This document provides an overview and agenda for a course on supply chain management. It discusses key topics that will be covered, including logistics and SCM concepts, flows within supply chains, the evolution of SCM, supply chain processes and structures, frameworks like SCOR, trends like lean supply chains, SCM functions and goals. It also notes that managing supply chains is challenging due to factors like geographically dispersed networks, conflicting objectives across stages, uncertainties and risks, and information distortion.

1. INTRODUCTION TO
SUPPLY CHAIN
MANAGEMENT (SCM)

2. AGENDA
UNIT-1
2
• OVERVIEW OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT
• FLOWS IN A SUPPLY CHAINS
• THE EVOLUTION OF SCM
• SUPPLY CHAIN PROCESSES
• SUPPLY CHAIN STRUCTURES – BASIC,
• SCOR FRAMEWORK,
• LEAN SUPPLY CHAIN MODEL
• RECENT TRENDS
• SCM – FUNCTIONS
• GOALS, KEY ISSUES AND CHALLENGES

3. Overview
to
logistics
UNIT-1
3
• Two way – sourcing material and dispatching
goods to market place.
• Effective movement broadens the enterprises
capabilities to expand businesses.
• Role- to deploy cost effective inventory ,
warehouses and transportation resources.
• Competitive weapon :- link supply resources
of farthest region of supply chain with widely
dispersed demand.
FACT
2015, Logistics cost is approximately
10% of U.S GDP.

4. 4
PRESENTATION
TITLE
Definition
to
logistics
APICS define it as “the art and science of obtaining, producing, and
Distributing material and product in proper place and proper quantities.”
CSCMP define it as “ the part of supply chain that plans,
implements and controls the efficient, effective forward and
reverse flow and storage of goods, services and related information
between point of origin to point of consumption in order to satisfy
the customer needs and wants.
“logistics is the management process by
which suppliers, manufacturers and
distributors store and move products
through the supply chain.

5. 5
Main components
Logistics comprises five essential components.
1. Demand planning -To guarantee customer order
fulfilment, demand planning is an essential logistics
function.
2. Storage and materials- Demand is unpredictable, it’s
important
To have surplus goods on standby in warehouses storage.
3. Inventory management- how much stock to hold and
where to locate it using targeted data to predict consumer
demand.
4. Transportation management- different modes of
transport to move merchandise from one stage of the supply
chain to the next.
5. Control -Logistics is a complex operational procedure that
requires a lot of precise information to be effective.
Forecasting demand, transportation times, and inventory are
crucial to keeping the operations to a tight timescale.
Components
of
logistics

6. Logistics
Functions
Order
managem
ent
Production
and
Procurement
Freight cost
and service
management
Warehouse
management
Transportai
on Routing
Load palnning
6
PRESENTATION
TITLE
Functions
of
logistics

7. 7
PRESENTATION
TITLE
l
o
g
i
s
t
i
c
s
p
e
r
f
o
r
m
a
n
c
e
m
e
t
r
i
c
e
s
1. Services
2. Fast flow response
3. Reduction of operating variances
4. Minimum inventories
5. Transportation reduction ‘quality management
6. Product life cycle support

8. A picture is better than 1000 words!
How many words would be better than 3 pictures?
- A supply chain consists
of
- aims to Match Supply and Demand,
profitably for products and services
SUPPLY SIDE DEMAND SIDE
The right
Product
Higher
Profits
The right
Time
The right
Customer
The right
Quantity
The right
Store
The right
Price
=
+
+ +
+ +
- achieves
Supplier Manufacturer Distributor Retailer Customer
Upstream
Downstream
S
u
p
p
l
y
C
h
a
i
n
M
a
n
a
g
e
m
e
n
t

9. What
is
a
supply
chain?
• Flow of products and services from
• Suppliers
• Raw materials manufacturers
• Intermediate goods manufacturers
• Finished goods manufacturers
• Distributors and wholesalers
• Retailers
• Customers
• Connected through transportation, information, and exchanges of funds
Manufacturer Distributor Retailer Customer
Supplier

10. 1 0
PRESENTATION
TITLE
“Getting
the
Right
Thing
at
right
place
at
right
time
for
profit”
In order to maximize supply chain surplus
• Every facility that impacts costs needs to be considered
• Suppliers’ suppliers
• Customers’ customers
• Efficiency throughout the supply chain network is required
using a network level approach
Supply chain management involves the management
of supply chain assets and products, information, and
fund flows to maximize total supply chain surplus.

