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Houston Area Inaugural SCOR Users' Forum
 

Houston Area Inaugural SCOR Users' Forum

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  • Reliability: The ability to deliver, on-time, complete, in the right condition, packaging and documentation to the right customer Responsiveness: The speed at which products and services are provided Agility (Flexibility): The ability to change (the supply-chain) in order to support changing (market) conditions Cost: The cost associated with operating the supply chain Assets: The effectiveness in managing assets in support of demand satisfaction
  • Reliability: The ability to deliver, on-time, complete, in the right condition, packaging and documentation to the right customer Responsiveness: The speed at which products and services are provided Agility (Flexibility): The ability to change (the supply-chain) in order to support changing (market) conditions Cost: The cost associated with operating the supply chain Assets: The effectiveness in managing assets in support of demand satisfaction
  • How to establish? Within your company: Collect data from comparable lines of business. Be careful to compare apples for apples. Insert example
  • How to establish? Within your company: Collect data from comparable lines of business. Be careful to compare apples for apples. Insert example
  • Design the future state In the design phase opportunities are translated to the to-be or future state process The type of project and/or business preferences determine the method of design Facilitated workshops Dedicated design team External team Use techniques like: paper process, conference room pilots, etc to validate the design. As-Is documentation is used to understand what already exists Document the future state The future state refers to all assets that determine the (effectiveness, cost and speed of the) process: Process (what and how is it done) People (who does and who owns it) Technology (it is supported by) Metrics (how do you know it works) Reason (why is it done) These aspects need to be captured in the design documentation. Additional aspect that may be captured dependant on the project are skills and architecture. PCOR engagements use standards for process and metrics in order to guarantee re-usability, consistency and repetition of work The stage gate is the review of the captured information with a select group of stakeholders, sponsors or subject matter experts.
  • Applying the 7 wastes, we can begin to identify disconnects or “areas of interest” in search of improvement opportunities
  • Design the future state In the design phase opportunities are translated to the to-be or future state process The type of project and/or business preferences determine the method of design Facilitated workshops Dedicated design team External team Use techniques like: paper process, conference room pilots, etc to validate the design. As-Is documentation is used to understand what already exists Document the future state The future state refers to all assets that determine the (effectiveness, cost and speed of the) process: Process (what and how is it done) People (who does and who owns it) Technology (it is supported by) Metrics (how do you know it works) Reason (why is it done) These aspects need to be captured in the design documentation. Additional aspect that may be captured dependant on the project are skills and architecture. PCOR engagements use standards for process and metrics in order to guarantee re-usability, consistency and repetition of work The stage gate is the review of the captured information with a select group of stakeholders, sponsors or subject matter experts.
  • How to establish? Within your company: Collect data from comparable lines of business. Be careful to compare apples for apples. Insert example
  • This slide highlights the current state of affairs of the supply-chain council (2006-2007). Instructors can highlight additional information as appropriate, including industries covered (from Oil and Gas to Automotive to Aerospace), sectors (Private, Defense, Governmental, Educational Institutions). Another point which can be supplied is that council members in two recent studies have outperformed their peers both in revenue and profit (2003 study) as well as outperformed the DOW and S&P 500 Stock indicators in the united states (2003-2006 benchmark). The council itself is a non-for-profit institution run by and for it’s membership. Structurally, it has a board of directors, day-to-day operations managed through an association management agency, and as well numerous committees and groups – Training and Education oversaw the development of this material, the Technical Development and Steering Committee (TDSC) researches, improves, and adjusts the framework content, variouis SIG’s (Special Industry Groups) look at specific application and practices with SCOR for their areas, and then committees also look at the function of the council – Legal, Marketing, and Financial oversight. It’s just like a company, but there are no ‘owners’. 2006-2007 represents the 10 th anniversary of the Council.
