SCOR®10.0 for Supply Chain Optimization

SCOR® Walkthrough 10.0 Supply-Chain Operations Reference-model John PAUL© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Professor & Research Fellow at BEM (Bordeaux Ecole de Management-France) Qualified SCOR® Instructor by Supply Chain Council Managing Director, iCognitive PLAN SOURCE MAKE DELIVER RETURN

Supply Chain Council Overview An independent, non-profit global association • 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© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • 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 Driving value through the use of SCOR® 3

Supply Chain Council Overview SCOR Model available in English and Chinese© 2011 Copyright iCognitive Pte. Ltd. All rights reserved On sale on: http://alturl.com/mqzzp www.supply-chain.org www.icognitive.com 4

SCOR® Introduction SCOR®: A process reference model Business Process Best Practices Process Reference Reengineering Benchmarking Analysis Model Capture the “as-is” Capture the “as-is” state of a state of a process and process and derive the derive the desired desired “to-be” future state “to-be” future state Quantify the operational performance of Quantify the operational similar companies performance of similar and establish internal companies and establish targets based on internal targets based on “best-in-class” results© 2011 Copyright iCognitive Pte. Ltd. All rights reserved “best-in-class” results Characterize the management Characterize the practices and management practices software solutions and software solutions that result in “best-in- that result in “best-in- class” performance class” performance 7

SCOR® Introduction Supply-Chain Operations Reference-model (SCOR) 10.0 – Processes [1/2] Plan P1 Plan Supply Chain P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns Source Make Deliver S1 Source Stocked Products M1 Make-to-Stock D1 Deliver Stocked Products Suppliers S2 Source MTO Products M2 Make-to-Order D2 Deliver MTO Products Customers S3 Source ETO Products M3 Engineer-to-Order D3 Deliver ETO Products© 2011 Copyright iCognitive Pte. Ltd. All rights reserved D4 Deliver Retail Products SR1 Source Return Defective Product DR1 Deliver Return Defective Product SR2 Source Return MRO Product DR2 Deliver Return MRO Product SR3 Source Return Excess Product DR3 Deliver Return Excess Product Enable 9

SCOR® Introduction Supply-Chain Operations Reference-model (SCOR) 10.0 – Processes [2/2] Plan P1 Plan Supply Chain P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns Level 1 Source Make Deliver processes and S1 Source Stocked Products M1 Make-to-Stock D1 Deliver Stocked Products Level 2 variations S2 Source MTO Products M2 Make-to-Order D2 Deliver MTO Products© 2011 Copyright iCognitive Pte. Ltd. All rights reserved S3 Source ETO Products M3 Engineer-to-Order D3 Deliver ETO Products D4 Deliver Retail Products D2.7 D2.6 D2.5 D2.4 D2.3 D2.2 D2.1 Level 3 Select Carriers & Route Plan & Build Consolidate Reserve Resources Receive, Sub Rate Shipments Shipments Loads Orders & Configure, Enter & Process Inquiry processes of Determine Validate Order & Quote Delivery Date D2 D2.8 D2.9 D2.10 D2.11 D2.12 D2.13 D2.14 D2.15 Receive Product Pick Product Pack Product Load Product Ship Product Receive & Install Invoice from Source or & Generate Verify Product Product Make Shipping Docs by Customer 10

SCOR® Introduction Using latest Version 10.0 • Structure – Section1: Introduction – Section 2: Metrics – Section 3: Processes • Chapter 3.1: Plan and Workflow Graphics • Chapter 3.2: Source and Workflow Graphics • Chapter 3.3: Make and Workflow Graphics • Chapter 3.4: Deliver and Workflow Graphics • Chapter 3.5: Return and Workflow Graphics© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • Chapter 3.6: Inputs and Outputs – Section 4: Best Practices • SCOR • Green SCOR • Risk Management – Section 5: People – Section 6: Special applications • Green SCOR 11

SCOR® Introduction Version 10.0 – Using Metrics Coding • Metrics Coding XX.y.z XX= Performance Attribute. The possible values for XX are: • RL= Reliability • RS= Responsiveness • AG= Agility • CO= Cost© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • AM= Asset Management y= Level of the metric z= a unique number 12

SCOR® Introduction Planning Processes Customer Customer processes Supply Chain Supplier processes Supplier Supply Plan Chain Source Make Deliver© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Return Return 13