11. “Managing supply and demand, sourcing raw materials and parts,
manufacturing and assembly, warehousing and inventory tracking,
order entry and order management, distribution across all channels,
and delivery to the customer”- The Supply Chain Council
“The design and management of seamless, value-added process
across organizational boundaries to meet the real needs of the
end customer” -Institute for Supply Management
“Supply chain management is a set of approaches utilized to
efficiently integrate suppliers, manufacturers, warehouses, and
stores, so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to
minimize system wide costs while satisfying service level
requirements”- Simchi-Levi et al, 2003
1 1
PRESENTATION
TITLE

12. Evolution Of Supply Chain Management
1950s 1960s 1970s 1980s 1990s 2000s Beyond
Traditional Mass Manufacturing
Inventory Management/Cost
Optimization
JIT, TQM, BPR,
Alliances
SCM
Formation/
Extensions
Further
Refinement of
SCM Capabilities

13. Evolution Of Supply Chain Management
• Mass production era (1900s – 1970s)
In the early 1900s, Henry Ford created the first moving assembly line reducing the time to build a
Model T from 728 hours to 1.5 hours
• Lean manufacturing era (1970s –1995)
In the early 1970s, Japanese manufacturers like Toyota changed the rules of production from mass to
lean. Lean manufacturing focuses on flexibility and quality more than on efficiency and quantity.
• Mass customization era (1995 – 2015?)
Beginning around 1995 and coinciding with the commercial application of the Internet, manufacturers
started to mass-produce customized products. Henry Ford’s famous statement “You can have any
color Model T as long as it’s black” no longer applies.
• Industry 4.0 (2015-till)
Impact of internet enabled world on supply chain can be mapped after first decade of 21st
century. Like IoT, RFID, Data Analytics, Real time data, Automation etc.

14. Flow
In
Supply
Chain
1 4
PRESENTATION
TITLE
1-14
Customer
Information
Product
Funds
Supplier

15. All stages involved, directly or indirectly, in fulfilling a customer request
Includes manufacturers, suppliers, transporters, warehouses, retailers, and
customers
Within each company, the supply chain includes all functions involved in
fulfilling a customer request (product development, marketing, operations,
distribution, finance, customer service)
Customer is an integral part of the supply chain.
Includes movement of products from suppliers to manufacturers to
distributors, but also includes movement of information, funds, and
products in both directions
Probably more accurate to use the term “supply network” or “supply web”
Typical supply chain stages: customers, retailers, distributors,
manufacturers, suppliers
All stages may not be present in all supply chains
(e.g., no retailer or distributor for Dell)
1 5
PRESENTATION
TITLE
Supply
Chain
Network

16. 1-16
Supply Chain Of Detergent (Wall-Mart)
Customer wants
detergent and goes
to Jewel
Jewel
Supermarket
Jewel or third
party DC
P&G or other
manufacturer
Plastic
Producer
Chemical
manufacturer
(e.g. Oil Company)
Tenneco
Packaging
Paper
Manufacturer
Timber
Industry
Chemical
manufacturer
(e.g. Oil Company)

17. 1-17
The Objective Of A Supply Chain
• Maximize overall value created
• Supply chain value: difference between what the final
product is worth to the customer and the effort the supply
chain expends in filling the customer’s request
• Value is correlated to supply chain profitability (difference
between revenue generated from the customer and the
overall cost across the supply chain)
• Sources of supply chain revenue: the customer
• Sources of supply chain cost: flows of information,
products, or funds between stages of the supply chain
• Supply chain success should be measured by total supply
chain profitability, not profits at an individual stage