  • Speaker/Trainer Notes SCOR 8.0 Training Day 1 Instructors may highlight that there are many process frameworks: Most consulting houses have their own process framework for working with clients (Accenture, Deloitte, PRTM). There are specialized industry frameworks – eTOM (enhanced Telecom Operations Map) and NGOSS (Next Generation Operations Support System) are useful for Telephone Networks; ITIL (IT Infrastructure Library) for Information Technology. Participants with questions about alternative frameworks should search a WIKI on internet for further information. What’s one unique feature about SCOR is that as opposed to most frameworks, it is not only a list of processes, or a list of practices, or metrics. It combines all three and adds ‘pre-defined’ relationships between processes, in terms of material, information, and work flows. These pre-defined relationships are the result of the research and collaborative definition that all participants in the SCOR development have contributed. It’s not perfect – it doesn’t represent all business flows – but it is quite valuable for hitting 95% of most business flows in supply chain.
  • Speaker/Trainer Notes SCOR 8.0 Training Day 1 Because SCOR is does not represent organizations, but rather activities, it is ‘boundaryless’. This is intentional. When you are considering how a supply-chain operates, you don’t want to ‘stop’ describing it when you must look at the activities of some participants. You can, in effect, look all the way from a grain of sand to a finished computer. In looking at various ways to describe this, you can use an anecdote that SCOR looks from “Cow to Cone” for Ice Cream, or if you feel particularly humorous, “from Stump to Rump” for toilet paper. Different trainers use different anecdotes, but you need to get across to the audience that by using Standard names Standard interconnects Boundaries only defined by process start/stop points You have the ability to truly optimize the performance of very, very large systems, cutting waste, cycle time, and improving cash consumption. This is a second unique feature of the SCOR model.
  • Impact of a significant change by level: Level 1 = 10,000; make outsourcing/insourcing decisions Level 2 = 100; consolidation of labs or source groups Level 3 = 10; new ways for prototyping or piloting builds Level 4 = 1; changing peoples tasks Level 5 = 0.1; changing the format of a message Six sigma projects mostly operate at level 4. SCOR projects operate at Level 1-3, that's why SCOR projects are much more profitable.
  • Speaker/Trainer Notes SCOR 8.0 Training Day 1 Reliability: The ability to deliver, on-time, complete, in the right condition, packaging and documentation to the right customer Responsiveness: The speed at which products and services are provided Agility (Flexibility): The ability to change (the supply-chain) in order to support changing (market) conditions Cost: The cost associated with operating the supply chain Assets: The effectiveness in managing assets in support of demand satisfaction
  • Business Process Management is the characterization at multiple levels of business process activity in a company, measurement, and guidance of the process to perform to specific goals. Many groups have focused on business process management as a key differentiator in the ‘new world’ of business and IT management.

Houston Area Inaugural SCOR Users' Forum Houston Area Inaugural SCOR Users' Forum Presentation Transcript

        • Houston Area
        • Inaugural
        • SCOR Users’ Forum
    Hosted by
  • Agenda
    • Planning - The Houston Users’ Forum Concept
      • Brainstorming of topics and format for future meeting
    09:00 Close Meeting 12:00
    • Dialogue
      • Facilitated discussion about SCOR and supply chain issues
    08:30 Break 09:30
    • Energy, Oil & Gas Project Team
      • SCOR Process Mapping Workshop
    09:45 Focus Schedule 07:30
    • SCOR Convergence with Six Sigma/Lean
      • Presented by Dan Swartwood , Director of Process and Supply Chain Design, Satellite Logistics Group
  • Lean, Six Sigma and SCOR
  • Background Improving our business can take on various forms Needed: an improvement process Process Specifications and requirements for new capabilities and practices Software Design ERP, MRP, CRM Implementation Workflow Design Process Audit Business Alignment Process Strategic Assessment Process Governance Value-Add Analysis New Business Design Merger, Acquisition or Divestiture Process Simplification Process Re-Engineering Approach Need to create greenfield operations model for business enterprise ERP, MRP or other software suite implementation driven by and linked to efficient process support Desire to identify and control workflow in company for greater execution efficiencies without specific automation Compliance to statutory reporting requirements for Sarbanes-Oxley 404 within context of risk & process models Creation of ISO9000 certification documentation Desire to align multiple business units to common set of goals and objectives for performance, linked clearly to enterprise objectives Need to understand and assess gaps in capability or performance in order to evaluate strategies Need to assess and manage business investments and risks at process level in order to evaluate strategies Desire to identify and eliminate non-value-add activities Must identify synergies and perform planning for post-merger or post-divestiture operations Need to eliminate redundancies and duplicated effort in processes Major reorganization desired. major changes or performance breakthroughs or new technology is to be introduced Business Challenge
  • Most Popular Improvement Processes
    • Lean
    • Six Sigma
    • Theory of Constraints (TOC)
    • Business Process Reengineering (BPR)
    • Total Productive maintenance (TPM)
    • Toyota Production System (TPS)
    • Plan-Do-Check-Act
    • Etc.
