Supply Chain Improvement Supply Chain Operations Reference (SCOR) model

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Supply Chain ImprovementSupply Chain Operations
Reference (SCOR) model
Peter A. Bolstorff Executive Director, Supply
Chain PRAGMATEK Consulting Group, LTD.

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SCOR - FAQs

• Who is the Supply Chain Council?
• What is SCOR?
• How do you use SCOR to achieve supply chain
  performance improvement?
• How can this apply to my company?
• How can I learn more about SCOR?

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Supply Chain Council

• The Supply-Chain Council (SCC) is an independent,
  not-for-profit, global corporation with
  membership open to all companies and
  organizations
• Over 800 Company Members (Practitioners,
  Technology Providers, Consultants, Academicians,
  Government)
• Wide range of industries (Manufacturers,
  Distributors, Retailers, CPG)
• The SCC endorses the Supply Chain Operations
  Reference-model (SCOR) as the cross-industry
  standard for supply-chain management

The SCC was organized in 1996 by Pittiglio Rabin
Todd McGrath (PRTM) and Advanced Manufacturing
Research (AMR), and initially included 69
voluntary member companies
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The Two Faces of SCOR
Process Reference
Applied
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The SCOR Framework
The integrated processes of Plan, Source, Make,
Deliver and Return, spanning your suppliers
supplier to your customers customer, aligned
with Operational Strategy, Material, Work
Information Flows.
Deliver
Source
Make
Deliver
Make
Source
Source
Make
Deliver
Source
CustomersCustomer
SuppliersSupplier
Your Company
Supplier
Customer
Internal or External
Internal or External
Supply Chain Operations Reference Model
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SCOR Project Roadmap
Operations Strategy

• Supply Chain Scope
• Performance Metrics
• Supply Chain SCORcard
• Competitive Performance Requirements and SCORcard
  Gap Analysis

Analyze Basis of Competition

• AS IS Material Flow
• Disconnect Gross Opportunity Analysis
• Material Flow Strategy and Best Practice Analysis
• Supply Chain Strategy
• TO BE Material Flow

Material Flow
Configure Supply Chain
Align Performance Levels, Practices, and Systems
Information and Work Flow

• AS IS Work/Information Map
• Transactional Analysis
• Design Specifications
• TO BE Work/Information Map
• Prioritized List of Changes

• Master Schedule of Projects
• ROI Analysis
• Technology Selection
• Detail Requirements, Solution Design,
  Configuration, Test Go Live

Implementation
Implement Supply-Chain Changes
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Applications of SCOR

• Software Selection Implementation
• Business Requirements
• Cost Reduction Productivity Improvement
• Direct
• Indirect
• Application optimization
• Upgrade
• Utilization
• Implement Operational Strategy
• Network Analysis Material Flow Design

• SKU Rationalization
• Delivery Performance Improvement
• OTIF Perfect Order
• Synchronize Lead-time
• Supply Chain Six Sigma and Lean Enterprise
• Continuous Improvement
• Organizational Learning
• Efficient Consumer Response
• Forecast Accuracy
• Category Marketing
• CPFR

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Implementation Results

• 2X to 6X ROI within 12 months
• Stock price improvement
• Income statement and balance sheet improvement
• Self fund technology investments
• Fully Leverage Capital Investment in Systems
• Utilization of current applications
• Business blue print to leverage needed upgrades
• Roadmap for e-investments
• Framework for supply chain process management and
  continuous improvement

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How Do I Use SCOR?to Improve Supply Chain
Performance
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Performance Improvement
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Project Approach
Discover
Analyze
Design
Develop
Implement
Educate
Opportunity
Strategy
Solution
Prototype
Install
Support

• Performance Metrics
• Benchmarks
• SCORcard
• Competitive Requirements

• Workshops
• Executive Briefings
• Customized Training
• SCOR Boot Camp for Project Managers

• Prioritized Supply Chain Changes
• Opportunity Analysis
• Master Schedule of Projects
• Supply Chain Project Office-Continuous
  Improvement Plan
• Detailed Design
• Technology Selection
• Conference Room Pilot

• Material Flow Design
• Disconnect Analysis
• Work and Information Flow Design
• Application Architecture
• Preliminary Implementation Plan

• Discovery Checklist
• Project Charter
• Stakeholder Interviews

3-4 Months
6 Months
1-2 Weeks
1 Week
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Educate for Support

• Key Points
• Develop an Evangelist
• Establish Core Team Buy IN
• Enroll an Active Executive Sponsorship