18. Managing A Supply Chain Is Not Easy
• Geographically dispersed complex network
• Conflicting objectives across the supply chain
• Uncertainty and risk factors
• Information distortion

19. Managing A Supply Chain Is Not Easy
• Geographically dispersed complex network

20. Managing A Supply Chain Is Not Easy
• Convenience
• Short lead time
• Large variety of
products
• Few stores
• Low inventory
• Little variety
• Close to DCs
• Low inventory
• Few DCs
• Large shipments
• Large production
batches
• Conflicting objectives across the supply chain
Manufacturer Distributor Retailer Customer

21. Managing A Supply Chain Is Not Easy
Uncertainty and risk factors
• 2019-2022 Panadamic ( Novel Corona)
• 2008 Great Recssion
• 2005 Hurricane Katrina
• P&G coffee supplies from sites around New Orleans
• Six month impact
• 2002 West Coast port strike
• Losses of $1B/day
• Store stock-outs, factory shutdowns
• 2001 India earthquake
• Supply interruptions for apparel manufacturers
• 1999 Taiwan earthquake
• Supply interruptions for HP and Dell

22. MANAGING A SUPPLY CHAIN IS NOT
EASY
• Information distortion
Manufacturer Distributor Retailer Customer
Supplier
Bullwhip effect

23. Decision Making In Supply Chain
Successful supply chain management requires decisions on the flow of
information, product, and funds that fall into three decision phases
Supply chain strategy or design
Supply chain planning
Supply chain operation

24. Decision Phases In A Supply Chain
TYPICAL DECISIONS
Strategic
Tactical
TYPE
TIME FRAME
•Supply chain network design (How many plants?
Location and capacities of plants and warehouses?)
•Supply chain strategies (Sell direct or through
retailers? Outsource or in-house? Focus on cost or
customer service?)
•Product mix at each plant
years
•Workforce & Production planning
•Inventory policies (safety stock level)
•Which locations supply which markets
•Transportation strategies
3 mo.- 1year
Operational
•Production scheduling
•Decisions regarding individual orders
•Place replenishment orders
daily

25. SUPPLY CHAIN PROCESS
• A supply chain is a sequence of processes and flows that take place within and
between different stages
• Cycle view
• The processes in a supply chain are divided into a series of cycles, each performed at the
interface between two successive stages of a supply chain
• Push/pull view
• The processes in a supply chain are divided into two categories depending on whether they are
executed in response or in anticipation of a customer order

26. 1-26
Cycle View Of A Supply Chain
• Each cycle occurs at the interface between two successive stages
• Customer order cycle (customer-retailer)
• Replenishment cycle (retailer-distributor)
• Manufacturing cycle (distributor-manufacturer)
• Procurement cycle (manufacturer-supplier)
• Cycle view clearly defines processes involved and the owners of
each process. Specifies the roles and responsibilities of each
member and the desired outcome of each process.

27. Cycle View Of Supply Chain Processes
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Retailer
Distributor
Manufacturer
Supplier
Cycle view
defines the
processes
involved and the
owner of each
process

28. Subprocesses In Each Cycle
Supplier markets
the product
Buyer
Supplier
Buyer places
an order
Supplier receives
the order
Supplier supplies
the order
Buyer receives
the order
Buyer may return
the product

29. CYCLE VIEW OF SUPPLY CHAIN
PROCESSES
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer Order Process
1. Customer Arrival
2. Customer Order Entry
3. Customer Order Fullfillment
4. Customer Order Receiving
Procurement Process
1. Component Order Arrival
2. Production Scheduling
3. Manufacturing/Shipping
4. Receiving
Manufacturing Process
1. Order Arrival
2. Production Scheduling
3. Manufacturing/Shipping
4. Receiving
Replenishment Process
1. Retail Order Trigger
2. Retail Order Entry
3. Retail Order Fullfillment
4. Retail Order Receiving

30. Push/Pull View Of Supply Chain processes
Customer order arrives
PULL
PROCESSES
PUSH
PROCESSES
Execution is initiated in response
to customer orders
(reactive)
Execution is initiated in
anticipation of customer orders
(speculative)
Processes are divided based on the timing of their
execution relative to a customer order

31. PUSH/PULL PROCESSES FOR THE
SUPPLY CHAIN OF DETERGENT
PULL
PUSH
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Retailer
Distributor
Manufacturer
Supplier

32. Cycle View Versus Push/Pull View
Which view is more useful when considering
operational decisions and which view is more
useful when considering strategic decisions?

