Supply Chain Operations Reference Model ® SCOR Version 8.0
© Supply-Chain Council, 2006. All rights reserved. The Supply-Chain Council has made every effort to assure the accuracy and usefulness of the information and metrics contained herein and is provided on an "AS IS" basis. The Supply-Chain Council makes no warranty, express or implied, of merchantability, fitness for a particular purpose, or accuracy. The Supply-Chain Council makes no representation as to the results obtained or obtainable and disclaims all liability for direct, indirect, special or consequential damage, including lost profits, lost business or the like, whether based in contract, tort (including negligence), product liability or otherwise.

®

SCOR is a registered trademark in the United States and Canada.

© Copyright 2006 Supply-Chain Council, Inc.

Acknowledgements
The following members (alphabetical by company) of the Supply-Chain Council Technical Development Steering Committee and Project Teams devoted extensive time and/or effort to the development of this Model – SCOR Version 8.0.
Name Company

Kevin Mansfield Cheryl Harrity Joe Faccenda Steve Hensley Bill Garrison Jörg Nienhaus Paul Schiller Paul Tilsley Sergio Vacca Steven Vanne Eric Cosman Russ Dickinson Stephen Graham Ray Walker Lars Magnusson Charles-Eric Roussel Alex Van Breedam Charlie Gifford Georgeann Fears Chang-rui Ren Jin Dong Luc Kremers Rob Hagan Jürgen Richert Taylor H. Wilkerson Shruti Mandana Dan Swartwood Monty Boyle Gary Cokins Keith Unger Melinda Spring Scott Stephens Arne Ziegenbein Scott Sealing John Nyere Peter Baker Nancy Craft Nishioka-san

Air Products & Chemicals, Inc APQC Aspentech Blue Sky Logistics Boeing Bosch, BP Chemicals BP Bulgari Caterpillar Logistics The Dow Chemical Company The Dow Chemical Company The Dow Chemical Company DuPont Ericsson Essilor France Flanders Institute for Logistics GE/Fanuc IBM Benchmarking IBM China IBM China iCognitive International Paper J&M Management Consulting AG LMI The Performance Measurement Group Pragmatek PriceWaterhouseCoopers SAS Stone Technologies, Inc. Supply-Chain Council Supply-Chain Council ETH Zurich United Space Alliance United States Department of Defense UTi Volvo Accenture

© Copyright 2006 Supply-Chain Council, Inc.

Supply Chain Operations Reference-model (SCOR) 8.0
Contents • Introduction • PLAN • SOURCE • MAKE • DELIVER • RETURN • Workflow Graphics • Glossary Process Terms Metrics Best Practices Inputs and Outputs • Appendices Appendix A: Metrics
Background Development Information

1 12 68 115 168 252 306

354 368 386 419

434 511

Appendix B: Best Practices
Background Development Information

© Copyright 2006 Supply-Chain Council, Inc.

June 2006

Supply Chain Operations Reference-model (SCOR) 8.0 Introduction
The Supply Chain Operations Reference-model (SCOR) is the product of the Supply-Chain Council (SCC), an independent, not-for-profit, global corporation with membership open to all companies and organizations interested in applying and advancing the state-of-the-art in supply-chain management systems and practices. The SCOR-model captures the Council’s consensus view of supply chain management. While much of the underlying content of the Model has been used by practitioners for many years, the SCOR-model provides a unique framework that links business process, metrics, best practices and technology features into a unified structure to support communication among supply chain partners and to improve the effectiveness of supply chain management and related supply chain improvement activities. The SCC was organized in 1996 and initially included 69 practitioner companies meeting in an informal consortium. Subsequently, the companies of the Council elected to form an independent not for profit trade association. The majority of the SCC’s members are practitioners and represent a broad cross-section of industries, including manufacturers, distributors, and retailers. Equally important to the Council and the advancement of the SCOR-model are the technology suppliers and implementers, the academicians, and the government organizations that participate in Council activities and the development and maintenance of the Model. At the time of this release, the Council has approximately 800 members worldwide and has established international chapters in Australia/New Zealand, Brazil, Greater China, Europe, Japan, Southeast Asia, and Southern Africa with additional requests for regional chapters pending. The Supply-Chain Council is interested in providing the widest possible dissemination of the SCOR-model. The wide-spread use of the Model results in better customer-supplier relationships, software systems that can better support members through the use of common measurements and terms, and the ability to rapidly recognize and adopt best practice no matter where it originates. SCC requests that all who use the SCOR-model provide attribution to the Supply-Chain Council. Additionally, members are encouraged to monitor the members section of the SCC website (www.supply-chain.org) to ensure that they are using the latest version of SCOR. This introduction is provided to assist new users of the SCOR-model to begin analytic and implementation projects. It is intended to remind experienced users of the framework and structure of the Model to assist in more complex applications and operationalizing the Model for their businesses. Finally, it is provided to orient members to the changes between Version 8.0 and Version 7.0. Version 8.0 of the SCOR-model is the tenth revision since the Model’s introduction in 1996. Revisions of the Model are made when it is determined by Council members that changes should be made to facilitate the use of the Model in practice. Specific changes in Version 8.0 are outlined later in this Introduction.

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Scope
The SCOR-model has been developed to describe the business activities associated with all phases of satisfying a customer’s demand. The Model itself contains several sections and is organized around the five primary management processes of Plan, Source, Make, Deliver, and Return (shown in Figure 1). By describing supply chains using these process building blocks, the Model can be used to describe supply chains that are very simple or very complex using a common set of definitions. As a result, disparate industries can be linked to describe the depth and breadth of virtually any supply chain. The Model has been able to successfully describe and provide a basis for supply chain improvement for global projects as well as site-specific projects.

Plan

Plan

Plan

Plan

Plan

Deliver Return

Source Return

Make

Deliver Return

Source Return

Make

Deliver Return

Source Return

Make

Deliver Return

Source Return

Suppliers’ Supplier

Supplier Internal or External Your Company

Customer

Customer’s Customer

Internal or External

Figure 1 - SCOR is organized around five major management processes. It spans: all customer interactions (order entry through paid invoice), all physical material transactions (supplier’s supplier to customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc.) and all market interactions (from the understanding of aggregate demand to the fulfillment of each order). It does not attempt to describe every business process or activity. Specifically, the Model does not address: sales and marketing (demand generation), product development, research and development, and some elements of post-delivery customer support. It should be noted that the scope of the Model has changed and is anticipated to change based on Council member requirements. With the introduction of Return, the Model has been extended into the area of post-delivery customer support (although it does not include all activities in that area). As shown in Figure 2, the Model is designed and maintained to support supply chains of various complexities and across multiple industries. The Council has focused on three process levels and does not attempt to prescribe how a particular organization should conduct its business or tailor its systems / information flow. Every organization that implements supply chain improvements using the SCOR-model will need to extend the Model, at least to Level 4, using organization-specific processes, systems, and practice.

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The Model is silent in the areas of human resources, training, and quality assurance among others. Currently, it is the position of the Council that these horizontal activities are implicit in the Model and there are other highly qualified organizations that are chiefly concerned with how an organization should train, retain, organize, and conduct their quality programs. Just as the Council recognized the requirements for marketing and sales in commercial organizations, the Council is not minimizing the importance of these other activities.

SCOR Contains Three Levels of Process Detail
Level
# Description

Schematic

Comments
Level 1 defines the scope and content for the Supply chain Operations Reference-model. Here basis of competition performance targets are set.

1 Top Level (Process Types) Source

Plan Make Deliver Return

Supply-Chain Operations Reference-model

Return

2
Configuration Level (Process Categories)

A company’s supply chain can be “configured-to-order” at Level 2 from core “process categories.” Companies implement their operations strategy through the configuration they choose for their supply chain.

3

Process Element Level (Decompose Processes)
P1.1
Identify, Prioritize, and Aggregate Supply-Chain Requirements

P1.3
Balance Production Resources with Supply-Chain Requirements

P1.4
Establish and Communicate Supply-Chain Plans

P1.2
Identify, Assess, and Aggregate Supply-Chain Requirements

Level 3 defines a company’s ability to compete successfully in its chosen markets, and consists of: • Process element definitions • Process element information inputs, and outputs • Process performance metrics • Best practices, where applicable • System capabilities required to support best practices • Systems/tools Companies “fine tune” their Operations Strategy at Level 3.

4
Not in Scope

Implementation Level (Decompose Process Elements)

Companies implement specific supplychain management practices at this level. Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions.

Figure 2 - SCOR is a hierarchical model with specific boundaries in regard to scope.

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The SCOR-model is a business process reference model as illustrated in Figure 3. That is, it is a Model that links process elements, metrics, best practice and the features associated with the execution of a supply chain in a unique format. The uniqueness and power of the Model and its successful implementation is chiefly derived from using these four elements together. It is important to note that this Model describes processes not functions. In other words, the Model focuses on the activity involved, not the person or organizational element that performs the activity.

Business Process Reengineering

Benchmarking

Best Practices Analysis

Process Reference Model

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-inclass” results

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

Figure 3 - SCOR is a business process reference model.

SCOR-model Structure
Besides the five basic management processes (Plan, Source, Make, Deliver, Return) that provide the organizational structure of the SCOR-model, it is useful to distinguish between the three process types in the Model: planning, execution, and enable (formerly infrastructure). A planning element is a process that aligns expected resources to meet expected demand requirements. Planning processes balance aggregated demand across a consistent planning horizon. Planning processes generally occur at regular intervals and can contribute to supply chain response time. Execution processes are triggered by planned or actual demand that changes the state of products. They include scheduling and sequencing, transforming materials and services, and moving product. Enable processes prepare, maintain, and manage information or relationships upon which planning and execution processes rely. A set of standard notation is used throughout the Model. P depicts Plan elements, S depicts Source elements, M depicts Make elements, D depicts Deliver elements, and R depicts Return elements. SR = Source Return and DR = Deliver Return. An E preceding any of the others (e.g., EP) indicates that the process element is an Enable element associated with the Planning or Execution element (in this case, EP would be an Enable Planning element). As indicated in Figure 2, the Model is hierarchical with three levels. P1.1 is a notation that indicates a third level process element. In this case, it is a Plan (P – Level 1) element that is concerned with supply chain planning (1 – Level 2) and is specific to identifying, prioritizing, and aggregating supply chain requirements (.1 – Level 3).

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The SCOR-model contains 8 basic sections: Introduction, Plan, Source, Make, Deliver, Return, Glossary and Appendices. For modeling purposes, Return is documented in two locations – Source and Deliver. Those Return processes that connect an organization with its supplier (i.e., the return of raw material) are documented as Source Return activities. Those processes that connect an organization with its customer (i.e. the receipt of returned finished goods) are documented as Deliver Return activities. This preserves the concept that Source connects an organization with its suppliers and Deliver connects an organization with its customers. The Plan and Execution (Source, Make, Deliver, Return) sections are the heart of the Model while the Glossary provides a listing of the standard process and metrics terms that are used within the Model. The Appendices provide detailed information on metrics and best practices. Plan, Source, Make, Deliver, and Return sections are organized with a standard structure. At the beginning of each section, there are graphics that provide a visual representation of the process elements, their relationships to each other, and the inputs and outputs that are germane to each process element. Following the graphics are text tables that identify: 1) the standard name for the process element, 2) the notation for the process element, 3) SCC’s “standard” definition for the process element, 4) performance attributes that are associated with the process element, 5) metrics that are associated with the performance attributes, 6) best practices that are associated with the process (candidates, not necessarily an exhaustive list), and features (generally technologically related) that can contribute to heightened performance of the process. Within the Source, Make and Deliver process elements, a common internal structure has been agreed upon. The Model focuses on three environments, Make-to-Stock, Make-to-Order, and Engineerto-Order. As a result, S1 becomes Source Make-to-Stock Product, S2 becomes Source Make-to-Order Product and S3 becomes Source Engineer-to-Order Product. This same convention is used for Make, i.e. M1 – Make-to-Stock, and Deliver, i.e. D2 – Deliver Make-to-Order Product. This convention was extended to Return in Version 5.0. R1 is the Return of Defective Product, R2 is the Return of Maintenance, Repair or Overhaul (MRO) Product, and R3 is the Return of Excess Product. Within each of the planning and execution sections and following the graphic and text descriptions, the associated Enable elements are described using the same graphic and text formats. It is important to note, that like the process elements themselves, the metrics are intended to be hierarchical. Although not explicit in the Model, Level 1 metrics, as shown in Figure 4 are typically “assigned” to P1 (Plan Supply Chain) and are decomposed (Level 2 and diagnostic metrics) to the respective planning, execution and enable elements.

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Performance Attributes and Level 1 Metrics
Level 1 Metrics are primary, high level measures that may cross multiple SCOR processes. Level 1 Metrics do not necessarily relate to a SCOR Level 1 process (PLAN, SOURCE, MAKE, DELIVER, RETURN).

Performance Attributes Level 1 Metrics
Reliability Perfect Order Fulfillment Order Fulfillment Cycle Time Upside Supply Chain Flexibility Upside Supply Chain Adaptability Downside Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-To-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Figure 4 - SCOR Performance Attributes and Level 1 Metrics The metrics are used in conjunction with performance attributes. In Version 4.0 of the Model, the Performance Attributes were expanded from four (Supply Chain Reliability, Supply Chain Flexibility and Responsiveness, Supply Chain Costs, and Supply Chain Asset Management) to five (Supply Chain Reliability, Supply Chain Responsiveness, Supply Chain Flexibility, Supply Chain Costs, and Supply Chain Asset Management). Generally, the impact of this exercise was to associate cycle time measures with Responsiveness and to identify needed metrics in the area of Flexibility. The table in Figure 5 defines the performance attributes and indicates which Level 1 metrics are associated with each attribute. The Performance Attributes are characteristics of the supply chain that permit it to be analyzed and evaluated against other supply chains with competing strategies. Just as you would describe a physical object like a piece of lumber using standard characteristics (e.g., height, width, depth), a supply chain requires standard characteristics to be described. Without these characteristics it is extremely difficult to compare an organization that chooses to be the low-cost provider against an organization that chooses to compete on reliability and performance. Customer-Facing Responsiveness Flexibility Internal-Facing Costs Assets

x x x x x x x x x x

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The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage. with the correct documentation. the process tables associated with Level 2 and 3 activities were reconciled to reflect the separation of the flexibility and responsiveness attributes and to ensure that the metrics measured what they were intended to measure. In Version 4. an organization may wish to examine the correlation between the request date and commit date.0. This includes the management of all assets: fixed and working capital. Delivery Performance is calculated as the total number of products delivered on time and in full based on a commit date. 7 June 2006 . These Level 1 Metrics are the calculations by which an implementing organization can measure how successful they are in achieving their desired positioning within the competitive market space. For example. Additionally. high level measures that may cross multiple SCOR processes. MAKE. to the correct customer. RETURN).Performance Attributes and Associated Level 1 Metrics Performance Attribute Supply Chain Reliability Performance Attribute Definition The performance of the supply chain in delivering: the correct product. In Version 5. in the correct quantity. For example. Level 1 Metrics do not necessarily relate to a SCOR Level 1 process (PLAN. Associated with the Performance Attributes are the Level 1 Metrics. at the correct time. The effectiveness of an organization in managing assets to support demand satisfaction. in the correct condition and packaging. Level 1 Metrics are created from lower level calculations. While these Performance Attributes are critical in implementing the Model. SOURCE. © Copyright 2006 Supply-Chain Council. standard Performance Attribute definitions were provided. The speed at which a supply chain provides products to the customer. (Level 1 Metrics are primary. DELIVER. Level 1 Metric Perfect Order Fulfillment Supply Chain Responsiveness Supply Chain Flexibility Order Fulfillment Cycle Time Upside Supply Chain Flexibility Upside Supply Chain Adaptability Downside Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-to-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Supply Chain Costs Supply Chain Asset Management The costs associated with operating the supply chain. to the correct place. even lower level metrics (diagnostics) are used to diagnose variations in performance against plan. Inc. formal definitions were not previously included in the Model. Lower level calculations (Level 2 metrics) are generally associated with a narrower subset of processes. First time users of the Model should be aware that the metrics in the Model are hierarchical – just as the process elements are hierarchical.0. Figure 5 – Definitions for SCOR Performance Attributes and which Level 1 metrics are associated with each attribute.

