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Version 5.0aAugust, 2001
Supply Chain Council&Supply Chain Operations Reference (SCOR)
Model Overview
Scott Stephens
Chief Technology Officer
Supply-Chain Council, Inc.
303 Freeport Road
Pittsburgh, PA 15215 USA
www.supply-chain.org
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Version 5.0aAugust, 2001 2
Supply Chain Management Changing Times
Eighteen months ago boom
Central issues Revenue Capture Demand forecast Speed
One month ago bust Central Issues
Cost Inventory
Now Uncertainty Emerging Issues
Just-in-case vs. just-in-time Consumer confidence
Supply chain management is now a watchword in business, Wall Street,and in the news media
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Version 5.0aAugust, 2001
Supply Chain Management&
The Supply Chain Council
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The SCC is an independent, not-for-profit, global corporation with
membership open to all companies and organizations interested inapplying and advancing state-of-the-art supply chain managementsystems and practices.
Over 700 Company Members
Cross-industry representation
Chapters in Australia/New Zealand, Europe, Japan, Korea,Latin America, and South East Asia with petitions for additionalchapters pending.
Over 30 new members per month
The Supply-Chain Council (SCC) has developed and endorsed theSupply Chain Operations Reference-model (SCOR) as the cross-industry standard for supply chain management
The SCC was organized in 1996 by Pittiglio Rabin Todd & McGrath (PRTM) and Advanced
Manufacturing Research (AMR), and initially included 69 voluntary member companies
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SCC Organization - Chapters and Staffing
SydneyAustralia / New
Zealand Accantia
SingaporeSouthEast Asia
Intel
Tokyo, Japan
Hitachi
Seoul, Korea
KoreanManagement
Assoc.
Mexico City, LatinAmerica
EXEL
Pittsburgh,PA Bayer
HeadquartersHeadquarters*Executive
Director
Amsterdam-Europe
Siemens
Under Development: Hong Kong, India
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C-Dennis Zagrodnik Daimler/ChrylserVC -Paul Welch - Nokia
Current Technical Committee Structure
Integration Committee
Plan Committee
Source Committee
Make Committee
Deliver Committee
Metrics Committee
C-Peter Bolstorff PragmatekV-Larry Gray CobreGroup
C-Katie Kaspar -VC -Oscar Chappel Tech ConnectionC -Ed Biancarelli Washington Group
VC -Irving Briks BellSouth
C - Dan Swartwood PragmatekVC - Rick Hughes Lockheed Martin
Intel SiemensRosettaNet
George Brown INTELHerbert Heinzel -Siemens
C- Major Scott Koster (USMC)
Return Committee
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Version 5.0aAugust, 2001 9
Quantify theoperationalperformance ofsimilar companies
and establishinternal targetsbased on best-in-class results
Benchmarking
Characterize themanagementpractices andsoftware solutionsthat result inbest-in-class
performance
Best PracticesAnalysis
Process ReferenceModel
Capture the as-isstate of a processand derive thedesired to-befuture state
Business ProcessReengineering
Capture the as-is state
of a process and derivethe desired to-be futurestate
Quantify the operationalperformance of similarcompanies and establishinternal targets based on
best-in-class resultsCharacterize themanagementpractices andsoftware solutionsthat result in best-in-class performance
What is a process reference model?
Process reference models integrate the well-known concepts ofbusiness process reengineering, benchmarking, and processmeasurement into a cross-functional framework
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Supplier
Plan
Customer CustomersCustomer
SuppliersSupplier
MakeDeliverSource Make DeliverMakeSourceDeliver SourceDeliver
Internal or External Internal or External
Your Company
Source
SCOR is structured around five distinctmanagement processes
SCOR ModelSCOR Model
Return Return ReturnReturn Return Return
Return Return
Building Block Approach
Processes Metrics
Best Practice Technology
S C O f
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Customers
Suppliers
P1 Plan Supply ChainPlanPlan
P2 Plan Source P3 Plan Make P4 Plan Deliver
Source Make Deliver
S1 Source Stocked Products M1 Make-to-Stock
M2 Make-to-Order
M3 Engineer-to-Order
D1 Deliver Stocked Products
D2 Deliver MTO Products
D3 Deliver ETO Products
S2 Source MTO Products
S3 Source ETO Products
Supply-Chain Operations Reference-model(SCOR) 5.0 - Processes
Return
Source
P5 Plan Returns
Return
Deliver
Enable
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Mapping material flow
Latin AmericanLatin American
SuppliersSuppliers
(D1)
WarehouseWarehouse
Other SuppliersOther Suppliers(D1)
ManufacturingManufacturing
European SupplierEuropean Supplier(S1)
(SR1,SR3)
C u s t o m e r
C u s t o m e r
C u s t o m e r
C u s t o m e r
(S1, D1)(SR1,DR1,DR3)
(S1, S2, M1, D1)
(SR1,SR3,DR3)
(D2)(DR1)
WarehouseWarehouse
WarehouseWarehouse
WarehouseWarehouse
(S1, D1)(SR1,DR1,DR3)
(S1, D1)
(SR1,DR1,DR3)
(S1, D1)(SR1,DR1,DR3)
(S1)
(SR1,SR3)
(S1)
(SR1,SR3)
(S1)
(SR1,SR3)
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Mapping the processes
Consumer
P2
P4
P3
P4
S1 D1 S1
P2
P2
P3
P4
M2S2 D2
M1 D1 S1S2D1
M1
EuropeanRM Supplier
Key OtherRM
Suppliers
S1
Alpha RegionalWarehousesRM
SuppliersConsumerALPHA
P1 P1 P1
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PerformanceAttribute
Performance Attribute Definition Level 1 Metric
Supply Chain DeliveryReliability
The performance of the supply chain indelivering: the correct product, to the correctplace, at the correct time, in the correct conditionand packaging, in the correct quantity, with thecorrect documentation, to the correct customer.
