Supply-Chain Operations Reference-model (SCOR) Overview

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

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

Business Process Reengineering Capture the as-is state of a process and derive the desired to-be future state

Benchmarking

Best Practices Analysis

Process Reference Model 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-inclass results

Characterize the management practices and software solutions that result in bestin-class performance

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-inclass 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

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

SCOR Boundaries (contd)

SCOR assumes but does not explicitly address Training Quality Information Technology (IT) administration (non-SCM)

SCOR is structured around five distinct management processes

Plan

Deliver Return

Source Return

Make

Deliver Return

Source Return

Make

Deliver Return

Source Return

Make

Deliver Return

Source Return

Suppliers Supplier

Supplier
Internal or External

Your Company

Customer
Internal or External

Customers Customer

SCOR Model SCOR links business metrics, processes, industry best practices, technology solutions, and skill development into a unified structure. It contains more than 200 process elements, 500 skill elements, 550 metrics, and 500 best practices, including supply chain risk management and environmental supply chain management

Supply-Chain Operations Reference-model (SCOR) 5.0 - Processes

Plan
P2 Plan Source P1 Plan Supply Chain P3 Plan Make P4 Plan Deliver P5 Plan Returns

Suppliers

Source
S1 Source Stocked Products

Make
M1 Make-to-Stock

Deliver
D1 Deliver Stocked Products

S2 Source MTO Products

M2 Make-to-Order

D2 Deliver MTO Products

S3 Source ETO Products

M3 Engineer-to-Order

D3 Deliver ETO Products

Return Source

Return Deliver

Enable

Customers

Scopes of SCOR Processes

Plan

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

Scope of SCOR processes

Source (Processes that procure goods and services to meet planned or actual demand) Sourcing/material acquisition

Obtain, receive, inspect, hold, and issue material

Vendor certification and feedback, sourcing quality, in bound freight, component engineering, vendor contracts, initiate vendor payments Raw Materials Warehouse management Raw Materials Transportation and installation management Manage traffic, manage inbound freight, manage Schedule installation activities Source Enable Activities Manage source business rules, manage RM inventories

Source

Scope of SCOR processes

Make (Processes that transform product to a finished state to meet planned or actual demand)
Schedule production

Production execution
Request and receive material, manufacture and test product, package, hold and/or release product Engineering changes, facilities and equipment, production status, production quality, shop scheduling/sequencing, short-term capacity WIP Transportation

Make

Make Enable Activities

Manage production business rules, manage WIP inventories

Scope of SCOR processes

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. Order management Enter and maintain orders, generate quotations, configure product, create and maintain customer database, manage allocations, maintain product/price database, manage accounts receivable, credits, collections and invoicing Finished Goods Warehouse management
Store, pick, pack and configure products, create customer specific packaging/labeling, consolidate orders, ship products

Deliver

Deliver Enable Activities

Manage channel business rules, order rules, manage deliver inventories, manage deliver quality. Manage product import/export

Scope of SCOR processes

Return Source Activities associated with returning material to a supplier including the communication with the trading partner, the generation of documentation, and the physical return / shipment of product.

Return

Return Deliver Activities associated with receiving and disposing of returned material from a customer including the communication with the trading partner, the generation of documentation, and the physical return / receipt and dispositioning of product.

SCOR Contains 3 Levels of Detail

Level # Description Schematic
Plan

Comments
Level 1 defines the scope and content for the Supply Chain Operations Reference model Here basis of competition performance targets are set A companys supply chain can be configured-toorder at Level 2 from approximately 24 core process categories. Companies implement their operations strategy through their unique supply chain configuration. 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 Companies fine tune their Operations Strategy at Level 3

Supply Chain Operations Reference model

1 Top Level (Process Types) 2 Configuration Level (Process Categories) 3 Process Element Level
(Decompose Processes)
P3.1 Identify, Prioritize, and Aggregate Production Requirements

Source

Make

Deliver

Return

Return

P3.3 Balance Production Resources with Production Requirements

P3.4 Establish Detailed Production Plans

P3.2 Identify, Assess, and Aggregate Production Resources

Not in Scope

Implementation Level
(Decompose Process Elements)

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

Enable
Enable Element Plan Source Make Deliver Return

1} Establish and Manage Rules 2) Assess Performance 3) Manage Data 4) Manage Inventory 5) Manage Capital Assets 6) Manage Transportation 7) Manage Supply Chain Configuration 8) Manage Regulatory Compliance 9) Process Specific Elements Align SC / Financials

Supplier Agreements

Process Elements
Planning element Processes that align expected resources to meet expected demand requirements. Planning processes balance aggregated demand and resources across a consistent planning horizon. Planning processes generally occur at regular intervals and can contribute to supply chain response time. Planning processes also integrate components of the model (S,M,D,R) and organizations (suppliers/customers). Execution elements Processes are triggered by planned or actual demand that changes the state of products. They include scheduling and sequencing, transforming materials and services, and moving product. Enable elements (formerly infrastructure) Processes that prepare, maintain, and manage information or relationships upon which planning and execution processes rely.