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  1. 1. Supply Chain Excellence SCOR “Certification”: Results from the Field March 31, 2004
  2. 2. Session Discussion Points <ul><li>Your Lean – Six Sigma – SCOR Integration Number </li></ul><ul><li>The Concept of Certification </li></ul><ul><li>Pilot Project Examples </li></ul><ul><ul><li>Supply Chain Scope and Resource Support </li></ul></ul><ul><ul><li>SCOR Metrics and Defect Analysis </li></ul></ul><ul><ul><li>Material Flow Opportunity Analysis </li></ul></ul><ul><ul><li>Transactional Productivity – Application Value Capture </li></ul></ul><ul><ul><li>Project List </li></ul></ul><ul><li>Ways to Get Involved </li></ul><ul><ul><li>Supply Chain Council SIG – Lean, Six Sigma, and SCOR Convergence </li></ul></ul>
  3. 3. Lean – Six Sigma – SCOR Integration Number <ul><li>An integration number attempts to define the level of implementation experience an organization has for each of the three methods </li></ul><ul><li>Using a sliding scale from 0 to 9, describe your company’s implementation experience with each method </li></ul><ul><ul><li>1 – No Experience </li></ul></ul><ul><ul><li>3 – Education Completed </li></ul></ul><ul><ul><li>5 – Pilot Project(s) Completed </li></ul></ul><ul><ul><li>7 – First Year of Full Scale Implementation Completed </li></ul></ul><ul><ul><li>9 – Have Sustained Multiple Years of Full Scale Implementation </li></ul></ul><ul><li>Examples of integration numbers when the SCOR “Certification” process started </li></ul><ul><ul><li>3 – 3 – 5 </li></ul></ul><ul><ul><ul><li>Lean 3 </li></ul></ul></ul><ul><ul><ul><li>Six Sigma 3 </li></ul></ul></ul><ul><ul><ul><li>SCOR 5 </li></ul></ul></ul><ul><ul><li>7 – 9 – 1 </li></ul></ul><ul><ul><li>1 – 1 – 5 </li></ul></ul><ul><ul><li>1 – 1 – 1 </li></ul></ul>
  4. 4. The Concept of Certification <ul><li>Training attempts to build the knowledge and skill level of an individual to be able achieve an acceptable level of performance (on defined tasks) which ultimately helps his/her organization achieve its goals </li></ul><ul><li>Certification is an official recognition by the organization that the individual can perform at an acceptable level </li></ul><ul><li>The basic process of training involves four steps </li></ul><ul><ul><li>Tell – Instructor lead Lecture </li></ul></ul><ul><ul><li>Show – Instructor lead examples </li></ul></ul><ul><ul><li>Practice – Instructor facilitated guided practice </li></ul></ul><ul><ul><li>Do – Trainee lead independent practice with instructor facilitated review and evaluation </li></ul></ul><ul><li>The basic process of certification involves three steps </li></ul><ul><ul><li>Completed Project </li></ul></ul><ul><ul><li>Demonstrated Results </li></ul></ul><ul><ul><li>“ Board” Certification </li></ul></ul><ul><li>There are some very familiar training – certification models </li></ul><ul><ul><li>APICS – CPIM and CPFIM </li></ul></ul><ul><ul><li>Six Sigma – Black Belt and Master Black Belt </li></ul></ul>
  5. 5. SCOR – Lean – Six Sigma Synergy <ul><li>The SCOR Framework drives project portfolio and selection </li></ul><ul><li>The Lean and Six Sigma approaches drive implementation – execution </li></ul><ul><li>Lean and Six Sigma analytical tools supplement the SCOR Analysis </li></ul><ul><li>Lean and Six Sigma have greater impact as the overarching Program – SCOR is a tool that takes a subordinate role </li></ul><ul><li>Six Sigma project portfolios needed some refreshing </li></ul><ul><li>Conclusion </li></ul><ul><li>SCOR Certification could be modeled after Black Belt Certification </li></ul><ul><li>Need to Develop the Path </li></ul>
  6. 6. ProEx™ Approach to SCOR Certification
