier Payment

S2.5 Authorize
Supplier Payment

S3.7 Authorize
Supplier Payment

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18

Make (Process ID: M)


Objectives of this process:
The process of adding value to products through mixing,

separating, forming, machining, and chemical processes.

Key Processes Comprehended:


Schedule production, request and receive material from

Source and/or Make processes


Manufacture, assemble/disassemble and test product,

package, hold/release product


Managing product quality and engineering changes
Managing facilities and equipment, production status

workflow and capacity management


Manage Work-In-Process (WIP) inventories

Hint: Itemnumber change? Probably Make in SCOR


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21

Make Configurations
Make-to-Stock (Process ID: M1)
The making of standard products and services. Planning
(Plan) processes determine what, how much and when to
make.

Make-to-Order (Process ID: M2)


The making of standard or configurable products and
services for unique customer orders. Customer orders
determine what, how much and when to make. Customer
orders can be traced throughout the Make process.

Engineer-to-Order (Process ID: M3)


The making of specialized products or services that are
fully or partially designed and made based on the
unique requirements and specifications of a particular
customer order or contract. Customer orders and
specifications can be traced throughout the Make
Copyrightprocess.
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22

Make Process Elements


Make-to-Stock (M1)

Make-to-Order (M2)

Engineer-to-Order
(M3)
M3.1 Finalize
Production
Engineering
M3.2 Schedule
Production
Activities

M1.1 Schedule
Production
Activities

M2.1 Schedule
Production
Activities

M1.2 Issue Material

M2.2 Issue Sourced/In- M3.3 Issue Sourced/InProcess Product


Process Product

M1.3 Produce and Test

M2.3 Produce and Test

M3.4 Produce and Test

M1.4 Package

M2.4 Package

M3.5 Package

M1.5 Stage Product

M2.5 Stage Finished


Product

M3.6 Stage Finished


Product

M1.6 Release Product


to Deliver

M2.6 Release Finished


Product to
Deliver

M3.7 Release Product to


Deliver

M1.7 Waste Disposal

M2.7 Waste Disposal

M3.8 Waste Disposal

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23

Deliver (Process ID: D)


Objectives of this process:
Perform customer-facing order management and order
fulfillment activities including outbound logistics.

Key processes comprehended:


Product, service and price quotations
Order entry and maintenance
Order consolidation, picking, packing, labeling and shipping
Import/export documentation
Customer delivery and installation
Logistics and Freight Management
Manage Finished Goods inventories

Hint: Order taking or Shipping? Probably Deliver


in SCOR
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25

Deliver Configurations
Deliver Stocked Product (Process ID: D1)
The delivery of standard products (and services) that are

maintained in a finished goods state prior to the receipt of a


customer order.

Deliver Make-to-Order Product (Process ID: D2)


The delivery of standard or configurable products and services

that are obtained (Source or Make) for a customer order.

Deliver Engineer-to-Order Product (Process ID: D3)


The delivery of specialized products and services that have

been fully or partially designed in negotiation and based on


requirements from a customer order and customer provided
specifications

Deliver Retail Product (Process ID: D4)


The delivery of standards goods in a retail store

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26

Deliver Process Elements


(1/3)
Stocked Products
(D1)

Make-to-Order (D2)

Engineer-to-Order
(D3)

D1.1 Process Inquiry &


Quote

D2.1 Process Inquiry &


Quote

D3.1 Obtain & Respond


to RFP/RFQ

D1.2 Receive, Enter &


Validate Order

D2.2 Receive,
D3.2 Negotiate &
Configure, Enter &
Receive Contract
Validate Order

D1.3 Reserve Inventory


& Determine
Delivery Date

D2.3 Reserve Inventory


& Determine
Delivery Date

D1.4 Consolidate
Orders

D2.4 Consolidate Orders D3.4 Schedule


Installation

D1.5 Build Loads

D2.5 Build Loads

D3.5 Build Loads

D1.6 Route Shipments

D2.6 Route Shipments

D3.6 Route Shipments

D1.7 Select Carriers &


Rate Shipments

D2.7 Select Carriers &


Rate Shipments

D3.7 Select Carriers &


Rate Shipments

D3.3 Enter Order,


Commit Resources
& Launch Program

RFP = Request for Proposal, RFQ = Request for Quote


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27

Deliver Process Elements


(2/3)
Stocked Products
(D1)

Make-to-Order (D2)