” The Metrics in SCOR 8. Inc. SCOR 7. The team surveyed SCC members on Best Practices that they want to see included in the future and this work is ongoing. Changed definitions in Version 8. Integration with scheduling and inventory management new: Available-to-Promise (ATP). or 3 Processes. spanning the supply chain.SCOR Version 8.0 Metrics that were categorized as lower level or no longer relevant have been archived. Planning Replanning Business Rules Plan Changes Design/upgrade production equipment to maximize flexibility and avoid line stoppages Electronic material move transactions ATP and Product Reservation add RFID old: None Identified new: Machine productivity and downtime monitoring. but do not “roll up” to Level 1 Metrics. Metrics that are considered to be “diagnostic” are not included in the Appendix A Metrics Hierarchy. This allows the easy “roll up” of cost and cycle time metrics to the Level 1 metrics. Best Practices no longer contain the “Feature” column.0.1. These measures are important measures. Metrics There is an additional Level 1 metric – Return on Working Capital – in the Assets Attribute category. An archived list of SCOR metrics is available upon request.0 similarly saw the addition of a Cycle Time metric for every process. there are no changes to the Level 1. It is also listed in the appropriate processes under “Metrics. The definition and other detailed information regarding this metric are included in the Metrics Appendix A in this publication. This column has been replaced by a definition where it has been identified. 2.0 have been significantly streamlined. See Glossary © Copyright 2006 Supply-Chain Council.0 Changes No Process Changes In Version 8. Version 7. Changes to some of the definitions throughout the Model have been updated and some process affiliations are changed. Level 2 processes now only include Level 1 metrics and a Cost metric has been added for every single process in the model.0 include: Barcoding Design/upgrade production equipment to maximize flexibility and avoid line stoppages Assessing export/import requirements during time of product development/manufacture Bar coding is used to minimize handling time and maximize data accuracy Cellular manufacturing Collaboration among Supply Chain partners extends outwards to customers. There are a few new hierarchical Level 3 metrics that are not yet defined and listed in the tables – this will be included in the next SCOR update – likely to be a minor update 8. 8 June 2006 . Best Practices The Best Practices Appendix has also been reworked to make it a more clean and consistent reference. now not maintained by the Council. as this was a “hangover” from when the Model used to list affiliated software features. (consistent to the other occurrences of the best practice process characteristic) old: None Identified new: Multi-country Export/Import documentation compliance old: Product serial number used as identifier new: Bar code interface for data collection devices Generate bar coded receiving documents old: None Identified new: Manufacturing is broken into work cells old: None Identified new: Supply Chain Advanced Planning Systems Supply Chain Integration Systems Integration between supply chain Advanced Planning and ERP execution systems Supply Chain Capacity Planning Systems old: None Identified new: Machine productivity and downtime monitoring old: Bar code data collection new: Automated process control and/or barcode data collection old: ATP and Product Reservation.

1).org members’ website with a zoom feature so that they can be enlarged for easy reading. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. The TDSC has agreed to post them ‘as is” for this printing until a more legible print version can be developed. the database output from this BPM will be released as a vendor-neutral format.supply-chain. The suppliers working with SCC on this project will help determine how this will be released and made available. Inc. to the last possible supply chain location. the type is very small in the workflow graphics. Forecasting. © Copyright 2006 Supply-Chain Council. Sales and Operations Planning new: Sales and Operations Planning (S&OP) old: Inventory Cycle Counting new: Statistical Test Count old: Assess Supplier Performance new: Supplier Performance Assessment System Inputs and Outputs New in the Glossary are the Inputs/Outputs and their definitions. old: S&OP.Supplier (Carrier) Agreements CPFR®.0 development was facilitated by a team working to use the ISA 95 standard in conjunction with SCOR. Sales and Operations Planning Inventory Cycle Counting Assess Supplier Performance old: Supplier (Carrier) Agreements new: Carrier Agreements old: CPFR®. 9 June 2006 . Replenishment (CPFR) New: Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. Forecasting. Collaborative Planning. This piece of the SCOR 8. Forecasting. such as assembly or packaging. A software licensing program is also being developed for future releases of SCOR in electronic format. Replenishment new: Collaborative Planning. As a result of these complex workflows and the rehosting in software rather than maintenance in Microsoft Word. These were not defined or listed for reference in any previous versions of SCOR. They are included behind the process tables. The definitions they added were included to also satisfy their use of both SCOR and ISA 95. They now also include “deliverables” – what is moving from one process to another. the workflow diagrams are very different than the previously published Microsoft Word graphics. Collaborative Planning. or into and out of the process. Workflow Graphics Prompted by the first time re-hosting of the SCOR model into a BPM native format. Replenishment Postponement S&OP. SCOR database For the next version of SCOR (most likely 8. They are also available as HTML files on the www.

Inc.SCOR Toolkit © Copyright 2006 Supply-Chain Council. 10 June 2006 .

5) the Project Team proposes how to integrate proposed changes into the overall Model. 11 June 2006 . These activities are coordinated by the Supply Chain Council’s Technical Development Steering Committee. usable Model that could be used by experienced Council members as well as organizations newly introduced to the SCOR concept. pursue and develop proposals for Model development and publish research results on the Council website. These project teams are short-lived groups that focus on specific Model challenges. researching and validating those changes. a standing body elected by their peers in the Council. confident that the Model’s stability had been demonstrated with over 5 years of application experience by Council members. and identifying the volunteer resources. In 2002. an implementation project team. The primary mechanism for changing the Model is the Project Team. These self-organizing and self-directed teams propose areas of investigation. 2) volunteers submit a Charter Proposal to the TDSC outlining the concept. metrics. features and inputs and outputs) or a research report (white paper). the Council depends on the contributions of its members to actively advance the state of knowledge in supply chain by identifying required Model changes. SCOR-model versions prior to Version 6. The change process and the coordination of the project team activities is led by the Technical Development Steering Committee (TDSC). the new Model is published for the SCC membership. The current technical development process relies on project teams composed of volunteers from Supply Chain Council member organizations. Changes to the Model are normally initiated by a Council member or members (but may be initiated by a Special Industry Group. best practice. the process consists of: 1) The Council issues a call for volunteers to work on an identified need for revision or change.The Technical Change Process The SCOR-model is developed and maintained by the voluntary efforts of the Supply Chain Council members. 4) upon approval. or the Chief Technical Officer). Inc.0 were developed in a Committee structure that was focused on developing a stable. 6) after final technical review the TDSC forwards the technical community recommendations for proposed changes/additions to the SCC Board of Directors. © Copyright 2006 Supply-Chain Council. schedules and milestones. Unlike other organizations with large technical staffs. 3) the TDSC reviews the proposed Charter and provides feedback on the proposed changes to the initiating group. and 7) following the approval of the Board. scope of work. and developing the consensus regarding the proposed changes. the Supply Chain Council shifted its technical development focus to specific implementation issues. The Model change process is documented on the SCC’s website. Essentially. which is comprised of elected representatives from the Council’s membership. the Project Team crafts the details of their scope of work and determines whether it is likely their efforts will lead to a Model change (which generally includes the modification of SCOR processes. It is expected that the normal term of a project team will be between 3-6 months.

The establishment and communication of courses of action over the appropriate time-defined (long-term. and time interval. and Aggregate Supply Chain Requirements The process of identifying.2 Identify. warehousing. annual. Corporate forecast. i. 1.3 Balance Supply Chain Resources with The process of identifying and measuring the gaps and imbalances between Supply Chain Requirements demand and resources in order to determine how to best resolve the variances through marketing. horizon and interval. packaging. weekly) planning horizon and interval. Product Line forecast. Source. For services. monthly. SKU. 1-5 years. The average actual cycle time consistently achieved to fulfill customer orders.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials.1 Identify. flexibility. Monthly.6 months. Inc.4 Establish Supply Chain Plans Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . i. Daily. The levels of aggregation can be at any element associated with a supply chain asset. prioritizing. as a whole with Chain Resources constituent parts. all sources of demand for the integrated supply chain of a product or service at the appropriate level. all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. The sales forecasting time interval generally coincides with how often the plan is updated. Weekly. Prioritize. Annual. The Category P1 includes four Level 3 Elements: P1. assets. outsource plans or some other action that will optimize service. The sum of the costs associated with planning supply chain activities. This includes the fixed assets used in Plan. Deliver. and Aggregate Supply The process of identifying. Make. pricing.P1 Plan Supply Chain The development and establishment of courses of action over specified time periods that represent a projected appropriation of supply chain resources to meet supply chain requirements for the longest time fence constraints of supply resources. time horizon. costs. Assess. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed i.e. aggregating. The process of developing a time-phased course of action that commits supply-chain resources to meet supply-chain requirements. and Return. The sales forecast is comprised of the following concepts: sales forecasting level. P1. horizon and interval. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. Daily. and Quarterly. SKU by Location. P1. Divisional forecast. The average time associated with planning source activities Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Weekly. 12 June 2006 .e. representing a projected appropriation of supply-chain resources to meet supply-chain requirements. (or other supply chain inconsistencies) in an iterative and collaborative environment.e. and prioritizing. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level. Monthly. Cost to Plan Supply Chain Order Fulfillment Cycle Time Plan Cycle Time Return on Supply Chain Fixed Assets © Copyright 2006 Supply-Chain Council. and aggregating. P1.

Executed properly. inventory. manufacturing. through Production to Supplier Request Supply chain planning optimization system Tools Support Balanced Decision Making (e. Including Sales. and Product Development Capability to Run “Simulated“ Full-Stream Supply/Demand Balancing for “What-If“ Scenarios Change in the Demand Signal Instantaneously “Reconfigures“ the Production and Supply Plans Collaborative Planning.org/intro. Components include accounts receivable.) Supply Chain is Designed to Have Supply None identified Flexibility Equal to Demand Volatility Supply/Demand Process is Highly Integrated Integrated supply chain planning system with interfaces to all supply/demand data sources through public and private digitally enabled from Customer Data Gathering to Order supply networks. The process brings together all the plans for the business (sales. Product Management. 13 June 2006 . development. supply chain revenue.. demand. Including Source-Make-Deliver Resources and Requirements from “Customers’ Customer to Suppliers’ Supplier“ Integrated process modeling and software reconfiguration tools Responsiveness and Flexibility Are Emphasized By Developing Expertise in Making Business Processes ReProgrammable. and new-product plans at both the detail and aggregate levels and tie to the business plan. Forecasting. Customer.. Replenishment (CPFR) None identified Supply chain modeling and visualization system Event-driven supply chain re-planning Collaborative Planning. (From APICS online dictionary. sourcing. both system Currently Available and Committed (Pegged) Enterprise-wide planning system customer Relationship Systems Re-Balancing of Full-Stream Supply/Demand on a Daily Basis. It is performed at least once a month and is reviewed by management at an aggregate (product family) level.g. The process must reconcile all supply. the sales and operation planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement. using a set of process and technology models. Forecasting and Replenishment is a concept that allows collaborative processes across the supply chain. marketing.html) Enterprise resource planning system Customer relationship management On-Line Visibility of All Supply-Chain Demand Requirements and Resources.Return on Working Capital Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain.. Best Practices: All Functions and Organizations Understand Their Impact on Supply/Demand Balancing. Re-Configurable and Continuously Changeable Sales and Operations Planning (S&OP) A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain. (From www. Inc.cpfr. Materials Management. covering a horizon sufficient to plan for resources and to support the annual business planning process. cost of goods sold and supply chain management costs. Marketing. Trade-Off between Service Level and Inventory Investment) © Copyright 2006 Supply-Chain Council. Receipt. Suppliers.. and financial) into one integrated set of plans. Manufacturing. It is the definitive statement of the company’s plans for the near to intermediate term. accounts payable.

© Copyright 2006 Supply-Chain Council. 14 June 2006 .Vendor Managed Inventory VMI is a concept for planning and control of inventory. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Inc. The on-site inventory is counted. and the inventory is restocked to predefined levels. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. damaged or outdated goods are removed.

Sum of Variance/Sum of Actuals to determine percentage error. horizon and interval. i. Divisional forecast.11 Load Vehicle & Generate Shipping Documentation The part of the supply chain requirements related to the customer’s needs. Monthly. Internet Trading Exchanges. Monthly. B2B Integration and Application Server Systems Joint Service Agreements (JSA) Collaborative Planning Systems Push-Based Forecasts Are Replaced with Standards Based (RosettaNet. and Aggregate Supply Chain Requirements The process of identifying. © Copyright 2006 Supply-Chain Council. The sales forecast is comprised of the following concepts: sales forecasting level. Prioritize. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. The sales forecasting time interval generally coincides with how often the plan is updated. EDI. 1. etc) B2B integration tools Customer Replenishment “Pull-Based“ and systems Signals Supply Chain Advance Planning System Collaboration among Supply Chain partners extends outwards to customers. SKU. Daily. and Aggregate Supply Chain Requirements Cycle Time Best Practices: Collaboration among Operations Strategy Team Supply Chain Advanced Planning Systems Supply Chain Integration Systems Integration between supply chain advanced planning and ERP execution systems Supply Chain Capacity Planning Systems Digital Links (XML Based.1 Identify. eBXML. Daily. all sources of demand for the integrated supply chain of a product or service at the appropriate level.P1.e. Prioritize. Planning Re-planning Business Rules Plan Changes Systems Support Accurate On-Line Visibility Advance Planning and Scheduling System of Full-Stream Demand Requirements and Supply Chain Event Management Software Priorities Inputs: Customer Requirements from Source: Customer Order Backlog from D1. Forecast accuracy is calculated for products and/or families for markets/distribution channels. and Aggregate Supply Chain Requirements The sum of the costs associated with identifying. including sales forecasts and actual orders and backorders Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems. Metrics (see Appendix A for metrics attributes): Cost to Identify.e. The average time associated with the identifying.3 Reserve Inventory & Determine Delivery Date Order Backlog from D1. and time interval. Weekly. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed i. Annual. Corporate forecast. assessing and aggregating supply chain requirements. OAGI. Prioritize. in unit measurement. Product Line forecast. 1-5 years.e. and aggregating supply chain requirements Forecast Accuracy Identify. Common calculation is Forecast Sum . aggregating. prioritizing. Weekly. Inc. time horizon. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level. SKU by Location. and prioritizing.6 months. 15 June 2006 . i. Etc. and Quarterly. spanning the supply chain. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped.

Inc. Generate Shipping Documentation Shipments from D1. Corresponding Financial Plan Projections. Source. These are reviewed periodically with actual results to verify the linkage of actual cause and Assets effect.3 Manage PLAN Data Collection Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Deliver.9 Align Supply Chain Unit Plan with Product Family supporting the Market/Channel Plans. Shipments from D1. Requirements © Copyright 2006 Supply-Chain Council. they represent balanced Supply and Demand.5 An update to the expected cause and effect statements that are the base Manage Integrated Supply Chain Capital for the Revised Aggregate Forecast and Projections. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by from EP.3 Balance Sources of demand for the integrated supply chain of a product or service Supply Chain Resources with Supply Chain at the appropriate level. horizon and interval.Planning Data from EP. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Determine Delivery Date Outputs: Supply Chain Requirements to P1. supporting Make. Revised Business Assumptions from EP. Revised Business Assumptions from EP.9 An update to the expected cause and effect statements that are the base Align Supply Chain Unit Plan with Financial for the Revised Aggregate Forecast and Projections.3 Reserve Inventory & Transactions related to sending the product to the customer.11 Load Vehicle & Transactions related to sending the product to the customer. 16 June 2006 . These are reviewed periodically with actual results to verify the linkage of actual cause and Plan effect.

Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. and Aggregate Supply Chain Resources Cycle Time Inventory Days of Supply The sum of the costs associated with identifying. Internet Trading Exchanges. and customer service (finished goods and spare parts) Make/Buy Decision from EP. and Aggregate Supply Chain Resources Identify. Also. specifications for products and services. and Aggregate Supply Chain Resources The process of identifying. as a whole with constituent parts.4 Establish Delivery A plan for a course of action over specified time periods that involves a Plans projected appropriation of supply resources to meet delivery requirements. and aggregating supply chain resource availability Five point annual average of the sum of all gross inventories (raw materials & WIP. Only includes inventory on company books. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. field samples. and operating supplies). prioritizing. specifications for products and services. and aggregating. A plan that describes how a company will utilize third party business partners to provide products and services which the company chooses not to provide with internal capacity.6 Manage Integrated Supply Chain Transportation Planning Data from EP. Assess. 17 June 2006 . and contract considerations. those stocks or items used to support production (raw materials and work-in-process items).4 Establish Production Plans © Copyright 2006 Supply-Chain Council. Assess. inventory consists of a list of goods and materials held available in stock.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems.P1. Inc.2 Identify. Production Plan includes production capability. Total gross value of inventory at standard cost before reserves for excess and obsolescence. assessing. Inputs: Delivery Plans from P4. A plan that describes how a company will utilize third party business partners to provide products and services which the company chooses not to provide with internal capacity. plant FG. horizon and interval. B2B Integration and Application Server Systems Joint Service Agreements (JSA) Collaborative Planning Systems Lead Times Updated Monthly None identified Review Product Profitability ABC and cost modeling.3 Manage PLAN Data Collection Production Plans from P3. performance expectations. all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. performance expectations. assessing and aggregating supply chain resources.5 Manage Integrated Supply Chain Capital Assets The output of the process used to determine whether a demand will be supplied with internal capacity or purchased through contract manufacturing and/or contracted services externally.5 Manage Integrated Supply Chain Capital Assets Outsource Plan from EP. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. supporting activities (maintenance. and contract considerations. Outsource Plan from EP. future liabilities should not be included Best Practices: Digital Links (XML Based. The average time associated with the identifying. field FG. other) ÷ (COGS ÷ 365). A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. EDI. Assess. Inventory from Source: Customer In business management. Etc. repair. Metrics (see Appendix A for metrics attributes): Cost to Identify.

4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan.). horizon and interval. 18 June 2006 .e.6 Manage A revision to plan for capital expenditures necessitated by either changes Integrated Supply Chain Transportation in specific business plans or factors and assumptions affecting a business plan. etc.3 Balance As a whole with constituent parts. © Copyright 2006 Supply-Chain Council.8 Manage Requirements dictated by process standards set by external entities (i. trade officials. PLAN Regulatory Requirements and government. Revised Capital Plan from EP. Compliance Revised Capital Plan from EP. Inc. Outputs: Supply Chain Resources to P1.Regulatory Requirements from EP. all sources of supply that are required Supply Chain Resources with Supply Chain to add value in the supply chain of a product or service at the appropriate Requirements level.5 Manage A revision to plan for capital expenditures necessitated by either changes Integrated Supply Chain Capital Assets in specific business plans or factors and assumptions affecting a business plan. Sourcing Plans from P2.

and stocking locations. pricing.2 Manage Performance of steps that will be taken to reach those goals and objectives from the Supply Chain current performance levels. business rules and transaction data. Only includes inventory on company books. Algorithms use the business rules and metrics as the drivers for the planning engine. Demand Flow Software that provides multiple data models including the business rules Leadership and metrics for the entire supply chain planning process. Outputs: Workflow to P1. ownership. and performed. product mix. and Aggregate Supply Chain Requirements Inventory Strategy from EP. Sources of demand for the integrated supply chain of a product or service at the appropriate level. Prioritize. Inc. horizon and interval. outsource plans or some other action that will optimize service. Manage Business Rules for PLAN Processes approved. warehousing. Analytical tools enable the ongoing maintenance and improvement of the business rules based on actual data. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. horizon and interval. Work In Process. For services. The total supply chain inventory strategy. Assess. The process of developing a time-phased course of action that commits supply-chain resources to meet supply-chain requirements. Metrics (see Appendix A for metrics attributes): Balance Supply Chain Resources with Supply Chain Requirements Cycle Time Cost to Balance Supply Chain Resources with Supply Chain Requirements Fill Rate Inventory Days of Supply The average time associated with balancing supply chain resources with supply chain requirements. Planning Decision Policies from EP. flexibility.1 Identify. other) ÷ (COGS ÷ 365). packaging.3 Balance Supply Chain Resources with Supply Chain Requirements The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing. Demand Planning. (or other supply chain inconsistencies) in an iterative and collaborative environment.P1. 19 June 2006 .4 Manage Integrated Supply Chain Inventory As a whole with constituent parts.1 Any company policies that affect how a planning process is defined. Customer Relationship Management (CRM) Software that provides customer input and keeps the customer informed about the planning of the production and delivery process by managing all contacts and communication with the customer thorough all channels including internet and traditional sales and customer service channels.4 Establish Supply Chain Plans © Copyright 2006 Supply-Chain Council. field samples. both inter and intra company. this metric is the proportion for services that are filled so that the service is completed within 24 hours Five point annual average of the sum of all gross inventories (raw materials & WIP. field FG. The sum of the costs associated with balance of supply chain resources with supply chain requirements. Business Intelligence (BI) Inputs: Supply Chain Resources from P1. Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the Plan from EP. and Aggregate Supply Chain Resources Supply Chain Requirements from P1. Finished and Purchased Finished Goods) including replenishment models. all sources of supply that are required to add value in the supply chain of a product or service at the appropriate level. future liabilities should not be included Best Practices: A data warehouse / data mart is the source of all planning (master) data. assets. plant FG. costs. Contains the plan for total inventory limits or levels (including Raw Material.2 Identify. Total gross value of inventory at standard cost before reserves for excess and obsolescence.

20 June 2006 . Prioritize. field samples. Establish Supply Chain Plans Cycle Time The average time associated with establishing and communicating supply chain plans Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw materials & WIP. plant FG. annual. representing a projected appropriation of supply-chain resources to meet supply-chain requirements. Inc. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. spanning the supply chain. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. B2B Integration and Application Server Systems Joint Service Agreements (JSA) Collaborative Planning Systems Supply Chain Advance Planning System Collaboration among Supply Chain partners extends outwards to customers. Metrics (see Appendix A for metrics attributes): Cost to Establish and Communicate Supply The sum of the costs associated with establishing and communicating Chain Plans supply chain plans. other) ÷ (COGS ÷ 365). and Aggregate Return Requirements Supply Chain Plans to P4.P1. and Aggregate Product Requirements © Copyright 2006 Supply-Chain Council.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems.1 Identify. Internet Trading Exchanges. Planning Replanning Business Rules Plan Changes Systems Support Accurate On-Line Visibility Advance Planning and Scheduling System of Full-Stream Demand Requirements and Priorities as Well as Resource Utilization and Availability Inputs: Workflow from P1. EDI.1 Identify. monthly. Etc. Supply Chain Plans to P2. Only includes inventory on company books. Total gross value of inventory at standard cost before reserves for excess and obsolescence.1 Assess.3 Balance Supply Chain Resources with Supply Chain Requirements Outputs: Supply Chain Plans to P5. and Aggregate Delivery Requirements Supply Chain Plans to Customer Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. field FG. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements.4 Establish Supply Chain Plans The establishment and communication of courses of action over the appropriate time-defined (long-term. future liabilities should not be included Best Practices: Collaboration among Operations Strategy Team Supply Chain Advanced Planning Systems Supply Chain Integration Systems Integration between supply chain advanced planning and ERP execution systems Supply Chain Capacity Planning Systems Digital Links (XML Based. Prioritize. weekly) planning horizon and interval.

Inc. © Copyright 2006 Supply-Chain Council. and Aggregate Production Requirements Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements.1 Identify. Prioritize. 21 June 2006 .Supply Chain Plans to P3.

P2 Plan Source The development and establishment of courses of action over specified time periods that represent a projected appropriation of material resources to meet supply chain requirements. etc) or Internet procurement networks to customer service linkage Inter-company resource planning with EDI/Internet communication None identified © Copyright 2006 Supply-Chain Council. inventory. Capacity Availability. Inc. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . And Aggregate Product Resources P2. Have Full Visibility of the Demand/Supply Plan Distinct and Consistent Linkages Exist to Ensure Disruptions and Opportunities in Material Resources Are Quickly and Accurately Communicated and Acted Upon EDI Links Integrate Supplier Resource Information (Inventory. Source. and considering. supply chain revenue. Including Strategic Partners. 22 June 2006 . The process of developing a time-phased course of action that commits resources to meet requirements. as a whole with constituent parts. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. For services.1 Identify. accounts payable. Cost to Plan Source Order Fulfillment Cycle Time Plan Source Cycle Time Return on Supply Chain Fixed Assets The sum of the costs associated with planning source activities.4 Establish Sourcing Plans The process of identifying. The levels of aggregation can be at any element associated with a supply chain asset. all sources of demand for a product or service in the supply chain. Return on Working Capital Best Practices: All Key Participants in the Supply Chain. EDI. Deliver. as a whole with constituent parts. Prioritize. cost of goods sold and supply chain management costs. The process of identifying.2 Identify.3 Balance Product Resources with Product Requirements P2. The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet sourcing plan requirements.) with Own Resources Joint Service Agreements with Suppliers Define the Levels of “Flexibility“ or Resource Upside Available Within Stated Lead Times and Agreed Upon Conditions Supply Chain Event Management Systems Bi-directional Digital Links (XML. all material and other resources used to add value in the supply chain for a product or services. The average time associated with planning source activities Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. This includes the fixed assets used in Plan. Etc. and considering. Make. The Category P2 includes four Level 3 Elements: P2.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. prioritizing. and Return. Assess. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. Components include accounts receivable. and Aggregate Product Requirements P2. evaluating. The average actual cycle time consistently achieved to fulfill customer orders.

assembly. Item Master from EP. Product Routings from EP. Prioritize.1 Identify.Sum of Variance/Sum of Actuals to determine percentage error. run times. in unit measurement. Metrics (see Appendix A for metrics attributes): Cost to Identify.3 Manage PLAN Execution information necessary to plan the balance of supply chain Data Collection resources to demand requirements at both the highest aggregate and lowest SKU planning levels. whether purchased or not. as a whole with constituent parts. Key elements of proper Routings include proper sequence of operations. Order Signal from D3. Order Signal from D2. which defines the Configuration system parameters with which to effectively plan and execute using ERP (MRP. and Aggregate Product Requirements The process of identifying. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Prioritize. prioritizing. Commit Reserved inventory and/or planned capacity and delivery date for a Resources & Launch Program specific order. and considering. and aggregating product requirements Best Practices: Capacity and Supply Constraints Are Balanced Against Demand during the Planning Cycle Categorize 100% of Total Inventory (Active.4 Establish Delivery A plan for a course of action over specified time periods that involves a Plans projected appropriation of supply resources to meet delivery requirements. Prioritize. prioritizing. relevant tolerances. and Aggregate Product Requirements Forecast Accuracy The sum of the costs associated with identifying. Usable.7 Manage Planning The Bill of Materials is a structured list of all the materials or parts needed Configuration to produce a particular finished product. Forecast accuracy is calculated for products and/or families for markets/distribution channels. and Aggregate Product Requirements Cycle Time The average time associated with the identifying. Delivery Plans from P4. lot size and setups. Excess. assessing and aggregating deliver requirements. Inc. 23 June 2006 . Identify. manufactured part.7 Manage Planning A record of specific information for each product. Common calculation is Forecast Sum . work center identification. subassembly. Obsolete) for Appropriate Action Master Production Scheduling Reflects Management of Capacity and/or Supply Constraints Sales and Operations Agree to Limits of Short Term Flexibility The Demand Plan is Updated Frequently to Reflect Actual Consumption or Customer Forecast Information None identified None identified None identified None identified None identified Inputs: Bill of Materials from EP. The equivalent concepts for services are the workflow processes and rules. etc) systems.3 Enter Order. © Copyright 2006 Supply-Chain Council. Planning Data from EP.P2.7 Manage Product routings represent the way products are made and are integrated Planning Configuration with the Bill of Materials.3 Reserve Resources Reserved inventory and/or planned capacity and delivery date for a & Determine Delivery Date specific order. all sources of demand for a product or service in the supply chain.

Production Plan includes production capability. Inc. all sources of demand for a product or service in the supply chain. All sources of demand in the Source Return of a product or service.4 Establish Supply Chain Plans Outputs: Product Requirements to P2.4 Establish and Communicate Return Plans Supply Chain Plans from P1.3 Balance Product Resources with Product Requirements As a whole with constituent parts. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. 24 June 2006 .4 Establish Production Plans A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Source Return Requirements from P5.Production Plans from P3. © Copyright 2006 Supply-Chain Council.

The target for the total product inventory.P2. all material and other resources used to add value in the supply chain for a product or services. supporting activities (maintenance. Product on order with a selected source.1 Schedule Product Deliveries Product On Order from S3.3 Manage PLAN Data Collection Product Availability from Source: Product Inventory Target Levels from ES. Obsolete Inventory is Reviewed at the Part None identified Number Level Inputs: Inventory Availability from S3. Those stocks or items on hand used to support production (raw materials and work in process items). eBXML. Availability of a product by location that is reserved. scheduled or available for sale. Inventory Availability from S1. supporting activities (maintenance.1 Schedule Product Deliveries © Copyright 2006 Supply-Chain Council. assessing and aggregating product resources. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. and Aggregate Product Resources Identify. And Aggregate Product Resources The process of identifying. including e. raw material.2 Identify. None identified Based on Supply and Demand Variability Inventory Performance is Measured at the None identified Dollar and Unit Levels Digital Linkages using XML standards (RosettaNet. Assess.4 Manage Product Inventory Product On Order from S1. The average time associated with the identifying. None identified Usable. as a whole with constituent parts. 25 June 2006 .4 Transfer Product Planning Data from EP. Inc. Product on order with a selected source. Product on order with a selected source.g. assessing. and considering. and aggregating product resource availability Best Practices: Capacity and Supply Constraints Identified None identified During MPS Schedule Process Are Balanced Against Demand during the Planning Cycle Categorize 100% of Total Inventory (Active. Obsolete) for Appropriate Action Inventory is Planned at the Part Level. and customer service (finished goods and spare parts). and customer service (finished goods and spare parts). OAGI) to Inventory Targets Are Reviewed and Adjusted Frequently automatically query inventory levels. repairs and operating supplies). repairs and operating supplies).4 Transfer Product Inventory Availability from S2. or the number of products ready to be or planned to be shipped to the specific customer or market at the specific time. Metrics (see Appendix A for metrics attributes): Cost to Identify. Assess. and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items). Assess. and Aggregate Product Resources Cycle Time The sum of the costs associated with identifying.6 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). repairs and operating supplies). supporting activities (maintenance.3 Schedule Product Deliveries Product On Order from S2. Excess. work in progress and finished goods. evaluating.

26 June 2006 . © Copyright 2006 Supply-Chain Council. all material and other resources used to add value in the supply chain for a product or services.3 Balance Product Resources with Product Requirements As a whole with constituent parts. Inc.Outputs: Product Sources to P2.