33. 1-33
Push/pull view of supply chains
Procurement,
Manufacturing and
Replenishment cycles
Customer Order
Cycle
Customer
Order Arrives
PUSH PROCESSES PULL PROCESSES

34. 1-34
Push/Pull View Of
Supply Chain Processes
• Supply chain processes fall into one of two categories depending on the timing of their
execution relative to customer demand
• Pull: execution is initiated in response to a customer order (reactive)
• Push: execution is initiated in anticipation of customer orders (speculative)
• Push/pull boundary separates push processes from pull processes
• Useful in considering strategic decisions relating to supply chain design – more global view of
how supply chain processes relate to customer orders
• Can combine the push/pull and cycle views
• The relative proportion of push and pull processes can have an impact on supply chain
performance

35. Are The Following Systems Push Or Pull?
Soda vending machines
Amazon.com
Emergency care
Paint industry
Runway capacity at an Airport

36. Supply chain structure
• Supply chain is a “global network used to deliver products and services from raw materials to
end customers through an engineered flow of information, physical distribution, and cash.”
• Supply chain consisting of a network of channel entities and processes. A supply chain
network has many forms. Regardless of whether it is a product or service chain or how many
channel entities are involved.
• An effectively structured supply chain will enable firms to guarantee the flow of goods and
services, reduce channel costs, and pursue competitive leadership in their market space.
3 6
PRESENTATION
TITLE

37. 3 7
PRESENTATION
TITLE
Basic and integrated Supply Chain

38. 3 8
PRESENTATION
TITLE
Basic Supply Chain Structures
The three basic entities of a supply chain: a producer with one supplier and one customer.
Supply chains can be internal to an enterprise as well as external.
The producing entity is responsible for the production of products (or services). The role of the
supplier is to provide production inventories to the producer who, in turn, produces finished products
that are then
sold to the customer.
The channel networks have four basic flows that connect the three channel entities together. The
first flow is concerned with the transfer of information up and down the channel.
The second flow represents the movement of inventory as it is transformed from materials into
finished goods and final sale to the customer.
The third flow tracks financial settlement at each entity in the channel.
The final flow concern with environmental sustainability such as reverse logistics, recycling,
conservation, and waste disposal.

39. Features:Basic Supply Chain Structures
• The networking of various levels of primary and secondary suppliers, delivery intermediaries,
and customers into a single, seamless supply chain system.
• The exact structure of any supply chain depends on the range of specialized functions required
of channel partners, the intensity of channel collaboration, the number of echelons (or tiers) in
the channel, and the number of channel intermediaries used in the delivery process.
• The integrated supply chain perspective transforms the traditional channel structure from a
loosely linked association of independent businesses into a networked, virtual organization
focused on common supply chain value, market impact, overall efficiency, and continuous
improvement.
3 9
PRESENTATION
TITLE

40. • A supply chain network consists of two segments.
• The first segment is the process value chain. This component is composed of networks of
materials, components, and resource suppliers that are used by channel integrators to produce
the product.
• The role of the process value chain is to receive information in the form of product
requirements, and then to translate that demand into the products and services demanded by
the customer.
• Once the anticipated portfolio of goods and services has been produced, they then enter the
second segment of the supply chain, the value delivery network.
• The goal of this component is the structuring of delivery channels that facilitate the
effective distribution of products and services reflecting as closely as possible the service
values demanded by the customer.
• The actual structure of the delivery channel is the responsibility of the integrators and
intermediaries that constitute the channel and will be dictated by the nature of demand and
the respective capabilities of the channel network constituents.
4 0
PRESENTATION
TITLE
Integrated Supply Chain