Engineer-to-Order
(D3)

D1.8 Receive Product


from Source or
Make

D2.8 Receive Product


from Source or
Make

D3.8 Receive Product


from Source or
Make

D1.9 Pick Product

D2.9 Pick Product

D3.9 Pick Product

D1.10 Pack Product

D2.10 Pack Product

D3.10 Pack Product

D1.11 Load Product &


Create
Documentation

D2.11 Load Product &


Create
Documentation

D3.11 Load Product &


Create
Documentation

D1.12 Ship Product

D2.12 Ship Product

D3.12 Ship Product

D1.13 Receive & Verify


Product by
Customer

D1.13 Receive & Verify


Product by
Customer

D1.13 Receive & Verify


Product by
Customer

D1.14 Install Product

D2.14 Install Product

D3.14 Install Product

D1.15 Invoice

D2.15 Invoice

D3.15 Invoice

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28

Deliver Process Elements


(3/3)
Retail Products (D4)
D4.1 Generate Stocking
Schedule
D4.2 Receive Product
at Store
D4.3 Pick Product from
Backroom
D4.4 Stock Shelf

The Retail supply chain


model does not match up to
the Manufacturing supply
chain model, therefore
processes are quite
different

D4.5 Fill Shopping


Cart
D4.6 Checkout
D4.7 Deliver and/or
Install

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29

Control processes: Plan,


Enable
Plan and Enable processes prepare the supplychain to ensure smooth execution
Planning processes balance the need for
resources, materials, capacity, etc. with the
availability of these resources. This includes
prioritization if needed.
Enable processes address 8 control aspects for
the supply chain. They monitor compliance,
deliver information from other process areas and
highlight dependencies
on these other process areas. They also
support maintenance of relationships
with suppliers.
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30

Planning Processes

Plan
Plan

Sourc
Sourc
ee

Make
Make

Return
Return

Deliv
Deliv
er
er

processes
Customer processes
Customer

Supplier processes
processes
Supplier

Supply
Supply Chain
Chain

Return
Return

Processes: Plan
Objective: Drive/coordinate execution processes
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31

Plan (Process ID: P)


Objectives of this process:
The process of determining requirements and corrective
actions to achieve supply chain objectives

Key Processes Comprehended:


Supply chain revenue planning/forecasting
Materials requirement planning
Factory, repair, maintenance facilities capacity
planning
Distribution requirements planning
Manage planning parameters

Hint: Forecasting, S&OP, MRP?


Probably Plan in SCOR
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32

Plan Configurations (1/2)


Plan Supply Chain (Process ID: P1)
Planning overall supply chain targets. Plan Supply Chain
drives and coordinates P2, P3, P4 and P5 plans (Compare to
Revenue plan, or Budget in certain industries)

Plan Source (Process ID: P2)


Planning of material ordering and receiving activities. Plan
Source calculates which materials need to be available when
to support the production plan (P3) and/or the delivery plan
(P4). (Compare to Materials Requirements Plan)

Plan Make (Process ID: P3)


Planning of production and/or MRO activities. Plan Make
ensures the production resources (capacity) are in place as
needed and may

generate production orders. (Compare to

Production Plan)

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33

Plan Configurations (2/2)


Plan Deliver (Process ID: P4)
Planning of order management, material handling and
transportation activities. Plan Deliver ensures
resources are in
place as needed and may generate or recalculate
shipping dates based on material availability.
(Compare to Shipment Plan, Load Planning)

Plan Return (Process ID: P5)


Planning of the reverse logistics shipping and
material handling capacity. Note: This does not
include the maintenance, repair or overhaul activity
planning as those are Make processes.

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34

Plan Processes
Planning is an iterative process:
1. The output of Plan Supply Chain is the input for Plan

Source, Plan Make, Plan Deliver and Plan Return


2. The output of Plan Source, Plan Make, Plan Deliver

and Plan Return are inputs for Plan Supply Chain; The
output of one cycle is the input for the next cycle

P3.1
P3.3

P1.1

P3.2
P1.3

P1.2

Plan Make

P1.4

Plan Supply Chain

P3.4

P1.1
P1.3
P1.2

P2.1
P2.3
P2.2

P2.4

P1.4

Plan Supply Chain


to P3.2

Plan Source

end full cycle


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begin next cycle


35

Enable Processes

Plan
Plan

Sourc
Sourc
ee

Make
Make

Return
Return

Deliv
Deliv
er
er

processes
Customer processes
Customer

Supplier processes
processes
Supplier

Supply
Supply Chain
Chain

Return
Return

Processes:
Enable Plan, Enable Source, Enable Make,
Enable Deliver and Enable Return
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36