Outputs: Workflow to P2. and performed. As a whole with constituent parts. Best Practices: Suppliers Share Responsibility for Balancing None identified Supply and Demand through Joint Service Agreements Inputs: Product Sources from P2. Assess. all sources of demand for a product or Prioritize.P2. As a whole with constituent parts. Metrics (see Appendix A for metrics attributes): Balance Product Resources with Product Requirements Cycle Time Cost to Balance Product Resources with Product Requirements The average time associated with balancing product resources and product requirements. and Aggregate Product service in the supply chain.1 Any company policies that affect how a planning process is defined. 27 June 2006 .2 Identify. Inc. all material and other resources used to And Aggregate Product Resources add value in the supply chain for a product or services. The sum of the costs associated with balance of product resources with product requirements. Manage Business Rules for PLAN Processes approved. Product Requirements from P2.3 Balance Product Resources with Product Requirements The process of developing a time-phased course of action that commits resources to meet requirements.4 Establish Sourcing Plans © Copyright 2006 Supply-Chain Council.1 Identify. Requirements Planning Decision Policies from EP.

4 Establish Sourcing Plans The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet sourcing plan requirements.2 Identify.3 Enter Order. An aggregate material requirements plan used to schedule material deliveries to meet production plan. © Copyright 2006 Supply-Chain Council.1 Schedule Product Deliveries Sourcing Plans to P1.3 Reserve Resources & Determine Delivery Date Sourcing Plans to ES. An aggregate material requirements plan used to schedule material deliveries to meet production plan.) is Used to None identified Provide Real-Time Demand Information and Handle Routine Transactions Inputs: Workflow from P2. An aggregate material requirements plan used to schedule material deliveries to meet production plan. and Aggregate Supply Chain Resources Sourcing Plans to P3. An aggregate material requirements plan used to schedule material deliveries to meet production plan.4 Transfer Excess Product Sourcing Plans to S2.3 Maintain Source Data Sourcing Plans to S1. Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan. An aggregate material requirements plan used to schedule material deliveries to meet production plan.2 Identify. and Aggregate Delivery Resources and Capabilities Sourcing Plans to D1.2 Identify. An aggregate material requirements plan used to schedule material deliveries to meet production plan. 28 June 2006 .2 Identify.4 Transfer Defective Product Sourcing Plans to P4. Assess. and Aggregate Return Requirements Sourcing Plans to DR2. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Inc.P2.4 Manage Product Inventory Sourcing Plans to D2. Commit Resources & Launch Program An aggregate material requirements plan used to schedule material deliveries to meet production plan. Metrics (see Appendix A for metrics attributes): Cost to Establish Sourcing Plans Establish Sourcing Plans Cycle Time The sum of the costs associated with establishing and communicating source plans. An aggregate material requirements plan used to schedule material deliveries to meet production plan.1 Identify Sources of Supply Sourcing Plans to P5. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Etc. and Aggregate Return Resources Sourcing Plans to S3. and Aggregate Production Resources Sourcing Plans to S3.1 Schedule Product Deliveries Sourcing Plans to D3. The average time associated with establishing and communicating source plans Best Practices: Blanket Purchase Orders Cover Period None identified Requirements Digital Linkage (EDI. An aggregate material requirements plan used to schedule material deliveries to meet production plan. XML.3 Schedule Product Deliveries Sourcing Plans to P5.1 Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan.3 Balance Product Resources with Product Requirements Outputs: Sourcing Plans to DR1.3 Reserve Inventory & Determine Delivery Date Sourcing Plans to ES. Assess. Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan.4 Transfer MRO Product Sourcing Plans to DR3. An aggregate material requirements plan used to schedule material deliveries to meet production plan. An aggregate material requirements plan used to schedule material deliveries to meet production plan. An aggregate material requirements plan used to schedule material deliveries to meet production plan.

Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. all sources of demand in the creation of a product or service. Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The average actual cycle time consistently achieved to fulfill customer orders. For services. and Aggregate Production Requirements P3. The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet production and operating plan requirements. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. and Aggregate Production Resources P3. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . and considering as a whole with constituent parts. Return on Working Capital Best Practices: Multi-plant supply/demand planning and execution Distinct and Consistent Linkages Exist to Ensure that Disruptions and Opportunities in Production Are Quickly and Accurately Communicated and Responses Made © Copyright 2006 Supply-Chain Council. Deliver.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. The process of identifying. Source. as a whole with constituent parts. and Return.4 Establish Production Plans The process of identifying. 29 June 2006 . inventory. Inc. and considering. evaluating.1 Identify. all things that add value in the creation of a product or performance of a service.2 Identify. cost of goods sold and supply chain management costs. Prioritize. prioritizing. The levels of aggregation can be at any element associated with a supply chain asset. Assess.3 Balance Production Resources with Production Requirements P3. The Category P3 includes four Level 3 Elements: P3. supply chain revenue. accounts payable. The process of developing a time-phased course of action that commits creation and operation resources to meet creation and operation requirements. Make. This includes the fixed assets used in Plan.P3 Plan Make The development and establishment of courses of action over specified time periods that represent a projected appropriation of production resources to meet production requirements. Components include accounts receivable.

Item Master from EP. The equivalent concepts for services are the workflow processes and rules. lot size and setups. configuration and customer Consideration of Supplier’s Material Availability in Company’s Supply Resources service applications (Including Supplier’s Production Plans & Capability. run times. and considering as a whole with constituent parts. Return Production Requirements from P5.4 Establish Courses of action over specified time periods that represent a projected Supply Chain Plans appropriation of total supply-chain resources to meet total supply-chain demand requirements. assessing and aggregating production requirements Forecast accuracy is calculated for products and/or families for markets/distribution channels.3 Enter Order. and Aggregate Production Requirements The process of identifying. planning.7 Manage Planning A record of specific information for each product. Inventory. Order Signal from D3. © Copyright 2006 Supply-Chain Council. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. etc) systems. all sources of demand in the creation of Establish and Communicate Return Plans a product or service.3 Reserve Resources Reserved inventory and/or planned capacity and delivery date for a specific & Determine Delivery Date order. Prioritize. in unit measurement. which defines the system Configuration parameters with which to effectively plan and execute using ERP (MRP.3 Balance Production Resources with Production Requirements As a whole with constituent parts. work center identification.Sum of Variance/Sum of Actuals to determine percentage error. and Aggregate Production Requirements Forecast Accuracy The sum of the costs associated with identifying. Delivery Plans from P4. prioritizing. Planning Data from EP. whether purchased or not. Order Signal from D2. and Delivery Plans) Inputs: Bill of Materials from EP. Inc. Metrics (see Appendix A for metrics attributes): Cost to Identify. and Aggregate Production Requirements Cycle Time The average time associated with the identifying.7 Manage Planning The Bill of Materials is a structured list of all the materials or parts needed Configuration to produce a particular finished product.P3. Supply Chain Plans from P1. 30 June 2006 . Outputs: Return Production Requirements to P3. Key elements of proper Routings include proper sequence of operations. prioritizing. and aggregating production requirements Best Practices: Digital linkage to supplier quoting. Prioritize. Prioritize.3 Manage PLAN Execution information necessary to plan the balance of supply chain Data Collection resources to demand requirements at both the highest aggregate and lowest SKU planning levels. relevant tolerances.4 Establish Delivery A plan for a course of action over specified time periods that involves a Plans projected appropriation of supply resources to meet delivery requirements. assembly. all sources of demand in the creation of a product or service.1 Identify. all sources of demand in the creation of a product or service. Commit Reserved inventory and/or planned capacity and delivery date for a specific Resources & Launch Program order. Product Routings from EP. manufactured part. subassembly.7 Manage Product routings represent the way products are made and are integrated Planning Configuration with the Bill of Materials.4 As a whole with constituent parts. Common calculation is Forecast Sum . Identify.

2 Identify. financing and disposition of capital outlays for such purposes as the purchase of new equipment.P3. and Aggregate Production Resources Identify. 31 June 2006 . evaluating.3 Manage PLAN Data Collection Production Schedule from M3. supporting activities (maintenance. and Aggregate Production Resources The process of identifying. and considering. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Outputs: Production Resources to P3.3 Balance Production Resources with Production Requirements As a whole with constituent parts.2 Schedule Production Activities Production Schedule from M1. and customer service (finished goods and spare parts). assessing and aggregating production resources. The average time associated with the identifying. Those stocks or items on hand used to support production (raw materials and work in process items). Metrics (see Appendix A for metrics attributes): Cost to Identify. Obsolete Inventory is Reviewed at the Part None identified Number Level Inputs: Equipment and Facilities Replacement and Disposition Plans from EM. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Assess. the introduction of new product lines. assessing. repairs and operating supplies). as a whole with constituent parts. and customer service (finished goods and spare parts). supporting activities (maintenance. repairs and operating supplies).2 Issue Sourced/In-Process Product Planning Data from EP.1 Schedule Production Activities Sourcing Plans from P2. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. all things that add value in the creation of a product or performance of a service. repairs and operating supplies).3 Issue Sourced/In-Process Product Actions relating to the planning.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. Assess. all things that add value in the creation of a product or performance of a service. Inc. Assess. supporting activities (maintenance. © Copyright 2006 Supply-Chain Council. Those stocks or items on hand used to support production (raw materials and work in process items). and aggregating production resource availability Best Practices: Inventory Targets Are Reviewed and Digital Linkages using XML standards (RosettaNet. and the modernization of plant facilities Those stocks or items on hand used to support production (raw materials and work in process items). Inventory Availability from M1.2 Issue Material Inventory Availability from M2. and customer service (finished goods and spare parts).1 Schedule Production Activities Production Schedule from M2.5 Manage Equipment and Facilities Inventory Availability from M3. and Aggregate Production Resources Cycle Time The sum of the costs associated with identifying. OAGI) to Adjusted Frequently automatically query inventory levels. eBXML. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.

P3. Manage Business Rules for PLAN Processes approved. all things that add value in the creation of a product or performance of a service. 32 June 2006 .3 Balance Production Resources with Production Requirements The process of developing a time-phased course of action that commits creation and operation resources to meet creation and operation requirements. As a whole with constituent parts. all sources of demand in the creation of Identify. Prioritize. Inc. Assess. Requirements Production Resources from P3. Metrics (see Appendix A for metrics attributes): Balance Production Resources with Product Creation Requirements Cycle Time Cost to Balance Production Resources with Product Creation Requirements The average time associated with balancing production resources with production creation requirements.1 Any company policies that affect how a planning process is defined. Best Practices: Inventory Targets Are Reviewed and Adjusted Frequently Digital Linkages using XML standards (RosettaNet. eBXML. OAGI) to automatically query inventory levels. and performed.1 As a whole with constituent parts. and Aggregate Production a product or service. Outputs: Workflow to P3. The sum of the costs associated with balance of production resources with product creation requirements. Inputs: Return Production Requirements from P3. and Aggregate Production Resources Planning Decision Policies from EP.2 Identify.4 Establish Production Plans © Copyright 2006 Supply-Chain Council.

1 Manage Production Rules Production Plans to M3. Production Plan includes production capability. 33 June 2006 . Production Plan includes production capability. Inputs: Workflow from P3. A master production plan used to allocate capacity among manufacturing and Aggregate Product Requirements resources and schedule finite manufacturing activities or executing the performance of a service.P3.4 Establish Production Plans The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet production and operating plan requirements. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. eBXML.1 Identify. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.3 Enter Order. Production Plan includes production capability. Production Plans to D2. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Prioritize.2 Identify. Assess.2 Schedule Production Activities Production Plan includes production capability. OAGI) to automatically query production capacity and ATP and schedule unplanned orders. and Aggregate Delivery Resources and Capabilities © Copyright 2006 Supply-Chain Council.5 Manage Equipment and Facilities A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.3 Balance Production Resources with Production Requirements Outputs: Production Plans to EM. Metrics (see Appendix A for metrics attributes): Cost to Establish Production Plans Establish Production Plans Cycle Time The sum of the costs associated with establishing and communicating production plans. The average time associated with establishing and communicating production plans Best Practices: Unplanned Orders Are Accepted and Scheduled Only When There is No Detrimental Impact on Overall Product Delivery Plan Digital Linkages using XML standards (RosettaNet. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.3 Reserve Resources & Determine Delivery Date Production Plan includes production capability. Production Plans to P2. Inc. Commit Resources & Launch Program Production Plans to P4. Production Plan includes production capability. Production Plans to EM. Production Plan includes production capability. Production Plans to D3.

Inc. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Production Plan includes production capability.2 Identify. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Production Plans to EM.1 Assess.3 Reserve Inventory A master production plan used to allocate capacity among manufacturing & Determine Delivery Date resources and schedule finite manufacturing activities or executing the performance of a service. Production Plan includes production capability. Production Plan includes production capability.Production Plans to D1. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Production Plan includes production capability.2 Identify. 34 June 2006 . Production Plans to M2.5 Stage Product © Copyright 2006 Supply-Chain Council. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Assess. and Aggregate Return Resources Production Plans to M2. Production Plan includes production capability.1 Schedule Production Activities Production Plans to M1. and Aggregate Supply Chain Resources Production Plans to M3.1 Schedule Production Activities Production Plans to P5. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.6 Stage Finished Product Production Plans to P5. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. and Aggregate Return Requirements Production Plans to M1. Production Plan includes production capability. Production Plan includes production capability.2 Manage Production Performance Production Plan includes production capability. Production Plan includes production capability. Production Plan includes production capability. Assess. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.5 Stage Finished Product Production Plans to P1.

