2. Supply Chain Operations Reference Model
(SCOR): Information about (SCC)
Developed by Supply Chain Council (SCC)
SCC: Independent, not-for-profit corporation organized in 1996 by:
Global management-consulting firm, Pittiglio Rabin Todd & McGrath (PRTM)
and
Market research firm, Advanced Manufacturing Research (AMR) in Cambridge,
Massachusetts.
Started with 69 voluntary companies; now close to 1000 members.
SCC Objective: To develop a standard supply-chain process reference model enabling
effective communication among the supply chain partners, by
Using standard terminology to better communicate and learn the supply chain issues
Using standard metrics to compare and measure their performances
3. Supply Chain Operations Reference Model
(SCOR)
SCOR:
Integrates Business Process Reengineering, Benchmarking, and Process
Measurement into a cross-functional framework.
Benchmarking Best Practices
Analysis
Process Reference
Model
Business Process
Reengineering
Quantify the
operational
performance of
similar companies
and establish
internal targets
based on “best-in-
class” results
Quantify the
operational
performance of
similar companies
and establish
internal targets
based on “best-in-
class” results Characterize the
management
practices and
software solutions
that result in
“best-in-class”
performance
Characterize the
management
practices and
software solutions
that result in
“best-in-class”
performance
Capture the “as-is”
state of a process
and derive the
desired “to-be”
future state
Capture the “as-is”
state of a process
and derive the
desired “to-be”
future state
Capture the “as-is” state
of a process and derive
the desired “to-be”
future state
Capture the “as-is” state
of a process and derive
the desired “to-be”
future state
Quantify the operational
performance of similar
companies and establish
internal targets based on
“best-in-class” results
Characterize the
management
practices and
software solutions
that result in “best-in-
class” performance
4. Supply Chain Operations Reference Model
(SCOR)
The Primary Use of SCOR:
To describe, measure and evaluate supply chain configurations.
SCOR contains:
Standard descriptions of management processes
A framework of relationships among the standard processes
Standard metrics to measure process performance
Management practices that produce best-in-class performance
Enables the companies to:
Evaluate and compare their performances with other companies effectively
Identify and pursue specific competitive advantages
Identify software tools best suited to their specific process requirements
5. Supply Chain Operations Reference Model
(SCOR): Boundaries
SCOR spans:
• All customer interactions, from order entry through paid invoice.
• All product (physical material and service) transactions, from supplier’s supplier to
customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc.
• All market interactions, from the understanding of aggregate demand to the
fulfillment of each order
SCOR does not attempt to describe every business process or activity, including:
• Sales and marketing (demand generation)
• Research and technology development
• Product development
• Some elements of post-delivery customer support
6. Supply Chain Operations Reference Model
(SCOR):Basic Management ProcessesPlan-Source-Make-Deliver-Return
Supplier’s
Supplier
Make DeliverSource Make DeliverMakeSourceDeliver SourceDeliverSource
Customer’s
Customer
Plan
Supplier
(Internal or
External)
Your Company
Customer
(Internal or
External)
Return
Return ReturnReturn
Return
Return
Plan-Source-Make-Deliver-Return provide the organizational structure of the SCOR-model
7. Scopes of Basic Management Processes
Plan (Processes that balance aggregate demand and supply to develop a course of action which
best meets sourcing, production and delivery requirements)
Balance resources with requirements
Establish/communicate plans for the whole supply chain
Source (Processes that procure goods and services to meet planned or
actual demand)
Schedule deliveries (receive, verify, transfer)
Make (Processes that transform product to a finished state to meet planned or actual demand)
Schedule production
Deliver (Processes that provide finished goods and services to meet planned or actual demand,
typically including order management, transportation management, and distribution
management)
Warehouse management from receiving and picking product to load and ship product.
Return (Processes associated with returning or receiving returned products)
Manage Return business rules
8. Return
Level
Description Schematic Comments
Top Level
(Process Types)
Level 1 defines the scope and content for the
Supply chain Operations Reference-model. Here
basis of competition performance targets are set.Source Make Deliver
Plan
1
#
Configuration Level
(Process
Categories)
A company’s supply chain can be “configured-
to-order” at Level 2 from the core “process
categories.” Companies implement their
operations strategy through the configuration
they choose for their supply chain.
2
Process Element
Level (Decompose
Processes)
Level 3 defines a company’s ability to compete
successfully in its chosen markets, and consists
of:
•Process element definitions
•Process element information inputs, and outputs
•Process performance metrics
•Best practices, where applicable
•System capabilities required to support best
practices
•Systems/tools
3
P1.1
Identify, Prioritize, and Aggregate
Supply-Chain Requirements
P1.2
Identify, Assess, and Aggregate
Supply-Chain Requirements
P1.3
Balance Production Resources with
Supply-Chain Requirements
P1.4
Establish and
Communicate
Supply-Chain Plans
Implementation
Level (Decompose
Process Elements)
4
Not
in Scope
Return
Three Levels of Process Detail
Companies implement specific supply-chain
management practices at this level. Level 4
defines practices to achieve competitive
advantage and to adapt to changing business
conditions.
SupplyChainOp
9. Customer-FacingLevel 1
Performance Metrics
Assets
Supply Chain
Reliability
Cost
Responsiveness
Delivery performance
Fill rate
Perfect order fulfillment
Order fulfillment lead time
Supply Chain Response Time
Production flexibility
Total SCM cost
Cost of Goods Sold
Value-added productivity
Warranty cost or returns processing cost
Cash-to-cash cycle time
Inventory days of supply
Asset turns
Internal-Facing
Flexibility
Performance Attributes
10. Level Metrics Facts
Level 1 Metrics are primary, high level measures that may cross multiple SCOR
processes.
They do not necessarily relate to a SCOR Level 1 process (Plan-Source-Make-Deliver-
Return).
There is hierarchy among the metrics in different levels.
Level 1 Metrics are created from lower level calculations (Level 2 metrics)
Level 2 Metrics:
Associated with a narrower subset of processes.
Example:
o Metric related with Delivery Performance: Total number of products delivered on
time and in full based on a commit date.
o Metric related with Production: Ratio Of Actual To Theoretical Cycle Time