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Using SCOR Best Practice Webinar


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Accompanying presentation for the free SCE Ltd. webinar highlighting a best-practice application of SCOR®, and summarizing the key steps to effectively utilize SCOR® in your company’s supply chain improvement initiatives.

We strongly urge attending the webinar ( in order to get the most out of the presentation.

It is appropriate for anyone who is thinking about using the SCOR® framework, or those who are doing so and want exposure to additional expertise.

Topics covered:
+Principles of SCOR Application
+Metrics, Performance, and the Business Case
+Process and System – Work and Information
+Organizational Learning Plan
+Next Steps

Published in: Business, Technology

Using SCOR Best Practice Webinar

  1. 1. Using SCOR®A Best Practice Case Study of a Typical SCOR® Project
  2. 2. Objective§  This webinar highlights a best-practice application ofSCOR®, and summarizes the key steps to effectively utilizeSCOR® in your company’s supply chain improvementinitiative.§  It is appropriate for anyone who is thinking about using theSCOR® framework, or those that are doing so and wantexposure to additional expertise.Copyright SCE Limited 20132
  3. 3. Agenda1.  Principles of SCOR Application2.  Metrics, Performance, and theBusiness Case3.  Process and System – Work andInformation4.  Organizational Learning Planand Next StepsCopyright SCE Limited 20133
  4. 4. Principles ofSCOR®ApplicationCopyright SCE Limited 20134§  Roadmap§  Organization§  Supply Chain Definition
  5. 5. Copyright SCE Limited 20135RoadmapPhase FOCUS Major Deliverables Challenge0BUILDORGANIZATIONSUPPORT•  Sponsor and KeyStakeholder Support•  EducationFinding the Tipping Pointfor Change1 DEFINE THEPROJECT•  Business Context Summary•  Supply Chain Definition•  Project Scope and CharterPlanning and Organizing aSupply Chain ExcellenceInitiative2ANALYZEPERFORMANCE•  Scorecard•  Defect Analysis•  Process AnalysisDefining the Metric andProcess Performance Gap3DEVELOP THEPROJECTPORTFOLIO•  Project Portfolio•  Implementation PriorityDeveloping the Project Listand Priority forImplementation4 IMPLEMENT APROJECT•  Development, Pilot, andImplementation of aPortfolio Project•  ResultsLow Risk Implementationof a Project thatDemonstrates Results
  6. 6. Organization§  The Active Executive Sponsor(s)§  Resource Provider§  Buck Stops Here§  Steering Team§  Review and ApproveRecommendations§  Champion ImplementationProjects§  The Project Leader§  Manage to Schedule§  Escalate Issues§  Design Team§  Analyze and Recommend§  Commit the TimeCopyright SCE Limited 20136
  7. 7. Supply Chain DefinitionRetailMarketsDistributorMarketsDirect-to-ConsumerMarketsOEM andKeyAccountsGovernmentHomeDeliveryInternationalFood Products X X XTechnologyProductsX X Developing X X XDurableProductsX X XFowlers NorthAmericaCustomer/Market ChannelsCopyright SCE Limited 20137
  8. 8. Metrics,Performance,and theBusiness CaseCopyright SCE Limited 20138§  Scorecard§  Portfolio§  Priority§  Benefits