Enable Processes
Objective:
The Enable processes are five groups of processes under Plan,
Source, Make , Deliver and Return with 3 distinct types of
objectives:
1.Manage process performance
2.Manage process control data
3.Manage process relationships

Key processes comprehended:


Managing business rules and monitoring adherence
Measuring supply chain performance and determine corrective

action
Managing risk and environmental impact
Managing the supply chain network and facilities

Hint: Equipment or plant maintenance? Probably Enable


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37

Enable Categories
Enable Plan (Process ID: EP)
Performance, data and relationship management processes for all
types of planning processes: Plan Supply Chain, Plan Source,
Plan Make, Plan Deliver and Plan Return. Examples: maintain
planning cycles, monitor planning accuracy, manage supply chain
risks.

Enable Source (Process ID: ES)


Performance, data and relationship management processes for all
receiving activities and supplier related processes. Examples:
Monitor supplier performance, maintain what is sourced where.

Enable Make (Process ID: EM)


Enable management processes for manufacturing, repair and
overhaul type processes. Examples: BOM maintenance, preventive
equipment maintenance, monitoring capacity
utilization/shortage.

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38

Enable Categories
Enable Deliver (Process ID: ED)
Performance, data and relationship management
processes for all order management, warehouse and
distribution activities and forwarder related
processes. Examples: Monitor order management and
forwarder performance, maintain a distribution
network, managing risk.

Enable Return (Process ID: ER)


Enable management processes for all types of reverse
logistics processes: MRO returns, defective product
returns and excess inventory returns.

Examples:

Maintain return approval rules, Maintain issue


tracking software, maintain a return distribution
network.
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39

Reverse Processes

Plan
Plan

Sourc
Sourc
ee

Make
Make

Return
Return

Deliv
Deliv
er
er

processes
Customer processes
Customer

Supplier processes
processes
Supplier

Supply
Supply Chain
Chain

Return
Return

Processes: Return (Source Return, Deliver Return)


Objective: reverse material flows
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40

Return (Process ID: R)


Objective of this process:
Moving material from customer back through supply chain
to address defects in product, ordering, or
manufacturing, or to perform upkeep activities.

Key Processes Comprehended


Identification of the need to return a product or asset
Requesting and issuing return authorization
Inspection and disposition decision-making
Transfer/Disposition of product or asset
Managing return transportation capacity
Managing returned material inventories

Hint: Reverse material flow? Probably Return in


SCOR
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41

Return Configurations
Return Defective Products (Process IDs: SR1 and DR1)
The return of products because the product is defective, the

wrong product was ordered or shipped.

Return Maintenance, Repair & Overhaul (IDs: SR2 and


DR2)
The return of products or assets to perform preventative

maintenance, (end-of-life) overhaul or repairs due to


breakage/aging with use

Return Excess Products (Process IDs SR3 and DR3)


The return of excess inventories and inventories of product

which will be retired (end-of-life excess). The product is new


and in original packaging.

SR = Source Return, DR = Deliver Return


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42

Return Configurations
Positioning Source Return and Deliver Return
Consider the flow of goods; Notice the positions of Source

and Deliver

Supplier
Deliver

My Company
Source

Deliver

Customer
Source

Now, notice the positions of Source Return and Deliver Return

Supplier
Deliver
Return

My Company
Source
Return

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Deliver
Return

Customer
Source
Return

43

Modeling with SCOR


Drivers for modeling: Why do you model
Business opportunities:
Strategy Development
Merger, Acquisition or Divestiture (Companies or Supply
Chains)
Process optimization and Re-engineering
Standardization, Streamlining and Management alignment
New business start-up (Company and Supply Chain start-ups)
Benchmarking
Process Outsourcing

Technology services:
Software implementation (ERP, PLM, QC)
Workflow & Service Oriented Architecture
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44

Different Model Types


SCOR recognizes different types of models. Each
serving a different purpose:
Business Scope diagram: Set the scope for a project or
organization
Geographic Map (a.k.a. Geo Map): Describes material flows in a
geographic context; Highlights node complexity or redundancy
Thread Diagram: Material flow diagram, focused on level 2
process connectivity; Describes high level process complexity
or redundancy
Workflow or Process Models: Information, material and work
flow diagram at level 3 (or beyond); Highlights information,
people and system interaction issues
) A node represents a logical or geographic entity in a supply chain.
Examples: Warehouse, Factory, Store