  • Six-Sigma History
    • Emphasis
      • Focus on quality and defect elimination
      • Data-driven decision-making
      • Highly structured approach to projects
    • Motorola
      • Pioneered in 1986 and originally defined as a metric for measuring defects
      • A methodology (*DMAIC) was developed to reduce defect levels below 3.4 Defects Per Million Opportunities (DPMO)
    * Define, Measure, Analyze, Improve, Control
  • Lean Focus – Waste Elimination
    • Processes have a tendency to evolve over time. Waste enters. This waste needs to be aggressively identified and removed for an organization to stay competitive.
    Value added lead-time is a small proportion of total cycle time, and is scattered throughout the process. We tend to concentrate on shrinking the 5-7% of value added lead-time rather than attacking the balance of waste Huge Improvements are possible Time Time
      • = Value Added Time
    Waste Waste Waste Lean Activities Concentrate Here Time
  • Challenges #1. Identification of improvement opportunities Typical approach: Interviews, pain points, pet projects, customer complaints process bottlenecks, long changeover times, disorganized areas Unpredictable performance areas, willing areas
    • Limitations:
    • Projects may reflect silo’s more than the end-to-end process
    • May not align with competitive strategy
    • Difficult to fully engage customers/suppliers
    • Projects are often identified around facilities and may not take an end-to-end view
  • Opportunities tend to flow in from an organizational framework Lean Six Sigma Opportunity Identification Management Directive Tactical & Pain-Oriented PQA Logistics Warehouse Production Procurement Matls Cntl Engineering Define Measure Analyze Improve Control
  • Challenges 3M – Over the 1 st 3 years of Six Sigma implementation the average project yielded $250K. At the end of 3 years projects were averaging $50K According to one study, up to to 98% of Lean initiatives fail to impact the bottom line #2. Maintaining *ROI on improvement activities All improvement efforts need a closed-loop to supply chain metrics *(Return on Investment)
  • “Before” Questions to Answer
    • Which business should be the focus?
    • What is the competitive strategy?
    • What is the current performance?
    • What should the performance be?
    • What are the performance gaps?
    • How can these gaps be closed?
    Would answers to these questions improve our continuous improvement efforts?
  • The SCOR Framework Supply Chain Operations Reference Model SCOR defines supply chain as the integrated processes of Plan, Source, Make, Deliver and Return , spanning your suppliers’ supplier to your customers’ customer Customer Customer’s Customer Deliver Make Source Source Internal or External Plan Plan Supplier Make Deliver Internal or External Source Plan Suppliers’ Supplier Deliver Plan Plan Deliver Source Make YOUR COMPANY Return
  • Which business should be the focus?
      • The Supply Chain Definition Matrix helps determine the number and size of supply chains
    Geography – Customer or Market Channel Commercial Retail x Commercial x x Small Airco x x Big Airco Product International Commercial Internet Direct Retailer Supply-Chain Definition Matrix
  • What are performance attributes? Customer Internal Asset Management (Fixed and working) Cost Flexibility (Ability to handle unplanned work) Responsiveness (cycle time) Delivery Reliability Attribute
  • What is the competitive strategy?
