Scor Model
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SCOR MODEL
AGENDA • •
Process Reference Model SCOR Model • • •
• •
What? Span it operates Limitations & Assumptions
AT&T Wireless Services Learnings
SCOR MODEL
SCOR – MANAGEMENT PROCESSES “Supplier’s suppliers to Customer’s customer”
SCOR – LIMITATIONS & ASSUMPTIONS Limitations • • • •
Sales and Marketing Research and technology development Product Development Some elements of post delivery customer support
Assumptions • • • •
Training Quality Information Technology Administration
AT&T WIRELESS SERVICES McCaw Cellular Communications: AT&T Wireless Services in 1994 • 70% manufacturing was outsourced. • Global presence was wide but not deep as only 10% of this revenue came from the global sales. • Transition from B2B business model to a consumerproduct model. • •
• •
Problem getting the right product at the right place at the right time Huge amount of inventory in pipeline. About 3 to 4 months. Plus the product life cycle was reducing in this segment.
Wireless Services division: Financial losses to 20% of the revenue Cash-to-cash cycle was 10 weeks.
AT&T SERVICES – LEVEL-1 METRICS
AT&T SERVICES – LEVEL 2 •
Pre-Implementation •
Complex supply chain network •
•
High conformance to forecast production requirements •
•
Sourcing lead times was over 200 days for some products
High forecast errors ranging from 40 – 80%
Change in supply chain • • • •
Demand driven supply chain Usage of common components To Combine manufacturing and distribution operations located in Mexico Reduction of supplier base and strengthen the partnership with chosen few suppliers
AT&T SERVICES – LEVEL 3 Specific elements improvement. • Real time information on available to promise quantity: integration with scheduling and inventory management system • Electronic order handling • Ship complete orders • Handle 90% order on FIFO basis
AT&T SERVICES – LEVEL 4
BENEFITS - POST IMPLEMENTATION •
•
Immediate financial improvements just by closing down and consolidating the SC into a make-to-order environment By the second year of implementation • • • •
Gross margin was improved by 10% of revenues – resulted in $200 million worth of savings Significant reduction in inventory – 55% reduction in inventory Improvement in cash flow – cash-to-cash cycles were reduced by about 70% Improvement in delivery performance – cycle times were reduced by 80% (12 weeks to 2 weeks)
LEARNING • •
• •
Need for fact-based analysis Identification of strategic performance advantages Top management involvement Need for continuous updation of • • •
Value proposition Benchmarks Refining supply chain
REFERENCES • • • •
•
SCOR Overview 9.0- Supply Chain Council. www.supply-chain.org Handbook on Supply Chain Management Evolving Enterprise: Volume 1-Lionheart Publishing. www.ism.ws
Thank You
AGENDA • •
Process Reference Model SCOR Model • • •
• •
What? Span it operates Limitations & Assumptions
AT&T Wireless Services Learnings
SCOR MODEL
SCOR – MANAGEMENT PROCESSES “Supplier’s suppliers to Customer’s customer”
SCOR – LIMITATIONS & ASSUMPTIONS Limitations • • • •
Sales and Marketing Research and technology development Product Development Some elements of post delivery customer support
Assumptions • • • •
Training Quality Information Technology Administration
AT&T WIRELESS SERVICES McCaw Cellular Communications: AT&T Wireless Services in 1994 • 70% manufacturing was outsourced. • Global presence was wide but not deep as only 10% of this revenue came from the global sales. • Transition from B2B business model to a consumerproduct model. • •
• •
Problem getting the right product at the right place at the right time Huge amount of inventory in pipeline. About 3 to 4 months. Plus the product life cycle was reducing in this segment.
Wireless Services division: Financial losses to 20% of the revenue Cash-to-cash cycle was 10 weeks.
AT&T SERVICES – LEVEL-1 METRICS
AT&T SERVICES – LEVEL 2 •
Pre-Implementation •
Complex supply chain network •
•
High conformance to forecast production requirements •
•
Sourcing lead times was over 200 days for some products
High forecast errors ranging from 40 – 80%
Change in supply chain • • • •
Demand driven supply chain Usage of common components To Combine manufacturing and distribution operations located in Mexico Reduction of supplier base and strengthen the partnership with chosen few suppliers
AT&T SERVICES – LEVEL 3 Specific elements improvement. • Real time information on available to promise quantity: integration with scheduling and inventory management system • Electronic order handling • Ship complete orders • Handle 90% order on FIFO basis
AT&T SERVICES – LEVEL 4
BENEFITS - POST IMPLEMENTATION •
•
Immediate financial improvements just by closing down and consolidating the SC into a make-to-order environment By the second year of implementation • • • •
Gross margin was improved by 10% of revenues – resulted in $200 million worth of savings Significant reduction in inventory – 55% reduction in inventory Improvement in cash flow – cash-to-cash cycles were reduced by about 70% Improvement in delivery performance – cycle times were reduced by 80% (12 weeks to 2 weeks)
LEARNING • •
• •
Need for fact-based analysis Identification of strategic performance advantages Top management involvement Need for continuous updation of • • •
Value proposition Benchmarks Refining supply chain
REFERENCES • • • •
•
SCOR Overview 9.0- Supply Chain Council. www.supply-chain.org Handbook on Supply Chain Management Evolving Enterprise: Volume 1-Lionheart Publishing. www.ism.ws
Thank You
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