Overview Presentation

Supply Chain
Operations Reference-model
(SCOR)

June 2003 1
 • 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 800 Company Members
• Cross-industry representation
• Chapters in Australia/New Zealand, Brazil, Europe, Japan,
North America, Southern Africa, and South East Asia with
petitions for additional chapters pending.
•The Supply-Chain Council (SCC) has developed and endorsed the
Supply Chain Operations Reference-model (SCOR) as the cross-
industry standard for supply chain management

SCOR Overview
July 2004 2
 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 Best Practices Process Reference
Reengineering Benchmarking Analysis Model
Capture
Capture the
the“as-is”
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state
Capture the “as-is” of
ofaaprocess
process and
andderive
derive
Capture the “as-is” the
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stateof
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state desired“to-be”
“to-be”future
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and
andderive
derive the
the state
desired “to-be” Quantify
desired
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futurestate
state operational
operational Quantify the operational
performance
performance of
of
similar companies performance of similar
similar
and companies companies and establish
andestablish
establish
internal targets internal targets based on
internal
based on targets
“best-in- “best-in-class” results
based on “best-in- Characterize
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class” results Characterizethe
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“best-in-class”
performance that result in “best-in-
performance class” performance

SCOR Overview
July 2004 3
 SCOR is structured around five distinct
management processes
Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Return Return Return Return Return

Return Return Return

Your Company Customer’s

Suppliers’ Supplier Customer
Customer
Supplier
Internal or External Internal or External

SCOR Model

Building Block Approach

Processes Metrics
Best Practice Technology

SCOR Overview
July 2004 4
 Supply-Chain Operations Reference-model
(SCOR) 6.1 - Processes
Plan P1 Plan Supply Chain

P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns

Source Make Deliver

Suppliers

Customers
S1 Source Stocked Products M1 Make-to-Stock 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

D4 Deliver Retail Products

Return Return
Source Deliver

Enable

SCOR Overview
July 2004 5
 SCOR Boundaries

 SCOR Spans:
• All supplier / customer interactions
 Order entry through paid invoice

• All physical material transactions

 From your supplier’s supplier to your customer’s

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

• Returns

SCOR Overview
July 2004 6
 SCOR Project Roadmap
Analyze Basis •Competitive Performance Requirements
Operations •Performance Metrics
of •Supply Chain Scorecard
Strategy
Competition •Scorecard Gap Analysis
•Project Plan
SCOR Level 1

•AS IS Geographic Map

Configure •AS IS Thread Diagram
supply chain Material Flow •Design Specifications
•TO BE Thread Diagram
•TO BE Geographic Map
SCOR Level 2
Align
Performance •AS IS Level 2, 3, and 4 Maps
Levels, Information •Disconnects
Practices, and and Work Flow •Design Specifications SCOR Level 3
Systems •TO BE Level 2, 3, and 4 Maps

Implement Develop, •Organization

Implement •Technology
supply
supplychain
chain Test, and Roll
•Process
Processes
Processesand
and Out •People
Systems
Systems

SCOR Overview
July 2004 7
 Mapping material flow
(S1, D1)
(SR1,DR1,DR3)

Manufacturing
Warehouse

(S1, S2, M1, D1) Customer

Customer (SR1,,DR1) European Supplier (S1)

(S1) (D2) (SR1,SR3)
(SR1,SR3) (DR1)
Warehouse
(S1, D1) Warehouse
(S1, D1)
(SR1,DR1,DR3) (SR1, DR3)
Latin American
Other Suppliers Suppliers
(D1) (D1)

Customer

Warehouse (S1)
(S1)
Customer

(SR1,SR3)
(S1, D1) (SR1,SR3)
(SR1,DR1,DR3)

SCOR Overview
July 2004 8
 Mapping the execution processes
Americas
Distributors

S1

SR1
European
S2 M2 D2
RM Supplier
SR3
S2
M1 D1 S1 D1 S1
DR1 SR1
DR1 SR1 DR1 SR1

DR3 SR3 DR3 SR3

S1

Key Other S1 M1 D1
RM
Suppliers
Alpha
RM ALPHA Regional Distributors
Suppliers Warehouses

SCOR Overview
July 2004 9
 Identifying Plan Activities
P1 P1 P1
P1 P1 P1

P2 P3
P2 P3
P
P
4 P
4 P
3 P
3 P
2
2
P2 P P
P2 P P
4 4
4 4

European
S2 M2 D2
RM Supplier

Key Other S1 M1 S2 M1 D1 S1 D1 S1
RM D1
Suppliers

S1

Alpha Consume
RM ALPHA Regional Distributors
r
Suppliers Warehouses

SCOR Overview
July 2004 10
 Supply Chain Scorecard & Gap Analysis
Supply Chain SCORcard Performance Versus Competitive Population
Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements
Delivery Performance to
Supply Commit Date 50% 85% 90% 95%
Chain
Reliability
Fill Rates 63% 94% 96% 98%
EXTERNAL

Perfect Order Fulfillment 0% 80% 85% 90% $30M Revenue

Responsiveness Order Fulfillment Lead times 35 days $30M Revenue

7 days 5 days 3 days
Supply Chain Key enabler to cost and
Flexibility Response Time 97 days 82 days 55 days 13 days asset improvements
Production Flexibility 45 days 30 days 25 days 20 days
Total SCM Management
Cost 3% $30M Indirect Cost
19% 13% 8%

Cost NA NA NA NA NA
INTERNAL

Warranty Cost

Value Added Employee

Productivity
NA $156K $306K $460K NA

Inventory Days of Supply 119 days 55 days 38 days 22 days NA

Cash-to-Cash Cycle Time
Assets 196 days 80 days 46 days 28 days $7 M Capital Charge
Net Asset Turns (Working
Capital)
2.2 turns 8 turns 12 turns 19 turns NA

SCOR Overview
July 2004 11
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