Keeping SCOR in Your Supply Chain    Rich Sherman, Director of North America              Supply Chain Council            ...
Agenda     • Who is the Supply Chain Council?     • The Role Of The SCOR Model In Optimizing       Supply Chain Performanc...
Who is the Supply Chain Council? 
SCC: An independent, non‐profit global association  •     Formed in 1996 to create and evolve an open industry process ref...
Global Scope With Over 800 Member Organizations   Member Distribution Geographic                     Australia/New        ...
Industry Membership Scope 
SCC Membership Accelerates a Company’s Use of–and Benefits From–SCOR And Related Models      Reference models,        Trai...
THE ROLE OF THE SCOR MODEL IN            OPTIMIZING SUPPLY CHAIN                  PERFORMANCE  8    AMR 2009 ‐ SCC & SCOR ...
What is SCOR®?       •   SCOR is a supply chain         process reference model                                           ...
Supply Chain Council Extended Frameworks –        DCOR and CCOR                                                           ...
SCOR Processes – Five Levels of Decomposition             Level 1                        Level 2             Level 3      ...
Supply Chain Balanced SCORcard       Standard Strategic (Level 1) Metrics                  Attribute                      ...
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...
P1 Plan Supply Chain  Metrics                     Best Practices Cash-to-Cash Cycle Time     Capability to run What-if sim...
The SCOR® model – a cross‐industry open standard       • The five integrated processes provide a boundary‐free view of the...
SCOR Case Example 17    AMR 2009 ‐ SCC & SCOR Executive Overview 
Define Business Scope              Suppliers                  ComfyCo             Customer            OEM          Supplie...
Create a Geo Map of ComfyCo (US)                              ComfyCo                                                     ...
Develop a SCOR Thread Diagram                                          Planning                 Level 2                 No...
Captured SCOR Level‐3 Model                                                                                          S1.4 ...
Benchmark to Identify Process Parity, Advantage, or      Superiority                                                      ...
SCOR/PBL Project – Baseline      • The SCOR perspective of “supplier’s supplier” through        “customer’s customer” is m...
The Member Journey • Begins with introduction to the   disciplines of SCOR • Progresses through initial pilot             ...
Closing Thoughts   Rich Sherman, Director of North America             Supply Chain Council            www.supply‐chain.org 
Change 
What Happened? 
Pair‐a‐dime Shift! 
Rules Are Rules • The Good news: It was a normal day in Sharon Springs,   Kansas, when a Union Pacific crew boarded a load...
Rules Are Rules • The Good news: A very alert crew noticed smoke   about halfway back in the train and immediately   stopp...
Rules are Rules • In defense of the crew, according to   Sixgun Jr., the crew tried to explain to   their Supervisors the ...
Rules Are Rules – Houston, We Have a Problem! 
Rules Are Rules – Houston, The Problem is Escalating! 
RULES ARE RULES – When you have a Problem‐  Dont let common sense get in the way of a good disaster!!! 
Thank You and Safe Travel!    www.supply-chain.orgRich Sherman, Director of North America     Email: rsherman@supply-chain...
Richard J. Sherman from Emeritus Supply Chain Council on ‘Keeping SCOR in Your Supply Chain’ & Chairman’s Wrap-Up
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Richard J. Sherman from Emeritus Supply Chain Council on ‘Keeping SCOR in Your Supply Chain’ & Chairman’s Wrap-Up

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Richard J. Sherman from Emeritus Supply Chain Council on ‘Keeping SCOR in Your Supply Chain’ & Chairman’s Wrap-Up

  1. 1. Keeping SCOR in Your Supply Chain  Rich Sherman, Director of North America  Supply Chain Council  www.supply‐chain.org 
  2. 2. Agenda  • Who is the Supply Chain Council?  • The Role Of The SCOR Model In Optimizing  Supply Chain Performance  • A Case Example  • Conclusion 2 AMR 2009 ‐ SCC & SCOR Executive Overview 
  3. 3. Who is the Supply Chain Council? 
  4. 4. 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 
  5. 5. 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%
  6. 6. Industry Membership Scope 
  7. 7. 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
  8. 8. THE ROLE OF THE SCOR MODEL IN  OPTIMIZING SUPPLY CHAIN  PERFORMANCE  8  AMR 2009 ‐ SCC & SCOR Executive Overview 
  9. 9. 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 
  10. 10. 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 
  11. 11. 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 
  12. 12. 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 
  13. 13. SCORmark Benchmarking – Diagnoses the Areas Most in Need of Improvement  
  14. 14. 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. 
  15. 15. 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
  16. 16. 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 
  17. 17. SCOR Case Example 17  AMR 2009 ‐ SCC & SCOR Executive Overview 
  18. 18. 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 
  19. 19. 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
  20. 20. Develop a SCOR Thread Diagram  Planning Level 2 Notation Processes Basic Process Flow Business Key Entities Context20 SCOR 8.0 PBL 
  21. 21. 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 
  22. 22. 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 
  23. 23. 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 
  24. 24. 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 
  25. 25. Closing Thoughts  Rich Sherman, Director of North America  Supply Chain Council  www.supply‐chain.org 
  26. 26. Change 
  27. 27. What Happened? 
  28. 28. Pair‐a‐dime Shift! 
  29. 29. 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.   
  30. 30. 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. 
  31. 31. 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”!   
  32. 32. Rules Are Rules – Houston, We Have a Problem! 
  33. 33. Rules Are Rules – Houston, The Problem is Escalating! 
  34. 34. RULES ARE RULES – When you have a Problem‐  Dont let common sense get in the way of a good disaster!!! 
  35. 35. Thank You and Safe Travel!  www.supply-chain.orgRich Sherman, Director of North America Email: rsherman@supply-chain.org Direct: +1 512-266-9041 Mobile: +1 512-294-6558

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