SCOR® Introduction PLAN – Balancing requirements and resources • Plan provides two important functions within the SCOR Model – Plan processes provide the mechanism for balancing demand requirements and available resources Plan – Plan processes provide an integrating function between other process elements and suppliers / customers • Includes elements such as: – Prioritizing demand requirements© 2011 Copyright iCognitive Pte. Ltd. All rights reserved – Planning inventory, distribution, production, material, and rough-cut capacity for all products and The balancing of all channels requirements – Supply chain configuration, long-term capacity and against resources resource planning, business planning, product phase-in/phase-out, manufacturing ramp-up, end- of-life management, product-line management – Manage planning infrastructure 14

SCOR® Introduction Execution Processes Customer Supply Chain Customer processes Supplier processes Supplier Supply Plan Chain Source Make Deliver© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Return Return Return Return 15

SCOR® Introduction SOURCE – Ordering and receipt of goods • Source processes document the activities that connect an organization to its suppliers • Source Processes include activities such as: Source – Material Acquisition • Obtain, receive, inspect, hold, and issue material – Vendor certification and feedback, sourcing quality, in bound freight, vendor contracts, initiate vendor© 2011 Copyright iCognitive Pte. Ltd. All rights reserved payments – Raw Materials Warehouse management Activities that connect – Raw Materials Transportation us to our suppliers • Manage traffic • Manage inbound freight – Manage Source business rules – Manage RM inventories 16

SCOR® Introduction MAKE – Conversion of materials • Make documents the processes that transform / converts raw materials into finished goods – Make processes do not imply a change of location but a qualitative transformation of the raw materials – Not all organizations will necessarily perform Make Make processes • Make processes include activities such as: – Request and receive material from Source processes – Manufacture and test product, package, hold and/or© 2011 Copyright iCognitive Pte. Ltd. All rights reserved release product – Engineering changes, facilities and equipment, production Change to status, production quality, shop scheduling/sequencing, form, fit, or short-term capacity – WIP Transportation function – Manage production business rules – Manage WIP inventories 17

SCOR® Introduction DELIVER – Fulfillment of customer orders • Deliver processes document the activities that connect an organization to its customers • Deliver processes include activities such as: – Order management • Enter and maintain orders • Generate quotations Deliver • Create and maintain customer database, maintain product/price database • Manage accounts receivable, credits, collections and invoicing – Finished Goods Warehouse management • Store, pick, pack and configure products, create customer© 2011 Copyright iCognitive Pte. Ltd. All rights reserved specific packaging/labeling, consolidate orders, ship Activities that products connect us to our • Finished Goods Transportation and installation management – Manage traffic, manage outbound freight, manage Schedule customers installation activities, perform installation, verify performance • Manage channel business rules, order rules, manage deliver inventories, manage deliver quality. Manage product import/export 18

SCOR® Introduction RETURN – Reverse flow of goods • Return processes document the activities associated with the handling of returns, that is, the return of a product to a supplier or the receipt of a returned product from a Return customer • Return Source – Activities associated with returning material to a supplier including the communication with the© 2011 Copyright iCognitive Pte. Ltd. All rights reserved trading partner, the generation of documentation, and the physical return / shipment of product. How to manage returns from your • Return Deliver customers and – Activities associated with receiving and disposing of returned material from a customer including the to your suppliers communication with the trading partner, the generation of documentation, and the physical return / receipt and disposal of product. 19

SCOR® Introduction SCOR links Company Strategy to Business Operations Strategic Europe an RM Supplie S2 M2 D2 S2 r M1 D1 S1 D1 S1 DR1 SR1 DR1 SR1 DR1 SR1 DR3 SR3 S1 Key S1 M1 D1 Other© 2011 Copyright iCognitive Pte. Ltd. All rights reserved RM Tactical Supplie rs RM Supplie ALPHA Alpha Regional Warehou Cons umer rs ses Operational Systems 20

Supply Chain Performance Measuring how well the supply chain performs is as essential as understanding how it operates • Measurements must link to business objectives • Measurements must provide insights into how to manage the supply chain more effectively© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • Measurements must be appropriate for the process activity they are measuring – Same level 22

Supply Chain Performance Eleven Level 1 metrics Performance Attributes Level 1 Strategic Metrics Customer-Facing Internal-Facing Reliability Responsiveness Agility Costs Assets Perfect Order Fulfillment √ Order Fulfillment Cycle Time √ Upside Supply Chain Flexibility √ Upside Supply Chain Adaptability √ Downside Supply Chain Adaptability √© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Overall Supply Chain Value-At-Risk √ Supply Chain Management Cost √ Cost of Goods Sold √ Cash-To-Cash Cycle Time √ Return on Supply Chain Fixed Assets √ Return on Working Capital √ 23

