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SCOR ®: A Journey of Supply Chain Process ExcellenceUsing SCOR to Drive Process ImprovementsDerinda Ehrlich
VP, Corporate and Channel Services, APICS
Introductions
Topics
• APICS and Supply Chain Council merger• What is SCOR?• Using SCOR to Drive Process
Improvements• Implementing SCOR• Next steps for YOUR organization
APICS merger with Supply Chain Council
Leading the Industry
• APICS is globally the leading association advancing supply chain and operations management.
• Our research, education and certification programs elevate individual and corporate supply chain performance, innovation and resilience.
• APICS Products and Services
– Professional Membership
– Research and Publications
– Education
– Certification
– Events
– APICS and the Supply Chain Council – officially merged August 2014
APICS Supply Chain Council (APICS SCC)• We are a global, non-profit organisation that developed and actively manages
the Supply Chain Operations Reference (SCOR) model.
• The SCOR® model is globally recognised as the standard framework that links supply chain process, performance, practices, people (organizations) and technology into a unified structure.
• Since 1996, over 5,000 companies worldwide have used SCOR®.
• APICS SCC Services
– Research Projects, Corporate Advisory Board, Executive Summit
– SCORmark™ Benchmark
– Training is now available through APICS
– Publications, Resource Library, and Case Studies
– Other Value Chain Frameworks including M4SC, DCOR®, CCOR®, and PLCOR®
APICS and APICS Supply Chain Council
APICS SCCAPICS
Training, certification and networking
Research, Benchmarking and
Process Frameworks
APICS Value Proposition
APICS delivers a total individual and corporate value proposition.
We help individuals achieve career development goals.
We help corporations achieve strategic supply chain goals.
Individuals Corporations, and Institutions
What is SCOR®?
A Process Framework
• Process frameworks deliver the well-known concepts of business process reengineering, benchmarking, and best practices into a cross-functional framework
– Process Standards: Plan, Source, Make, Deliver, Return, Enable
– Performance Standards: Perfect Order Fulfillment, Cash-to-Cash Cycle Time, Cost of Goods Sold, Order Fulfillment Cycle Time, etcetera
– Practices: EDI, Cross-Training, Sales & Operations Planning, …
– People/Skills: Process, practices, and metrics cross-referenced with personnel skills that include experience, aptitude and training needs
History of SCOR• In 1996, 69 companies collaborated• Described the Supply Chain in terms of a Process Framework• Currently on SCOR version 11• Since 1996 more than 5000 companies used SCOR
Business Process Re-engineering
Performance Benchmarking
Best Practices Analysis
Organizational Design
Capture the ‘as-is’ business activity and design the future ‘to-be’ state
Quantify relative performance of similar supply chains and establish internal targets
Identify practicesand software solutions that result in significantly better performance
Assess skills and performance needs and align staff and staffing needs to internal targets
Process Reference Framework
Processes Performance (metrics)
Practices People (skills)
SCOR® Processes
Supplier CustomerSuppliers’Supplier
Source
Internal or External
Your Organization
Return
Deliver MakeSource
Return
Plan
Deliver
Return
Source
Return
MakeSource
Return
Plan
Deliver
Return
DeliverMake
Plan
Return Return
Customers’Customer
Enable
Internal or External
EnableEnable
SCOR MODEL
SCOR® Process DecompositionLevel Description Examples Comments1
Process Types (Scope)
Plan, Source, Make, Deliver, Return and Enable
Level-1 defines scope and content of a supply chain. At level-1 the basis-of-competition performance targets for a supply chain are set
2
Process Categories (Configuration)
Make-to-Stock, Make-to-Order, Engineer-to-Order Defective Products, MRO Products, Excess Products
Level-2 defines the operations strategy. At level-2 the process capabilities for a supply chain are set. (Make-to-Stock, Make-to-Order)
3
Process Elements (Steps)
• Schedule Deliveries• Receive Product• Verify Product• Transfer Product• Authorize Payment
Level-3 defines the configuration of individual processes. At level-3 the ability to execute is set. At level-3 the focus is on the right:• Processes• Inputs and Outputs• Practices• Technology capabilities• Skills of staff
SCOR® Metrics Attribute SCOR 11.0 Metrics
Reliability RL.1.1 Perfect Order Fulfillment
Responsiveness RS.1.1 Order Fulfillment Cycle Time
Agility AG.1.1 Upside Supply Chain Flexibility
AG.1.2 Supply Chain Upside Adaptability
AG.1.3 Downside Supply Chain Adaptability
AG.1.4 Overall Value At Risk (VAR)
Cost CO.1.1 Total Cost to Serve
Asset Management Efficiency
AM.1.1 Cash-to-Cash Cycle Time
AM.1.2 Return on Supply Chain Fixed Assets
SCOR Quick Reference Guide
SCOR QRG is a handy reference for SCOR Processes and Performance (metrics) across the main SCOR processes
Other APICS SCC FrameworksC
ustomer processesS
uppl
ier
proc
esse
s
Product & PortfolioManagement PLCOR™
Supply Chain SCOR®
Product & Process Design
DCOR™
Sales & Support
CCOR™
Using SCOR® to DriveProcess Improvements
Nigel Clements, from the Deming Forum estimates that up to 70% of process improvement projects fail.