Delivery Performance
Fill Rates
Perfect Order Fulfillment
Supply ChainResponsiveness
The velocity at which a at which a supply chainprovides products to the customer.
Order Fulfillment Lead Times
Supply ChainFlexibility
The agility of a supply chain in responding tomarketplace changes to gain or maintaincompetitive advantage.
Supply Chain Response Time
Production Flexibility
Supply Chain Costs The costs associated with operating the supplychain.
Cost of Goods Sold
Total Supply Chain ManagementCosts
Value-Added Productivity
Warranty / Returns ProcessingCosts
Supply Chain AssetManagementEfficiency
The effectiveness of an organization in managingassets to support demand satisfaction. Thisincludes the management of all assets: fixed andworking capital.
Cash-to-Cash Cycle Time
Inventory Days of Supply
Asset Turns
Linking Supply Chain Performance Attributes andLevel 1 Metrics
S ppl Chain SCORcard & Gap Anal sis
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Supply Chain SCORcard & Gap AnalysisNEW Product Line
50%
$30M Revenue
$30M Indirect Cost
35 days
97 days
0%
63%
Supply Chain SCORcard Performance Versus Competitive Population
Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements
Delivery Performance toCommit Date
85% 90% 95%
Fill Rates 94% 96% 98%
EXTERNAL
SupplySupply
ChainChain
ReliabilityReliability
Perfect Order Fulfillment 80% 85% 90%
Order Fulfillment Lead times7 days 5 days 3 days
Flexibility
Responsiveness
Production Flexibility 30 days 25 days 20 days
Total SCM ManagementCost 19% 13% 8% 3%
INTERNAL Cost Warranty Cost NA NA NA NA NA
Value Added Employee
Productivity NA $156K $306K $460K NA
Inventory Days of Supply 119 days 55 days 38 days 22 days NA
AssetsCash-to-Cash Cycle Time
196 days 80 days 46 days 28 days
Net Asset Turns (Working
Capital) 2.2 turns 8 turns 12 turns 19 turns NA
Supply Chain ResponseTime 82 days 55 days 13 days
45 days
$7 M Capital Charge
Key enabler to cost andasset improvements
$30M Revenue
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S1 D1 S1
M2S2 D2
M1 D1 S1
S2
D1M1
S1
Cycle Time
ScheduleAchievement
Perfect OrderFulfillment
DeliveryPerformance
Supplieron time delivery
Perfect OrderFulfillment
Supplieron time delivery
Perfect OrderFulfillment
On Time
In Full
Docs
Damage
On Time
In Full
Docs
Damage
RevenueAccounts Receivable
Cash Flow
Decomposing Metrics
EuropeanRM Supplier
Key OtherRM
Suppliers
Consumer
Alpha RegionalWarehousesRM
SuppliersConsumerALPHA
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Consumer
RMSuppliers
S1 D1 S1
M2S2 D2
M1 D1 S1
S2
D1M1
S1
Cycle Time
ScheduleAchievement
Perfect OrderFulfillment
DeliveryPerformance
Supplieron time delivery
Perfect OrderFulfillment
Supplieron time delivery
Perfect OrderFulfillment
On Time
In Full
Docs
Damage
On Time
In Full
Docs
Damage
RevenueAccounts Receivable
Cash Flow
Perfect OrderFulfillment
Actual - 85%
Perfect Order
FulfillmentGoal 95%
ScheduleAchievementActual 95%
Perfect OrderFulfillment
Actual 90%
DeliveryPerformanceActual 99%
Supplieron time delivery
Actual 85%
MetricsConflict
Inventory
Under-performance
Process
Systems Under-performanceProcessSystems
Performance Measurement
Consumer
Alpha RegionalWarehousesRM
SuppliersConsumerALPHA
EuropeanRM Supplier
Key OtherRM
Suppliers
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Material FlowMaterial Flow
SCOR Level 1
OperationsOperationsStrategyStrategy
Analyze Basis
ofCompetition
SCOR Level 2
Configuresupply chain
AlignPerformance
Levels,Practices, and
Systems
Implementsupply chain
Processes andSystems
SCOR Project Roadmap
Competitive Performance Requirements
Performance MetricsSupply Chain ScorecardScorecard Gap AnalysisProject Plan
AS IS Geographic MapAS IS Thread DiagramDesign Specifications
TO BE Thread DiagramTO BE Geographic Map
Informationand Work Flow
AS IS Level 2, 3, and 4 MapsDisconnectsDesign SpecificationsTO BE Level 2, 3, and 4 Maps
Develop,Test, and Roll
Out
OrganizationTechnologyProcessPeople
SCOR Level 3