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45

Creating a Scope Diagram


Steps to create a Business Scope Diagram
1.Create or open the business scope diagram template
2.Identify customers of your organization or project and

enter these in the customers column in the scope


diagram.
3.Identify and enter the key nodes within your

organization or project. A node represents a logical or


geographic entity in the supply chain. Consider:
Warehouse, Factory, Store, HQ etc.
4.Identify and enter the suppliers of your organization

or project
5.Optionally link the nodes to reflect material and/or
Material
information flow
information flows. Use
a and
different
color and/or stroke
Information flow

differentiate material and information flows. Example:


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46

Creating a Scope Diagram


Supplier

My Organization

Customer

My Organization

Customer

Supplier
Flash Inc.

Steps to create a Business Scope Diagram


1.Create or open the business scope
diagram template
2.Identify and enter the customers of
your project or organization
3.Identify and enter the key nodes within
your project or organization
4.Identify and enter the suppliers of
your project or organization
5.Optionally link the nodes to reflect
material and/or information flows
(using different color/stroke)

Supplier

My Organization

Flash Inc.

mp3 HQ

Battery ltd.

Battery ltd.

Factory
Comps
4

Customer

mp3 HQ

DC

Retail Inc.

Factory

DC

Retail Inc.

Comps

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47

The Result: Scope Diagram


Suppliers
Flash
Inc.

Battery ltd.

mp3,
mp3Inc.
HQ

Customers

Factory

Retail, Inc.

Components

Warehouse

Service Providers
Material and information flow
Information flow
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48

Modeling with SCOR


Steps to create the Geographic Map:
1. Create geographic context (a.k.a. the map)
2. Draw and name your customers on the map
a. Identify the level 2 processes
b. List the level 2 processes in the customer on your map
3. Beginning with your customers, repeat this for every node on

the map:
a. Identify all supplying nodes (where does material come

from)
b. Draw and name these supplying nodes on the map
c. Identify the level 2 processes
d. list these in the node on your map
e. Draw the material flows (arrows connecting the nodes)

Repeat until you have included all your suppliers/nodes


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49

Creating a Geographic Map


Steps to create the Geographic Map:
1.Create geographic context (a.k.a. the map)
2.Draw and name your customers on the map
a.Identify the level 2 processes
b.List the level 2 processes in the customer
node
3.Starting with your customers, repeat for each
node:
a.Identify all supplying nodes
b.Draw and name these supplying nodes
c.Identify the level 2 processes
d.List the level 2 processes in each node
e.Draw the material flows (connecting arrows)
Repeat until you have included all your suppliers

Retail, Inc
S1, P2

UK

Germany

Drive Supplier
D1, P1, P4 d

3
b

China

France
India
Spain

b
e
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MP3 Factory
S1, M1, D1

d
50

Result: The Geographic Map


Retail, Inc
S1, P2
Battery Supplier
D1, P1, P4

HQ
P1, P2, D2, S2

Drive Supplier
D1, P1, P4

MP3 Factory
P3, S1, M1, D1

Question: No flow from HQ; Why?


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51

Modeling with SCOR


Steps to establish SCOR process models (workflows)
1. Obtain generic descriptions (this is what people describe)
2. Map these generic descriptions to SCOR process IDs (normalize)
3. Create swimming lanes to reflect organizational boundaries
4. Create workflow with these SCOR processes
5. Add description to workflows to reflect inputs/outputs of the

processes
6. Optionally add other relevant information
1
1. Orders are faxed in and
entered in OMS
2. Every night the orders are
scheduled
3. The orders are released to the
factory based on the delivery
date offset
4. Factory
creates
and schedules
Copyright
Supply
Chain Council,
2008. All rights
factory work orders in SFCS

2
D2.2 Receive, Enter, Validate
Order
D2.3 Reserve Inventory &
Determine
Delivery Date
M2.1 Schedule Production
Activities
reserved