  9. 9. 9ScorecardTechnology Products Group Benchmark Data2-May-11Performance Attributeor CategoryLevel 1 PerformanceMetrics2010 ActParity50thPercentileAdvantage70thPercentileSuperior90thPercentileParity GapCompetitiveGapCompetitiveGapAnalysisSourceExternalSupply Chain DeliveryReliabilityPerfect OrderFulfillment30.2% 74.0% 81.0% 88.0% -43.8% -57.8%$6,750,000SCORmarkSupply ChainResponsivenessOrder Fulfillment CycleTime11.0 10.0 6.50 3.0 -1.0 -4.5 SCORmarkSupply Chain FlexibilityUpside Supply ChainFlexibility91.5 60 45.0 29 -31.5 -46.5 SCORmarkInternalSupply Chain CostCost of Goods 63.6% 54.7% 44.3% 26.0% -8.9% NA $40,050,000 HooversSupply ChainManagement Cost12.8% 9.5% 6.8% 3.9% -3.3% -3.3% $14,850,000 SCORmarkSupply Chain AssetManagement EfficiencyInventory Days ofSupply60.5 20.4 8.9 0.0 -40.1 -40.1 $31,442,000 Hoovers
  10. 10. PortfolioCopyright SCE Limited 201310ProjectNumberProject Phrase Project Description Revenue ($)Perfect OrderFulfillment (%)OrderFulfillmentCycle Time(days)UpsideSupply ChainFlexibility(days)Total SupplyChainManagementCost ($)COGS ($) Inventory ($)$450,000,000 30.2% 11.0 91.5 $57,600,000 $286,200,000 $47,437,0001ImproveDemandManagementand ForecastingThis project will improve poorlydefined practices, underutilizedmodeling techniques, anduntrained personnel.8.0% $1,660,000Baseline11EstablishFormal ReturnManagementThis project will define andimplement a reverse logisticsprocesses from goodsmovement to policy to theauthorization process.$1,350,000 $660,00012Eliminate PoorInventoryControlPracticesThis project will focus on defectsthat relate to inventory recordaccuracy, shrinkage, and cyclecounting.2.5% $1,660,000$4,500,000 64.5% 1.0 35.0 $14,715,540 $16,182,000 $16,900,000$454,500,000 94.7% 10.0 56.5 $42,884,460 $270,018,000 $30,537,000BenefitProjected Performance Level
  11. 11. Copyright SCE Limited 201311Priority
  12. 12. Benefits§  Average OI improvement of 3% to sales (high 4.5% - low 1.5%)§  Typical Inventory Turn improvements of 20%§  30% Faster System Implementations with 30% more Functionality§  Continuous Improvement Portfolios Refreshed at a Value of 0.5%§  Mitigation of costs associated with risk managementCopyright SCE Limited 201312
  13. 13. Copyright SCE Limited 201313ROIFowlers Project PortfolioFY 1 FY 2 FY 3100% 25% 40% 100%1 (250)$ 75$ 120$ 300$ 1.982 -$ -$ -$ -$ -3 (6,500)$ 625$ 1,000$ 2,500$ 0.634 -$ -$ -$ -$ -5 (1,800)$ 1,400$ 2,240$ 5,600$ 5.136 (1,100)$ 625$ 1,000$ 2,500$ 3.757 (250)$ 1,250$ 2,000$ 5,000$ 33.008 (2,200)$ 2,025$ 3,240$ 8,100$ 6.089 (2,250)$ 4,375$ 7,000$ 17,500$ 12.8310 -$ -$ -$ -$ -11 (750)$ 775$ 1,240$ 3,100$ 6.8212 (125)$ 75$ 120$ 300$ 3.96(15,225)$ 11,225$ 17,960$ 44,900$Improve Supplier FlexibilityImplement Formal Product Life CycleManagement ProcessEngineer an Integrated Tactical PlanningProcessEliminate Poor Inventory Control PracticesImplement Sales and Operations PlanningImprove Efficiency and Effectiveness of thePhysical Supply Chain NetworkTighten Up Order Management DisciplineEstablish Formal Return ManagementImprove Demand Management andForecastingOptimize Supply Management PracticesImprove Information TechnologyEffectivenessImprove Data IntegrityIst YearCostInvestment3 Year BenefitGross EVA Benefit ($ in 000s)3 YR ROI% of Annualized Benefit AchievedGrand Total
  14. 14. Copyright SCE Limited 201314Value
  15. 15. Process andSystem – WorkandInformationCopyright SCE Limited 201315§  Staple Yourself to anOrder§  SCOR® Level 3 ProcessAnalysis§  SCOR® Level 4 ProcessDevelopment
  16. 16. Copyright SCE Limited 201316SCOR®
  17. 17. Copyright SCE Limited 201317Hierarchy