41. 4 1
PRESENTATION
TITLE
BASIC SUPPLY CHAIN STRATEGIES: stable, reactive, and efficient reactive.
A stable supply chain has long trading history between channel entities. It focuses on execution,
efficiencies, and cost performance. Use simple connectivity technologies with little need for real-
time information sharing. An example is a fastener supply chain that competes using scale
production, stable pricing, and readily available inventories.
A reactive supply chain: channel entities act to fulfill the on-demand requirements from customers.
Such supply chains are perceived as cost centers, use minimal networking technologies, and regard
throughput as the main goal of the channel structure. An example is a make-to order producer of
computer equipment, such as Dell, that offers customers the ability to customize their orders.
An efficient reactive supply chain is efficient, low-cost provider of goods and services. It focuses
on efficiency and cost management to keep total delivered costs low. It considers connectivity
technologies and internal process automation as the key to increasing profits, expanding capacities,
and increasing channel product and information velocities. An example is a retail chain that uses
point-of-sale (POS) and collaborative planning, forecasting, and replenishment (CPFR) to broadcast
demand to various levels of upstream channel suppliers.

42. 4 2
PRESENTATION
TITLE

43. Vertical Supply Chain
• A vertically managed supply chain seek to
absorb as many channel entities as possible
inside the organization.
• Example is the early Ford Motor Company
which pursued a strategy of owning as many
tiers of supply channel entities as possible.
• Advantages of this strategy are direct
management control of the supply channel,
close materials and operations cost control, and
high interaction with the customer. Issues
regarding supplier instability and capacity gaps
are eliminated and focused economies of scale
are gained.
• Drawbacks are heavy management and
facilities costs, the expense involved in building
new competencies, and the risk of not being
responsive enough to marketplace changes.
Most companies today pursue a strategy where
key core competencies are integrated vertically,
while non-essentials are outsourced to channel
partners.
4 3
PRESENTATION
TITLE

44. Horizontal supply chain
• In Horizontal strategy corporate managers seek
to outsource as many administrative, production,
and distribution functions from supply network
partners while retaining ownership of core
competencies.
• Channel flows are regulated by transaction and
long-term contracts. The advantages of this
strategy are leveraging partners to achieve local
economies of scale and scope, concentrating
company focus on internal core competencies
• Drawbacks center on loss of control of functions,
increased risk due to possible channel partner
failures, the hollowing out of internal
competencies, increased burden to manage
channel complexities, and possible compromise
of proprietary information to competitors.
4 4
PRESENTATION
TITLE

45. 4 5
PRESENTATION
TITLE

46. SCOR Supply Chain Strategy
4 6
PRESENTATION
TITLE
https://www.youtube.com/watch?v=7EYKwnhnLOE

47. 4 7
PRESENTATION
TITLE

48. SUPPLY CHAIN OPERATIONS REFERENCE
MODEL (SCOR)
• SCOR is the product of the American Production and Inventory Control Society
(APICS) is developed and approved by the Supply Chain Council in 1996.
• It is a cross-industry diagnostic tool for supply chain management.
• It is regularly updated to adapt changes in commercial supply chain practices.
• It is a powerful tool for evaluating and comparing supply chain activities and
performance.
• The SCOR Model describes process activities related to meeting customer
demand, which include plan, source, manufacture, delivery, return, and enable.
• It does not provide any optimization methods, but aims at providing a
standardized terminology for the description of supply chains.
• This standardization allows benchmarking of processes and the extraction of
best practices for certain processes.
4 8
PRESENTATION
TITLE

49. Scope Of SCOR
• Use common set of definitions to describe very simple or very complex
supply chains.
• Companies around the world use this model as a basis for global supply chain
and dedicated for improvement projects.
• Enables users to address, improve, and communicate SCM.
• Advances the SCM, to ensure reliability, consistency and efficiency, and the
compatibility of the supply chain with the organization's goals.
• The updated version includes more "drivers for supply chain success",
covering topics such as the Omni channel, metadata and block chain, digital
strategies, Integrated sustainability standards, using the GRI.
4 9
PRESENTATION
TITLE