Return on Working Capital Total Deliver Costs Best Practices: Distinct and Consistent Linkages Exist to Bi-directional Digital Links (XML. The Category P4 includes four Level 3 Elements: P4. and Return. Prioritize. all sources of demand in the delivery of a product or service. and Aggregate Delivery Resources and Capabilities P4. 35 June 2006 . supply chain revenue. Make. as a whole with constituent parts. Source. The average actual cycle time consistently achieved to fulfill customer orders. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. cost of goods sold and supply chain management costs. EDI. Deliver. For services. as a whole with constituent parts.1 Identify. accounts payable. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . evaluating. and Aggregate Delivery Requirements P4.4 Establish Delivery Plans The process of identifying.3 Balance Delivery Resources and Capabilities with Delivery Requirements P4. Inc. inventory.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. This includes the fixed assets used in Plan. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. etc) or Internet procurement Ensure Disruptions and Opportunities in networks to customer service linkage Material Resources Are Quickly and Accurately Communicated and Acted Upon Proactive Education of Customers to Set None identified Expectations and Encourage Close Working Relationships (Knowledge of Long-Lead Items. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. The process of identifying. The levels of aggregation can be at any element associated with a supply chain asset. all things that add value in the delivery of a product or service. Agreement on Levels of Flexibility) © Copyright 2006 Supply-Chain Council. The sum of the costs associated with the Deliver processes. and considering. Visibility to Supply Resources.2 Identify. and considering. The establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements. The process of developing a time-phased course of action that commits delivery resources to meet delivery requirements. Cost to Plan Deliver Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The sum of the costs associated with planning the delivery of product. prioritizing. Components include accounts receivable. Assess.P4 Plan Deliver The development and establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements.

theft. Inputs: Actual Shrink from Source: Company Reductions of actual quantities of items in stock.Sum of Variance/Sum of Actuals to determine percentage error. prioritizing. OAGI) to Scheduled Only When There is No automatically query production capacity and ATP and schedule unplanned Detrimental Impact on Overall Product orders. and Aggregate Delivery Requirements The process of identifying. Product Plans. Etc. and the inventory is restocked to predefined levels. The on-site inventory is counted. evaporation. Production Plans. Metrics (see Appendix A for metrics attributes): Cost to Identify. Common calculation is Forecast Sum .1 Identify. and Aggregate Delivery Requirements Cycle Time The average time associated with the identifying. eBXML. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. in process. and Aggregate Delivery Requirements Forecast Accuracy The sum of the costs associated with identifying. and considering. EDI. Identify. Planogram Flexibility for None identified Seasonal/Promotional changes RFID and Other Tagging POG software/field force Unplanned Orders Are Accepted and Digital Linkages using XML standards (Rosettanet. all sources of demand in the delivery of a product or service. Prioritize. deterioration. etc. Prioritize.) Provide Accurate Visibility customer inventory systems into Actual Demand via Customer Forecasts. Inc. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. and Inventory Positions Electronic Matching Between POS Data and Integrated Software Systems Store Inventory (Shelves and Back Room) Eliminate “Special Deals“ Sales to Reduce None identified Returns and Improve Forecast Accuracy (Reduces Uncertainty. as a whole with constituent parts. Lowers Safety Stock Requirements. Prioritize. in unit measurement. © Copyright 2006 Supply-Chain Council. The loss may be caused by scrap. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Identifies stock-outs from shrinkage or item misplacement. and aggregating delivery requirements Best Practices: Customer Relationship and Digital Linkages Tightly integrated supply chain or demand planning with point of sale and (XML. damaged or outdated goods are removed. assessing and aggregating deliver requirements Forecast accuracy is calculated for products and/or families for markets/distribution channels.P4. prioritizing. MIT of Supply Matching Shelf Stock to Expectations A software based system that corrects shelf inventory levels based on actual product present (possible RFID solution). Delivery Plan Vendor Managed Inventory VMI is a concept for planning and control of inventory. 36 June 2006 . or in transit. Cheaper to Administer) Forecasts Are Replaced with Actual B2B Integration and Application Server Systems Customer Replenishment Signals and Orders Where Possible Ideal Stock Position Based on Days/Weeks Pilot by Wal-Mart.

interest. which establishes an allowance or deduction. lead times.4 Stock Shelf The determination of inventory quantity by actual count. Promotion activities .6 Checkout Product Routings from EP.3 Manage PLAN Data Collection Point of Sale Data (Daily) from D4. A record of specific information for each product.e. generally (may be manual) through the use of bar-coding.7 Manage Planning Configuration Markdown Plans from Source: Company Merchandise Category/Classification from Source: Company Order Backlog from D1. or finished goods that are ordered. publicity. For example.1 Manage Business Performance targets in service related measures (i.Result of a calculation that determines the most cost effective to quantity to order or produce. The categorization of goods based upon the range of specifications met during the manufacturing process. The equivalent concepts for services are the workflow processes and rules. relevant tolerances. buying in quantity. etc.3 Enter Order. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. usually when the buyer meets certain stipulated conditions that reduce the price of the products purchased. etc) systems. or magnetic media and equipment. The relief of inventory and computation of sales data at the time and place of the sales. A determination or projection of the requirements the supply chain must meet in the handling and execution of returns. Service levels are established by balancing requirements against operational strategy. lot size and setups. components. Stock-out History from Source: Company History of a lack of materials. Item Master from EP. timing) Economic Order Quantity . quantity. Key elements of proper Routings include proper sequence of operations. 37 June 2006 . Part of the Market Plan.7 Manage Planning Configuration Product/Category Lifecycle from Source: Company Promotion/Event Plans from Source: Company Service Levels from EP. work center identification. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Inc.4 Establish and Communicate Return Plans EOQ/ESQ’s from Source: Company The amount of time that normally elapses between the time an order is received and the time the order is shipped.) compared to the established service requirements. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. trial or purchase by final customers or others in the marketing channel. Economic Shipping Quantity . The time from initial research and development to the time at which the sales and support of the product to customers are withdrawn. delivery Rules for PLAN Processes performance. which defines the system parameters with which to effectively plan and execute using ERP (MRP.3 Reserve Resources & Determine Delivery Date Order Backlog from D3.e. granted by the seller to the buyer. (i. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. Product routings represent the way products are made and are integrated with the Bill of Materials. Commit Resources & Launch Program Planning Data from EP. etc. Physical inventories can be taken on a continuous. periodic or annual basis.DC/Vendor Lead Time from Source: Company DC/Vendor Transit Time from Source: Company Deliver Return Requirements from P5. based upon paying early. run times. mix.Result of a calculation that determines the most cost effective quantity to ship. Store Shelf Inventory Counts from D4.other than advertising. A standard allowance that is assumed on any given order for the movement of items from one operation to the next.3 Reserve Inventory & Determine Delivery Date Order Backlog from D2. and personal selling .that stimulate. © Copyright 2006 Supply-Chain Council.

Delivery Requirements Item Stocking Requirements to D4. Demand for inventory maybe dependant or independent. Inc. Inventory functions are anticipation. cycle (lot size). whether raw materials. 38 June 2006 . hedge. buffer or reserve). work in process. a SKU / Subclass. © Copyright 2006 Supply-Chain Council. fluctuation (safety. an service parts.3 Balance As a whole with constituent parts. Outputs: Delivery Requirements to P4. all sources of demand in Delivery Resources and Capabilities with the delivery of a product or service. transportation (pipeline).2 Receive The activities and techniques of determining the desired Product at Store levels of items.Supply Chain Plans from P1.4 Establish Supply Chain Plans Year-to-Year for Like SKU/Subclass from Source: Company Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. The sales or demand history that is analogous to the present situation for similar products. or finished products.

3 Those stocks or items on hand used to support production (raw materials and work in process items). © Copyright 2006 Supply-Chain Council. destinations. repairs and Reserve Resources & Determine Delivery operating supplies).3 Those stocks or items on hand used to support production (raw materials and work in process items). supporting activities (maintenance. mix. Production Plan includes production capability. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Assess. weight. and Aggregate Delivery Resources Cycle Time The average time associated with the identifying. and aggregating delivery resource availability Inputs: Deliver Return Requirements from P5. Load Information from D1. Common calculation is Forecast Sum .e. in unit measurement.4 Establish and Communicate Return Plans Finish Goods Inventory Target Levels from ED. the equivalent of the maximum.P4. quantity. Determination of the time required from the receipt of the order until the item should be delivered. 39 June 2006 .Sum of Variance/Sum of Actuals to determine percentage error. Sourcing Plans from P2. timing) In a min-max inventory system.4 Establish Production Plans Information relative to a load that is built and shipped. repairs and Reserve Inventory & Determine Delivery operating supplies).4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. and customer service (finished goods and spare Date parts). all things that add value in the delivery of a product or service. items. (i. Identify. assessing. Assess. and Aggregate Production Resources Forecast Accuracy The sum of the costs associated with identifying. Forecast accuracy is calculated for products and/or families for markets/distribution channels. Inc. evaluating. Metrics (see Appendix A for metrics attributes): Cost to Identify. The target inventory is equal to the order point plus a variable order quantity. customer. and customer service (finished goods and spare Date parts). Inventory Availability/Delivery Date from D1. etc Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels.5 Build Loads Planning Data from EP. or the available resources at a point in time able to generate an output. and Aggregate Delivery Resources and Capabilities The process of identifying. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. supporting activities (maintenance. and considering. Inventory Availability/Delivery Date from D2. i. Assess.3 Manage PLAN Data Collection Production Plans from P3.2 Identify.e. assessing and aggregating production resources. The capability of a system or resource to produce a quantity of output in a Commit Resources & Launch Program particular time period. Resource Availability from D3.4 Manage Finished Goods Inventories A determination or projection of the requirements the supply chain must meet in the handling and execution of returns. Determination of the time required from the receipt of the order until the item should be delivered.3 Enter Order. as a whole with constituent parts.

40 June 2006 .Outputs: Delivery Resources and Capabilities to P4. all things that add value in the delivery of Balance Delivery Resources and Capabilities a product. Inc. with Delivery Requirements © Copyright 2006 Supply-Chain Council.3 As a whole with constituent parts.

1 Any company policies that affect how a planning process is defined. Delivery Resources and Capabilities Delivery Requirements from P4. all sources of demand in the delivery of Prioritize. Best Practices: Rules-based distribution planning system Demand Priorities Reflecting Strategic Customer Relationships as Business Policies Trading partner agreements Are Automatically Followed in Allocating Resources.P4. Assess. 41 June 2006 . and performed. The sum of the costs associated with balance of delivery resources with delivery requirements. and Aggregate Delivery a product or service.1 Identify. and Aggregate a product.4 Establish Delivery Plans © Copyright 2006 Supply-Chain Council. all things that add value in the delivery of P4. Inc.2 Identify. Manage Business Rules for PLAN Processes approved.3 Balance Delivery Resources and Capabilities with Delivery Requirements The process of developing a time-phased course of action that commits delivery resources to meet delivery requirements. As a whole with constituent parts. First-In-First-Out (FIFO) is Utilized as the Default Scheduling Priority Inputs: Delivery Resources and Capabilities from As a whole with constituent parts. Metrics (see Appendix A for metrics attributes): Balance Delivery Resources with Delivery Requirements Cycle Time Cost to Balance Delivery Resources with Delivery Requirements The average time associated with balancing deliver resources and deliver requirements. Outputs: Workflow to P4. Requirements Planning Decision Policies from EP.

P4. Aggregate Return Requirements Delivery Plans to P3.3 Enter Order. The average time associated with establishing and communicating deliver plans The percentage of ship-from-stock orders shipped within 24 hours of order receipt.1 Identify. Metrics (see Appendix A for metrics attributes): Cost to Establish Delivery Plans Establish Delivery Plans Cycle Time Fill Rate The sum of the costs associated with establishing and communicating deliver plans.2 Identify. Delivery Plans to D1. Prioritize. Delivery Plans to D2.3 Balance Delivery Resources and Capabilities with Delivery Requirements Outputs: Delivery Plans to P1. Aggregate Production Requirements Delivery Plans to P2. According to Defined Business Rules None identified To Address Conditions which Cannot be Adequately Satisfied During the Current Planning Period. Delivery Plans to M1.3 Reserve Resources & A plan for a course of action over specified time periods that involves a Determine Delivery Date projected appropriation of supply resources to meet delivery requirements. Etc. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements.g. Delivery Plans to M2. this metric is the proportion for services that are filled so that the service is completed within 24 hours Best Practices: Plans that Violate Business Rules (e. For services. Cost.1 Identify.1 Assess. Considering Total Business Impacts (Revenue.6 Stage Finished A plan for a course of action over specified time periods that involves a Product projected appropriation of supply resources to meet delivery requirements. Delivery Plans to P5. Aggregate Return Resources Delivery Plans to M3. Each Functional Area Develops Prioritized Recommendations for the Subsequent Planning Period Inputs: Workflow from P4. Aggregate Product Requirements Delivery Plans to D3. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements.4 Establish Delivery Plans The establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements.) Plans Which Do Not Violate Business Rules None identified Are Communicated Openly and CrossFunctionally for Execution Specific Changes to the Plan Are Agreed to None identified Cross-Functionally. Assess. Joint None identified Service Agreements) Are Addressed CrossFunctionally. Customer Service. Prioritize. Assess.3 Reserve Inventory & A plan for a course of action over specified time periods that involves a Determine Delivery Date projected appropriation of supply resources to meet delivery requirements.5 Stage Product A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Commit A plan for a course of action over specified time periods that involves a Resources & Launch Program projected appropriation of supply resources to meet delivery requirements. Inc. Delivery Plans to P5.2 Identify. 42 June 2006 . © Copyright 2006 Supply-Chain Council. Quality.5 Stage Finished A plan for a course of action over specified time periods that involves a Product projected appropriation of supply resources to meet delivery requirements. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. and A plan for a course of action over specified time periods that involves a Aggregate Supply Chain Resources projected appropriation of supply resources to meet delivery requirements.

Stocking Requirements to D4. © Copyright 2006 Supply-Chain Council. transportation (pipeline). Inventory functions are anticipation. Inc. 43 June 2006 . Demand for inventory may be dependant or independent.1 Generate Stocking Schedule The activities and techniques of determining the desired levels of items. or finished products. fluctuation (safety. whether raw materials. work in process. hedge. buffer or reserve). and service parts. cycle (lot size).

Inc. The Category P5 includes four Level 3 Elements: P5.4 Establish and Communicate Return The establishment and communication of courses of action over specified Plans time periods that represent a projected appropriation of required return resources and or assets to meet return process requirements. determine demand in a resale market.P5 Plan Return A strategic or tactical process to establish and adjust courses of action or tasks over specified time periods that represent a projected appropriation of return resources and assets to meet anticipated as well as unanticipated return requirements. The process of identifying.1 Assess. 44 June 2006 . Metrics (see Appendix A for metrics attributes): Cost to Plan Return Order Fulfillment Cycle Time The sum of the costs associated with planning the returning of product. and Aggregate Return Requirements P5. and considering. P5. Assess.) Demand Planning Systems to forecast returns. Best Practices: Planning and Forecasting Outsourced Return process Use Demand Planning Collaborative planning and forecasting with RETURN outsourcing partners (3PL. and Aggregate Return Resources The process of identifying. and project a revenue stream. and consideration for all resources that add value to.3 Balance Return Resources with Return The process of developing courses of action that make feasible the Requirements commitment the appropriate return resources and or assets to satisfy return requirements. © Copyright 2006 Supply-Chain Council. The scope includes unplanned returns of sold merchandise as well as planned returns of “rotable” products that are refurbished for reissue to customers. all sources of demand for the return of a product. P5.2 Identify. The average actual cycle time consistently achieved to fulfill customer orders. predict yield rates for reusable products or components. reverse drop shippers. etc. or constrain the processes for the return of a product. evaluating. as a whole with constituent parts. execute. evaluating.

months. year. Configure. call centers or CRM system.) and expressed in any specified increments (per day. Business rules align Return process policies with business strategy. A promise in a contract that binds one to a specific course of action. month. and using the past pattern to predict future returns. week. Historical Return Rates from SR3. goals.) and expressed in any specified increments (per day. etc. such as the return history on a similar product. i. The return demand needs to be included in the production plan as soon as possible because upon repair it may be the next piece of serviceable inventory to satisfy demand. years. These promises maybe made by either the buyer of seller. assessing and aggregating return requirements. etc.1 Authorize Excess Product Return A judgmental forecasting technique based upon the a return history that is analogous to a present situation. month. Prioritize. The average time associated with the identifying. Historical Return Rates from SR1. month. Enter & Validate Order Business Rules for Return Processes from ER. Contractual Obligations from Source: Plan (Marketing. etc.3 Request A judgmental forecasting technique based upon the a return history that is Defective Return Authorization analogous to a present situation. years. Inc. Legal) Delivery Plans from P4.2 Receive.) Rules for conducting business. developing and maintaining customer and channel performance standards of an return processes such as service levels. Prioritize. and objectives.2 Receive. possibly to the store level with retail returns. such as the return history on a similar product.3 Request A judgmental forecasting technique based upon the a return history that is Excess Return Authorization analogous to a present situation. etc.) Actual Sales History from D3. Use Historical Based Return Rate Forecasts None identified Real Time Return Anticipation Inputs: Actual Sales History from D2.) and expressed in any specified increments (per day. etc. such as the return history on a similar 45 June 2006 . Commit Resources & Launch Program months.1 Assess. Metrics (see Appendix A for metrics attributes): Cost to Identify. etc. as a whole with constituent parts. Historical Return Rates from DR2.) Actual Sales History from D1. and Aggregate Return Requirements The process of identifying.1 Authorize MRO Product Return © Copyright 2006 Supply-Chain Council. and aggregating return requirements Best Practices: Having real time data on return demand and including it in the plan and forecast. and using the past pattern to predict future returns.4 Establish Delivery A plan for a course of action over specified time periods that involves a Plans projected appropriation of supply resources to meet delivery requirements. year.P5. Amount of past sales spanning any specified period of time (weeks. and using the past pattern to predict future returns. Sales. Historical Return Rates from DR3.3 Enter Order. Enter and Validate Order Amount of past sales spanning any specified period of time (weeks.e. and Aggregate Return Requirements Identify.1 Manage Business Rules for Return Processes Amount of past sales spanning any specified period of time (weeks. and considering. months. evaluating. Requires a connection with customers. years. prioritizing. week. such as the return history on a similar product. all sources of demand for the return of a product. and Aggregate Return Requirements Cycle Time The sum of the costs associated with identifying. given service requirements by supply chain stakeholders/trading partners. week. A judgmental forecasting technique based upon the a return history that is analogous to a present situation. year.