    • Procedure
      • Prioritize supply chain performance requirements for each supply chain
        • 1 superior (S),
        • 1 advantage (A),
        • 3 parity (P)
      • Each unique combination of ratings defines Your Supply Chain Strategy for the channel
    Compared to Industry Performance: Superior = 90% percentile, Parity = Median, Advantage = Average of S & P A S P Flexibility A P A Responsiveness P P P Asset Management P P P Cost S A S Delivery Reliability Comm’l Small Airco Big Airco Competitive Requirements Performance Attribute or Category
    • SCOR metrics
    How do we measure supply chain performance? Voice of External Customer Voice of Internal Customer Return on Working Capital Return on Supply Chain Fixed Assets Cash-to-Cash Cycle Time Asset Management Cost of Goods Sold Supply Chain Management Cost Cost Supply Chain Adaptability † Supply Chain Flexibility Flexibility Order Fulfillment Cycle Time Responsiveness Perfect Order Fulfillment Delivery Reliability Metric Attribute
  • What is the current performance? 22 days 10.1% 62 days 14 days 98% Big Airco Cash-to-Cash Cycle Time Supply Chain Mgmt Cost Upside Supply Chain Flexibility Order Fulfillment Cycle Time Perfect Order Fulfillment Metric Asset Management Cost Flexibility Responsiveness Delivery Reliability Attribute
  • APQC Benchmarking Supply-Chain Council’s Benchmarking Portal: An exclusive value-added service for SCC members   SIMPLE. POWERFUL. FAST. SECURE. SCORmark benchmarking is here                                                     Through an alliance with APQC , a leading global resource for best practices and benchmarking, SCC members have access to confidential benchmarking based on the Supply-Chain Operations Reference ® Model metrics to: •  Set reasonable performance goals based on the SCOR model •  Calculate performance gaps against a global database •  Develop company-specific roadmaps for supply chain competitive success
    • Performance gap
    What are the performance gaps?
    • Its now possible to compare the performance of a supply chain to a range of benchmark companies
    20 days 10.2% 40 days 4 days 98% Superior 22 days 10.1% 62 days 14 days 98% Company 45 days 10.8% 80 days 8 days 92% Parity 30 days 10.4% 62 days 6 days 96% Adv Cash-to-Cash Cycle Time Supply Chain Mgmt Cost Ups. Supply Chain Flexibility Order Fulfillment Cycle Time Perfect Order Fulfillment Metric (level 1) Asset Management Cost Flexibility 8 days Responsiveness Del. Reliability Gap Attribute
  • How can these gaps be closed? VSM, Future-state, Process map, SIPOC Material Flow Analysis Using SCOR SCOR level 2 elements (S1,M1,D1) Best Practices i.e. Vendor-managed inventory Customer Entities Major Level 2 processes Basic Flow Indication Basic Geographic Context ComfyCo Entities Major Suppliers OEM Supplier ( D 1 ) Refrigerant Supplier ( D 1 ) Electronics Supplier ( D 1 ) Motor Supplier ( D 1 ) Basic Units ( P 1 , P 2 , P 3 , S 1 , M 1 , M 2 ) Controls Plant ( P 3 , S 1 , M 1 ) Retail Distribution ( P 4 , D 1 ) Commercial Distribution ( P 4 , D 2 ) Retail Customers ( S 1 ) Commercial Customer ( S 2 ) I I I I I FG WIP RM I I I I I I I I
  • Material Flow (Value Stream) Map Customer Entities Major Level 2 processes Basic Flow Indication Basic Geographic Context ComfyCo Entities Major Suppliers OEM Supplier ( D 1 ) Refrigerant Supplier ( D 1 ) Electronics Supplier ( D 1 ) Motor Supplier ( D 1 ) Basic Units ( P 1 , P 2 , P 3 , S 1 , M 1 , M 2 ) Controls Plant ( P 3 , S 1 , M 1 ) Retail Distribution ( P 4 , D 1 ) Commercial Distribution ( P 4 , D 2 ) Retail Customers ( S 1 ) Commercial Customer ( S 2 ) Responsiveness Gap = 8 days I I I I I FG WIP RM I I I I I I I I
  • How can these gaps be closed? VSM, Future-state, Process map, SIPOC Work & Information Flow Analysis using SCOR SCOR level 3 elements (S1.1,M1.1,D1.1) Best Practices i.e. Vendor-managed inventory Standard inputs/outputs S1.2 Rec’v Product Retns Product Sched. recpts Rec.Ver. M 2.1 Schedule Production Activities M 2.2 Issue Sourced/I n - Process Product M 2.3 Produce and Test M 2.4 Package M 2.5 Stage Finished Product M 2.6 Release Finished Product to Deliver I 10 days 5 days 30 days 3 days 1 day
