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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 Version 5.0a
www.supply-chain.org August, 2001
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
Version 5.0a August, 2001
2
Supply Chain Management & The Supply Chain Council
Version 5.0a August, 2001
• The SCC is an independent, not-for-profit, global corporation with membership open to all companies and organizations interested in applying and advancing state-of-the-art supply chain management systems 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 additional chapters pending. • Over 30 new members per month • The Supply-Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference-model (SCOR) as the crossindustry 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 Version 5.0a August, 2001
4
SCC Organization - Chapters and Staffing Seoul, Korea
Pittsburgh, PA Bayer
Korean Management Assoc.
Headquarters *Executive Director
Tokyo, Japan Hitachi Singapore– SouthEast Asia Intel Sydney Australia / New Zealand – Accantia
Version 5.0a August, 2001
Mexico City, Latin America EXEL
Under Development: Hong Kong, India 5
AmsterdamEurope Siemens
Membership SCC Member Composition
SCC Membership by Region Practitioners Software Vendors
North America Europe
Consultants
Japan Other
Universities/Gov. Orgs/Assns.
700+ SCC members, Composition
Version 5.0a August, 2001
40%: Practitioners 25%: Enabling Technology Providers 20%: Consultants 15%: Universities, Associations, Government Organizations
6
Current Technical Committee Structure Integration Committee C-Peter Bolstorff – Pragmatek V-Larry Gray – Cobre Plan CommitteeGroup Make Committee C-Katie Kaspar C -Ed Biancarelli – Washington Group VC -Oscar Chappel – Tech Connection VC -Irving Briks – BellSouth Source Committee C-Dennis Zagrodnik – Daimler/Chrylser VC -Paul Welch - Nokia Return Committee
Deliver Committee C - Dan Swartwood –Pragmatek VC - Rick Hughes – Lockheed Martin
C- Major Scott Koster (USMC) Intel – Siemens RosettaNet
Version 5.0a August, 2001
George Brown – INTEL Herbert Heinzel Siemens
Metrics Committee
7
Supply-Chain Operations Reference-model (SCOR) Overview
Version 5.0a August, 2001
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
Version 5.0a August, 2001
Best Practices Analysis
Benchmarking
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 “best-in-class” performance
9
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
Version 5.0a August, 2001
10
SCOR is structured around five distinct management processes Plan
Deliver Return
Suppliers’ Supplier
Source
Make
Return
Deliver Return
Supplier
Source
Make
Return
Deliver Return
Your Company
Source
Make
Return
Source
Return
Return
Customer
Internal or External
Internal or External
SCOR Model Building Block Approach Processes Best Practice Version 5.0a August, 2001
Deliver
11
Metrics Technology
Customer’s Customer
Supply-Chain Operations Reference-model (SCOR) 5.0 - Processes Plan
P1 Plan Supply Chain
Source S1 Source Stocked Products
S2 Source MTO Products
S3 Source ETO Products
P4 Plan Deliver
P3 Plan Make
Make M1 Make-to-Stock
M2 Make-to-Order
M3 Engineer-to-Order
Deliver D1 Deliver Stocked Products
D2 Deliver MTO Products
D3 Deliver ETO Products
Return Deliver
Return Source
Enable Version 5.0a August, 2001
P5 Plan Returns
12
Customers
Suppliers
P2 Plan Source
SCOR Contains 3 Levels of Detail Level
Supply Chain Operations Reference model
#
Not in Scope
Version 5.0a August, 2001
Description
Schematic
Comments
Plan
1
Source
Top Level (Process Types)
Deliver
Make
Return
Return
2
Here basis of competition performance targets are set A company’s supply chain can be “configured-toorder” at Level 2 from approximately 24 core “process categories.”
Configuration Level
3
Level 1 defines the scope and content for the Supply Chain Operations Reference model
(Process Categories)
Companies implement their operations strategy through their unique supply chain configuration.