2012 WSJ by S. Chakravorty estimate 60% of Six Sigma projects fail.
Typical Lean and Six Sigma ChallengesTop Five Challenges with Lean/Six Sigma projects
1. Executive alignment / change management2. Project selection (typically through brainstorming)3. Projects aligned to functions (silos and departments)4. Access to meaningful metrics and performance data 5. Quantifying the benefit/outcome
Source: © 2003 Dan Swartwood
End to End ViewStrategic Metric
(Attribute)Strategy
Perfect Order(Reliability)
Consistently getting the orders right, and product meets quality requirements
Order Fulfilment Cycle-Time (Responsiveness)
The consistent speed of providing products/services to customers
Flexibility, Adaptability & Risk(Agility)
The ability to respond to upside or downside changes and overall value at risk
Cost to Serve(Costs)
The cost associated with managing and operating the supply chain
Asset Management (Asset Management
Efficiency)
The effectiveness in managing the supply chain’s assets in support of fulfillment
Ext
ern
alIn
tern
al
Hierarchy of SCOR Metrics
Level 1
Level 2
Level 3
Level 1Strategic Metric
Level 3
Diagnostic Metrics
Level 2Process Metrics
Hierarchy of SCOR Metrics
Level 1
Level 2
Level 3
Level 1Ability to execute the strategy
Level 3
Diagnose the gap
Level 2Explains why the strategy not achieved
Hierarchy of SCOR MetricsLevel 1Strategic Metric
Level 3
Diagnostic Metrics
Level 2Process Metrics
Customer Perfect Order
Orders Delivered In Full
- Delivery Item Accuracy- Delivery Quantity Accuracy
Level 1
Level 2
Level 3
Customer Perfect Order Fulfilment
Orders Delivered in
Full
Delivery Item
Accuracy
Delivery Quantity Accuracy
Competitive Requirements
Competitive Requirements
• Identify Customer Groups or Market Segments• Based on the expectations for that supply chain, define
performance requirements for each segment– One assigned superior (S)– Two assigned advantage (A)– Two assigned parity (P)
• Each unique combination of ratings defines the Supply Chain Strategy for the channel
• Think of the rating as a desired state, NOT where you want to improve the most
ExampleCompetitive Requirements
Retail Channel
Distributor Channel
Delivery Reliability S A
Responsiveness A P
Agility A PTotal Supply Chain Management Cost P A
Asset Management Efficiency P S
What are YOUR targets?
Determine your Competitive Requirements• Identify your largest channel• Determine where you desire to perform at best in class• Determine two attributes where you desire to be better than average• The remaining two get parity rankings
Delivery Reliability
Responsiveness
Agility
Total Supply Chain Management Cost
Asset Management
Discussion
• Q: Where did you place your S?• Q: Where is your largest performance
gap?• Q: What insight did you learn?
How do you know the size of the gap?