50. SCOR Process
• SCOR model describes business activities associated with all phases of
meeting a customer's demand.
• The model itself is organized around the six basic management processes:
plan, source, manufacture, delivery, and return, enable.
• SCOR covers all customer transactions (from quotation to cash payment), all
material transactions (from purchase to payment, including equipment,
supplies, spare parts, bulk products, software, etc.) and all market transactions
(Manufacturing, from understanding total demand to fulfilling each order).
5 0
PRESENTATION
TITLE

51. Faculty of Management Sciences
This level consists of the six elementary process types:
• Plan
• Source.
• Make.
• Deliver.
• Return.
• Enable.
Level 1: Process Types
Self study question:
What do you think is the
scope for each process
types?

52. Plan
• Plan covers processes to balance resource capacities with demand requirements and the communication of plans across the supply
chain.
• It also has measurement of the supply chain performance and management of inventories, assets and transportation among others.
Source
• Source covers the identification and selection of suppliers, measurement of supplier performance as well as scheduling of their
deliveries, receiving of products and processes to authorize payments.
• It also includes the management of the supplier network and contracts as well as inventories of delivered products.
Make
• Covers processes that transform material, intermediates and products into their next state, meeting planned and current demand.
Make also covers processes to schedule production activities, produce and test, packaging as well as release of products for delivery.
Furthermore, make covers the management of in-process products (WIP), equipment and facilities.
Deliver
• Deliver covers processes like order reception, reservation of inventories, generating quotations, consolidation of orders, load building
and generation of shipping documents and invoicing. Deliver includes all steps necessary for order management, warehouse
management and reception of products at a customer’s location together with installation. It manages finished product inventories,
service levels and import/export requirements.
Return
• processes for returning defective or excess supply chain products as well as MRO products. The return process also covers post-
delivery customer service.
• It covers the authorization of returns, scheduling of returns, receiving and disposition of returned products as well as replacements or
credits for returned products. In addition, return manages return inventories as well as the compliance to return policies.
Enable
• The enable processes support the planning and execution of the above supply chain processes. Enable processes are related to
maintaining and monitoring of information, resources, compliance and contracts that govern the operation of the supply chain.
Therefore enable processes interact with other domains, ranging from HR processes to financial processes and sales and support
processes.
Figure 1: Level 1 Process Types

53. Faculty of Management Sciences
Level 2: Process Categories
• The six process types of level 1 are broken down into 30 process categories,
including nine enable process categories.
• The second level deals with the configuration of the supply chain.
• At this level identify typical redundancies of established businesses such as:
• overlapping planning processes and
• duplicated purchasing.
• Delayed customer orders indicate a need for integration of suppliers and
customers.

54. sE1:
Manage business rules
sE2:
Manage performance
sE3:
Manage data and information
sE4:
Manage human resources
sE5:
Manage assets
sE6:
Manage contracts
sE7:
Manage networks
sE8:
Manage regulatory compliance
sE9:
Manage risk
Enable
sSR1:
Source return
defective
product
sDR1:
Deliver return
defective
product
sSR2:
Source return
MRO product
sDR2:
Deliver return
MRO product
sSR3:
Source return
excess product
sDR3:
Deliver return
excess product
Return
sD1:
Deliver stocked
Product
sD2:
Deliver
make-to-order
Product
sD3:
Deliver
engineer-to-
order
Product
sD4:
Deliver retail
product
Deliver
sM1:
Make-to-stock
sM2
Make-to-order
sM3:
Engineer-to-
order
Make
sS1:
Source stocked
Product
sS2:
Source
make-to-order
Product
sS3:
Source
engineer-to-
order
product
Source
sP1:
Plan supply
chain
sP2:
Plan source
sP3:
Plan make
sP4:
Plan deliver
sP5:
Plan return
Plan
Process
Categorie
s
Process
Types
Table 1: Level 2 Process
Categories

