PLAN SOURCE MAKE DELIVER RETURN

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SCOR® Walkthrough 10.0Supply-Chain Operations Reference-model

John PAUL Professor & Research Fellow at BEM (Bordeaux Ecole de Management-France)

Qualified SCOR® Instructor by Supply Chain Council

Managing Director, iCognitive

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SUPPLY CHAIN COUNCIL OVERVIEW

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Supply Chain Council Overview

An independent, non-profit global association

• The SCC is an independent, not-for-profit, trade association

• Membership open to all companies and organizations

• Focus is on research, application and advancement and advancing state-of-the-art supply chain management systems and practices

• Developer and endorser of the Supply Chain Operations Reference (SCOR®) as a cross-industry standard for supply chain management

• Offers Training, Certification, Benchmarking, Research, Team Development, Coaching, and Cross-standard Integration focused on the SCOR® framework

• Founded in 1996

• Approaching 1000 Association Members

• Chapters in North America, Europe, Japan, South Africa, Latin America, Australia/New Zealand, South East Asia and Greater China, with developing Chapters India and Middle East

Driving value through the use of SCOR®

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Supply Chain Council Overview

SCOR Model available in English and Chinese

www.supply-chain.orgOn sale on: http://alturl.com/mqzzp

www.icognitive.com

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SCOR OVERVIEW VERSION 10.0

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6

Building Block Approach

Processes Metrics

Best Practice Technology

SCOR® Introduction

Six distinct management processes structure SCOR®

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SCOR® Introduction

SCOR®: A process reference model

Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results

Benchmarking

Characterize the management practices and software solutions that result in “best-in-class” performance

Best Practices Analysis

Process Reference Model

Capture the “as-is” state of a process and derive the desired “to-be” future state

Business Process Reengineering

Capture the “as-is” state of a process and derive the desired “to-be” future state

Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results

Characterize the management practices and software solutions that result in “best-in-class” performance

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SCOR® Introduction

SCOR® contains three levels of details

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SCOR is a

Top-Down

Process

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Cu

sto

mers

Su

pp

liers

Enable

SR1 Source Return Defective Product

SR2 Source Return MRO Product

SR3 Source Return Excess Product

DR1 Deliver Return Defective Product

DR2 Deliver Return MRO Product

DR3 Deliver Return Excess Product

P1 Plan Supply Chain

P2 Plan Source P3 Plan Make P4 Plan Deliver

Source Make Deliver

S1 Source Stocked Products M1 Make-to-Stock

M2 Make-to-Order

M3 Engineer-to-Order

D1 Deliver Stocked Products

D2 Deliver MTO Products

D3 Deliver ETO Products

S2 Source MTO Products

S3 Source ETO Products

P5 Plan Returns

D4 Deliver Retail Products

Plan

SCOR® Introduction

Supply-Chain Operations Reference-model (SCOR) 10.0 – Processes [1/2]

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P1 Plan Supply Chain

P2 Plan Source P3 Plan Make P4 Plan Deliver

Source Make Deliver

S1 Source Stocked Products M1 Make-to-Stock

M2 Make-to-Order

M3 Engineer-to-Order

D1 Deliver Stocked Products

D2 Deliver MTO Products

D3 Deliver ETO Products

S2 Source MTO Products

S3 Source ETO Products

P5 Plan Returns

D4 Deliver Retail Products

Plan

Level 3 Sub

processes of D2

Level 1 processes

andLevel 2

variations

Process Inquiry & Quote

D2.1

Receive, Configure, Enter &

Validate Order

D2.2

Select Carriers & Rate Shipments

D2.7

RouteShipments

D2.6

Plan & BuildLoads

D2.5

Consolidate Orders

D2.4

Reserve Resources &

DetermineDelivery Date

D2.3

Pick Product

D2.9

Receive Product from Source or

Make

D2.8

Load Product & Generate

Shipping Docs

D2.11

Ship Product

D2.12

Receive & Verify Product by Customer

D2.13

Install Product

D2.14

Invoice

D2.15

Pack Product

D2.10

SCOR® Introduction

Supply-Chain Operations Reference-model (SCOR) 10.0 – Processes [2/2]

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SCOR® Introduction

Using latest Version 10.0• Structure

– Section1: Introduction– Section 2: Metrics– Section 3: Processes

• Chapter 3.1: Plan and Workflow Graphics• Chapter 3.2: Source and Workflow Graphics• Chapter 3.3: Make and Workflow Graphics• Chapter 3.4: Deliver and Workflow Graphics• Chapter 3.5: Return and Workflow Graphics• Chapter 3.6: Inputs and Outputs

– Section 4: Best Practices• SCOR• Green SCOR• Risk Management

– Section 5: People– Section 6: Special applications

• Green SCOR

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SCOR® Introduction

Version 10.0 – Using Metrics Coding

• Metrics Coding

XX.y.z

XX= Performance Attribute. The possible values for XX are:• RL= Reliability

• RS= Responsiveness

• AG= Agility

• CO= Cost

• AM= Asset Management

y= Level of the metric

z= a unique number

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SCOR® Introduction

Planning Processes

Cu

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pp

lie

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Supply Chain

Cu

sto

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r pro

ce

sse

sSu

pp

lie

r p

roce

sse

s Supply Chain

DeliverMakeSource

ReturnReturn

Plan

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SCOR® Introduction

PLAN – Balancing requirements and resources• Plan provides two important functions

within the SCOR Model

– Plan processes provide the mechanism for balancing demand requirements and available resources