Process Element Level
Level 3 defines a company’s 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 •
(Decompose Processes) P3.1 Identify, Prioritize, and Aggregate Production Requirements
P3.2
P3.3
P3.4
Balance Production Resources with Production Requirements
Establish Detailed Production Plans
Identify, Assess, and Aggregate Production Resources
Companies “fine tune” their Operations Strategy at Level 3 4
Companies implement specific supply chain management practices at this level
Implementation Level
Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions
(Decompose Process Elements)
13
Mapping material flow (S1, D1) (SR1,DR1,DR3) Manufacturing Warehouse (S1, S2, M1, D1) (SR1,SR3,DR3) C u s to m e r
(S1) (SR1,SR3) Warehouse (S1, D1) (SR1,DR1,DR3) Other Suppliers (D1)
Warehouse (S1, D1) (SR1,DR1,DR3) Latin American Suppliers (D1)
C u s to m e r
Warehouse (S1, D1) (SR1,DR1,DR3)
Version 5.0a August, 2001
C u s to m e r
(S1) (SR1,SR3)
(S1) (SR1,SR3)
14
C u s to m e r
European Supplier (S1) (D2) (SR1,SR3) (DR1)
Mapping the processes P1
P1
P1
P3
P2
P 4
P 3
P 2 P 4
P2
European RM Supplier
Key Other RM Suppliers
S2
M2
S1
M1
P 4
D2
D1
S2
M1
D1
S1
D1
S1
S1 RM Suppliers
Version 5.0a August, 2001
ALPHA
15
Alpha Regional Warehouses
Consume Consumer r
Linking Supply Chain Performance Attributes and Level 1 Metrics Performance Attribute
Performance Attribute Definition
Level 1 Metric
Supply Chain Delivery Reliability
The performance of the supply chain in delivering: the correct product, to the correct place, at the correct time, in the correct condition and packaging, in the correct quantity, with the correct documentation, to the correct customer.
Delivery Performance
Supply Chain Responsiveness
The velocity at which a at which a supply chain provides products to the customer.
Order Fulfillment Lead Times
Supply Chain Flexibility
The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage.
Supply Chain Response Time
Supply Chain Costs
The costs associated with operating the supply chain.
Cost of Goods Sold
Fill Rates Perfect Order Fulfillment
Production Flexibility
Total Supply Chain Management Costs Value-Added Productivity Warranty / Returns Processing Costs Supply Chain Asset Management Efficiency
The effectiveness of an organization in managing assets to support demand satisfaction. This includes the management of all assets: fixed and working capital.
Cash-to-Cash Cycle Time Inventory Days of Supply Asset Turns
Version 5.0a August, 2001
16
Supply Chain SCORcard & Gap Analysis NEW Product Line Supply Chain SCORcard Overview Metrics
EXTERNAL
Supply Chain Reliability
Responsiveness Flexibility
SCOR Level 1 Metrics
Actual
Parity
Advantage
Superior
Delivery Performance to Commit Date
50%
85%
90%
95%
Fill Rates
63%
94%
96%
98%
Perfect Order Fulfillment
0%
80%
85%
90%
Order Fulfillment Lead times
35 days
7 days
5 days
3 days
97 days
82 days
55 days
13 days
45 days
30 days
25 days
20 days
19%
13%
8%
3%
Warranty Cost
NA
NA
NA
NA
NA
Value Added Employee Productivity
NA
$156K
$306K
$460K
NA
119 days
55 days
38 days
22 days
NA
196 days
80 days
46 days
28 days
$7 M Capital Charge
2.2 turns
8 turns
12 turns
19 turns
NA
Supply Chain Response Time Production Flexibility
INTERNAL
Total SCM Management Cost
Cost
Inventory Days of Supply
Assets
Cash-to-Cash Cycle Time Net Asset Turns (Working Capital)
Version 5.0a August, 2001
Performance Versus Competitive Population
17
Value from Improvements
$30M Revenue $30M Revenue Key enabler to cost and asset improvements
$30M Indirect Cost
Decomposing Metrics
Revenue Accounts Receivable Cash Flow
Perfect Order Fulfillment
Cycle Time
Supplier on time delivery
Schedule Achievement
Perfect Order Fulfillment On Time
On Time Delivery Performance
In Full
In Full
Docs
Docs European RM Supplier
Key Other RM Suppliers
S2
M2
Supplier on time delivery
S2 S1
M1
Damage
Damage
D2
M1
D1
D1
S1
Perfect Order Fulfillment D1
S1
S1
RM Suppliers Version 5.0a August, 2001
ALPHA
18
Alpha Regional Warehouses
Consume Consumer r
Revenue Accounts Receivable Cash Flow
Performance Measurement Cycle Time
Metrics Conflict
Invento ry Supplier Supplier on time delivery on time delivery Actual – 85%
Perfect Order Fulfillment Perfect Order Fulfillment Goal – 95%
Schedule Schedule Achievement Achievement Actual – 95%
Delivery Delivery Performance Performance Actual – 99% European RM Supplier