and using the past pattern to predict future returns. Corresponding Management/Engineering) Projections.1 Authorize Defective Product Return Item Master from EP. Return requirements dictated by process standards set by external entities (i. Production Plans from P3. relevant tolerances. The equivalent concepts for services are the workflow processes and rules.4 Establish Courses of action over specified time periods that represent a projected Supply Chain Plans appropriation of total supply-chain resources to meet total supply-chain demand requirements. Inc.e. work center identification.3 Request A judgmental forecasting technique based upon the a return history that is MRO Return Authorization analogous to a present situation. These are reviewed Plan periodically with actual results to verify the linkage of actual cause and effect.9 An update to the expected cause and effect statements that are the base Align Supply Chain Unit Plan with Financial for the Revised Aggregate Forecast and Projections. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. government. Supply Chain Plans from P1. they represent balanced Supply and Demand. © Copyright 2006 Supply-Chain Council. which defines the system parameters with which to effectively plan and execute using ERP (MRP. Deliver. they represent balanced Supply and Demand.9 Align Supply Chain Unit Plan with Financial Plan Outputs: Return Requirements to P5. supporting Make. such as the return history on a similar product. Revised Business Assumptions from EP.8 Manage Return Regulatory Requirements Revised Aggregate Forecast and Projections from EP. Sourcing Plans from P2. Source.7 Manage Planning Configuration A judgmental forecasting technique based upon the a return history that is analogous to a present situation. etc) systems. all sources of demand for the return of a Return Resources with Return Requirements product. supporting Make. run times.3 Balance As a whole with constituent parts.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan.4 Establish Production Plans Production Plan includes production capability. Historical Return Rates from DR1. and using the past pattern to predict future returns. etc. Revised Business Assumptions from EP. Corresponding Projections. An update to the aggregate Supply-Chain Forecasts of Demand by Product Family supporting the Market/Channel Plans.). Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together.3 Manage PLAN Data Collection Product Routings from EP. A record of specific information for each product. trade officials. such as the return history on a similar product. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by from Source: Plan (Marketing. Product Product Family supporting the Market/Channel Plans. Historical Return Rates from SR2. Product routings represent the way products are made and are integrated with the Bill of Materials. These are reviewed Assets periodically with actual results to verify the linkage of actual cause and effect. Return Regulatory Requirements from ER. 46 June 2006 . Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Source. lot size and setups. Deliver. Sales. and using the past pattern to predict future returns.5 An update to the expected cause and effect statements that are the base Manage Integrated Supply Chain Capital for the Revised Aggregate Forecast and Projections. Key elements of proper Routings include proper sequence of operations.product. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.7 Manage Planning Configuration Planning Data from EP.

2 See “Product Return Capabilities“ Manage Performance of Return Processes MRO Product Return Capabilities from ER. Assess. Planning Data from EP. MRO Product Return Capabilities from ER.2 Identify. goals. and Aggregate Return Resources Identify. evaluating. Metrics (see Appendix A for metrics attributes): Cost to Identify. specifications for products and services.1 Manage Business Rules for Return Processes A plan that includes an estimate of future costs and revenues related to expected activities. and aggregating return resource availability Best Practices: Allow Source Suppliers Full Visibility into the Shared supply chain forecasting and event management functionality with Current Return Situations and the Source suppliers Forecasted Return Activity Joint Service Agreements with Source Collaborative planning tools with the Source suppliers Suppliers to Share Responsibilities and Costs of Returns Rapid Reconfiguration of Return Capacity Use of RETURN tracking and projection systems and flexible partner agreements that allow the rapid addition of RETURN capacity to match unexpected demand. and Aggregate Return Resources The process of identifying. i.3 Manage Return Data Collection Delivery Plans from P4. developing and maintaining customer and channel performance standards of an return processes such as service levels. Assess. Contains the plan for total inventory limits or levels (including Raw Material. ownership. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. given service requirements by supply chain stakeholders/trading partners. 47 June 2006 .4 Establish Delivery Plans Inventory Strategy from EP. and consideration for all resources that add value to.4 Manage Integrated Supply Chain Inventory A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Information required in the process of integrating and maintaining the accuracy of return execution. Rules for conducting business. assessing and aggregating return resources. and objectives. execute. Make/Buy Decision from EP. Business rules align Return process policies with business strategy. or constrain the processes for the return of a product. Assess. Work In Process. both inter and intra company.P5. The budget serves as pattern for and a control over future operations.9 Align Supply Chain Unit Plan with Financial Plan Business Rules for Return Processes from ER. and stocking locations. product mix. assessing. Inputs: Budget Constraints from EP. performance expectations. Data About Return Capabilities from ER. The average time associated with the identifying.6 Manage A plan that describes how a company will utilize third party business Integrated Supply Chain Transportation partners to provide products and services which the company chooses not to provide with internal capacity.3 Manage PLAN Execution information necessary to plan the balance of supply chain Data Collection resources to demand requirements at both the highest aggregate and lowest SKU planning levels.5 Manage The output of the process used to determine whether a demand will be Integrated Supply Chain Capital Assets supplied with internal capacity or purchased through contract manufacturing and/or contracted services externally. and Aggregate Return Resources Cycle Time The sum of the costs associated with identifying.5 See “Product Return Capabilities“ Manage Return Capital Assets Outsource Plan from EP.e. © Copyright 2006 Supply-Chain Council. The total supply chain inventory strategy. Inc. Finished and Purchased Finished Goods) including replenishment models. and contract considerations.

Return Process Capabilities from EP. © Copyright 2006 Supply-Chain Council. Policies.8 Return requirements dictated by process standards set by external entities Manage Return Regulatory Requirements (i.4 The process of receipt and verification of the returned item against the Transfer Excess Product return authorization and other documentation and prepares the item for transfer. government. Outputs: Return Resources to P5.4 The process of receipt and verification of the returned item against the Transfer Defective Product return authorization and other documentation and prepares the item for transfer. 48 June 2006 . Return Transportation Guidelines. Agreements from ER.8 Manage Requirements dictated by process standards set by external entities (i.3 The process of receipt and verification of the returned item against the Receive MRO Product return authorization and other documentation and prepares the item for transfer. or constrain the processes for the return of a product. Inc.4 Establish Production Plans A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Return Inventory Transfer Data from DR2.Production Plans from P3. etc. Return Inventory Transfer Data from DR1.). & Guidelines.e.2 Manage Performance of Supply Chain The capability of a system or resources to produce a quantity output in a particular time period Return Process Workflow Definition and Definition and maintenance of the information flow about the Returns Policies from ER.3 The process of receipt and verification of the returned item against the Receive Excess Product return authorization and other documentation and prepares the item for transfer.5 Manage A revision to plan for capital expenditures necessitated by either changes Integrated Supply Chain Capital Assets in specific business plans or factors and assumptions affecting a business plan.7 Manage Return Network supply chain network for a group of similar or complimentary items through Configuration out their life cycle Return Regulatory Requirements from ER.4 The process of receipt and verification of the returned item against the Transfer MRO Product return authorization and other documentation and prepares the item for transfer. Return Inventory Transfer Data from DR1.3 Balance Return Resources with Return Requirements All resources that add value to. Return Inventory Transfer Data from DR3. policies and agreements for the transportation activities around return process.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan.6 Manage Integrated Supply Chain business (internal capacity) or a third party business partner (external Transportation capacity) is capable of producing over a particular period of time when all factors that control the production processes are working optimally. PLAN Regulatory Requirements and Compliance Return Inventory Targets from ER. government. trade officials.3 The process of receipt and verification of the returned item against the Receive Defective Product return authorization and other documentation and prepares the item for transfer. Projected Internal and External Capacity An estimate of the amount of product or service a particular part of the from EP. Sourcing Plans from P2.).6 Manage Return Transportation Revised Capital Plan from EP.e. Return Inventory Return Inventory Transfer Data from DR2. Production Plan includes production capability. etc. trade officials. Regulatory Requirements from EP.4 Manage The goals and approach to the management of return inventories. execute. Return Inventory Transfer Data from DR3.

49 June 2006 . Inc.© Copyright 2006 Supply-Chain Council.

All resources that add value to. Inputs: Return Resources from P5. Outputs: Workflow to P5.1 Assess. 50 June 2006 . and As a whole with constituent parts. Best Practices: Advance Planning Engines Applied to Advanced math model “solvers“ that optimize / minimize constraints.2 Manage Performance of that will be taken to reach those goals and objectives from the current Supply Chain performance levels. Metrics (see Appendix A for metrics attributes): Balance Return Resources with Return Requirements Cycle Time Cost to Balance Return Resources with Return Requirements The average time associated with balancing return resources and return requirements.1 Any company policies that affect how a planning process is defined. Assess. Cost Accounting System to Determine the ABC costing system Best Return Process to Follow from a Cost of Business Perspective Dynamic Return Restocking Management Dynamic prioritization of restocking plans in order to rapidly re-sell products that are in demand thus reducing new inventory demand. Inc. Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the steps Plan from EP. Manage Business Rules for PLAN Processes approved. all sources of demand for the return of a product. The sum of the costs associated with balance of return resources with return requirements. execute. Aggregate Return Requirements Planning Decision Policies from EP. or constrain the processes for the return of a product.3 Balance Return Resources with Return Requirements The process of developing courses of action that make feasible the commitment the appropriate return resources and or assets to satisfy return requirements.4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. and Aggregate Return Resources Return Requirements from P5.2 Identify. Returns routing. and performed.P5. restocking priorities and costs.

any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. mix.4 Establish and Communicate Return Plans The establishment and communication of courses of action over specified time periods that represent a projected appropriation of required return resources and or assets to meet return process requirements. Inputs: Workflow from P5.2 Manage Performance of Return Processes A determination or projection of the requirements the supply chain must meet in the handling and execution of returns. (i. (i.1 Authorize MRO Product Return © Copyright 2006 Supply-Chain Council. Also requires integration with the CRM system for real time redirection of customer returns based upon cost and capacity. The ability the supply chain has to return products in a valid and accurate way.e. by transmitting new requirements and directives using mathematical models.1 Authorize Defective Product Return A planned series of actions or operations that advances returns from one stage to another.P5. Prioritize. Process Procedures to ER. quantity.2 Identify. timing) A planned series of actions or operations that advances returns from one stage to another. The ability the supply chain has to return products in a valid and accurate way. timing) A determination or projection of the requirements the supply chain must meet in the handling and execution of returns. and Aggregate Delivery Resources and Capabilities Process Procedures to ER. or established procedures to manage and execute all activities in the process. The average time associated with establishing and communicating return plans Best Practices: Full Internal (And External If Source Suppliers Share in the Return Process Responsibilities) Visibility to Return Plans Rapid. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. Inc. routings. The capability of a system or resources to produce a quantity output in a particular time period. Assess.1 Identify.1 Manage Business Rules for Return Processes Product Return Capabilities to DR1. outsourcing and flexible partnership agreements. mix.e. etc.8 Manage Return A planned series of actions or operations that advances returns from one Regulatory Requirements stage to another. and Aggregate Delivery Requirements Deliver Return Requirements to P4. or established procedures to manage and execute all activities in the process. or established procedures to manage and execute all activities in the process. Metrics (see Appendix A for metrics attributes): Cost to Establish and Communicate Return Plans Establish and Communicate Return Plans Cycle Time The sum of the costs associated with establishing and communicating return plans. 51 June 2006 . the Internet. quantity. Product Return Capabilities to DR2.3 Balance Return Resources with Return Requirements Outputs: Deliver Return Requirements to P4. The capability of a system or resources to produce a quantity output in a particular time period. and. Process Procedures to ER. Dynamic Reconfiguration of Return Process to Meet Demand Intranet and Extranet communications tools The ability to reset and reconfigure the RETURN process capacity. and.

Source Return Requirements to P2. 52 June 2006 . given service requirements by supply chain stakeholders/trading partners.1 Authorize Excess Product Return Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.4 Manage Return Inventory Return Plans to SR2. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal.1 Identify.1 Authorize Excess Product Return The capability of a system or resources to produce a quantity output in a particular time period. Inc. The ability the supply chain has to return products in a valid and accurate way. All sources of demand in the Source Return of a product or service.1 Authorize Defective Product Return Return Plans to ER. Return Plans to ER. Prioritize. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.2 Disposition Defective Courses of action over specified time periods that represent the projected Product appropriation of required return resources and or assets to meet the return process requirements. and Aggregate Production Requirements Return Rules and Policies to ER.2 Disposition MRO Product Return Plans to ER.1 Identify. Rules and Policies for conducting business. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Return Plans to ER.5 Manage Return Capital Courses of action over specified time periods that represent the projected Assets appropriation of required return resources and or assets to meet the return process requirements.Product Return Capabilities to DR3. Return Plans to DR2. and. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.1 Manage Business Rules for Return Processes Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. all sources of demand in the creation of a product or service. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. goals and objectives.1 Authorize MRO Product Return Return Production Requirements to P3.2 Disposition Excess Product Return Plans to DR1. Return Plans to SR1.7 Manage Return Network Configuration Return Plans to DR3. developing and maintaining customer and channel performance standards of return processes such as service levels. and Aggregate Product Requirements © Copyright 2006 Supply-Chain Council. i.6 Manage Return Transportation Return Plans to SR3. As a whole with constituent parts.e. Prioritize. Rules and policies align the Return process with the organization’s business strategy.

and assets. Work In Process.7 Manage Planning Configuration The process of defining and maintaining the information about a unique supply chain network for a group of similar or complimentary products through their full life cycle.).6 Manage Integrated Supply Chain The process of defining an integrated supply chain transportation strategy Transportation and maintaining the information which characterizes total supply chain transportation requirements. EP. The Category EP includes nine Level 3 Elements: EP. including the evaluation of market need. ABC classification. EP. i. cycle time. cost.8 Manage PLAN Regulatory The process of identifying and complying with regulatory documentation Requirements and Compliance and process standards set by external entities (i. maintaining. Performance targets established for the execution of supply chain processes are reflected in the process elements for PLAN. etc.e. © Copyright 2006 Supply-Chain Council. routings. and bill of materials. EP. ownership. EP. This element also includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. delivery reliability. 53 June 2006 . product realization (development. Inc. government.) when planning for the integrated supply chain network. Finished and Purchased Finished Goods) including replenishment models. integrating and maintaining the accuracy of supply chain execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels.4 Manage Integrated Supply Chain The process of establishing total supply chain inventory strategy and Inventory planning the total inventory limits or levels (including Raw Material. trade officials. developing and maintaining customer and channel performance standards of an entire supply chain such as service levels. event planning (promotions.9 Align Supply Chain Unit Plan with The process of revising the long-term supply chain capacity and resource Financial Plan plans. Business rules align PLAN process policies with business strategy. and delivery plans. make. introduction and production).5 Manage Integrated Supply Chain The process of defining capacity strategy (i. rationalization. maintaining and dispositioning an organization’s capital assets to operate the integrated supply chain.e. EP.3 Manage PLAN Data Collection The process of collecting. but also business assumptions. and the management of transporters both inter and intra company. given service requirements by supply chain stakeholders/trading partners. and after-market support. and objectives. internal versus contract Capital Assets manufacturing or internal versus 3rd Party Logistics) and then acquiring. given the inputs from the strategic and business plans. i. product mix. source. EP. product discontinuation.e.e. EP. and stocking locations.1 Manage Business Rules for PLAN Processes The process of establishing. EP. The plan contains necessary business requirements for information and relationships to effectively and efficiently PLAN the Supply Chain. goals.2 Manage Performance of Supply Chain The process of measuring actual integrated Supply Chain performance against internal and/or external standards to develop and implement a course of action to achieve targeted performance levels.EP Enable PLAN A plan for the development and establishment of courses of action over specified time periods to appropriate delivery resources to meet projected delivery requirements. both inter and intra company. responsiveness. etc. This includes revision of not only aggregate forecast and projections related to supply chain. and enforcing decision support criteria for Supply Chain Planning which translate to rules for conducting business.