Best Practices - Green SCOR An Excellent Foundation for Environmental Accounting • Sustainable business models and environmental accounting are growing business concerns. • There are multiple approaches to measuring the total environmental footprint of an© 2011 Copyright iCognitive Pte. Ltd. All rights reserved organization or supply chain with no agreed upon standards. • SCOR provides an excellent foundation for environmental accounting in the supply chain. 25

Best Practices - Green SCOR Green metrics Aggregation along SCOR process structure Total Carbon Footprint Level 1 Air + Liquid + Solid - % Recycle = Total Environmental Footprint Tier 3 Tier 2 Tier1 Your Customer S2 M2 D2 S2 M2 D2 Company Level 2 D1 S2 M2 D2 D2 S1 M1 D1 S1 M1 D1 Carbon Air Liquid© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Solid % Recyc M2.1 M2.2 M2.3 M2.4 M2.5 M2.6 M2.7 Schedule Issue Produce and Package Stage Release Waste Level 3 production Product Test Product Product to Disposal Activities Deliver Carbon Carbon Carbon Carbon Carbon Carbon Carbon Air Air Air Air Air Air Air Liquid Liquid Liquid Liquid Liquid Liquid Liquid Solid Solid Solid Solid Solid Solid Solid % Recyc % Recyc % Recyc % Recyc % Recyc % Recyc % Recyc 26

Best Practices – Risk Management Supply Chain Risk Management (SCRM) • SCRM – The systematic identification, assessment and mitigation of potential disruptions in logistics networks with the objective to reduce their negative impact on the supply chain network’s performance.© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • Related SCOR Processes – EP.9, ES.9, EM.9, ED.9, ER.9 28

Best Practices – Risk Management Three phase approach for SCRM Phase 1: Phase 2: Phase 3: Risks identification Risks assessment Risks mitigation Supply risks Risks assessment & Control and monitor evaluation Operations risks Risks strategy Mitigation measures management selection© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Demand risks Security risks Decreasing the Risks plan definition impact Other risks (regulations, environmental, Decreasing the etc…) likehood 30

Best Practices – Risk Management SCOR Enables Risk Monitoring Delivery Performance 12 100% 10 80%8 60%6 40%4© 2011 Copyright iCognitive Pte. Ltd. All rights reserved 20%2 0 0 Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Fournisseur Chine Singapore Europe du Europe de Europe Afrique de Afrique de Amerique du Amerique Amerique du Nord lEst Occidentale lOuest lEst Nord centrale Sud Suppliers © 2008 Copyright – iCognitive Pte, Ltd . Tous droits réservés Example of Supplier Risk Monitoring 31

People Introduction to Supply Chain Management Skills in SCOR Supply Chain Architecture Overview© 2011 Copyright iCognitive Pte. Ltd. All rights reserved People Section Skills • Experience • Aptitude • Training • Competency 33

People Supply Chain Assets – Human Capital Key elements of the People section Skill Experience Aptitude Training Competency • Capacity to • The knowledge • A natural, • A particular skill • The state or deliver pre- or skill acquired acquired, or type of quality of being determined by observation learned or behavior qualified, having results with or active developed learned through the ability, to minimal input of participation ability to instruction over perform a time and energy • i.e. Cycle perform a a period of time specific role© 2011 Copyright iCognitive Pte. Ltd. All rights reserved • i.e. Master Counting, Cross certain kind of • i.e. SCOR-S • 5 Levels: Novice, Scheduling, Docking, and work at a certification, Beginner, Import/Export Hazardous certain level. APICS CPIM Competent, Regulations, Materials • i.e. Accuracy, certification but Proficient, Production Handling Analytical, also include on- Expert Planning, Risk Natural the-job training Mitigation etc leadership etc etc. 34

Full presentation with more details about SCOR V10.0 is available on: http://www.icognitive.com/index.php?option =com_phocadownload&view=category&id=6 %3A&download=107%3Ascor_v10_sc_optimiz© 2011 Copyright iCognitive Pte. Ltd. All rights reserved ation&Itemid=64&lang=en iCognitive Downloads: http://alturl.com/878ek 35

With Hands-On Experience in SCOR Supply Chain Excellence Award - With support of iCognitive, British American Tobacco Pakistan SCOR implementation project won two awards from Supply Chain Council: •Supply Chain Operational Excellence Award •Global Award for Supply Chain Excellence© 2011 Copyright iCognitive Pte. Ltd. All rights reserved Provider of SCOR® workshops as qualified SCOR® instructor certified by the supply chain council : more than 2000 supply chain professionals trained in more than 200 companies. 38

SCOR®10.0 for Supply Chain Optimization

by melodis on Jun 20, 2011

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