Key Other RM Suppliers
S2
M2
M1
Fulfillment Perfect Order Actual – 90% On TimeFulfillment Actual - 85% In Full Docs
Docs
D2
D1
UnderDamage performance Supplier Processon time delivery D1 M1 S1 Systems
S1 RM RM Suppliers Suppliers Version 5.0a August, 2001
On Time In Full
S2 S1
Perfect Order Fulfillment Perfect Order
ALPHA
19
Damage Perfect Order Fulfillment
UnderD1 S1 performance Process Systems
Alpha Regional Warehouses
Consume Consume Consumer rr
SCOR Project Roadmap Analyze Basis of Competition
Configure supply chain
Align Performance Levels, Practices, and Systems
Operations Strategy
•Competitive Performance Requirements •Performance Metrics •Supply Chain Scorecard •Scorecard Gap Analysis •Project Plan
Material Flow
•AS IS Geographic Map •AS IS Thread Diagram •Design Specifications •TO BE Thread Diagram •TO BE Geographic Map
Information and Work Flow
Implement supply chain Processes and Systems Version 5.0a August, 2001
SCOR Level 1
•AS IS Level 2, 3, and 4 Maps •Disconnects •Design Specifications •TO BE Level 2, 3, and 4 Maps
Develop, Test, and Roll Out
20
SCOR Level 2
•Organization •Technology •Process •People
SCOR Level 3
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, 190 countries, 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 Version 5.0a August, 2001
21
SCOR Projects – A Wide Range of Adoption Consumer Foods Project Time (Start to Finish) – 3 months Investment - $50,000 US 1st Year Return - $4,300,000 US Electronics Project Time (Start to Finish) – 6 months Investment - $3-5 Million US Projected Return on Investment - $ 230 Million US Software and Planning SAP bases APO key performance indicators (KPIs) on SCOR Model Aerospace and Defense SCOR Benchmarking and use of SCOR metrics to specify performance criteria and provide basis for contracts / purchase orders
Version 5.0a August, 2001
22
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
Currently
Version 5.0a August, 2001
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
working with Intel to develop an instructor training course
23
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
Version 5.0a August, 2001
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, Nov 14, 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
24
2000 - 2001 Technical Accomplishments
Released Version 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
Version 5.0a August, 2001
Completed Return Processes Began updating the Model’s best practice (e-business) Began metrics restructure and glossary update (Note of caution to users previous to SCOR 5.0)
5 versions of workshop developed and delivered– Over 500 members have attended SCOR Workshops with companies like Intel, HP, EDS, US Department of Defense, Compaq Baxter, SAP, hosting in-house Workshops
25
SCOR Model Timeline - 6.0
After completing Version 5.0 changes committees began working Version 6.0 - tentatively scheduled for release in Spring 2002
Version 5.0a August, 2001
Metrics Revision and Decomposition Trees Return – Metrics and Best Practice Complete Best Practice and e-Business Improvement Collaboration
26
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
Version 5.0a August, 2001
27
SCC provides the forum - SCOR documents the learning
Version 5.0a August, 2001
Process Model provides a toolset for rapidly modeling and understanding the supply chain Metrics provide a toolset for evaluating the supply chain and rapidly identifying high value opportunities Best practices and features provide a candidate list of improvement options The SCOR Model is the only model of its type that links these elements and provides a means for assessment of the supply chain outside of the individual organization Council members have demonstrated dramatic implementation successes in virtually every industry in every region of the world. The pace and number of SCOR implementations is accelerating and more and more organizations are adopting SCOR as the framework for their supply chain improvements.
28
The Bottom Line -
Council members have demonstrated dramatic implementation successes in virtually every industry in every region of the world. The pace and number of SCOR implementations is accelerating and more and more organizations are adopting SCOR as the framework for their supply chain improvements.
