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Using SCOR Best Practice Webinar
This document outlines a webinar focused on best practices for implementing the SCOR® framework in supply chain improvement initiatives, detailing key principles, metrics, and processes. It includes a roadmap for organization, performance analysis, project development, and implementation strategies, along with a case study showcasing project portfolios and anticipated benefits. Additionally, it emphasizes the importance of organizational learning and offers next steps for individuals and teams interested in adopting SCOR®.
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Using SCOR Best Practice Webinar
- 1. Using SCOR® A BestPractice Case Study of a Typical SCOR® Project
- 2. Objective § This webinarhighlights a best-practice application of SCOR®, and summarizes the key steps to effectively utilize SCOR® in your company’s supply chain improvement initiative. § It is appropriate for anyone who is thinking about using the SCOR® framework, or those that are doing so and want exposure to additional expertise. Copyright SCE Limited 20132
- 3. Agenda 1. Principles ofSCOR Application 2. Metrics, Performance, and the Business Case 3. Process and System – Work and Information 4. Organizational Learning Plan and Next Steps Copyright SCE Limited 20133
- 4. Principles of SCOR® Application Copyright SCELimited 20134 § Roadmap § Organization § Supply Chain Definition
- 5. Copyright SCE Limited20135 Roadmap Phase FOCUS Major Deliverables Challenge 0 BUILD ORGANIZATION SUPPORT • Sponsor and Key Stakeholder Support • Education Finding the Tipping Point for Change 1 DEFINE THE PROJECT • Business Context Summary • Supply Chain Definition • Project Scope and Charter Planning and Organizing a Supply Chain Excellence Initiative 2 ANALYZE PERFORMANCE • Scorecard • Defect Analysis • Process Analysis Defining the Metric and Process Performance Gap 3 DEVELOP THE PROJECT PORTFOLIO • Project Portfolio • Implementation Priority Developing the Project List and Priority for Implementation 4 IMPLEMENT A PROJECT • Development, Pilot, and Implementation of a Portfolio Project • Results Low Risk Implementation of a Project that Demonstrates Results
- 6. Organization § The ActiveExecutive Sponsor(s) § Resource Provider § Buck Stops Here § Steering Team § Review and Approve Recommendations § Champion Implementation Projects § The Project Leader § Manage to Schedule § Escalate Issues § Design Team § Analyze and Recommend § Commit the Time Copyright SCE Limited 20136
- 7. Supply Chain Definition Retail Markets Distributor Markets Direct-to- Consumer Markets OEMand Key Accounts Government Home Delivery International Food Products X X X Technology Products X X Developing X X X Durable Products X X X Fowlers North America Customer/Market Channels Copyright SCE Limited 20137
- 8. Metrics, Performance, and the Business Case CopyrightSCE Limited 20138 § Scorecard § Portfolio § Priority § Benefits
- 9. 9 Scorecard Technology Products GroupBenchmark Data 2-May-11 Performance Attribute or Category Level 1 Performance Metrics 2010 Act Parity 50th Percentile Advantage 70th Percentile Superior 90th Percentile Parity Gap Competitive Gap Competitive Gap Analysis Source External Supply Chain Delivery Reliability Perfect Order Fulfillment 30.2% 74.0% 81.0% 88.0% -43.8% -57.8% $6,750,000 SCORmark Supply Chain Responsiveness Order Fulfillment Cycle Time 11.0 10.0 6.50 3.0 -1.0 -4.5 SCORmark Supply Chain Flexibility Upside Supply Chain Flexibility 91.5 60 45.0 29 -31.5 -46.5 SCORmark Internal Supply Chain Cost Cost of Goods 63.6% 54.7% 44.3% 26.0% -8.9% NA $40,050,000 Hoovers Supply Chain Management Cost 12.8% 9.5% 6.8% 3.9% -3.3% -3.3% $14,850,000 SCORmark Supply Chain Asset Management Efficiency Inventory Days of Supply 60.5 20.4 8.9 0.0 -40.1 -40.1 $31,442,000 Hoovers
- 10. Portfolio Copyright SCE Limited201310 Project Number Project Phrase Project Description Revenue ($) Perfect Order Fulfillment (%) Order Fulfillment Cycle Time (days) Upside Supply Chain Flexibility (days) Total Supply Chain Management Cost ($) COGS ($) Inventory ($) $450,000,000 30.2% 11.0 91.5 $57,600,000 $286,200,000 $47,437,000 1 Improve Demand Management and Forecasting This project will improve poorly defined practices, underutilized modeling techniques, and untrained personnel. 8.0% $1,660,000 Baseline 11 Establish Formal Return Management This project will define and implement a reverse logistics processes from goods movement to policy to the authorization process. $1,350,000 $660,000 12 Eliminate Poor Inventory Control Practices This project will focus on defects that relate to inventory record accuracy, shrinkage, and cycle counting. 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 $30,537,000 Benefit Projected Performance Level
- 11. Copyright SCE Limited201311 Priority
- 12. Benefits § Average OIimprovement of 3% to sales (high 4.5% - low 1.5%) § Typical Inventory Turn improvements of 20% § 30% Faster System Implementations with 30% more Functionality § Continuous Improvement Portfolios Refreshed at a Value of 0.5% § Mitigation of costs associated with risk management Copyright SCE Limited 201312