cost and profit. projected balance sheet. © Copyright 2006 Supply-Chain Council. and enforcing decision support criteria for Supply Chain Planning which translate to rules for conducting business. Product Resources with Product approved. and increase its earnings performance. developing and maintaining customer and channel performance standards of an entire supply chain such as service levels. and performed.3 Balance Any company policies that affect how a planning process is defined. A longer range. and performed. Inc.EP. Return Resources with Return Requirements approved. and/or customer segment.3 Balance Any company policies that affect how a planning process is defined. goals. lead times. Requirements Planning Decision Policies to P5. Requirements Planning Decision Policies to P1. and performed. given service requirements by supply chain stakeholders/trading partners. This process develops objectives usually accompanied by budgets.e. Requirements Service Levels to P4.1 Identify. A set of minimum acceptable values that describe service requirements of a particular industry. high-level plan that describes how a company intends to conduct business. Planning Processes Where Cross-Functional Input is Leveraged to Set Business Rules Inputs: Business Plan from Source: Company A document resulting from a process of linking the long-range strategy with projections of revenue. Performance targets in service related measures (i. channel.3 Balance Any company policies that affect how a planning process is defined. activity. Business rules align PLAN process policies with business strategy. Planning Decision Policies to P2. Service levels are established by balancing requirements against operational strategy. Metrics (see Appendix A for metrics attributes): Cost to Manage Business Rules for PLAN Processes Manage Business Rules for PLAN Processes Cycle Time The sum of the .e. and performed. and performed. and a cash flow statement. Production Resources with Production approved. i. etc.) compared to the established service requirements. Service Requirements from Source: Company Strategic Plan from Source: Company Outputs: Planning Decision Policies to P4.1 Manage Business Rules for PLAN Processes The process of establishing.3 Balance Any company policies that affect how a planning process is defined. and objectives. delivery and Aggregate Delivery Requirements performance.Costs to Manage Business Rules for PLAN Processes The average time associated with managing plan business rules Best Practices: Integrated Business and Supply-Chain Supply Chain performance dashboard capability. Delivery Requirements Planning Decision Policies to P3. Prioritize. Supply Chain Resources with Supply Chain approved.3 Balance Any company policies that affect how a planning process is defined. 54 June 2006 . Delivery Resources and Capabilities with approved. Improve its market and competitive position. maintaining.

g. and asset management. flexibility and responsiveness. e.2 Manage Production Performance A process that identifies opportunities for performance improvement and facilitates their realization through the use of metrics. Inc. The capability of a system or resources to produce a quantity output in a Assess.e. cost. i. Outputs: Return Process Capabilities to P5. cost. and asset management. delivery reliability. and asset management. delivery reliability. and asset management. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. delivery reliability.2 Manage Performance of Supply Chain The process of measuring actual integrated Supply Chain performance against internal and/or external standards to develop and implement a course of action to achieve targeted performance levels. cycle time.g. flexibility and responsiveness.EP. Sound Project Management Process and None identified Methodology Inputs: Continuous Improvement Process from Source: Company Supply-Chain Performance Metrics from ED. and assets.2 Assess Delivery Performance Supply-Chain Performance Metrics from ES. cost. © Copyright 2006 Supply-Chain Council. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. and reporting tools that support strategic and business plans. responsiveness. process development methodologies/approaches.2 Manage Performance of Return Processes Supply-Chain Performance Metrics from EM. Metrics (see Appendix A for metrics attributes): Cost to Manage Performance of Supply The sum of the costs associated with assessing supplier performance.4 Manage Product Inventory Supply-Chain Performance Metrics from ER. e. e. cost. delivery reliability. Chain Manage Performance of Supply Chain Cycle The average time associated with managing the performance of return Time activities Best Practices: Efficient and Effective Benchmarking None identified Process Leveraging Cross Industry Metrics and Definitions Reliable Continuous Improvement Process None identified and Methodology. and Aggregate Return Resources particular time period Supply Chain Performance Improvement Plan to P1. Performance targets established for the execution of supply chain processes are reflected in the process elements for PLAN. flexibility and responsiveness. A plan that describes goals and objectives for a supply chain and the steps that will be taken to reach those goals and objectives from the current performance levels.g. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. delivery reliability.g. e.3 Balance Return Resources with Return Requirements A plan that describes goals and objectives for a supply chain and the steps that will be taken to reach those goals and objectives from the current performance levels. 55 June 2006 . Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. project management principles.2 Identify. flexibility and responsiveness. cost.3 Balance Supply Chain Resources with Supply Chain Requirements Supply Chain Performance Improvement Plan to P5.

1 Identify. A data warehouse/data mart is the source of all planning (master) data. Prioritize. Planning Data to P2.3 Manage PLAN Data Collection The process of collecting. and Execution information necessary to plan the balance of supply chain Aggregate Product Requirements resources to demand requirements at both the highest aggregate and lowest SKU planning levels. and Execution information necessary to plan the balance of supply chain Aggregate Supply Chain Requirements resources to demand requirements at both the highest aggregate and lowest SKU planning levels. and Aggregate Return Requirements Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Outputs: Planning Data to P4. Planning Data to P2. Single Data Source for Decision Support and Business Rules Memory based planning systems provide one single data model and data mart (including the business rules) for the entire supply chain planning and execution process.1 Identify. and Aggregate Delivery Resources and Capabilities Planning Data to P5. Analyzing tools enable the ongoing maintenance and improvement of the business rules based on actual data. business rules and transaction data. Planning Data to P1.EP. The average time associated with collecting plan data Best Practices: Integrated Demand and Supply Planning Demand Planning. and Execution information necessary to plan the balance of supply chain Aggregate Production Requirements resources to demand requirements at both the highest aggregate and lowest SKU planning levels.1 Assess. Assess.2 Identify.1 Identify. 56 June 2006 . and Execution information necessary to plan the balance of supply chain Aggregate Supply Chain Resources resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Prioritize.1 Identify. Prioritize. Algorithms use the business rules as the driver for the planning engine.2 Identify. Supply Planning and especially the Supply Plan Execution Are no longer disconnected. Planning Data to P4.2 Identify. and Execution information necessary to plan the balance of supply chain Aggregate Return Resources resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Assess. All required planning and execution data is integrated and shared in between all functional areas within an organization.2 Identify. Planning Data to P1. Planning Data to P3. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes): Cost to Manage PLAN Data Collection Manage PLAN Data Collection Cycle Time The sum of the costs to Manage PLAN Data Collection. Prioritize. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Inputs: Supply Chain Execution Data from Source: Company Information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. and Execution information necessary to plan the balance of supply chain Aggregate Delivery Requirements resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Assess. Assess. Inc. © Copyright 2006 Supply-Chain Council. integrating and maintaining the accuracy of supply chain execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Planning Data to P5. And Execution information necessary to plan the balance of supply chain Aggregate Product Resources resources to demand requirements at both the highest aggregate and lowest SKU planning levels.

57 June 2006 . and Execution information necessary to plan the balance of supply chain Aggregate Production Resources resources to demand requirements at both the highest aggregate and lowest SKU planning levels. Inc. Assess.2 Identify. © Copyright 2006 Supply-Chain Council.Planning Data to P3.

1 Authorize Excess on uncertain demand for the finished products Product Return Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based Information from DR1.Sum of Variance/Sum of Actuals to determine percentage error. in unit measurement. product mix. Manage Integrated Supply Chain Inventory The average time associated with managing integrated supply chain Cycle Time inventory Best Practices: Capability to Run Multiple “Simulated“ Full. Work In Process. Metrics (see Appendix A for metrics attributes): Cost to Manage Integrated Supply Chain Inventory Forecast Accuracy The sum of the costs associated with managing the integrated supply chain inventory. lot size and setups. Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based Information from DR3. Key elements of proper Routings include proper sequence of operations.EP. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. run times.4 Manage Integrated Supply Chain Inventory The process of establishing total supply chain inventory strategy and planning the total inventory limits or levels (including Raw Material. Stream Supply/Demand Balancing Against Long-Term Capacity Plans and Scenarios Inputs: Capacity Constraints from Source: Company A capacity constraint is said to exist when the available capacity at a resource may be insufficient to meet the workload necessary to support the desired throughput. work center identification. relevant tolerances.e. Company approved. A capacity constraint is often a bottleneck. Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials.1 Authorize Defective on uncertain demand for the finished products Product Return Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products Information from DR2. ownership.Supply Chain modeling capabilities. and performed. Outputs: Inventory Capacity to EM. and stocking locations. Inc. Finished and Purchased Finished Goods) including replenishment models. Advanced Planning Systems.2 Manage Production Performance Maximum rate of output for the inventory management and warehouse process Maximum rate of output for the inventory management and warehouse process © Copyright 2006 Supply-Chain Council.1 Authorize MRO Product Return Planning Decision Policies from Source: Any company policies that affect how a planning process is defined.1 Manage Production Rules Inventory Capacity to EM. Common calculation is Forecast Sum . i. 58 June 2006 . The equivalent concepts for services are the workflow processes and rules. both inter and intra company. Forecast accuracy is calculated for products and/or families for markets/distribution channels.

1 Authorize MRO Product on uncertain demand for the finished products Return The total supply chain inventory strategy. Contains the plan for total inventory limits or levels (including Raw Material. product mix. The total supply chain inventory strategy. and stocking locations. 59 June 2006 . Work In Process.2 Identify.Inventory Strategy to P5. Finished and Purchased Finished Goods) including replenishment models.1 Authorize Defective Product Return Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products Information to DR3. Work In Process. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products © Copyright 2006 Supply-Chain Council. and Aggregate Return Resources Inventory Strategy to P1. both inter and intra company. both inter and intra company. Finished and Purchased Finished Goods) including replenishment models. ownership. Inc. product mix.1 Authorize Excess Product Return Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based Information to DR2. ownership. Assess. and stocking locations. Contains the plan for total inventory limits or levels (including Raw Material.3 Balance Supply Chain Resources with Supply Chain Requirements Manage Integrated Supply Chain Inventory Information to DR1.

i. Forecast accuracy is calculated for products and/or families for markets/distribution channels.EP. run times. lot size and setups. Inc. maintaining and dispositioning an organization’s capital assets to operate the integrated supply chain.e. Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials. Outputs: Make/Buy Decision to P5. internal versus contract manufacturing or internal versus 3rd Party Logistics) and then acquiring. Assess. Planning Decision Policies from Source: Any company policies that affect how a planning process is Company defined. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Advanced Planning Systems. Metrics (see Appendix A for metrics attributes): Cost to Manage Integrated Supply Chain Capital Assets Forecast Accuracy The sum of the costs associated with managing integrated supply chain assets. approved. The output of the process used to determine whether a and Aggregate Return Resources demand will be supplied with internal capacity or purchased through contract manufacturing and/or contracted services externally. Make/Buy Decision to P1.2 Identify. © Copyright 2006 Supply-Chain Council. The output of the process used to determine whether a and Aggregate Supply Chain Resources demand will be supplied with internal capacity or purchased through contract manufacturing and/or contracted services externally. Manage Integrated Supply Chain Capital Assets Cycle Time The average time associated with managing integrated supply chain capital assets Best Practices: Alignment of Strategic and Business Plans with Long-Term Capacity and Resource Planning Capability to Run Multiple “Simulated“ FullStream Supply/Demand Balancing Against Long-Term Capacity Plans and Scenarios Use of Cross Functional Teams to Execute the Process of Developing Long-Term Capacity and Resource Plans None identified Supply Chain modeling capabilities.5 Manage Integrated Supply Chain Capital Assets The process of defining capacity strategy (i. Key elements of proper Routings include proper sequence of operations. A capacity constraint is often a bottleneck. in unit measurement.Sum of Variance/Sum of Actuals to determine percentage error.2 Identify. Assess. The equivalent concepts for services are the workflow processes and rules. None identified Inputs: Capacity Constraints from Source: Company A capacity constraint is said to exist when the available capacity at a resource may be insufficient to meet the workload necessary to support the desired throughput. and performed. relevant tolerances. Common calculation is Forecast Sum .e. work center identification. 60 June 2006 .

An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. worker effort.2 Manage The highest. specifications for products and services. and equipment.Outsource Plan to P1. and equipment.1 Manage Production Rules Projected Internal and External Capacity The highest.2 Identify. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan.1 Identify. performance expectations.2 Identify. sustainable output rate which can be achieved Production Performance with the current product specifications. product mix. and Aggregate Return Requirements Revised Business Assumptions to P1.2 Identify. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. Production Capacity to EM. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. Assess. worker effort. and Aggregate Supply Chain Requirements Revised Capital Plan to P5. sustainable output rate which can be achieved with the current product specifications. Revised Business Assumptions to P5. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan. Inc. Production Capacity to EM. and A plan that describes how a company will utilize third party business partners to provide products and services which Aggregate Supply Chain Resources the company chooses not to provide with internal capacity. Prioritize. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. 61 June 2006 . Assess. plant. plant. An estimate of the amount of product or service a particular part of the business (internal capacity) or a third party business partner (external capacity) is capable of producing over a particular period of time when all factors that control the production processes are working optimally. and contract considerations. and Aggregate Return Resources Revised Capital Plan to P1.1 Assess. and Aggregate Supply Chain Resources © Copyright 2006 Supply-Chain Council. An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. Assess. product mix.

Common calculation is Forecast Sum . and performed. Manage Integrated Supply Chain Transportation Cycle Time The average time associated with managing integrated supply chain transportation Best Practices: Alignment of Strategic and Business Plans None identified with Long-Term Capacity and Resource Planning Capability to Run “Simulated“ Full-Stream Supply chain modeling and visualization system Supply/Demand Balancing for “What-If“ Scenarios Use of Cross Functional Teams to Execute None identified the Process of Developing Long-Term Capacity and Resource Plans Inputs: Capacity Constraints from Source: Company A capacity constraint is said to exist when the available capacity at a resource may be insufficient to meet the workload necessary to support the desired throughput. The equivalent concepts for services are the workflow processes and rules. Key elements of proper Routings include proper sequence of operations. work center identification. and A plan that describes how a company will utilize third party business partners to provide products and services which Aggregate Supply Chain Resources the company chooses not to provide with internal capacity. A capacity constraint is often a bottleneck. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. and the management of transporters both inter and intra company. Forecast accuracy is calculated for products and/or families for markets/distribution channels. Inc. approved. Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials. and contract considerations. 62 June 2006 . in unit measurement. specifications for products and services. © Copyright 2006 Supply-Chain Council.EP.6 Manage Integrated Supply Chain Transportation The process of defining an integrated supply chain transportation strategy and maintaining the information which characterizes total supply chain transportation requirements. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. lot size and setups.Sum of Variance/Sum of Actuals to determine percentage error. Outputs: Outsource Plan to P1.2 Identify. performance expectations. relevant tolerances. Planning Decision Policies from Source: Any company policies that affect how a planning process is Company defined. Assess. Metrics (see Appendix A for metrics attributes): Cost to Manage Integrated Supply Chain Transportation Forecast Accuracy The sum of the costs associated with managing integrated supply chain transportation. run times.