Version 5.0a August, 2001
29
Scott Stephens Chief Technology Officer Supply-Chain Council, Inc. 303 Freeport Road Pittsburgh, PA 15215 USA Version 5.0a
www.supply-chain.org August, 2001
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
Version 5.0a August, 2001
2
Supply Chain Management & The Supply Chain Council
Version 5.0a August, 2001
• The SCC is an independent, not-for-profit, global corporation with membership open to all companies and organizations interested in applying and advancing state-of-the-art supply chain management systems 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 additional chapters pending. • Over 30 new members per month • The Supply-Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference-model (SCOR) as the crossindustry 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 Version 5.0a August, 2001
4
SCC Organization - Chapters and Staffing Seoul, Korea
Pittsburgh, PA Bayer
Korean Management Assoc.
Headquarters *Executive Director
Tokyo, Japan Hitachi Singapore– SouthEast Asia Intel Sydney Australia / New Zealand – Accantia
Version 5.0a August, 2001
Mexico City, Latin America EXEL
Under Development: Hong Kong, India 5
AmsterdamEurope Siemens
Membership SCC Member Composition
SCC Membership by Region Practitioners Software Vendors
North America Europe
Consultants
Japan Other
Universities/Gov. Orgs/Assns.
700+ SCC members, Composition
Version 5.0a August, 2001
40%: Practitioners 25%: Enabling Technology Providers 20%: Consultants 15%: Universities, Associations, Government Organizations
6
Current Technical Committee Structure Integration Committee C-Peter Bolstorff – Pragmatek V-Larry Gray – Cobre Plan CommitteeGroup Make Committee C-Katie Kaspar C -Ed Biancarelli – Washington Group VC -Oscar Chappel – Tech Connection VC -Irving Briks – BellSouth Source Committee C-Dennis Zagrodnik – Daimler/Chrylser VC -Paul Welch - Nokia Return Committee
Deliver Committee C - Dan Swartwood –Pragmatek VC - Rick Hughes – Lockheed Martin
C- Major Scott Koster (USMC) Intel – Siemens RosettaNet
Version 5.0a August, 2001
George Brown – INTEL Herbert Heinzel Siemens
Metrics Committee
7
Supply-Chain Operations Reference-model (SCOR) Overview
Version 5.0a August, 2001
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
Version 5.0a August, 2001
Best Practices Analysis
Benchmarking
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 “best-in-class” performance
9
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
Version 5.0a August, 2001
10
SCOR is structured around five distinct management processes Plan
Deliver Return
Suppliers’ Supplier
Source
Make
Return
Deliver Return
Supplier
Source
Make
Return
Deliver Return
Your Company
Source
Make
Return
Source
Return
Return
Customer
Internal or External
Internal or External
SCOR Model Building Block Approach Processes Best Practice Version 5.0a August, 2001
Deliver
11
Metrics Technology
Customer’s Customer
Supply-Chain Operations Reference-model (SCOR) 5.0 - Processes Plan
P1 Plan Supply Chain
Source S1 Source Stocked Products
S2 Source MTO Products
S3 Source ETO Products
P4 Plan Deliver
P3 Plan Make
Make M1 Make-to-Stock
M2 Make-to-Order
M3 Engineer-to-Order
Deliver D1 Deliver Stocked Products
D2 Deliver MTO Products
D3 Deliver ETO Products
Return Deliver
Return Source
Enable Version 5.0a August, 2001
P5 Plan Returns
12
Customers
Suppliers
P2 Plan Source
SCOR Contains 3 Levels of Detail Level
Supply Chain Operations Reference model
#
Not in Scope
Version 5.0a August, 2001
Description
Schematic
Comments
Plan
1
Source
Top Level (Process Types)
Deliver
Make
Return
Return
2
Here basis of competition performance targets are set A company’s supply chain can be “configured-toorder” at Level 2 from approximately 24 core “process categories.”
Configuration Level
3
Level 1 defines the scope and content for the Supply Chain Operations Reference model
(Process Categories)
Companies implement their operations strategy through their unique supply chain configuration.