• Deliverables
• General SCOR Workshops
• Customized Workshops
• Executive Briefings
• SCOR Boot Camp for Project Managers
• Supply Chain Management for Dummies, Oct 2000,
  SCTN Supply Chain University, April 2001 SCTN
  Spreading the Word, Oct 2001, SCTN

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Discover the Opportunity

• Key Points
• Uses a checklist to collect appropriate
  information to paint an appropriate business
  context
• Actively involves your entire business team key
  stakeholders
• Scopes your project respecting all supply chain
  factors
• The Project Charter is the critical output

• Deliverables
• Business Context Summary
• Project Charter
• Scope
• Organization
• Plan
• A Model of Project Management, Sep/Oct 1999,
  SCTN Scale versus Scope, Dec 2001, SCTN

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Business Context

• Strategic Background
• Strengths Weaknesses Opportunities Threats (SWOT)
  
• Value Proposition
• Critical Success Factors
• Critical Business Issues
• Competitive Analysis
• Business and Financial Information
• Profit and Loss Statement
• Balance Sheet

• Internal Profile
• Organization
• Physical Locations
• Other Key Performance Indicators
• External Profile
• Market/Customers
• Suppliers

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Supply Chain Scope

• Project is defined by the unique combination of
• Geography
• Customer(s)
• Item(s) or Products
• Process(es)
• Supplier(s)

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ALPHA Definition Matrix
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Project Charter

• I. Introduction
• Maintenance of the Project Charter
• II. Project Overview
• Scope
• Business Objectives
• Project Objectives
• III. Project Approach
• Methodology
• Project Schedule
• Project Milestones Deliverables
• Dependencies

• IV. Project Budget
• V. Project Organization
• Organization Chart
• Project Resources
• Roles and Responsibilities
• VI. Measures of Success
• Stakeholder Expectations
• Benchmarks
• Benefit Analysis
• VII. Project Communication
• Communication Plan
• Control Procedures

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Project Organization
BU Advisory/Steering Committee
BU Project Sponsor
BU Project Manager
Content SME
Experienced Project Manager
BU Design Team
BU Extended Team
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Analyze to Align Strategy

• Key Points
• Balances Customer, Internal, and Shareholder
  Facing Metrics
• Incorporates multiple sources of useful
  benchmarks
• SCORcard data queries Hot Links to the PL
• Provides the foundation for strategy, priority,
  and cascading goals

• Deliverables
• SCOR v5.0 Metrics
• Competitive Performance Requirements
• SCORcard
• www.pmgbenchmarking.com, www.marketguide.com
• Target the Impact, Cut the Risk, June 2000, SCTN
  How to SCOR with Six Sigma, September 2001, SCTN

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SCOR v5.0 Metrics
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Competitive Requirements
Performance Attribute
Performance vs. Competition
Supply Chain 1
Supply Chain 2
From your Organizations Point of View
Delivery Reliability
?
?
?
Flexibility/ Responsiveness
?
Supply Chain Cost
?
?
Asset
?
?
Legend
?
Superior
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SCORcard
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Design Material Flow

• Key Points
• Includes all Internal External Physical
  Locations
• Incorporates P/N classification SCOR L2
• Stock versus To Order
• RM versus FG versus WIP
• Illustrates P/N Routes
• Transportation Cost
• Inventory Level
• Leadtime
• Disconnect Analysis drives savings opportunity

• Deliverables
• AS IS Material Flow
• Disconnect Analysis
• List and Group
• Quantify
• Prioritize
• TO BE Material Flow
• When Performance is no Joking Matter, April 2000,
  SCTN

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Classify Items
Plan
Source
Make
Deliver
S1 Source Stocked Products
M1 Make-to-Stock
D1 Deliver Stocked Products
S2 Source MTO Products
M2 Make-to-Order
D2 Deliver MTO Products
Suppliers
Customers
S3 Source ETO Products
M3 Engineer-to-Order
D3 Deliver ETO Products
R1 Return Defective Product R2 Return MRO
Product R3 Return Excess Products
Return
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Physical Material Flow
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Disconnect Analysis

• Identify individual disconnects (brainstorm)
• Group disconnects using an Affinity Diagram
  approach
• Quantify Disconnects
• Analyze Cause and Effect with Disconnect Group
  using Fishbone Analysis
• Estimate Performance Opportunity using Test
  Scenarios for each Fishbone
• Validate Savings

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Fishbone Analysis
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TO BE Material Flow