55. Supply
Chain
SCOR FRAMEWORK LEVELS
Level-1 Sets Scope and
Context, Geographies,
Segments and Products
M3
Make
Engineer to Order
M2
Make
Build to Order
M1
Make
Build to Stock
Level-2 Identifies Major
Configurations within
Geographies, Segments and
Products
M2.01
Schedule
Production
Activities
M2.02
Issue Product
M2.03
Produce & Test
M2.04
Package
M2.05
Stage Product
M2.06
Release Product to
Deliver
Level-3 Identifies key
business activities within a
configuration
Plan
Return
Deliver
Make
Source
Plan
Return
Deliver
Make
Source

56. Faculty of Management Sciences
Level 3: Process Elements
• At this level, the supply chain is tuned.
• The process categories are further broken down into process elements.
• Detailed metrics and best practices for these elements are part of the SCOR-
model at this level.
• Furthermore, most process elements can be linked and possess an input
stream (information and material) and/or an output stream (also information
and material).

57. Source: Springer, 2015
Figure 2: SCOR Model Level 3

58. Faculty of Management Sciences
Metrics and Best Practices
Source: Springer,
2015

59. Faculty of Management Sciences
A Procedure for Application of the
SCOR-Model
The configuration procedure for the SCOR Model consists of seven steps:
1. Define the business unit to be configured.
2. Geographically place entities that are involved in source, make, deliver and return
process types.
3. Enter the major flows of materials as directed arcs between locations of entities.
4. Assign and link the most important source, make, deliver and return processes categories
to each location.
5. Define partial process chains of the (modeled) supply chain (e.g. for distinct product
families).
6. Enter planning process categories (“sP2”–“sP5”) using dashed lines to illustrate the
assignment of execution to planning process categories.
7. Define a top-level “sP1” planning process if possible, i.e. a planning process category
that coordinates two or more partial process chains.

60. SCOR performance
SCOR's Performance or Metrics section focuses on understanding the supply
chain outcomes, and consists of two types of elements
• Performance features and metrics
• Providing the concept of process / practice verification.
SCOR recognizes five performance features
• Reliability.
• Responsiveness.
• Agility.
• Cost.
• Asset Management Efficiency.
6 1
PRESENTATION
TITLE

61. SCOR Practices
• Application and Practice are a great way to create or conduct a process or a
group of operations. Exclusivity or distinction can be associated with process
automation, technology applied to the process, special skills applied to the
process, a unique process performance sequence, or a unique way to distribute
processes and link them between organizations. All practices have links to one
or more operations, one or more metrics, and one or more skills.
There are four types of Best SCOR (Supply Chain Council, 2019
• Emerging practices.
• Best practices.
• Standard practices.
• Declining practices
6 2
PRESENTATION
TITLE

62. SCOR Model Metrics And Performance
Measurements
• Designed and maintained the model to support supply chains of various
complexities and across many industries.
• There are several levels used to measure the supply chain performance. These
levels help standardize supply chain performance metrics so that companies
can be evaluated against other companies and businesses, even if they operate
differently.
• A smaller organization compared to a larger one, or companies can judge the
supply chain performance versus companies in other industries. There are
more than 250 scales under the SCOR model, categorized according to the
five performance characteristics:
• reliability, responsiveness, agility, costs, and asset management efficiency.
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63. • Companies use these elements to define supply chain requirements by
specifying performance attributes that prioritize them, and areas the company
can perform at a moderate pace.
• A measure is a standard for measuring the performance of a supply chain or
process.
• SCOR measures are diagnostic measures.
• SCOR integrates well-known concepts of business process reengineering,
standard setting, process performance measurement, organizational design,
and logistics management by integrating these technologies into a multi-
functional framework across four levels.
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64. Faculty of Management Sciences
Benefits of SCOR Model
 The model enables full leverage of capital investment,
 creation of a supply chain road map,
alignment of business functions, and
an average of two to six times return on investment
Increase the speed of system implementations
Improve business agility
Accelerate business process effectiveness
Improve inventory turns
Support organizational learning goals
Improve overall operational performance

65. Lean Supply Chain
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66. SUMMARY
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