  18. 18. Copyright SCE Limited 201318WorksheetIntervieweesAccountableFunctionLevel 4 Step Description System Module Responsible Event Time1Enter thedescription ofeach of theprocess steps;often referred toas Level 4process stepsEnter theSystem Moduleand/orTransactionEnter the title(s)of those doingthe workThis is an effortof the amount oftime (oftencalculated inminutes) and isnormalized toone of fourtransactions, i.e.purchase order,work order,sales order,returnauthorization, orforecast20InitialsRelativeWeightIntervieweesInitialThis comparesthe relativeimpact to therest of thedisconnects inthe listEnter the primary transactionalinput(s) to this processEnter the SCOR Level 3 Processelement ID and description, i.e.,M1.1 Schedule ProductionActivitiesEnter the primary transactionaloutput(s) to this processProcess Steps(>4 and <11)Total Event Time for Process StepsEnter the interviewees from the interview planning worksheet.Enter the title of the ultimate role accountable to the performance of this SCOR Level 3process.Primary Input(s) SCOR Element Primary Output(s)Disconnectscausing reworkand/or extendedwait timeDisconnect DescriptionDescribe major disconnects that cause processsteps to be reworked and/or add to process waittime (delay)Business RulesEnter the business rules, both formal and informal, that directly or indirectly influenceprocess performance
  19. 19. Process AnalysisCopyright SCE Limited 201319Mx.1ScheduleProductionMx.2Issue ProdDx.1Process Inquiry &QuoteDx.2Receive, Enter, &Validate OrderDx.3Reserve(Resources)Inventory andDetermine DeliveryDateDx.4ConsolidateOrdersDx.5Build LoadsDx.6Route ShiDx.8Receive Productfrom Source orMakeP1Plan Supply ChainP3Plan MakeP4Plan Deliver
  20. 20. SCOR® Level 4Copyright SCE Limited 201320P3.1.1Completemonth endvalidationP1.1.1Analyzeforecast errorand BIASperformanceP1.1.2Generate andvalidatestatisticalforecastP1.1.4ConductDemandReview andApprove PlanP1.1.5Updatelaunch andreplenishmentNPD plansand forecastsP1.1.7UpdatepromotionaleventcalendarP1.1.8Updatecustomeraccount plansP1.1.6IdentifydemandshapingopportunitiesP1.1.3Conduct Pre-DemandDetailedReviewFINANCE1DEMANDPLANNING2DEMANDPLANNING3DEMANDPLANNING4SALES &MARKETING5SALES15MARKETING13MARKETING10SUPPLYPLANNING11P1.2.3UpdateForecastSUPPLYPLANNING6SCOR® P1.1S&OP: Demand Plan
  21. 21. OrganizationalLearning Planand Next StepsCopyright SCE Limited 201321§  Organizational Learning§  Individual Development§  Next Steps
  22. 22. Organizational Learning1.  Executive Brief2.  Using SCOR® Workshop – On Line3.  Using SCOR® Workshop – On Site4.  Supply Chain Excellence Project – Pilot1.  Broad Scope Strategy2.  Narrow Scope Kaizen Event5.  Supply Chain Excellence Continuous ImprovementCopyright SCE Limited 201322
  23. 23. Individual Development1.  SCOR-P Certification – the Supply Chain Council2.  SCOR-S Certification – the Supply Chain Council3.  SCOR® Coach – SCE LimitedCopyright SCE Limited 201323
  24. 24. Next Steps§  Identify a sponsor§  Hold an Executive Brief§  Conduct an on-site Using SCOR® Workshop§  Evaluate individual learning requirementsCopyright SCE Limited 201324
  25. 25. Case Study25
  26. 26. Copyright SCE Limited 201327Thank You!§§  Using SCOR® Series§  Supply Chain Excellence: The Blog§  Linked in -§  facebook -§  Twitter -!/SCEsupplychain§  Email:§  +1 651 439 3422