- 13. Copyright SCE Limited201313 ROI Fowlers Project Portfolio FY 1 FY 2 FY 3 100% 25% 40% 100% 1 (250)$ 75$ 120$ 300$ 1.98 2 -$ -$ -$ -$ - 3 (6,500)$ 625$ 1,000$ 2,500$ 0.63 4 -$ -$ -$ -$ - 5 (1,800)$ 1,400$ 2,240$ 5,600$ 5.13 6 (1,100)$ 625$ 1,000$ 2,500$ 3.75 7 (250)$ 1,250$ 2,000$ 5,000$ 33.00 8 (2,200)$ 2,025$ 3,240$ 8,100$ 6.08 9 (2,250)$ 4,375$ 7,000$ 17,500$ 12.83 10 -$ -$ -$ -$ - 11 (750)$ 775$ 1,240$ 3,100$ 6.82 12 (125)$ 75$ 120$ 300$ 3.96 (15,225)$ 11,225$ 17,960$ 44,900$ Improve Supplier Flexibility Implement Formal Product Life Cycle Management Process Engineer an Integrated Tactical Planning Process Eliminate Poor Inventory Control Practices Implement Sales and Operations Planning Improve Efficiency and Effectiveness of the Physical Supply Chain Network Tighten Up Order Management Discipline Establish Formal Return Management Improve Demand Management and Forecasting Optimize Supply Management Practices Improve Information Technology Effectiveness Improve Data Integrity Ist Year Cost Investment 3 Year Benefit Gross EVA Benefit ($ in 000's) 3 YR ROI % of Annualized Benefit Achieved Grand Total
- 14. Copyright SCE Limited201314 Value
- 15. Process and System –Work and Information Copyright SCE Limited 201315 § Staple Yourself to an Order § SCOR® Level 3 Process Analysis § SCOR® Level 4 Process Development
- 16. Copyright SCE Limited201316 SCOR®
- 17. Copyright SCE Limited201317 Hierarchy
- 18. Copyright SCE Limited201318 Worksheet Interviewees Accountable Function Level 4 Step Description System Module Responsible Event Time 1 Enter the description of each of the process steps; often referred to as Level 4 process steps Enter the System Module and/or Transaction Enter the title(s) of those doing the work This is an effort of the amount of time (often calculated in minutes) and is normalized to one of four transactions, i.e. purchase order, work order, sales order, return authorization, or forecast 2 0 Initials Relative Weight Interviewee's Initial This compares the relative impact to the rest of the disconnects in the list Enter the primary transactional input(s) to this process Enter the SCOR Level 3 Process element ID and description, i.e., M1.1 Schedule Production Activities Enter the primary transactional output(s) to this process Process Steps (>4 and <11) Total Event Time for Process Steps Enter the interviewees from the interview planning worksheet. Enter the title of the ultimate role accountable to the performance of this SCOR Level 3 process. Primary Input(s) SCOR Element Primary Output(s) Disconnects causing rework and/or extended wait time Disconnect Description Describe major disconnects that cause process steps to be reworked and/or add to process wait time (delay) Business Rules Enter the business rules, both formal and informal, that directly or indirectly influence process performance
- 19. Process Analysis Copyright SCELimited 201319 Mx.1 Schedule Production Mx.2 Issue Prod Dx.1 Process Inquiry & Quote Dx.2 Receive, Enter, & Validate Order Dx.3 Reserve (Resources) Inventory and Determine Delivery Date Dx.4 Consolidate Orders Dx.5 Build Loads Dx.6 Route Shi Dx.8 Receive Product from Source or Make P1 Plan Supply Chain P3 Plan Make P4 Plan Deliver
- 20. SCOR® Level 4 CopyrightSCE Limited 201320 P3.1.1 Complete month end validation P1.1.1 Analyze forecast error and BIAS performance P1.1.2 Generate and validate statistical forecast P1.1.4 Conduct Demand Review and Approve Plan P1.1.5 Update launch and replenishment NPD plans and forecasts P1.1.7 Update promotional event calendar P1.1.8 Update customer account plans P1.1.6 Identify demand shaping opportunities P1.1.3 Conduct Pre- Demand Detailed Review FINANCE 1 DEMAND PLANNING 2 DEMAND PLANNING 3 DEMAND PLANNING 4 SALES & MARKETING 5 SALES 15 MARKETING 13 MARKETING 10 SUPPLY PLANNING 11 P1.2.3 Update Forecast SUPPLY PLANNING 6 SCOR® P1.1 S&OP: Demand Plan
- 21. Organizational Learning Plan and NextSteps Copyright SCE Limited 201321 § Organizational Learning § Individual Development § Next Steps
- 22. Organizational Learning 1. ExecutiveBrief 2. Using SCOR® Workshop – On Line 3. Using SCOR® Workshop – On Site 4. Supply Chain Excellence Project – Pilot 1. Broad Scope Strategy 2. Narrow Scope Kaizen Event 5. Supply Chain Excellence Continuous Improvement Copyright SCE Limited 201322
- 23. Individual Development 1. SCOR-PCertification – the Supply Chain Council 2. SCOR-S Certification – the Supply Chain Council 3. SCOR® Coach – SCE Limited Copyright SCE Limited 201323
- 24. Next Steps § Identifya sponsor § Hold an Executive Brief § Conduct an on-site Using SCOR® Workshop § Evaluate individual learning requirements Copyright SCE Limited 201324
- 25.
- 27. Copyright SCE Limited201327 Thank You! § Scelimited.com § Using SCOR® Series § Supply Chain Excellence: The Blog § Linked in - http://www.linkedin.com/in/peterbolstorff § facebook - http://www.facebook.com/pages/Supply-Chain-Excellence/ 257802574290912 § Twitter - https://twitter.com/#!/SCEsupplychain § Email: peterbolstorff@scelimited.com § +1 651 439 3422