• Identifies appropriate leading practices to
  improve material flow
• CPFR, cross-dock, VMI, rapid replenishment,
  supplier agreements, product rationalization
• Eliminates inefficiencies identified in
  disconnect analysis
• Transportation cost, inventory turns, lead-time,
  delivery performance

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Design Work Information Flow

• Key Points
• Integrates the work and information flow which
  moves the material
• Incorporates application modules and sub-modules
• Organization roles illustrated using Swim
  Diagram
• Blueprints the impact of e to your business
• Focuses performance on transactional productivity

• Deliverables
• AS IS Work Information Flow
• Revised Disconnect Analysis
• Productivity
• Quality
• TO Be Work Information Flow
• SCOR Cheat Sheet
• Before You Buy, Re-connect, February 2000 Slow
  Down to Speed Up, Nov/Dec 1999 Putting the e
  in Enterprise, August 2000, SCTN How to Design a
  Business Blueprint, August 2000, SCTN

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Transactional Analysis

• Purchase Order
• Work Order
• Sales Order
• Return Authorization
• Planning Event
• Forecast
• Replenishment Order

• Staple Yourself to an Order
• Process Steps (Level 4)
• Inputs and Outputs
• Enabling Technology
• Business Rules
• Transactional Productivity
• Volume
• Cycle Time
• Event Time
• Elapsed Time
• Yield

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Transactional Analysis
PROCESS


M1.2 Make (Stocked Product) Issue Material

INPUT / OUTPUT




Staged Components

Production Schedule




Pull Instruction



M1.2










PROCESS STEPS

1.

Locate Components

2.

Wand Components out of Warehouse

3.

Move components to in process staging area

4.

Sequence components based on schedule


TECHNOLOGY USED
Oracle Manufacturing, , Manual, RF, Excel


VOLUME
1300 pcs / hr

CYCLE TIME
Event 1 hr / Elapsed 4 hrs






YIELD
85


BUSINESS RULES

1.

Dont let the production line stop.


DISCONNECTS

1.

Pull materials from receiving area.


 
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SCOR Level 3 Source
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Plan Element Relationships
P1 Plan Supply Chain
P2 Plan Source
P3 Plan Make
P4 Plan Deliver
D1.3 Reserve Inventory Promise Date
S1.1 Schedule Product Deliveries
D1.5 Plan Build Loads
M1.1 Schedule Manufacturing Activities
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Business Blue Print
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Productivity Improvement
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Prioritize Disconnects
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Develop Integrated Solution

• Key Points
• Recommendations address all factors of
  performance
• Portfolio of Projects managed as a whole
  initiates ROI analysis
• Integrates with Application Detailed Business
  Requirements Definition and Solution Design
• Transition Teams from Design to Implementation

• Deliverables
• Master Schedule of Projects
• ROI Schedule
• Implementation Organization
• Keeping Your Focus, December 2000 and Who SCORed
  my Cheese? February 2001, More Faster, Less
  Later, June 2001, SCTN

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Balanced Project Mix
Pace of Change
Balanced Project Mix
Fast
Measured
Focused Improvement
Continuous Improvement
Tactical
Scope of Change
Focused Restructuring
Business Process Innovation
Strategic
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Master Project Schedule
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Projected Net Earnings Impact
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Implement the Changes
Project Management Office
Project Management Methodology
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Toro Adoption Progress
1st SCOR Project
Phase 1 Implemented
Enterprise SCOR
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Project Life Cycle Adoption
Discover
Analyze
Design
Develop
Implement
1 Week
4 Weeks
8-12 Weeks
24 - 32 Weeks

• Discovery Checklist
• Customized Training
• Project Charter
• Detailed SCORcard w/Benchmarks
• Opportunity Assessment

• AS IS TO BE Material Flow
• Detailed Disconnect Analysis
• Design Specifications
• AS IS TO BE Work and Information Flow
• Prioritized List of Supply Chain Changes
• Technology Selection

• Master Schedule of Projects
• ROI Analysis
• Technology Selection
• Detail Design (Requirements) and Configure
• Pilot (Test) and Roll Out or Go Live

Business Case
To Be Solutions Recommendations for Change
2X to 6X ROI within 12 months
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Resources

• www.supply-chain.org
• www.supplychaintech.com
• www.forbes.com
• www.pmgbenchmarking.com
• www.Toro.com - 3Q Earnings Announcement
  (NYSETTC) 5 by Five Initiative
• www.pragmatek.com