SCC: An independent, non‐profit global association • Formed in 1996 to create and evolve an open industry process reference model of the supply chain for the benefit of helping companies rapidly and dramatically improve supply chain operations • SCC has established the supply chain world’s most widely accepted framework – the SCOR® process reference model – for evaluating and comparing supply chain activities and their performance – SCOR is an open industry process standard containing over 200 process elements, 550 metrics, and 500 best practices including risk and environmental management and HR skills requirements for each process – It lets companies quickly determine and compare the performance of supply chain and related operations within their company or against other companies and can be used as an unbiased foundation for value based outsourcing relationships (e.g., DoD PBL standard) • SCC continually advances its tools and educates members about how companies are capitalizing on those tools – With membership open to all interested organizations SCC ‐ ISM/NAPM April 2010
Global Scope With Over 800 Member Organizations Member Distribution Geographic Australia/New Zealand China South Africa Latin America Southeast North Asia America Japan Member Affiliation Government Europe SME End User Also developing chapters in Enabling Technology India and the Middle East Consultant Non-Profit/Academic 0% 10% 20% 30% 40% 50%
SCC Membership Accelerates a Company’s Use of–and Benefits From–SCOR And Related Models Reference models, Training, certification, benchmarking, tools professional and career research and help development and from SCOR experts volunteer opportunities Chapters, events, workgroups, and forums to share SCOR and supply chain knowledge and experience
THE ROLE OF THE SCOR MODEL IN OPTIMIZING SUPPLY CHAIN PERFORMANCE 8 AMR 2009 ‐ SCC & SCOR Executive Overview
What is SCOR®? • SCOR is a supply chain process reference model Customer processes Customer processes Supply Chain Supplier processes containing over 200 process elements, 550 metrics, and Plan 500 best practices including risk and environmental management Source Make Deliver • Organized around the five primary management processes of Plan, Source, Return Return Make, Deliver and Return • Developed by the industry for Process, arrow indicates material flow direction use as an industry open Process, no material flow Information flow standard ‐ Any interested organization can participate in its continual development 99 AMR 2009 ‐ SCC & SCOR Executive Overview
Supply Chain Council Extended Frameworks – DCOR and CCOR Product Management Customer processes Supplier processes Product Design Sales & Support DCOR™ CCOR™ Supply Chain SCOR™ Technical Development Steering Committee Working Groups – Frameworks, Processes, Metrics, Sustainability, Risk, Skills, etc. Special Interest Groups – Industry, Methodologies, Best Practices, etc. Other Ongoing Research Projects10 AMR 2009 ‐ SCC & SCOR Executive Overview
SCOR Processes – Five Levels of Decomposition Level 1 Level 2 Level 3 Level 4 Level 5 Scope Configuration Activity Workflow Transactions S1 EDI Supply-Chain S1.2 Source XML Source Receive Product Stocked Product Differentiates Differentiates Names Tasks Sequences Steps Links Business Complexity Transactions Defines Scope Differentiates Links, Metrics, Job Details Details of Capabilities Tasks and Automation Practices Sets Strategy First Tier Second Tier Industry or Technology Diagnostics Diagnostics Company Specific Specific Standard SCOR definitions Company/Industry definitions11 AMR 2009 ‐ SCC & SCOR Executive Overview
Supply Chain Balanced SCORcard Standard Strategic (Level 1) Metrics Attribute Metric (Strategic) Reliability Perfect Order Fulfillment Customer Responsiveness Order Fulfillment Cycle Time Agility Supply Chain Flexibility Supply Chain Adaptability† Cost Supply Chain Management Cost Internal Cost of Goods Sold Assets Cash‐to‐Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital † upside and downside adaptability metrics12 AMR 2009 ‐ SCC & SCOR Executive Overview
SCORmark Benchmarking – Diagnoses the Areas Most in Need of Improvement
Best Practices Best practice: "A current, structured, proven and repeatable method for making a positive impact on desired operational results." • Current Must not be emerging and can not be antiquated • Structured Has clearly stated Goal, Scope, Process, and Procedure • Proven Success has been demonstrated in a working environment and can be linked to key metrics • Repeatable The practice has been proven in multiple environments.