– Plan processes provide an integrating function between other process elements and suppliers / customers

• Includes elements such as:

– Prioritizing demand requirements

– Planning inventory, distribution, production, material, and rough-cut capacity for all products and all channels

– Supply chain configuration, long-term capacity and resource planning, business planning, product phase-in/phase-out, manufacturing ramp-up, end-of-life management, product-line management

– Manage planning infrastructure

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Plan

The balancing of

requirements

against resources

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SCOR® Introduction

Execution Processes

Cu

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pp

lie

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Supply Chain

Cu

sto

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ce

sse

sSu

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roce

sse

s Supply Chain

DeliverMakeSource

ReturnReturn

Plan

ReturnReturn

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SCOR® Introduction

SOURCE – Ordering and receipt of goods

• Source processes document the activities that connect an organization to its suppliers

• Source Processes include activities such as:

– Material Acquisition

• Obtain, receive, inspect, hold, and issue material

– Vendor certification and feedback, sourcing quality, in bound freight, vendor contracts, initiate vendor payments

– Raw Materials Warehouse management

– Raw Materials Transportation

• Manage traffic

• Manage inbound freight

– Manage Source business rules

– Manage RM inventories

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Source

Activities that connect

us to our suppliers

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• Make documents the processes that transform / converts raw materials into finished goods – Make processes do not imply a change of location but a

qualitative transformation of the raw materials

– Not all organizations will necessarily perform Make processes

• Make processes include activities such as:– Request and receive material from Source processes

– Manufacture and test product, package, hold and/or release product

– Engineering changes, facilities and equipment, production status, production quality, shop scheduling/sequencing, short-term capacity

– WIP Transportation

– Manage production business rules

– Manage WIP inventories

Make

Change to

form, fit, or

function

SCOR® Introduction

MAKE – Conversion of materials

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• Deliver processes document the activities that connect an organization to its customers

• Deliver processes include activities such as:– Order management

• Enter and maintain orders• Generate quotations • Create and maintain customer database, maintain

product/price database• Manage accounts receivable, credits, collections and

invoicing– Finished Goods Warehouse management

• Store, pick, pack and configure products, create customer specific packaging/labeling, consolidate orders, ship products

• Finished Goods Transportation and installation management– Manage traffic, manage outbound freight, manage Schedule

installation activities, perform installation, verify performance

• Manage channel business rules, order rules, manage deliver inventories, manage deliver quality. Manage product import/export

Deliver

Activities that

connect us to our

customers

SCOR® Introduction

DELIVER – Fulfillment of customer orders

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• Return processes document the activitiesassociated with the handling of returns, thatis, the return of a product to a supplier orthe receipt of a returned product from acustomer

• Return Source– Activities associated with returning material to a

supplier including the communication with thetrading partner, the generation of documentation,and the physical return / shipment of product.

• Return Deliver– Activities associated with receiving and disposing of

returned material from a customer including thecommunication with the trading partner, thegeneration of documentation, and the physicalreturn / receipt and disposal of product.

Return

How to manage

returns from your

customers and

to your suppliers

SCOR® Introduction

RETURN – Reverse flow of goods

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SCOR® Introduction

SCOR links Company Strategy to Business Operations

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Systems

Operational

S1

D1 S1

M2S2 D2

M1 D1 S1

S2

D1M1

Europe

an RM

Supplie

r

Key

Other

RM

Supplie

rs

Alpha

Regional

Warehou

ses

S1

DR1 SR1

DR1 SR1 DR1 SR1

DR3 SR3

RM

Supplie

rs

Cons

umer

ALPHATactical

Strategic

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SUPPLY CHAIN PERFORMANCE

Supply Chain Competitive Analysis - Measuring Performance Metrics

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Supply Chain Performance

Measuring how well the supply chain performs is as essential as understanding how it operates

• Measurements must link to business objectives

• Measurements must provide insights into how to manage the supply chain more effectively

• Measurements must be appropriate for the process activity they are measuring

– Same level

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Supply Chain Performance

Eleven Level 1 metrics

Level 1 Strategic Metrics

Performance Attributes

Customer-Facing Internal-Facing

Reliability Responsiveness Agility Costs Assets

Perfect Order Fulfillment √

Order Fulfillment Cycle Time √

Upside Supply Chain Flexibility √

Upside Supply Chain Adaptability √

Downside Supply Chain Adaptability √

Overall Supply Chain Value-At-Risk √

Supply Chain Management Cost √

Cost of Goods Sold √

Cash-To-Cash Cycle Time √

Return on Supply Chain Fixed Assets √

Return on Working Capital √

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SCOR BEST PRACTICESGREEN SCOR

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Best Practices - Green SCOR

An Excellent Foundation for Environmental Accounting

• Sustainable business models and environmental accounting are growing business concerns.