Process Element Level
Level 3 defines a company’s 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 •
(Decompose Processes) P3.1 Identify, Prioritize, and Aggregate Production Requirements
P3.2
P3.3
P3.4
Balance Production Resources with Production Requirements
Establish Detailed Production Plans
Identify, Assess, and Aggregate Production Resources
Companies “fine tune” their Operations Strategy at Level 3 4
Companies implement specific supply chain management practices at this level
Implementation Level
Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions
(Decompose Process Elements)
13
Mapping material flow (S1, D1) (SR1,DR1,DR3) Manufacturing Warehouse (S1, S2, M1, D1) (SR1,SR3,DR3) C u s to m e r
(S1) (SR1,SR3) Warehouse (S1, D1) (SR1,DR1,DR3) Other Suppliers (D1)
Warehouse (S1, D1) (SR1,DR1,DR3) Latin American Suppliers (D1)
C u s to m e r
Warehouse (S1, D1) (SR1,DR1,DR3)
Version 5.0a August, 2001
C u s to m e r
(S1) (SR1,SR3)
(S1) (SR1,SR3)
14
C u s to m e r
European Supplier (S1) (D2) (SR1,SR3) (DR1)
Mapping the processes P1
P1
P1
P3
P2
P 4
P 3
P 2 P 4
P2
European RM Supplier
Key Other RM Suppliers
S2
M2
S1
M1
P 4
D2
D1
S2
M1
D1
S1
D1
S1
S1 RM Suppliers
Version 5.0a August, 2001
ALPHA
15
Alpha Regional Warehouses
Consume Consumer r
Linking Supply Chain Performance Attributes and Level 1 Metrics Performance Attribute
Performance Attribute Definition
Level 1 Metric
Supply Chain Delivery Reliability
The performance of the supply chain in delivering: the correct product, to the correct place, at the correct time, in the correct condition and packaging, in the correct quantity, with the correct documentation, to the correct customer.
Delivery Performance
Supply Chain Responsiveness
The velocity at which a at which a supply chain provides products to the customer.
Order Fulfillment Lead Times
Supply Chain Flexibility
The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage.
Supply Chain Response Time
Supply Chain Costs
The costs associated with operating the supply chain.
Cost of Goods Sold
Fill Rates Perfect Order Fulfillment
Production Flexibility
Total Supply Chain Management Costs Value-Added Productivity Warranty / Returns Processing Costs Supply Chain Asset Management Efficiency
The effectiveness of an organization in managing assets to support demand satisfaction. This includes the management of all assets: fixed and working capital.
Cash-to-Cash Cycle Time Inventory Days of Supply Asset Turns
Version 5.0a August, 2001
16
Supply Chain SCORcard & Gap Analysis NEW Product Line Supply Chain SCORcard Overview Metrics
EXTERNAL
Supply Chain Reliability
Responsiveness Flexibility
SCOR Level 1 Metrics
Actual
Parity
Advantage
Superior
Delivery Performance to Commit Date
50%
85%
90%
95%
Fill Rates
63%
94%
96%
98%
Perfect Order Fulfillment
0%
80%
85%
90%
Order Fulfillment Lead times
35 days
7 days
5 days
3 days
97 days
82 days
55 days
13 days
45 days
30 days
25 days
20 days
19%
13%
8%
3%
Warranty Cost
NA
NA
NA
NA
NA
Value Added Employee Productivity
NA
$156K
$306K
$460K
NA
119 days
55 days
38 days
22 days
NA
196 days
80 days
46 days
28 days
$7 M Capital Charge
2.2 turns
8 turns
12 turns
19 turns
NA
Supply Chain Response Time Production Flexibility
INTERNAL
Total SCM Management Cost
Cost
Inventory Days of Supply
Assets
Cash-to-Cash Cycle Time Net Asset Turns (Working Capital)
Version 5.0a August, 2001
Performance Versus Competitive Population
17
Value from Improvements
$30M Revenue $30M Revenue Key enabler to cost and asset improvements
$30M Indirect Cost
Decomposing Metrics
Revenue Accounts Receivable Cash Flow
Perfect Order Fulfillment
Cycle Time
Supplier on time delivery
Schedule Achievement
Perfect Order Fulfillment On Time
On Time Delivery Performance
In Full
In Full
Docs
Docs European RM Supplier
Key Other RM Suppliers
S2
M2
Supplier on time delivery
S2 S1
M1
Damage
Damage
D2
M1
D1
D1
S1
Perfect Order Fulfillment D1
S1
S1
RM Suppliers Version 5.0a August, 2001
ALPHA
18
Alpha Regional Warehouses
Consume Consumer r
Revenue Accounts Receivable Cash Flow
Performance Measurement Cycle Time
Metrics Conflict
Invento ry Supplier Supplier on time delivery on time delivery Actual – 85%
Perfect Order Fulfillment Perfect Order Fulfillment Goal – 95%
Schedule Schedule Achievement Achievement Actual – 95%
Delivery Delivery Performance Performance Actual – 99% European RM Supplier