  • M 2.1 Schedule Production Activities M 2.2 Issue Sourced/I n - Process Product M 2.3 Produce and Test M 2.4 Package M 2.5 Stage Finished Product M 2.6 Release Finished Product to Deliver Work & Information Flow Value-Stream Mapping Value-stream mapping Efficiency issues Good performance Marginal Performance I 10 days 5 days 30 days 3 days 1 day
  • Organize disconnects - select improvement strategy “ Just do it!” Lean Strategic Six Sigma Six Sigma
  • Identify Best Practices Electronic Tag tracking to Point of Use (POU) destination Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Vendor Managed Inventory VMI
  • Opportunity Ranking quick wins nice to have sponsor issue consider carefully Change in many processes 80/20: low impact Expensive Change Difficult to back out Low ROI Long Deployment Change in few processes 80/20: low impact area Inexpensive Change Easy to back out Low ROI Quick Deployment Low Return Change in many processes 80/20: high impact Expensive Change Difficult to back out High ROI Long Deployment Change in few processes 80/20: high impact Inexpensive Change Easy to back out High ROI Quick Deployment High Return High Risk Low Risk
  • Scorecard Outcome
    • Performance gap gone!
    -27 days -0.6% -17 days -2 days -6.5% Parity Gap 20 days 10.2% 40 days 4 days 98% Superior 18 days 10.2% 63 days 6 days 98.5% Company 45 days 10.8% 80 days 8 days 92% Parity 30 days 10.4% 62 days 6 days 96% Adv Cash-to-Cash Cycle Time Supply Chain Mgmt Cost Ups. Supply Chain Flexibility Order Fulfillment Cycle Time Perfect Order Fulfillment Metric (level 1) Assets Cost Flexibility Responsiveness Reliability Req Gap Attribute
  • Convergence is Complementary x X Strategic alignment of business activities with customer/competitive requirements X X X Systematic methodology for problem solving X X Variability and quality improvement emphasis X X X Customer centric focus X X x Six Sigma X X Highlights waste and identifies actions X Implements process & system improvements X X Prioritizes process improvements for system X x Establishes Continuous Improvement Culture X Benchmarking X X Supply chain level metrics for system performance x X Ability to see the supply chain system as a whole x X Common language and architecture from supply chain to supply chain Lean SCOR
  • www.Supply-Chain.org [email_address] LEAN Converge SCOR SIX SIGMA
    • Dialogue
      • Facilitated discussion about SCOR and supply chain issues
  • Supply-Chain Council
  • Supply-Chain Council
    • The SCC is an independent, not-for-profit, trade association
    • Membership open to all companies and organizations
    • Focus is on research, application and advancement and advancing state-of-the-art supply chain management systems and practices
    • Developer and endorser of the Supply Chain Operations Reference (SCOR ® ) as a cross-industry standard for supply chain management
    • Offers Training, Certification, Benchmarking, Research, Team Development, Coaching, and Cross-standard Integration focused on the SCOR® framework
    • Founded in 1996
    • Approaching 1000 Association Members
    • Chapters in North America, Europe, Japan, South Africa, Latin America, Australia/New Zealand, South East Asia and Greater China, with developing Chapters India and Middle East
    Risky Business: SCOR for Risk Management Driving value through the use of SCOR ®
  • Industry Membership Scope Risky Business: SCOR for Risk Management
  • SCOR: A Process Framework
    • Process frameworks deliver the well-known concepts of business process reengineering, benchmarking, and best practices into a cross-functional framework
      • Standard processes: Plan, Source, Make, Deliver, Return, Enable
      • Standard metrics: Perfect Delivery, Cash Cycle Time, Supply-Chain Cost, etc
      • Standard practices EDI, CPFR, Cross-Training, etc
    • Pre-defined relationships between processes, metrics and practices
    Australia - SCOR Executive Overview
  • SCOR Processes