52

Elements of a Business
Process
Process is defined by more than just activity

not in SCOR

metrics
business rules
measurements

inputs

best practices

activity

people

outputs

technology
geography

skills

interface
organization

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platform
53

Obtaining Generic
Descriptions
Staple-Yourself-To-An-Order;
Proven technique to obtain generic language process
descriptions:
Follow the logical flow of an order through the process.
Each level 1 process has an order (except Plan): Customer
order for Deliver, Production order for Make, Purchase order
for Source and Return Authorization for Return.
For each order start with the process of order creation and
follow the order and document each activity until the order is
completed/closed.
Similarly follow the steps of the planning cycles you
encounter.
Finally cover any process you have missed so far; Use your SCOR
list of processes as a check-list.
Hint: To obtain generic descriptions for an end-to-end supply
chain: Start with Plan, then Deliver, Make, Source.
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54

Obtaining Generic
Descriptions
The purpose of capturing process is to understand
it and remove, adjust or repair it where needed
Recognize process characteristics:
'Measurements': It takes 30 minutes to build
'Business rule': The plan is updated weekly
'People': This is handled by Joanna on Thursdays
'Business rule': This is done to provide .. with .. data..
'Inputs' or 'triggers': When we receive the document..
'Outputs': We send them the document..
'Technology': We print the document from the .. system..
'Business rules': We need two copies of the form ..

Verify hearsay statements, to eliminate perception

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55

SCOR Metrics
Definitions:
Performance Attribute: a characteristic to describe a
strategy. Performance attributes serve as
classification for KPIs and metrics
Key Performance Indicator (KPI): a metric that is
representative to measure the overall performance or
state-of-affairs
Metric: a standard for measurement
Measurement: an observation that reduces the
amount of uncertainty about the value of a quantity

SCOR metrics: Diagnostic metrics


Linked to business objectives
Highlight the gap in performance
Change over time is more valuable than a single sample
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56

Internal

Customer

Performance Attributes
Attribute

Strategy

Reliability
(RL)

Consistently getting the orders


right, product meets quality
requirements

Responsiveness
(RS)

The consistent speed of providing


products/services to customers

Agility (AG)

The ability to respond to changes


in the market (external
influences)

Cost (CO)

The cost associated with managing


and operating the supply chain

The effectiveness in managing the


supply chains assets in support
of fulfillment
What is/are the most important attributes
to achieve your supply chain strategy?

Assets (AM)

Question
:

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57

Levels in Metrics
Level 1: Strategic metrics a.k.a. Key Performance Indicators
Measure overall supply chain performance; health of the supply chain
Set the scope and objectives for a supply chain, project or

organization
Translate a business problem or strategy into something measurable
Establish the priority or priorities for organization

Level 2: Diagnostic metrics


Measure a part of the supply chain and/or a part of the strategic

metric
Provide direction to where problems originate
Caution: Level 2 metrics do not by definition add up to a level 1

metric

Beyond level 1 and 2: all metrics are called level 3


SCOR does not specify levels for metrics that are not level 1 or 2
These metrics serve as further diagnostic tools

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58

SCOR Metrics Codification


SCOR metrics have unique identifiers:
1.Two capitals are performance attributes: RL, RS, AG, CO and

AM (5)
2.Two capitals, a period the number one (1) and a number are

strategic (a.k.a. level 1) metrics:


RL.1.1, RS.1.1, AG.1.1, CO.1.1, CO.1.2, AM.1.3

(10 in total)

3.Two capitals, a period the number two (2) and a number are

diagnostic (a.k.a. level 2) metrics:


RL.2.1, RS.2.1, AG.2.1, CO.2.1, CO.2.2, AM.2.7 (36 in total)
4.Two capitals, a period the number three (3) and a number are

diagnostic (or level 3) metrics:


RL.3.1, RS.3.1, AG.3.1, CO.3.149, CO.3.151, AM.3.44 (>500)

XX = performance attribute,
XX.1.n = level 1, XX.2.n = level 2, and so on
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59

KPIs; Strategic Metrics

Customer

Measuring strategy: KPIs are strategic (level


1) metrics
Attribute

Strategic metric

Reliability

RL.1.1 Perfect Order Fulfillment

Responsivenes RS.1.1 Order Fulfillment Cycle Time


s
Agility

AG.1.1 Upside Supply Chain Flexibility


AG.1.2 Supply Chain Upside
Adaptability

Internal

AG.1.3 Supply Chain Downside


Adaptability
Cost

CO.1.1 Supply Chain Management Cost


CO.1.2 Cost of Goods Sold

Assets

Copyright Supply Chain

AM.1.1 Cash-to-Cash Cycle Time


AM.1.2 Return on Supply Chain Fixed
Council, Assets
2008. All rights reserved

60

Strategic Reliability
Metric
Metric:

RL.1.1 Perfect Order Fulfillment

Definition The percentage of orders delivered on-time, in


:
full. Components of perfect include all items
and quantities on-time, using the customers
definition of on-time, complete documentation
and in the right condition
Calculatio [Total Perfect Orders] / [Total Number of
n:
Orders]
Diagnostic
Metrics:

(examples)

Notes:

RL.2.1 % Orders Delivered in Full


RL.2.4 Perfect Condition
RL.3.19 % Orders Received Defect Free
RL.3.24 % Orders Received Damage Free

An order is perfect only if all L2/L3 metrics


are perfect; An order must be: on-time AND infull AND right condition AND right
documentation

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61

Strategic Responsiveness
Metric
Metric:

RS.1.1 Order Fulfillment Cycle Time

Definition The average actual cycle time consistently


:
achieved to fulfill customer orders. The
actual cycle time starts with the receipt of
the order and ends with the customer
acceptance of the delivery. The unit of
measure is days.
Calculatio [Sum Actual Cycle Times For All Orders
n:
Delivered] / [Total Number Of Orders
Delivered]
Diagnostic RS.2.2 Make Cycle Time
Metrics:
RS.2.3 Deliver Cycle Time
(examples) RS.3.96 Pick Product Cycle Time
Notes:

Copyright Supply

Order Fulfillment Cycle Time includes dwell


time. Dwell time is the time no value add
activities are performed on the order or
Chain Council, 2008. All rights reserved
product, imposed by customer requirements.

62

Strategic Agility Metrics


Metric:

AG.1.1 Upside Supply Chain Flexibility

Definition The number of days required to achieve an


:
unplanned sustainable 20% increase in
quantities delivered. Seasonality is not
considered unplanned/unforeseen. The unit of
measure for flexibility is calendar days.
Calculatio The larger of the number of days required to
n:
achieve sustainable increase for Source, Make
and Deliver
Diagnostic AG.2.1 Upside Source Flexibility
Metrics:
AG.2.2 Upside Make Flexibility
AG.2.3 Upside Deliver Flexibility
Notes:

This metric may have more than one Source,


Make and Deliver Flexibility component
depending on the complexity of the supply
chain.

Copyright Supply Chain Council, 2008. All rights reserved

63

Strategic Asset Metrics


Metric:

AM.1.1 Cash-to-Cash Cycle Time

Definition The time it takes for cash invested in


:
materials to flow back into the company after
finished goods have been delivered to
customers. The unit of measure for Cash-toCash Cycle Time is calendar days
Calculatio [Inventory Days of Supply] + [Days Sales
n:
Outstanding] [Days Payable Outstanding]
Diagnostic AM.2.1 Days Sales Outstanding (DSO)
Metrics:
AM.2.2 Inventory Days of Supply (IDOS)
AM.2.3 Days Payable Outstanding (DPO)
Notes:

For services, the time between paying the


resources assigned to a service and receiving
payment for the service delivery.

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64

Strategic Asset Metrics


Metric:

AM.1.2 Return on Supply Chain Fixed Assets

Definition The return an organization receives on its


:
invested capital in supply chain fixed assets.
This includes the fixed assets used to Plan,
Source, Make, Deliver and Return. Examples of
fixed assets include land, buildings,
machinery, trucks
Calculatio ([Supply Chain Revenue] [COGS] [Supply
n:
Chain Management Costs]) / [Supply Chain Fixed
Assets]
Diagnostic AM.3.11
Metrics:
AM.3.18
AM.3.20
AM.3.27
Notes:
Copyright Supply

Deliver Fixed Assets Value


Make Fixed Assets Value
Plan Fixed Asset Value
Source Fixed Assets Value

Supply-Chain Revenue is the operating revenue


generated from a supply chain. This does not
Chain Council, 2008. All rights reserved
include non-operating revenue, such as

65

Metrics and Analysis


Levels in metrics help root cause performance issues
Strategic metrics (level 1) can be diagnosed by investigating

the level 2 metrics.