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SCOR Implementations
Plan, development, and formation of a company to support a new product line(Complete)
Re-engineering of supply chain processes for a corporation (138 divisions, 190countries, 770 sites) (In process)
Implementation of SCOR processes corporate-wide Level 1 Metrics used as executive evaluation criteria
Re-organization of logistics groups into Plan, Source, Make, Deliver (Complete) Multiple organizations
Collaborative forecasting Contracts and purchase orders
Thinking is easy, acting is difficult, and
to put one's thoughts into action is the
most difficult thing in the world. Goethe
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Supply Chain Council Outreach
SCOR Workshops (2000)
Atlanta, January 20-21 Chandler, AZ (Intel), February 8-9
Fountainbleu, March 9-10
Oregon (Intel) March 28-29
Chicago, April 12-13
Sydney, May 4-5
Singapore, June 1-2
Detroit, June 22-23
London, July 11-12
Philadelphia (SAP), July 18-19
Waldorf, Germany (SAP), August 1-2 Auckland, NZ, August 3-4
Singapore (SAP), August 8-9
Chandler, AZ (Intel) August
Amsterdam, September 28-29
Tokyo, October 5-6
Mexico City, October 12-13
St. Louis, October 26-27
Sydney, November 6-16 (3 - public, SAP, CHH)
Hanover, Germany November 9-10
Oslo, Norway Dec 3-5
Currently working with Intel to develop an instructor training course
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Supply Chain Council Outreach
SCOR Workshops (2001)
Anaheim, January 20-21
Singapore, February 20-21
Singapore (BASF), February 22-23
Cancun, Mexico March 7-8
New Orleans, April 5-6
Melbourne (BHP), April 20-22
Tokyo, April 23-24
Brussels (Medtronics), May 2-3 Gohteburg, May 9-10
Singapore, May 18-19
Charlotte, June 18-19
Albany, GA (USMC) September 6-7
Einhoven (Origin) Sept 19-19
Chicago, September 27-28
Berlin, October 4-5
Frankfurt (BASF), October 23-25
Washington DC, November 12-13
Gotheburg, December 4-5
Events
Supply-Chain World-Europe Berlin, Germany,Oct 1-3, 2001
Supply-Chain World-Japan Tokyo, Japan, Nov 1,2001
SCOR Users Seminar Washington, DC, USA, Nov14, 2001
SCC Winter Meetings Charlotte, North Carolina,
USA, Jan 23-24, 2002 Senior Supply-Chain Executive Retreat Phoenix,
Arizona, USA, Feb. 27 Mar. 1, 2002
Supply-Chain World-Latin America, Monterrey,Mexico, March dates TBD
Supply-Chain World-North America New Orleans,Louisiana, USA, April 22-24, 2002
Supply-Chain World-South East Asia Singapore,May 15-16, 2002
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2000 - 2001 Technical Accomplishments
Released Version 5.0
Completed Return Processes Began updating the Models best practice (e-business) Began metrics restructure and glossary update
(Note of caution to users previous to SCOR 5.0) Research
Joint APICS research publication
Continued support of Penn State / Manugistics Research Formation of Research Strategies Advisory Board
Workshop material development and conduct
5 versions of workshop developed and delivered Over 500members have attended SCOR Workshops with companies likeIntel, HP, EDS, US Department of Defense, Compaq Baxter, SAP,
hosting in-house Workshops
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SCOR Model Timeline - 6.0
After completing Version 5.0 changes committees began workingVersion 6.0 - tentatively scheduled for release in Spring 2002
Metrics Revision and Decomposition Trees
Return Metrics and Best Practice Complete
Best Practice and e-Business Improvement Collaboration
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SCOR Model Directions
Changes anticipated to shift from structural issues to implementation
issues Product Development Customer/Supplier Relationship Management Import / Export E-business Reverse logistics / warranty returns Inventory optimization Service environment Synchronizing advanced planning and business planning
Special Industry Groups / International Chapters Finance and metrics
Benchmarking regional issues
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