GWBrown, IT Strategy & Technology, 4/12/00 R R ® ® 1 SCOR Experience at Intel Presentation for Supply Chain Council April 12, 2000 George W. Brown Intel

GWBrown, IT Strategy & Technology, 4/12/00RR®® 1

SCOR Experience at IntelSCOR Experience at IntelPresentation for

Supply Chain CouncilApril 12, 2000

George W. BrownIntel Worldwide IT, Strategy & Technology


AgendaAgenda

Objectives for Presentation Context for Supply Network Improvement at

Intel SCOR Pilot Project

Supply Network Task Force Supply Network Tools Task Force Pilot Scope and Deliverables

Lessons Learned and Observations SCOR/Tool Update Summary of Potential Wins


Objectives for PresentationObjectives for Presentation

Highlight Intel’s Emphasis on Supply Network Management

Summarize Our SCOR Pilot Experience

Share Our Learning's and Observations

Recommend Improvements in SCOR/Tools


SupplierSupplier ManufacturerManufacturer CustomerCustomer

Multiple Views on Supply Chain Multiple Views on Supply Chain Definition ...Definition ...

Supply chain = Supply chain = Activities within and between Activities within and between each circleeach circle

DISCOVERDISCOVER DEVELOPDEVELOP DEPLOYDEPLOY

Supply chain = Supply chain = Entire context of the product life Entire context of the product life cyclecycle

Multiple SuppliersMultiple SuppliersMultiple ProductionMultiple ProductionOperations withinOperations within

a Businessa BusinessMultiple CustomersMultiple Customers

Most Supply Chains consist of many Most Supply Chains consist of many “threads”“threads”


Lead to Supply Network Thinking Lead to Supply Network Thinking and ...and ...

FUTURE...FUTURE... Integrated Supply Network Performance is a Driver of Competitiveness.

Competition is no longer just between individual firms, but is between the supply networks that design, develop, produce and deliver products to the end customer.

NEW COMPUTER INDUSTRY PARADIGMS SPEED ..... Internet Time

FLEXIBILITY ..... Quick TPT

COST ..... Highly Competitive Consumer Market


… … a Common Visiona Common Vision

Be the Leader in Supply Network Management

Operate the right multiple supply networks driven by business needs

Execute each network as a single, virtual enterprise enabled by the Internet


… … and Supply Network Goalsand Supply Network Goals

Drive Cycle Time Reduction in all our

businesses across the Supply Networks

Design & Implement Agile/Flexible

Supply Networks


Supply Chain Task Force Supply Chain Task Force FormedFormed

To establish a methodology for how we analyze different business Supply Networks

To better identify which cycle time CSIs we should target

To assess the relative impact (and cost) of improving cycle time through variation of different portions of our overall supply chain

To improve efficiency and effectiveness of targeted supply chain


… … and a Supportingand a Supporting Supply Chain Tools Task Force Supply Chain Tools Task Force

To evaluate tools and methodologies to support supply chain improvements

To support the SCOR Model/Methodology Provides structure and common language including definition of

process steps and metrics to model supply chain Reference Model provides an archetype to configure supply chain

Consistency of definition allows for effective evaluation With appropriate Tool, Time invested can yield value added

results

To explore integration with other planning and business process modeling activities


The SCOR Tool Assessment ProcessThe SCOR Tool Assessment Process

StakeholderBriefing

SCOR Pilot

PreliminaryAssessment

Formalizethe Process

CompleteSelection

• Factor in new SCOR requirements

• Identify Stakeholders

• Assimilate all requirements

• Make recommendation decision

• Prepare propagation plan

• SCOR and Tool Training

• Apply SCOR methodology

• Plan tool/methodology improvements

• Analysis of SCOR• Identify options• Make tool

selection for pilot


D1.6 D1.5 D1.3 D1.2 D1.1

D1.8 D1.9 D1.10 D1.11 D1.12 D1.13

D1.4D1.7

ARIS EasySCOR utilized for ARIS EasySCOR utilized for SCOR ModelingSCOR Modeling

Level One in EasySCOR Modeler

Plan

Source

Make Deliver

Deliver

D0 Deliver Infrastructure

D1 Deliver Stocked Products

D2 Deliver Make-to-Order Products

D3 Deliver Engineer-to-Order Products

Level Two in EasySCOR

Modeler

Level Three in EasySCOR Modeler


Business Area Characteristics: Global in Source, Make and Deliver; represents a fractional portion of overall business; only one product type taken under consideration.

