Case Studies

This section will focus on 3 case studies to see how the SCOR model was implemented, how
much time was taken for the implementation and the results that were achieved. The 3
companies in focus are:
1) United Space Alliance, LLC
2) Manugistics
3) Alcatel

United Space Alliance is one of the world’s leading space operations company and is equally
owned by The Boeing Company and Lockheed Martin Corporation.
The Parachute Refurbishment Facility (PRF) was chosen as the unit within the corporation for
assessment of the SCOR model since it represented most of the internal and external processes
within the company.

Objectives of Project:
To ensure that the SCOR model was a feasible method of analyzing the supply chain
To increase customer satisfaction by improving material acquisition process and eliminating
workflow process delays. The total duration of the project was about 9 months (August 2000 –
May 2001)

With reference to the methods used in the SCOR model, Source, Make and Deliver elements
were included in the project. Initially, however focus was on USA’s internal processes.

Approach used:
A considerable effort was required to convert practices in use by USA to the metrics specified by
SCOR. One of the major tools that aided USA was the Supply Chain “Roadmap” which provided
step-by-step detailed information.

Steps involved
Firstly, a project charter was used to maintain clear goals throughout the process.
The next phase was to collect historical data and identify “as-is” metrics. This was one of the
challenging areas since limited data was available
A top-down system approach was used, wherein Level 1 metrics were determined first, and then
further decomposed to Level 3 metrics. Benchmarking was performed simultaneously and this
helped USA determine that it was the area of sourcing that needed to be concentrated upon.

Benefits achieved:
The various metrics that showed a significant improvement were:
- End Item Delivery Performance
- Perfect Order Fulfillment
- Supply-chain Response Time
- Value-added Productivity
Manugistics
Profile: Manugistics offers the industry's most proven demand and supply chain solutions,
including enterprise applications and infrastructure products, strategic consulting, and
Manugistics Consulting Services. Manugistics solutions optimize strategic and planning
decisions, drive flawless execution, and help companies drive exponential value from their
existing systems.

Objective:
Since Manugistics supply chain solutions wants to continue providing companies with lowest total
cost benefits, it is continuously trying to develop and fine-tune its planning and execution
optimization engines.

Implementation
The Manugistics developed solution is based upon an order-to delivery (an Internet-based
collaborative solution) system that leads to reduced inventory levels and improved forecast
accuracy. A combination of new technologies coupled with proven Manugistics applications create
a robust solution. The total implementation time for developing a solution for 1 of its main
customers – Mitsubishi was less than 6 months

Impact on SCOR model:

Make: Along the way, as the forecasts go through their iterations, the manufacturing plants are
provided with a picture of real demand which in turn drives their manufacturing planning and
scheduling functions
Plan: This phase involves 2 aspects:
- Highly complex algorithms that drive the forecasting mechanism
- A collaborative component that helps automakers to share preliminary forecasts with
district managers and ultimately its dealers via the internet.
Source: This aspect is impacted to a lesser degree, possibly because it is a solely Manugustics
developed solution.

Results:
• Reduce port stock from a high of over 45,000 units to 0 – resulting in over $100 million in
cost savings,
• Slash collective vehicle inventory in half – from 80,000 to 40,000 units (both numbers are
approximate),
• Lower the average age of vehicles on dealer lots from 166 days to 38 days – resulting in
the delivery of higher quality vehicles to customers, a corresponding decrease in
warranty costs and lower inventory carrying costs,
• Reduce order-to-delivery time by approximately 75%,
Alcatel
Profile:

Alcatel provides end-to-end communications solutions, enabling carriers, service providers and
enterprises to deliver content to any type of user, anywhere in the world. Leveraging its long-term
leadership in telecommunications network equipment as well as its expertise in applications and
network services, Alcatel enables its customers to focus on optimizing their service offerings and
revenue streams. It claims to provide leading-edge products and services in virtually every sector
of the Telecommunications industry.

Objective:
Before January 2001, Alcatel realized that many products were not being released on time, the
cycle time for inventory and installations was too long, and there were inefficiencies in the
interface processes. Due to these problems, customer service was being affected and there was
a need for improvement.

Implementation:
In accomplishing its goal, a Business Improvement Council (BIC) was set up that essentially
establish the right metrics which govern the supply chain, institutionalize best practices and
manage via facts/metrics.
“As-is” Practices:
- Customer places discrete order
- Enter and then schedule order
- Manage order fulfillment
- Achieve customer buy-off for order
- Plan manufacturing
- Buy/build product & prepare for shipment
- Deliver to site

“To-be” Pull based, VMI system

- Alcatel plans strategic inventory
- Customer pulls whatever is needed
- Via EDI, components are delivered, and product is built
- Products get replenished to site.

Results
SCOR helped Alcatel with its process, structure and benchmarking. They realized that they need
to communicate and collaborate more frequently with their suppliers. With regards to metrics, the
following changes were noted:
• On-time delivery increased from approx 10 % in Jan ‘01à 50% in Nov ’01
• Total Backlog ↓,
• Supply Chain Management Cost ↑ by 18% as a % of Revenue
• Material Acquisition Cost ↓ 33% as a % of Revenue
Example of SCOR Process Element Best Practices Showing Impact on ERP System
References:

www.supply-chain.org

www.usalliance.com

www.manugistics.com

www.alcatel.com

http://web.syr.edu/~jbhagnar/casestudies.htm