10th LECTURE - Supply Chain Management...Continued

7/23/2019 10th LECTURE - Supply Chain Management...Continued

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10th Lecture – Supply Chain Management…Continued

Computing Key Performance Indicators

PROCESS CONTROL

The problems along the supply chain that create uncertainty andariability are most often caused by errors! If deliveries are missed or arelate, if orders are lost, if errors are made in lling out forms, if items with highobsolescence rates (like PCs) or perishable items are allowed to stay too long ininventory, if demand forecast errors are made, if plant and equipment are notproperly maintained, then the supply chain can be disrupted, thereby reducingsupply chain performance Thus" at any stage in the process" statisticalprocess control charts can be used to monitor process performance!

SCOR

The supply chain operations reference (SCOR # model is a supply chain diagnostictool that proides a cross$industry standard for supply chainmanagement It was developed and is maintained by the Supply ChainCouncil" a global not!for!prot trade association organi"ed in #$$% with

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membership open to companies interested in improving supply chain e&ciencyprimarily through the use of 'C *he 'upply Chain Council ('CC) has almost#,+++ corporate members around the world, including many ortune -++companies The purpose of the SCOR model is to de%ne a company&scurrent supply chain processes" 'uantify the performance of similarcompanies to establish targets to achiee (best$in$class) performance"and identify the practices and soft*are solutions that *ill yield (best in

class) performance!

It is organi+ed around a set of %e primary management processes,plan" source" ma-e" delier" and return" as sho*n in .igure belo*! Theseprocesses proide a common set of de%nitions" or building bloc-s" thatSCOR uses to describe any supply chain" from simple to comple/! Thisallo*s supply chains for di0erent companies to be lin-ed and compared!

'upply Chain .nablers

1 primary feature of the SCOR model is the use of a set of performanceindicators or (metrics) to measure supply chain performance! Thesemetrics are categori+ed as (customer$facing) or (internal$facing) assho*n in Table belo*! Customer$facing metrics measure supply chaindeliery reliability" responsieness" and 2e/ibility *ith respect tocustomers and suppliers! Internal$facing metrics measure supply chaincost and asset management e3ciency! The metrics may be used formultiple supply chain processes!

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Table : 'C Performance 0etrics

These metrics are used to deelop a (SCORcard) that measures both acompany&s current supply chain performance for di0erent processes andits competitor&s metrics The company then pro4ects the leel of metricsit needs to be on a par *ith its competitors" to hae an adantage oerits competitors" or to be superior! *he value associated with these measuredimprovements in performance is then pro1ected for the di2erent performanceattributes or e3ample, a company may know that the industry 4median ll rate5is $+6 and the industry best!in!class performance is $$6 *he company hasdetermined that its current ll rate is %-6, and that a ll rate of $+6 will give it

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parity with its competitors, a $-6 ll rate will give it an advantage, and a $$6 llrate will make it superior to most of its competitors *he company may thenpro1ect that the improvement in its ll rate plus improvements in the other supplychain reliability attributes (ie, delivery performance and perfect order fulllment)will increase supply chain value by 8#+ million in revenue *his process wherein acompany measures its current supply chain performance, compares it to itscompetition, and then pro1ects the performance levels it needs to compete is

referred to as 4gap analysis5 'C then provides a framework not only formeasuring performance but for diagnosing problems and identifying practices andsolutions that will enable a company to achieve its competitive performanceob1ectives

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ASSIGNMENT

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C1SE PRO5LE6

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10th LECTURE - Supply Chain Management...Continued