Supply Chain Characteristics:Less than cost effective and/or customer responsive as is desired. Traditional business model does not always support the business area needs. Some of the current ‘work around’ processes are not sufficiently efficient and/or robust.

SC Task Force Sets up 1st SCOR SC Task Force Sets up 1st SCOR PilotPilot

Pilot Mission: Identify areas for improvement in customer service and internal supply

chain efficiency Pilot use of Supply Chain Methodology and Tool(s) for Intel Document high level supply chain model guidelines for similar businesses


SCOR Pilot ProcessSCOR Pilot Process

Identify team , charter,

mission and scope

SCOR and Tool Training

Develop AS IS model

Identify metrics and

gaps

Refine AS ISModel

Gather Data for AS IS /TO BE

Review modelsfor supply

chain optimization

Develop TO BE models and identify

gaps

Plansupply chain optimization strategies

Develop EnterpriseSupply Chain

Scorecard

Identify BusinessImprovement

Targets

BaselineExisting Baseline

Processes

DefineScorecard

IdentifyPerformance

ImprovementsCross-

Functional Team:Core Team: Transportation,

Finance, Assembly and Test

Manufacturing, Warehouses,

Materials, Strategic Logistics, Biz

Operations

Tool/Methodology Support Team:

IT Strategy &Technology (ARIS

EasySCOR), ATM Business

Process, Corp Logistics

(Manugistics Navigator)

Extended Team/Consultants:

Geography, Sys. Mfg., IDS Scheer


SC Task Force DeliverablesSC Task Force Deliverables

Document Pilot Supply Chain Document current Supply Chain process

improvement efforts in Pilot business area Identify & “Go Do” short-term improvements Identify, get support & identify owners for

long-term improvements Summarize findings and learnings for using

Supply Chain Methodology and Tools Document guiding Supply Chain principles for

“Pilot-Like” businesses Document learnings and BKMs on managing a

Supply Chain taskforce


As-Is Configured in As-Is Configured in EasySCOREasySCOR

Suppliers Supplier

Suppliers Assemble/ Package Distribution Centers Geo Ports of Entry

Americas--->

Europe--->

Asia--->


SCOR Metrics Assessed at Level I & SCOR Metrics Assessed at Level I & IIII

PerformanceAttributes

L ITie

Metric for P1, Plan SupplyChain

Metric for P2, Plan Source Metricfor P3 Plan Make Metric for P4, Plan Deliver

Cycle Time PF,TLC,CCT,DP,AT

Cumulative Source/Make CycleTime

Replan Cycle Time

Cash-to-cash Cycle Time

Cumulative Source Cycle Time

Source Flexibility

Supplier Cycle Time

Cumulative Make Cycle Time

Make flexibility

Number of End Products/SKU’s

Order Management Cycle Time

Cost PF,TLC,CCT,DP,AT

Total Order Management Costs

D/S Planning Costs

Inventory Carrying Costs

Value-Added Productivity

Obsolete Inventory

Raw Material Inventory CarryingCosts

Number of Supply Sources

Raw Material Shrinkage

Commodity Management Profile

Work-In-Process InventoryCarrying Costs

WIP Shrinkage

Material Overhead Cost PerDollar of Material Expenditure

Finished Goods InventoryCarrying Costs

Finished Goods Shrinkage

Order management costs

Total Logistics Costs

Service/Quality PF,TLC,CCT,DP,AT

Forecast Accuracy

Delivery to Customer RequestDate

Fill Rate

Product & Process DataAccuracy (Bills of Material,Routings, Planning Factors, etc.)

Supplier Delivery Performanceto Customer Request Date

Supplier Fill Rate

Production plan adherence

Actual to Theoretical CycleTime

Fill rate

Forecast Accuracy

Delivery to Customer RequestDate

Assets PF,TLC,CCT,DP,AT

Return on Assets

Capacity Utilization

Total Inventory DOS

Total Raw Material InventoryDOS

Total WIP Inventory DOS

Inventory Obsolescence

Total Finished Goods InventoryDOS

PF = Production Flexibility, TLC = Total Logistics Cost, CCT = Cash-to-Cash Cycle Time, DP = Delivery Performance; AT = Asset Turns; xx = no tie; xx = tie


SCOR Elements Considered for FitSCOR Elements Considered for Fit

Level III


Alternatives/Opportunities Alternatives/Opportunities EvaluatedEvaluated

We developed our own process for first-pass evaluation of business improvement opportunities

Evaluation helped prioritize opportunities for more rigorous analysis through simulation and optimization studies


Observations on Our Application Observations on Our Application of SCOR Methodologyof SCOR Methodology

Common language and structure enabled quick assimilation of unfamiliar business process across supply chains and within supply chain

SCOR metrics stimulated good thought process toward development of indicators

Used SCOR model as a framework to model business process

Balanced customization of indicators and compliance with SCOR metrics

Matched the level of detail to the project objective(s)


Observations on Data GatheringObservations on Data Gathering

Spend time identifying ‘right’ metrics to measure the business-- very time consuming, don’t underestimate!