Different types of relationships exist between a metric (the

parent) and its diagnostic metrics (the children):


1. The parent is the sum of its children (e.g. time and cost)
2. The children are multiplied to calculate the parent (e.g.

yield)
3. The relationship is undefined (but can be statistically

observed)
Diagnostic metrics dont necessarily add up to their parents:

Order Fulfillment Cycle Time IS NOT the sum of Deliver Cycle


Time + Make Cycle Time + Source Cycle Time for most supply
chains

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66

Metrics Data
Each company will need to develop a tool or
instructions where to source the data for the SCOR
metrics
There are two types of data:
Recorded data; obtain from transactional systems such as ERP
(Enterprise Resource Planning), WMS (Warehouse Management
System), financial systems, etc. For example: compare timestamps in these systems to calculate cycle times.
Observed data; obtain through interviews, error logs, audits
and/or time-studies. For example the observed percentage of
orders requiring additional customer setup in a system,
percentage of manual repackaging events on the shipping
dock.

There is no easy button


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67

Scorecards and SCORcards


Definitions
Scorecard: A visual display of the most important

information needed to achieve one or more objectives,


consolidated and arranged in a single view
Balanced Scorecard: A scorecard providing metrics

related to four organizational strategies: financial,


customer, internal process, and employee learning and
growth
SCORcard: A scorecard providing metrics related to

five supply chain strategies: reliability,


responsiveness, Agility, cost and assets

Importance
Communicate supply chain priorities
Monitor all strategic areas, not just the top

priority

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68

SCORcard Metrics Selection


SCORcard metric requirements:
Measurable and quantifiable
Avoid 'feel good' metrics like supplier satisfaction or
customer satisfaction, unless they are an aggregation of
well-defined detail metrics. Framework-based metrics
simplify the selection process.
Linkage to responsibility
Avoid metrics that have no impact on performance reviews
(supplier or employee), ensure the metric is linked to
the (right) process owner at the right level.
Ensure metric is well-defined
Multiple interpretations of a metric may lead to 'workarounds' and negation of the effort. SCOR metrics are
pre-defined; limiting the discussion on metric
definitions.

Copyright Supply Chain Council, 2008. All rights reserved

69

Metrics Selection
Interpreting the definitions
Customer facing metrics should be measured as close to the

customer experience as possible.


The moment of order submission instead of order entry
Delivered performance instead of shipping performance
Received quality instead of produced or shipped quality
Measure what makes sense: Dont have data; approximate the

missing component until you will be able to obtain the


data
Tip: It is not about how you think it should be measured,

ask your customer what is important to him/her


And: Internal focused metrics also have a customer

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70

Benchmarking
Definitions
Benchmarking: Comparing an organizations performance,
products, practices, and/or services with those of other
organizations that operate in the same or comparable
industry
Parity: Being equal in performance; No real advantage over
others
Advantage: Being in a favorable position; In a stronger
position than
Superior: Being of high rank or quality; Leading

Usage
Establish Goals. Know where you are relative to others
(competitors or peers), and express where you're going.
Monitor Performance. Track relative progress you and
others (your competitors or peers) make.
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71

Benchmark Requirements
Compare like for like
Using standard metrics
A numerical comparison of the performance of two
companies in the same industry may not have value when
the metric is different.
Measuring the same process/business model
Avoid comparing the performance of a make-to-stock
process to an engineer-to-order process. The purpose of
these processes is different, measure them accordingly.
Demographics
Make sure you understand the other organizations in the
benchmark. Regional differences, and differences in
product, or services may influence results.

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72

Best Practices
Definitions:
Best practice: "A current, structured, proven and
repeatable method for making a positive impact on
desired operational results."
Current: Must not be emerging and can not be antiquated
Structured: Has clearly stated Goal, Scope, Process,
and Procedure
Proven: Success has been demonstrated in a working
environment and can be linked to key metrics
Repeatable: The practice has been proven in multiple
environments.

Importance
Alternatives to the way you do business
Equalize the competitive landscape
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73

Types of Practices
Best practices are Current, structured,
proven and repeatable methods for making a
positive impact on desired operational
results.
Leading practices are innovations adopted by
single companies or industries which provide
dramatically improved performance in a
process, but because of proprietary
restrictions, or novelty, are not widely
known or adopted.
Worst practices or Poor practices: Practices
that are known to produce negative impacts on
operational results.
Copyright Supply Chain Council, 2008. All rights reserved

74

www.supply-chain.org

info@supply-chain.org

This presentation is the exclusive property of the


Supply Chain Council. Copyright Supply Chain
Council. 2006. All rights reserved. The marks
SCOR, CCOR, DCOR and SCOR Roadmap are the
exclusive property of the Supply Chain Council.

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