    • Five distinct management processes link together (the chain in supply-chain) seamlessly from supplier to customer
    SCOR for Benchmarking Supplier Customer Customer’s Customer Suppliers’ Supplier Make Deliver Make Deliver Make Source Deliver Source Internal or External Internal or External Your Company Source SCOR Model Plan Source Deliver Return Return Return Return Return Return Return Return
  • SCOR Hierarchy Australia - SCOR Executive Overview S1 Source Stocked Product Supply-Chain Source S1.2 Receive Product Standard SCOR definitions Company/Industry definitions EDI XML Level 1 Level 2 Level 3 Level 4 Level 5 Scope Configuration Activity Workflow Transactions Differentiates Business Differentiates Complexity Names Tasks Sequences Steps Links Transactions Defines Scope Differentiates Capabilities Links, Metrics, Tasks and Practices Job Details Details of Automation Framework Language Framework Language Framework Language Industry or Company Specific Language Technology Specific Language
  • Metrics
    • SCOR metrics: Standard Level 1 Metrics
    SCOR for Benchmarking Customer Internal † upside and downside adaptability metrics Attribute Metric (level 1) Reliability Perfect Order Fulfillment Responsiveness Order Fulfillment Cycle Time Agility (Flexibility) Supply Chain Flexibility Supply Chain Adaptability † Cost Supply Chain Management Cost Cost of Goods Sold Assets Cash-to-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital
  • Training & Certification SCOR for Benchmarking *reserved for University Students in SCM Studies Level Key Requirements SCOR Scholar (SCOR/S) *
    • SCOR University Curriculum
    • SCOR Level 0 Exam
    SCOR Professional (SCOR/P)
    • SCOR Framework
    • SCOR Implementation
    • SCOR Level 1 Exam
    SCOR Expert (SCOR/E)
    • SCOR/P
    • SCOR Project Case Study
    • SCOR Project Peer Review
    • SCOR Level 2 Exam
    SCOR Master (SCOR/M)
    • SCOR/E
    • 5 years SCM Experience
      • 2 in SCOR Areas
    • 2 years SCOR Experience
    • SCOR Practicum
    • Instruction Workshop
    • SCOR Level 3 Exam
    • Positive Training Evaluations
    SCOR Subject Master (SSM in…)
    • SCOR/M
    • Subject Training
    • Positive Subject Training Evaluation
  • Benchmarking SCOR for Benchmarking
  • The Value of SCOR Risky Business: SCOR for Risk Management
  • Value of Using SCOR 1 SCOR for Benchmarking 1 Hughes & Michels (1998) Transform your supply chain. Releasing value in business. London, UK Area Improvement Raw materials purchase cost 25% Cost of Distribution 35% Total resource deployed 50% Manufacturing space 50% Investment in Tooling 50% Order cycle time 60% New product development cycle 60% Inventory 70% Paperwork and Documentation 80% Quality Defects 100%
  • Further Information
    • www.supply-chain.org
    • [email_address]
    Risky Business: SCOR for Risk Management
    • Planning
    • Houston Users’ Forum Concept
      • Brainstorming of topics and format for future meeting
    • Thank-You for attending
    • Houston Area
    • Inaugural
        • SCOR Users’ Forum
    • Energy, Oil & Gas Project Team
    • SCOR Process Mapping Workshop
  • Industry Structure Oil & Gas Industry Segments Defined
    • Upstream
      • Activities and businesses involved in the exploration, development and production of crude oil or natural gas
    • Midstream
      • Activities and business involved in the transportation, aggregation, and storage of oil & gas commodities, including pipeline and water freight.
    • Downstream
      • Activities and businesses involved in processing and refining of oil & gas products and the distribution, packaging, and marketing of motor fuels, lubricants, petro chemicals & other hydrocarbon products, including pipeline between the streams.
    Oil Field Services Exploration & Production Distribution & Packaging Trading & Marketing Customers Natural Gas Crude Oil Transportation Aggregation Storage Crude Oil Natural Gas Refining & Processing Batch** Continuous * *Examples (not all inclusive) – Petro Chemicals and Natural Gas Products **Examples (not all inclusive) – Lubricants, Specialty Chemicals, Refined Oil Products Refining