  7. 7. Initial “Pilot” Projects <ul><ul><li>Twelve companies were founding companies of the SCOR/Six Sigma/Lean Convergence SIG </li></ul></ul><ul><ul><li>These companies generated 8 “pilot” projects in the past twelve months where the basic 5 steps were applied </li></ul></ul><ul><ul><li>What did they do? </li></ul></ul><ul><ul><li>ProEx™ Phase </li></ul></ul><ul><ul><ul><li>0 – Supply Chain Scope and Resource Support </li></ul></ul></ul><ul><ul><ul><li>1 – SCOR Metrics and Defect Analysis </li></ul></ul></ul><ul><ul><ul><li>2 – Material Flow Opportunity Analysis </li></ul></ul></ul><ul><ul><ul><li>3 – Transactional Productivity – Application Value Capture </li></ul></ul></ul><ul><ul><ul><li>4 – Project List </li></ul></ul></ul>
  8. 8. Supply Chain Scope and Resource Support <ul><li>Teaching Point – key points to assemble a Supply Chain Definition matrix… </li></ul><ul><ul><li>Customer/channel groups define the columns – double clicking gets you to a customer ship to address </li></ul></ul><ul><ul><li>Products/businesses define the rows – double clicking gets you to an item number </li></ul></ul><ul><ul><li>Put an X where products are sold to customers </li></ul></ul><ul><ul><li>The Data behind each X includes revenue, inventory, unit volume, and gross margin </li></ul></ul>
  9. 9. Supply Chain Scope and Resource Support <ul><li>Create a supply chain definition matrix for your company </li></ul><ul><li>Which Xs or fraction of Xs will be the focus of your pilot? </li></ul>
  10. 10. Supply Chain Scope and Resource Support <ul><li>Project Resources </li></ul><ul><ul><li>Project Leader FT </li></ul></ul><ul><ul><ul><li>Master Black Belt </li></ul></ul></ul><ul><ul><ul><li>Black Belt </li></ul></ul></ul><ul><ul><ul><li>Functional Leader </li></ul></ul></ul><ul><ul><li>Design Team PT – FT </li></ul></ul><ul><ul><ul><li>Green Belts </li></ul></ul></ul><ul><ul><ul><li>Black Belts </li></ul></ul></ul><ul><ul><ul><li>Functional Leaders - Analysts </li></ul></ul></ul><ul><li>Project Resources </li></ul><ul><ul><li>Executive Sponsor PT </li></ul></ul><ul><ul><li>Steering Team PT </li></ul></ul><ul><ul><ul><li>Executive Leaders </li></ul></ul></ul><ul><ul><ul><li>Project Leader </li></ul></ul></ul><ul><ul><ul><li>Executive Sponsor </li></ul></ul></ul>
  11. 11. SCOR Metrics and Defect Analysis <ul><li>SCOR Metrics are the only cross industry standard measures for supply chain processes… </li></ul><ul><ul><li>Identify the SCOR Level One Measures considered in scope for the pilot </li></ul></ul><ul><ul><li>Develop a data collection plan </li></ul></ul><ul><ul><ul><li>Definition </li></ul></ul></ul><ul><ul><ul><li>Sampling Plan </li></ul></ul></ul><ul><ul><ul><li>Appropriate Segmentation </li></ul></ul></ul><ul><ul><ul><li>Defect Analysis </li></ul></ul></ul><ul><li>SCOR Metrics </li></ul><ul><ul><li>On Time and In Full to Customer Commit – Request </li></ul></ul><ul><ul><li>Perfect Order Fulfillment </li></ul></ul><ul><ul><li>Order Fulfillment Lead Time </li></ul></ul><ul><ul><li>Supply Chain Responsiveness </li></ul></ul><ul><ul><li>COGS </li></ul></ul><ul><ul><li>Total Supply Chain Management Costs </li></ul></ul><ul><ul><li>Cash-to-Cash Cycle Time </li></ul></ul><ul><ul><li>Inventory Days of Supply </li></ul></ul><ul><ul><li>Asset Turns </li></ul></ul><ul><ul><li>Gross Margin </li></ul></ul><ul><ul><li>Operating Margin </li></ul></ul><ul><ul><li>Net Operating Margin </li></ul></ul><ul><ul><li>Return on Assets </li></ul></ul>
  12. 12. SCOR Metrics and Defect Analysis <ul><li>Order Fulfillment Lead Time </li></ul><ul><ul><li>Customer Authorization to Order Entry Complete </li></ul></ul><ul><ul><li>Order Entry Complete to Start Manufacture </li></ul></ul><ul><ul><li>Start Manufacture to Manufacturing Ship </li></ul></ul><ul><ul><li>Manufacturing Ship to Order Received at Warehouse </li></ul></ul><ul><ul><li>Order Received at Warehouse to Order Shipped to Customer </li></ul></ul><ul><ul><li>Order Shipped to Customer to Customer Receipt of Order </li></ul></ul><ul><ul><li>Order Received at Customer to Installation Complete </li></ul></ul>
  13. 13. SCOR Metrics and Defect Analysis