• There are multiple approaches to measuring the total environmental footprint of an organization or supply chain with no agreed upon standards.

• SCOR provides an excellent foundation for environmental accounting in the supply chain.

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Best Practices - Green SCOR

Green metrics Aggregation along SCOR process structure

26

Level 1

Level 2

Level 3

S1

M2S2 D2

D1M1 S1

M2S2 D2

D1M1

M2S2 D2D1 D2

Tier 3

Total Carbon Footprint

Air + Liquid + Solid - % Recycle = Total Environmental

Footprint

Tier 2 Tier1 Your

Company

Customer

Carbon

Air

Liquid

Solid

% Recyc

M2.1

Schedule production Activities

M2.5

Stage Product

M2.2

Issue Product

M2.3

Produce and Test

M2.4

Package

M2.6

Release Product to

Deliver

Carbon

Air

Liquid

Solid

% Recyc

Carbon

Air

Liquid

Solid

% Recyc

Carbon

Air

Liquid

Solid

% Recyc

Carbon

Air

Liquid

Solid

% Recyc

Carbon

Air

Liquid

Solid

% Recyc

Carbon

Air

Liquid

Solid

% Recyc

M2.7

Waste Disposal

Carbon

Air

Liquid

Solid

% Recyc

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SCOR BEST PRACTICESRISK MANAGEMENT

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Best Practices – Risk Management

Supply Chain Risk Management (SCRM)

• SCRM

– The systematic identification, assessment and mitigation of potential disruptions in logistics networks with the objective to reduce their negative impact on the supply chain network’s performance.

• Related SCOR Processes

– EP.9, ES.9, EM.9, ED.9, ER.9

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Best Practices – Risk Management

Example of Typical Supply Chain Risks

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Supply risks

Operations risks

Phase 3:Risks mitigation

Phase 1:Risks identification

Control and monitor

Mitigation measures

Demand risks

Security risks

Other risks

(regulations,

environmental,

etc…)

Decreasing the

impact

Risks assessment &

evaluation

Risks plan definition

Risks strategy

management selection

Phase 2:Risks assessment

Decreasing the

likehood

Best Practices – Risk Management

Three phase approach for SCRM

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0

2

4

6

8

10

12

Fournisseur Chine

Fournisseur Singapore

Fournisseur Europe du

Nord

Fournisseur Europe de

l'Est

Fournisseur Europe

Occidentale

Fournisseur Afrique de

l'Ouest

Fournisseur Afrique de

l'Est

Fournisseur Amerique du

Nord

Fournisseur Amerique

centrale

Fournisseur Amerique du

Sud

© 2008 Copyright – iCognitive Pte, Ltd . Tous droits réservés

100%

80%

60%

40%

20%

0

Deliv

ery

Perf

orm

ance

Suppliers

Best Practices – Risk Management

SCOR Enables Risk Monitoring

Example of Supplier Risk Monitoring

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WHAT IS NEW IN V10.0?SCM SKILLS AND CAPABILITIES -

PEOPLE

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People

Introduction to Supply Chain Management Skills in SCOR

33

Supply Chain Architecture Overview

People SectionSkills • Experience • Aptitude • Training • Competency

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People

Supply Chain Assets – Human CapitalKey elements of the People section

34

Skill

• Capacity to deliver pre-determined results with minimal input of time and energy

• i.e. Master Scheduling, Import/Export Regulations, Production Planning, Risk Mitigation etc

Experience

• The knowledge or skill acquired by observation or active participation

• i.e. Cycle Counting, Cross Docking, and Hazardous Materials Handling

Aptitude

• A natural, acquired, learned or developed ability to perform a certain kind of work at a certain level.

• i.e. Accuracy, Analytical, Natural leadership etc

Training

• A particular skill or type of behavior learned through instruction over a period of time

• i.e. SCOR-S certification, APICS CPIM certification but also include on-the-job training etc.

Competency

• The state or quality of being qualified, having the ability, to perform a specific role

• 5 Levels: Novice, Beginner, Competent, Proficient, Expert

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Full presentation with more details about SCOR V10.0 is available on:

http://www.icognitive.com/index.php?option=com_phocadownload&view=category&id=6

%3A&download=107%3Ascor_v10_sc_optimization&Itemid=64&lang=en

iCognitive Downloads: http://alturl.com/878ek

35

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Thank youFor more information please

contact us atinfo@icognitive.com or

+65 6325 2810

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iCognitive, an Expert in Supply Chain Management

37

CONSULTING BENCHMARKING

TRAINING TECHNOLOGY

RESEARCH IN SUPPLY CHAIN

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With Hands-On Experience in SCOR

38

Supply Chain Excellence Award - With supportof iCognitive, British American Tobacco PakistanSCOR implementation project won two awardsfrom Supply Chain Council:

•Supply Chain Operational Excellence Award•Global Award for Supply Chain Excellence

Provider of SCOR® workshops as qualified SCOR® instructor certified by the supply chain council : more than 2000 supply chain professionals trained in more than 200 companies.