Lean and Six Sigma driven with SCORSCOR with Lean/Six Sigma projects
1. Executive alignment and sponsorship of improvement projects• Roadmap, data and criteria • Defined people (roles/responsibilities) and practices
2. Project selection • Portfolio of improvement projects aligned to Supply Chain data and strategic direction
3. Projects often aligned to functions and silos versus end-to-end• Projects aligned to SCOR processes (end to end) Plan, Source, Make, Deliver and
Return
4. Opportunities for improvement often not data driven• Standardised operational definition for performance measures• Quantified performance gaps through SCORMark™ data
5. Quantifying the benefit/outcome• Comparative data to measurable outcomes for similar Supply Chains
Implementing SCOR
SCOR® Implementation RoadmapStep FOCUS Major Deliverables Touch Points APICS Enabler
1BUILD ORGANISATION SUPPORT
• Sponsor and Key Stakeholder Support
• EducationORIENTATION
Executive Brief
Orientation Webinar
Public SCOR-P Training
In-house SCOR-P Training
2 DEFINE THE PROJECT
• Business Context Summary• Supply Chain Definition• Project Scope and Charter
3 ANALYSE PERFORMANCE
• Scorecard • Metric Defect Analysis• Process Analysis
BENCHMARKSCORmark®
Benchmarking Orientation
4DEVELOP THE PROJECT PORTFOLIO
• Project Portfolio• Implementation Priority
PORTFOLIO DEVELOPME
NT
Roadmap Progress Webinar
5 IMPLEMENT A PROJECT
• Development, Pilot, and Implementation of a Portfolio Project
• Results
SATISFACTION SURVEY
APICS Instructor List
APICS SCC Sponsor List
Top Motivations to Use SCOR®
1. Building a Technology Investment Roadmap
2. In Search of Return on Investment (ROI) for Capacity
3. Creating a Supply Chain Strategy4. Implementing Supply Chain
Performance Improvements5. Improving Sales and Operations
Planning6. Developing Organizational Talent,
Support and Competence7. Maximising Use of Existing
Technology
8. Achieving Operational Excellence9. Due Diligence as part of a Merger or
Acquisition10. Globalising and Managing Business
Processes11. Integrating with the greater Value
Chain12. Integrating Lean, Six Sigma, and
SCOR to Build a Better Project Portfolio
13. Defining and Building an Effective and Efficient Supply Chain Organization
SCOR Implementation Benefits
• Average Operating Income improvement of 3% to sales (high 4.5% - low 1.5%)• Typical inventory turn improvements of 20%• Delivery reliability improvement of 25%• 20% improvement in flexibility• 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
Shareholder Value
What are your organisation's main motivations in considering the use of SCOR?
Potential SCOR Implementation Role
What potential role would you play in a SCOR Project?• A. Sponsoring Executive• B. Key Stakeholder• C. Evangelist –Subject Matter Expert
Discussion
• Q: Are you prepared?• Q: What is your approach?
Continue the Conversation
Learn More About SCOR® Training
SCOR® Training Options
APICS SCC offers training that provides in-depth understanding of the Supply Chain Reference (SCOR®) model, widely recognised as the global standard for supply chain management.
– SCOR® Group Training: Cost-effective, customized group learning at your location
– SCOR® Training:Thorough, effective, skills development in public classroom setting2015 schedule - http://www.apics.org/careers-education-professional-development/events/conferences/scor-professional-training
SCOR Mobile App
• Official launch soon, but you can check it out now!
• www.APICS.org/SCORapp • Enhanced digital version of the
SCOR Quick Reference Guide• Offers an outline of the processes
under the four main areas of the model – Process, Performance, Practices and People
Continue the Conversation
Peter BolstorffExecutive Director APICS Supply Chain [email protected]
Carolyn Lawrence – For Affiliate Subscription and On BoardingDirector Corporate Development APICS Supply Chain [email protected]
Derinda EhrlichVP Corporate and Channel [email protected]
Dominic Longo, CSCP – For TrainingDirector Corporate ServicesAPICS [email protected]
Q&A
Thank You!