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Supply-Chain Council
Founded in 1996
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
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
Information flow
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
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
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
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
Job Details
Details of
Automation
Framework
Language
Industry or
Company
Language
Technology
Specific
Language
Framework
Language
Framework
Language
Company/Industry definitions
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
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
Copyright Supply Chain Council, 2008. All rights reserved
Activity focused
11
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:
processes:
P1.1, P1.2, S2.1, M1.5, D3.12 (111 processes in total)
Two groups of exceptions for level 3:
12
seed buns
sauce
2 tbsp mustard
10 shredded lettuce
leaves
2 sliced tomatoes
Ingredients of a burger:
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
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
I3
D3
R1
S1
15
SCOR
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.
17
Make-to-Order (S2)
Engineer-to-Order
(S3)
S3.1 Identify Sources
of Supply
S3.2 Select Final
Supplier(s) and
Negotiate
S1.5 Authorize
Supplier Payment
S2.5 Authorize
Supplier Payment
S3.7 Authorize
Supplier Payment
18
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.
22
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
M1.4 Package
M2.4 Package
M3.5 Package
23
25
Deliver Configurations
Deliver Stocked Product (Process ID: D1)
The delivery of standard products (and services) that are
26
Make-to-Order (D2)
Engineer-to-Order
(D3)
D2.2 Receive,
D3.2 Negotiate &
Configure, Enter &
Receive Contract
Validate Order
D1.4 Consolidate
Orders
27
Make-to-Order (D2)
Engineer-to-Order
(D3)
D1.15 Invoice
D2.15 Invoice
D3.15 Invoice
28
29
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
Copyright Supply Chain Council, 2008. All rights reserved
31
32
Production Plan)
33
34
Plan Processes
Planning is an iterative process:
1. The output of Plan Supply Chain is the input for Plan
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
P3.4
P1.1
P1.3
P1.2
P2.1
P2.3
P2.2
P2.4
P1.4
Plan Source
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
Copyright Supply Chain Council, 2008. All rights reserved
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
action
Managing risk and environmental impact
Managing the supply chain network and facilities
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.
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.
Examples:
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
40
41
Return Configurations
Return Defective Products (Process IDs: SR1 and DR1)
The return of products because the product is defective, the
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
Supplier
Deliver
Return
My Company
Source
Return
Deliver
Return
Customer
Source
Return
43
Technology services:
Software implementation (ERP, PLM, QC)
Workflow & Service Oriented Architecture
Copyright Supply Chain Council, 2008. All rights reserved
44
45
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
46
My Organization
Customer
My Organization
Customer
Supplier
Flash Inc.
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
47
Battery ltd.
mp3,
mp3Inc.
HQ
Customers
Factory
Retail, Inc.
Components
Warehouse
Service Providers
Material and information flow
Information flow
Copyright Supply Chain Council, 2008. All rights reserved
48
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)
49
Retail, Inc
S1, P2
UK
Germany
Drive Supplier
D1, P1, P4 d
3
b
China
France
India
Spain
b
e
Copyright Supply Chain Council, 2008. All rights reserved
MP3 Factory
S1, M1, D1
d
50
HQ
P1, P2, D2, S2
Drive Supplier
D1, P1, P4
MP3 Factory
P3, S1, M1, D1
51
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
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.
Copyright Supply Chain Council, 2008. All rights reserved
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 ..
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
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Internal
Customer
Performance Attributes
Attribute
Strategy
Reliability
(RL)
Responsiveness
(RS)
Agility (AG)
Cost (CO)
Assets (AM)
Question
:
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
metric
Provide direction to where problems originate
Caution: Level 2 metrics do not by definition add up to a level 1
metric
58
AM (5)
2.Two capitals, a period the number one (1) and a number are
(10 in total)
3.Two capitals, a period the number two (2) and a number are
XX = performance attribute,
XX.1.n = level 1, XX.2.n = level 2, and so on
Copyright Supply Chain Council, 2008. All rights reserved
59
Customer
Strategic metric
Reliability
Internal
Assets
60
Strategic Reliability
Metric
Metric:
(examples)
Notes:
61
Strategic Responsiveness
Metric
Metric:
Copyright Supply
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yield)
3. The relationship is undefined (but can be statistically
observed)
Diagnostic metrics dont necessarily add up to their parents:
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.
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Importance
Communicate supply chain priorities
Monitor all strategic areas, not just the top
priority
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Metrics Selection
Interpreting the definitions
Customer facing metrics should be measured as close to the
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.
Copyright Supply Chain Council, 2008. All rights reserved
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.
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
Copyright Supply Chain Council, 2008. All rights reserved
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
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