  14. 14. Material Flow Opportunity Analysis <ul><li>Key deliverables for this phase </li></ul><ul><ul><li>AS IS Geographic Map and Thread Diagram </li></ul></ul><ul><ul><li>Disconnect Analysis </li></ul></ul><ul><ul><li>TO BE Geographic Map and Thread Diagram </li></ul></ul><ul><ul><li>Opportunity Analysis </li></ul></ul><ul><ul><li>Other material flow analytical techniques </li></ul></ul><ul><ul><ul><li>Spaghetti Diagram </li></ul></ul></ul><ul><ul><ul><li>Value Stream Map </li></ul></ul></ul><ul><ul><ul><li>Network Analysis </li></ul></ul></ul><ul><li>Disconnect and Opportunity Analysis </li></ul><ul><ul><li>Brainstorm individual disconnects by metric </li></ul></ul><ul><ul><li>Use an affinity diagram to group like disconnects </li></ul></ul><ul><ul><li>Develop problem Statements for each group </li></ul></ul><ul><ul><li>Conduct root cause analysis for each group using fishbone diagrams </li></ul></ul><ul><ul><li>Quantify the value of eliminating the problem </li></ul></ul><ul><ul><li>Categorize ease of implementation and size of opportunity using Effort – Impact Diagram </li></ul></ul>
  15. 15. Material Flow Opportunity Analysis <ul><li>Disconnect and Opportunity Analysis Statistics </li></ul><ul><ul><li>Average 16 disconnects per person </li></ul></ul><ul><ul><li>Average 26 problem statements per project </li></ul></ul><ul><ul><li>Range of operating income improvement value is from 1.0% to 3.5% to sales </li></ul></ul><ul><ul><li>2 Quick Hit projects identified for Green Belt or Black Assignment </li></ul></ul><ul><li>Top 5 Problems </li></ul><ul><ul><li>Data Integrity Poor </li></ul></ul><ul><ul><li>Poor Equipment Utilization </li></ul></ul><ul><ul><ul><li>Run Time </li></ul></ul></ul><ul><ul><ul><li>Unplanned Down Time </li></ul></ul></ul><ul><ul><ul><li>Planned Down Time </li></ul></ul></ul><ul><ul><li>Ineffective Sales and Operations Planning </li></ul></ul><ul><ul><li>Disconnect Scheduling, Tactical Planning, and Sales and Operations Planning </li></ul></ul><ul><ul><li>Long Manufacturing Lead Times </li></ul></ul>
  16. 16. Transactional Productivity – Application Value Capture
  17. 17. Transactional Productivity – Application Value Capture
  18. 18. The SCOR Business Blue Print
  19. 19. Project List
  20. 20. Effort – Impact
  21. 21. Implementation Approach <ul><li>Software Implementation </li></ul><ul><ul><li>Detailed Design </li></ul></ul><ul><ul><li>Configuration </li></ul></ul><ul><ul><li>Test </li></ul></ul><ul><ul><li>Go-Live </li></ul></ul><ul><li>Six Sigma </li></ul><ul><ul><li>Define </li></ul></ul><ul><ul><li>Measure </li></ul></ul><ul><ul><li>Analyze </li></ul></ul><ul><ul><li>Improve </li></ul></ul><ul><ul><li>Control </li></ul></ul><ul><li>Lean Manufacturing </li></ul><ul><ul><li>Workplace Organization – 5S </li></ul></ul><ul><ul><li>Flow Production – Value Stream Map </li></ul></ul><ul><ul><li>Company Culture </li></ul></ul><ul><ul><li>Continuous Improvement </li></ul></ul><ul><ul><li>Visual Controls </li></ul></ul><ul><ul><li>Empowered Teams </li></ul></ul><ul><li>Class A Processes </li></ul><ul><ul><li>Strategic Planning </li></ul></ul><ul><ul><li>People Team </li></ul></ul><ul><ul><li>Total Quality and Continuous Improvement </li></ul></ul><ul><ul><li>New Product Development </li></ul></ul><ul><ul><li>Planning and Control </li></ul></ul>
  22. 22. More Information <ul><li>The Supply Chain Council – SCOR Advisor Program </li></ul><ul><li>The Supply Chain Council SIG Lean, Six Sigma, and SCOR Convergence – www.supply-chain.org </li></ul><ul><ul><li>Leadership Forum </li></ul></ul><ul><ul><li>Case Studies </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Materials </li></ul></ul><ul><ul><li>Projects are underway </li></ul></ul><ul><li>The AIT Group – www.theaitgroup.com – Developers of the ProEx™ approach to SCOR Certification </li></ul><ul><li>www.scorwizard.com – SCOR Project Managers Toolkit </li></ul><ul><li>www.scelimited.com – the SCOR users resource center </li></ul><ul><li>Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR Model </li></ul><ul><li>Peter Bolstorff – [email_address] </li></ul>

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