Recognize that the level of detail of information and analysis should match the objective of the taskforce

Would have been nice to do benchmarking but limited time and ability to make direct comparisons made it difficult

Need to include inventory/capital costs in model to be comprehensive

Validating labor and handling costs has value beyond Pilot

Modeling for a complex network requires significant effort to baseline & up-date-- but there is benefit in optimizing several factors simultaneously


Learnings from SC Task ForceLearnings from SC Task Force

Introduce SCOR Methodology and/or Tools early in team process

Begin data population of As-Is early & allow a minimum of 1 month for data population and 1 month for validation

Mapping of Level II metrics to Level I indicators is highly subjective and potentially time consuming

Positioning of Plan elements is difficult to align with operational experience and is non-intuitive

Methodology provides the structure to define the current and optimized business process but not the “how” for successful implementation-- need more support in this area.

Need to have capability to customize metrics and not force fit SCOR metrics


Intangible Benefits from PilotIntangible Benefits from Pilot

Big benefit has been raising the knowledge level of the entire team about the business, supply chain processes and solidifying relationships… intangible but real and powerful!

Provides structure and common language including definition of process steps and metrics to model supply chain

SCOR proliferation is gaining support Larger SCOR projects under way


R/3 & APO Ref. Models

Biz

Drivers

Function

Process

Procedure

Task

Biz + Tech-nology Infra-

structure

Biz Function Scope

Template

Biz Process Levels

SCOR plus Enterprise SCOR plus Enterprise Information Architecture = Biz Information Architecture = Biz Process RepositoryProcess Repository

•Process improvement methodology•Generic, uses archetypes•Best practices and metrics

Supply Chain

SCOR

Information Architecture•Provides details about Intel business process relationships


SCOR applied to B2B e-SCOR applied to B2B e-CommerceCommerce

Support the Sub-contractor Direct Ship project Supply chain improvement project from SCOR Pilot B2B scenario linked to EAI

Leverage SCOR to develop a BKM around e-business scenario modeling Start with supply chain models Refine the model representation of B2B scenarios Drill down to the interchange process specification level Perform SCOR-based simulation

Explore mapping of SCOR to the Rosettanet Work with both the Supply Chain Council and RosettaNet Siemens is committed in a joint effort

Currently developing a Value Proposition statement and pilot plan Internal review process will precede SCC/Rosettanet proposal


Start with Supply Chain ModelsStart with Supply Chain Models

Planning the SO

Scheduling the Delivery

Executing the Delivery

Processing in the 3PF ScenarioProcessing in the 3PF Scenario

Level III

Planning

Scheduling

Execution


Refine the Models for B2B Refine the Models for B2B ScenariosScenarios

3PF Planning/Scheduling B2B

3PF Shipping B2B


Drill into Interchange Drill into Interchange SpecificationSpecification

Export/Transport

Export/Transport

SubcontractorSubcontractorSellerSeller

OrderManagerment

OrderManagerment

ShippingShipping

SalesOrder

ProductionProduction

ReservationPlanning

Goods ReceiptProcessing

Vehicle Specification/Search Request

via Internet

ShipmentTracking

Transport Control

Vehicle Locating and Allocation

Order Processing

Order TrackingOrder Tracking

OEM DealerImporter

IDS ScheerE-Business Scenarios will be used to visualize the flow of communication between business participants


Perform SCOR-based SimulationPerform SCOR-based Simulation

Use eSCOR for tpt/cost analysis

Transfer ARIS Model into GensymeSCOR

Define products

Define resources

Run simulation


Potential Big Wins for SCOR Potential Big Wins for SCOR BKMBKM

Facilitate mapping of Level II & III metrics to Level I indicators

Make positioning of PLAN elements more intuitive

Provide a “how-to” guidelines for applying SCOR beyond configuration analysis

Drag and Drop SCOR modeling

Cost/TPT analysis through simulation

SCOR-based BKM for B2B modeling

Visualize SCOR metrics through integrated performance monitoring


Questions?

Documents

GWBrown, IT Strategy & Technology, 4/12/00 R R ® ® 1 SCOR Experience at Intel Presentation for Supply Chain Council April 12, 2000 George W. Brown Intel