P1 Plan Supply Chain Metrics Best Practices Cash-to-Cash Cycle Time Capability to run What-if simulations Change in Demand signal instantaneously Cost to Plan SC “reconfigures” Production and Supply Plans Order Fulfillment Cycle Time CPFR Plan Cycle Time On-line visibility of demand Return on SC Fixed Assets Re-balancing on full-stream supply and demand Return on Working Capital Supply/Demand Processes are fully integrated S&OP Tools support balanced decision making VMI
The SCOR® model – a cross‐industry open standard • The five integrated processes provide a boundary‐free view of the true end‐ to‐end Extended Supply Chain • Supports Outsourcing Analysis and Performance Based Logistics/Outsourcing 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 External16 AMR 2009 ‐ SCC & SCOR Executive Overview
SCOR Case Example 17 AMR 2009 ‐ SCC & SCOR Executive Overview
Define Business Scope Suppliers ComfyCo Customer OEM Supplier Basic Unit Retail Retail Plant Warehouse Customer Motor Supplier Refrigerant Supplier Controls Commercial Commercial Plant Warehouse Customer Electronics Supplier Scoping identifies all parties involved in program18 SCOR 8.0 PBL
Create a Geo Map of ComfyCo (US) ComfyCo Major Level 2 Entities processes Major Suppliers OEM Supplier (D1) Basic Units Motor Supplier (P1, P2, P3, S1, (D1) Commercial M1, M2) Customer (S2) Basic Flow Commercial Distribution Indication (P4, D2) Refrigerant Supplier Retail (D1) Distribution Controls Plant (P4, D1) Retail (P3, S1, M1) Customers (S1) Electronics Supplier (D1) Basic Customer Geographic Entities Context19 SCOR 8 0 PBL
Develop a SCOR Thread Diagram Planning Level 2 Notation Processes Basic Process Flow Business Key Entities Context20 SCOR 8.0 PBL
Captured SCOR Level‐3 Model S1.4 Transfer Product Factory M2.1 M2.2 M2.3 M2.4 M2.5 M2.6 Schedule Issue Produce and Test Package Stage Finished Release Production Sourced/In- Process Product Finished Activities Product Product to Deliver D2.1 D2.2 D2.3 D2.4 D2.5 D2.6 D2.7 D2.9 D2.8 Process Inquiry Receive, Reserve Consolidate Orders Build Loads Route Select Carriers Pick Product Receive & Quote Configure, Resources & Shipments & Rate Product from Enter and Determine Shipments Source or Validate Order Delivery Date Make Distribution D2.15 D2.14 D2.13 D2.12 D2.11 D2.10 Invoice Install Product Receive & Verify Ship Product Load Product& Pack Product Product by Generate Customer Shipping Documentation21 SCOR 8.0 PBL
Benchmark to Identify Process Parity, Advantage, or Superiority Parity Req Attribute Metric (level 1) Company Parity Adv Superior Gap Gap Reliability Perfect Order Fulfillment 98% 92% 96% 98% -6% Responsiveness Order Fulfillment Cycle Time 14 days 8 days 6 days 4 days 6 days 8 days Flexibility Ups. Supply Chain Flexibility 62 days 80 days 62 days 40 days -18 days Cost Supply Chain Mgmt Cost 10.1% 10.8% 10.4% 10.2% -0.7% Assets Cash-to-Cash Cycle Time 22 days 45 days 30 days 20 days -23 days Scoping Identifies one or more Parity Median of targeted metrics for Statistical Sample improvement Advantage Midpoint of Parity and Superior Potential Outsource Superior 90th percentile of Opportunity population22 SCOR 8.0 PBL
SCOR/PBL Project – Baseline • The SCOR perspective of “supplier’s supplier” through “customer’s customer” is measured by the degree of integration – Internal Integration – External Integration – Enterprise Optimization • Performance Based Logistics (PBL) maturity is measured in the same way – Partnerships between suppliers and customers – Managed by metrics, enabled by processes and innovation • The SCOR model provides a toolkit to design and implement, manage, and measure PBL processes throughout the life cycle of the relationship. 24 SCOR 8.0 PBL
The Member Journey • Begins with introduction to the disciplines of SCOR • Progresses through initial pilot 1 Learning applications of SCOR to individual supply chains 2 Piloting • Wide scale deployment of SCOR discipline follows early successes • Final integration of SCOR with all 3 Deploying Quality Management techniques and organizations • Resulting in endless renewal of the 4 Integrating knowledge framework in the company from Council and intra‐ company experience 5 Renewing
Closing Thoughts Rich Sherman, Director of North America Supply Chain Council www.supply‐chain.org
Rules Are Rules • The Good news: It was a normal day in Sharon Springs, Kansas, when a Union Pacific crew boarded a loaded coal train for the long trek to Salinas, Kansas. • The Bad news: A few miles into the trip, a wheel bearing became overheated and melted, letting a metal support drop down and grind on the rail, creating white hot molten metal droppings spewing down to the rail.
Rules Are Rules • The Good news: A very alert crew noticed smoke about halfway back in the train and immediately stopped the train in compliance with the rules. • The Bad news: The train stopped with the hot wheel over a wooden bridge with creosote soaked ties and trusses.
Rules are Rules • In defense of the crew, according to Sixgun Jr., the crew tried to explain to their Supervisors the situation; but, they were instructed not to “move the damn train”!