Key Other RM Suppliers
S2
M2
M1
Fulfillment Perfect Order Actual – 90% On TimeFulfillment Actual - 85% In Full Docs
Docs
D2
D1
UnderDamage performance Supplier Processon time delivery D1 M1 S1 Systems
S1 RM RM Suppliers Suppliers Version 5.0a August, 2001
On Time In Full
S2 S1
Perfect Order Fulfillment Perfect Order
ALPHA
19
Damage Perfect Order Fulfillment
UnderD1 S1 performance Process Systems
Alpha Regional Warehouses
Consume Consume Consumer rr
SCOR Project Roadmap Analyze Basis of Competition
Configure supply chain
Align Performance Levels, Practices, and Systems
Operations Strategy
•Competitive Performance Requirements •Performance Metrics •Supply Chain Scorecard •Scorecard Gap Analysis •Project Plan
Material Flow
•AS IS Geographic Map •AS IS Thread Diagram •Design Specifications •TO BE Thread Diagram •TO BE Geographic Map
Information and Work Flow
Implement supply chain Processes and Systems Version 5.0a August, 2001
SCOR Level 1
•AS IS Level 2, 3, and 4 Maps •Disconnects •Design Specifications •TO BE Level 2, 3, and 4 Maps
Develop, Test, and Roll Out
20
SCOR Level 2
•Organization •Technology •Process •People
SCOR Level 3
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, 190 countries, 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 Version 5.0a August, 2001
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SCOR Projects – A Wide Range of Adoption Consumer Foods Project Time (Start to Finish) – 3 months Investment - $50,000 US 1st Year Return - $4,300,000 US Electronics Project Time (Start to Finish) – 6 months Investment - $3-5 Million US Projected Return on Investment - $ 230 Million US Software and Planning SAP bases APO key performance indicators (KPIs) on SCOR Model Aerospace and Defense SCOR Benchmarking and use of SCOR metrics to specify performance criteria and provide basis for contracts / purchase orders
Version 5.0a August, 2001
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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
Currently
Version 5.0a August, 2001
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
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
Version 5.0a August, 2001
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, Nov 14, 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
Research
Joint APICS research publication Continued support of Penn State / Manugistics Research Formation of Research Strategies Advisory Board
Workshop material development and conduct
Version 5.0a August, 2001
Completed Return Processes Began updating the Model’s best practice (e-business) Began metrics restructure and glossary update (Note of caution to users previous to SCOR 5.0)
5 versions of workshop developed and delivered– Over 500 members have attended SCOR Workshops with companies like Intel, 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 working Version 6.0 - tentatively scheduled for release in Spring 2002
Version 5.0a August, 2001
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
Version 5.0a August, 2001
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SCC provides the forum - SCOR documents the learning
Version 5.0a August, 2001
Process Model provides a toolset for rapidly modeling and understanding the supply chain Metrics provide a toolset for evaluating the supply chain and rapidly identifying high value opportunities Best practices and features provide a candidate list of improvement options The SCOR Model is the only model of its type that links these elements and provides a means for assessment of the supply chain outside of the individual organization Council members have demonstrated dramatic implementation successes in virtually every industry in every region of the world. The pace and number of SCOR implementations is accelerating and more and more organizations are adopting SCOR as the framework for their supply chain improvements.
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The Bottom Line -
Council members have demonstrated dramatic implementation successes in virtually every industry in every region of the world. The pace and number of SCOR implementations is accelerating and more and more organizations are adopting SCOR as the framework for their supply chain improvements.
Version 5.0a August, 2001
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