Transportation Capacity to EM. Revised Capital Plan to P1. and Aggregate Supply Chain assumptions affecting a business plan. Projected Internal and External Capacity to An estimate of the amount of product or service a particular P5.2 Manage The capability of a transportation system to perform it’s Production Performance function.Outsource Plan to P5. Assess. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and Assess.1 Manage Production Rules The capability of a transportation system to perform it’s function. performance expectations.2 Identify. Inc. and Aggregate Return part of the business (internal capacity) or a third party Resources business partner (external capacity) is capable of producing over a particular period of time when all factors that control the production processes are working optimally. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. and contract considerations. Resources Transportation Capacity to EM. and A plan that describes how a company will utilize third party business partners to provide products and services which Aggregate Return Resources the company chooses not to provide with internal capacity. © Copyright 2006 Supply-Chain Council. 63 June 2006 . specifications for products and services. Projected Internal and External Capacity An estimate of the amount of product or service a particular part of the business (internal capacity) or a third party business partner (external capacity) is capable of producing over a particular period of time when all factors that control the production processes are working optimally.2 Identify.2 Identify. Assess.

Item Master to P5. subassembly. subassembly. which defines the system parameters with which to effectively plan and execute using ERP (MRP.7 Manage Planning Configuration The process of defining and maintaining the information about a unique supply chain network for a group of similar or complimentary products through their full life cycle. etc) systems. manufactured part. which defines the system Return Requirements parameters with which to effectively plan and execute using ERP (MRP.Sum of Variance/Sum of Actuals to determine percentage error. Common calculation is Forecast Sum . Prioritize. Forecasting. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. product discontinuation. Manage Planning Configuration Cycle Time The average time associated with managing the planning of the supply chain configuration Best Practices: ABC Classification Incorporates leading practices such as Efficient Consumer Response. and real time point of consumption reporting. assembly. Item Master to P2. which defines the system Aggregate Product Requirements parameters with which to effectively plan and execute using ERP (MRP.1 Identify. Inc. Bill of Materials to P2. introduction and production).1 Identify. and Aggregate Production Requirements The Bill of Materials is a structured list of all the materials or parts needed to produce a particular finished product.EP. which defines the system parameters with which to effectively plan and execute using ERP (MRP. rationalization. whether purchased or not. assembly. Prioritize.1 Assess. Metrics (see Appendix A for metrics attributes): Cost to Manage Planning Configuration Forecast Accuracy The sum of the Cost to Manage Planning Configuration Forecast accuracy is calculated for products and/or families for markets/distribution channels. and after-market support. New Items Introductions Are part of the Sales and Operations Planning Process at the General Management Business Team Level SKU Rationalization Use of Platform Teams in the New Product Development Process None identified None identified None identified None identified None identified Outputs: Bill of Materials to P3. whether purchased or not. and bill of materials. Prioritize. etc. and A record of specific information for each product. Vendor Managed Inventory. and Aggregate A record of specific information for each product. in unit measurement.). event planning (promotions. © Copyright 2006 Supply-Chain Council. The Bill of Materials is a structured list of all the materials or parts needed and Aggregate Product Requirements to produce a particular finished product. and Replenishment. manufactured part. Prioritize. Prioritize. Item Master to P4.1 Identify. 64 June 2006 . ABC classification. This element also includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. and A record of specific information for each product. product realization (development.1 Identify. routings. etc) systems. and A record of specific information for each product. Collaborative Planning. Aggregate Production Requirements etc) systems. including the evaluation of market need. Item Master to P3. Aggregate Delivery Requirements etc) systems.1 Identify.

lot size and setups.1 Identify. Prioritize. run times. Prioritize. lot size and setups. The equivalent concepts for services are the workflow processes and rules. Key elements of proper Routings include proper sequence of operations. Product routings represent the way products are made and are integrated and Aggregate Production Requirements with the Bill of Materials. The equivalent concepts for services are the workflow processes and rules. relevant tolerances. lot size and setups. work center identification. Inc. Key elements of proper Routings include proper sequence of operations. work center identification. relevant tolerances. work center identification. Product Routings to P3.Product Routings to P2. run times. relevant tolerances. run times.1 Identify. The equivalent concepts for services are the workflow processes and rules.1 Identify. Product routings represent the way products are made and are integrated and Aggregate Product Requirements with the Bill of Materials. run times. Product routings represent the way products are made and are integrated and Aggregate Delivery Requirements with the Bill of Materials. Product Routings to P5. Prioritize. and Product routings represent the way products are made and are integrated Aggregate Return Requirements with the Bill of Materials. The equivalent concepts for services are the workflow processes and rules. Key elements of proper Routings include proper sequence of operations. lot size and setups. Key elements of proper Routings include proper sequence of operations. relevant tolerances. work center identification.1 Assess. 65 June 2006 . © Copyright 2006 Supply-Chain Council. Product Routings to P4.

Inc. government. etc. government. Metrics (see Appendix A for metrics attributes): Cost to Manage Plan Regulatory Requirements and Compliance Manage Plan Regulatory Requirements and Compliance Cycle Time The sum of the costs to Manage Plan Regulatory Requirements and Compliance.EP.2 Identify. etc. trade officials. Assess. The average time associated with managing the planning of regulatory requirements and compliance Outputs: Regulatory Requirements to P5. 66 June 2006 .2 Identify.). and Aggregate Supply Chain Resources Requirements dictated by process standards set by external entities (i. government. and Aggregate Return Resources Regulatory Requirements to P1.). etc. Requirements dictated by process standards set by external entities (i.e.e.e. Assess.8 Manage PLAN Regulatory Requirements and Compliance The process of identifying and complying with regulatory documentation and process standards set by external entities (i. trade officials.) when planning for the integrated supply chain network. © Copyright 2006 Supply-Chain Council. trade officials.

A longer range. they represent balanced Supply and Demand. Revised Business Assumptions to P1. and Aggregate Return periodically with actual results to verify the linkage of actual cause and Requirements effect.1 An update to the expected cause and effect statements that are the base Identify.1 An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. Metrics (see Appendix A for metrics attributes): Align Supply Chain Unit Plan with Financial Plan Cycle Time Cost to Align Supply Chain Unit Plan with Financial Plan The average time associated with aligning the supply chain unit plan with the financial plan The sum of the costs associated with aligning supply chain performance plans with financial plans. Revised Business Assumptions to P5. projected balance sheet.9 Align Supply Chain Unit Plan with Financial Plan The process of revising the long-term supply chain capacity and resource plans. Deliver. and a cash flow statement. and Aggregate Return Family supporting the Market/Channel Plans.1 Identify. activity. Source. make.EP. Improve its market and competitive position. and Aggregate Supply for the Revised Aggregate Forecast and Projections. A plan that includes an estimate of future costs and revenues related to and Aggregate Return Resources expected activities. and increase its earnings performance. Prioritize. © Copyright 2006 Supply-Chain Council. Requirements supporting Make. high-level plan that describes how a company intends to conduct business. Deliver. These are reviewed Assess. The budget serves as pattern for and a control over future operations.2 Identify. This process develops objectives usually accompanied by budgets. This includes revision of not only aggregate forecast and projections related to supply chain. Prioritize. Best Practices: Re-Planning Process Exists in Multi-Levels Business to business Internet capability to share common data. Corresponding Projections. source. Corresponding Projections. Inc. These are reviewed Chain Requirements periodically with actual results to verify the linkage of actual cause and effect. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. they represent balanced Supply and Demand. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product to P5.1 Assess. and Aggregate Family supporting the Market/Channel Plans. Assess. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product to P1. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Supply Chain Requirements supporting Make. but also business assumptions. cost and profit. given the inputs from the strategic and business plans. of the Supply-Chain between Business Enterprises None identified Re-Planning Process Links the Supply Chain Operation with the Business Strategy and the Marketing Strategy Strategic Sales and Operations Planning None identified Process in Place and Managed at the Executive Level Inputs: Business Plan from Source: Company A document resulting from a process of linking the long-range strategy with projections of revenue. Strategic Plan from Source: Company Outputs: Budget Constraints to P5. Source. 67 June 2006 . and delivery plans.

S1 Source Stocked Product
The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and or services. The Category S1 includes five Level 3 Elements:
S1.1 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against an existing contract or purchase order. The requirements for product releases are determined based on the detailed sourcing plan or other types of product pull signals. The process and associated activities of receiving product to contract requirements. The process and actions required determining product conformance to requirements and criteria. The transfer of accepted product to the appropriate stocking location within the supply chain. This includes all of the activities associated with repackaging, staging, transferring and stocking product. For service this is the transfer or application of service to the final customer or end user. The process of authorizing payments and paying suppliers for product or services. This process includes invoice collection, invoice matching and the issuance of checks.

S1.2 Receive Product S1.3 Verify Product S1.4 Transfer Product

S1.5 Authorize Supplier Payment

Metrics (see Appendix A for metrics attributes):
Cost to Source Inventory Days of Supply (Raw Material ) Order Fulfillment Cycle Time Product Acquisition Costs The sum of the costs associated with Source. Value of raw materials ÷ (COGS ÷ 365). The average actual cycle time consistently achieved to fulfill customer orders. Product acquisition costs include costs incurred for the production of product: sum of product management and planning, supplier quality engineering, inbound freight and duties, receiving and product storage, incoming inspection, product process engineering and tooling costs. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. This includes the fixed assets used in Plan, Source, Make, Deliver, and Return. The levels of aggregation can be at any element associated with a supply chain asset. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Components include accounts receivable, accounts payable, inventory, supply chain revenue, cost of goods sold and supply chain management costs. The average time associated with Source Processes

Return on Supply Chain Fixed Assets

Return on Working Capital

Source Cycle Time

Best Practices:
Alliance and Leverage Agreements Joint Service Agreements (JSA) Postponement None identified Collaborative Planning Systems Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes, such as assembly or packaging, to the last possible supply chain location.

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S1.1 Schedule Product Deliveries
Scheduling and managing the execution of the individual deliveries of product against an existing contract or purchase order. The requirements for product releases are determined based on the detailed sourcing plan or other types of product pull signals. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes):
% Schedules Changed within Supplier’s Lead Time Average Days per Engineering Change Average Days per Schedule Change Average Release Cycle of Changes Cost to Schedule Product Deliveries Schedule Product Deliveries Cycle Time The number of schedules that are changed within the suppliers lead-time divided by the total number of schedules generated within the measurement period # of days each engineering change impacts the delivery date divided by the total # of changes. # of days each schedule change impacts the delivery date divided by the total # of changes. Cycle time for implementing change notices divided by total number of changes. The sum of the costs associated with scheduling product deliveries. The average time associated with scheduling the shipment of the return of MRO product

Best Practices:
Advanced Ship Notices Allow for Tight Synchronization between Source and Make Processes Consignment Agreements Are Used to Reduce Assets and Cycle Time While Increasing the Availability of Critical Items Mechanical (Kanban) Pull Signals Are Used to Notify Suppliers of the Need to Deliver Product Utilize EDI Transactions to Reduce Cycle Time and Costs Blanket order support with scheduling interfaces to external supplier systems Consignment inventory management Electronic Kanban support EDI interface for 830, 850, 856 & 862 transactions

Inputs:
Logistics Selection from ES.6 Manage Incoming Product Production Schedule from M2.1 Schedule Production Activities Production Schedule from M3.2 Schedule Production Activities Production Schedule from M1.1 Schedule Production Activities Replenishment Signal from M3.3 Issue Sourced/In-Process Product Replenishment Signal from D1.3 Reserve Inventory & Determine Delivery Date Replenishment Signal from M2.2 Issue Sourced/In-Process Product Replenishment Signal from M1.2 Issue Material
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Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system.
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Return Inventory Transfer Data from DR3.4 The process of receipt and verification of the returned item against the Transfer Excess Product return authorization and other documentation and prepares the item for transfer. Return Inventory Transfer Data from DR2.4 The process of receipt and verification of the returned item against the Transfer MRO Product return authorization and other documentation and prepares the item for transfer. Return Inventory Transfer Data from DR1.4 The process of receipt and verification of the returned item against the Transfer Defective Product return authorization and other documentation and prepares the item for transfer. Sourcing Plans from P2.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. Supplier Performance from ES.2 Assess The results of measuring the actual supplier performance on cost, quality, Supplier Performance engineering, purchasing, and so on, based on an agreed set of measurements.

Outputs:
Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull replenishment system, or the signal that sends the estimated need of parts or services to the supplier.

Product On Order to P2.2 Identify, Assess, Product on order with a selected source. And Aggregate Product Resources Product On Order to ES.9 Manage Supplier Product on order with a selected source. Agreements Scheduled Receipts to D1.8 Receive Product Product due to arrive. from Source or Make Scheduled Receipts to M1.1 Schedule Product due to arrive. Production Activities Scheduled Receipts to S1.2 Receive Product Product due to arrive. Scheduled Receipts to D4.2 Receive Product Product due to arrive. at Store Scheduled Receipts to M2.1 Schedule Product due to arrive. Production Activities Scheduled Receipts to M3.2 Schedule Product due to arrive. Production Activities

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S1.2 Receive Product
The process and associated activities of receiving product to contract requirements. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes):
% Orders/ Lines Processed Complete % Orders/ Lines Received On-Time To Demand Requirement % Orders/ Lines Received with Correct Shipping Documents Cost to Receive Product Receiving Product Cycle Time The number of orders / lines that are processed complete divided by the total orders / lines processed within the measurement period The number of orders / lines that are received on-time to the demand requirements divided by the total orders / lines for the demand requirements in the measurement period The number of orders / lines that are received on-time with correct shipping documents divided by the total orders / lines processed in the measurement period The sum of the costs associated with receiving product. Total elapsed time from time product is received to time it is passed to next process

Best Practices:
Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Carrier Agreement - Bar code interface for data collection devices - Generate bar coded receiving documents - Product serial number used as identifier - RFID Carrier agreements are agreements between a company and its domestic and global carriers (for both, inbound raw materials and outbound finished goods) specifying service levels, payment terms, and other conditions. None identified

Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Skip lot/sampling inspection logic Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use - Electronic Tag tracking to Point of Use (POU) destination (Dock to Line or End Destination) Vendor Managed Inventory VMI is a concept for planning and control of inventory, in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels.

Inputs:
Defective Products from DR1.4 Transfer Defective Product Excess Products from DR3.4 Transfer Excess Product MRO Products from DR2.4 Transfer MRO Product Product from Source: Supplier Scheduled Receipts from S1.1 Schedule Product Deliveries Maintenance, Repair and Overhaul spare parts used to support of operations and maintenance. Material in excess of the current requirements. Maintenance, Repair and Overhaul spare parts used to support of operations and maintenance. The end object of a transformation process that includes physical objects, information or services. Product due to arrive.

Outputs:

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Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria. Receipt Verification to ES.8 Manage Import/Export Requirements Receipt Verification to ES.1 Manage Sourcing Business Rules Receipt Verification to S1.3 Verify Product Receipt Verification to ED.8 Manage Import/Export Requirements Receipt Verification to ES.6 Manage Incoming Product Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria.

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S1.3 Verify Product
The process and actions required determining product conformance to requirements and criteria. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes):
% Orders/ Lines Received Defect Free Cost to Verify Product Verify Product Cycle Time The number of orders / lines that are received defect free divided by the total orders / lines processed in the measurement period. The sum of the costs associated with raw material verification. The average time associated with verifying raw material product

Best Practices:
Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy - Bar code interface for data collection devices - Generate bar coded receiving documents - Product serial number used as identifier - RFID None identified

Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Skip lot/sampling inspection logic Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use Electronic Tag tracking to Point of Use (POU) destination Supplier Replaces Defective Material at Electronic Tag tracking to Point of Use (POU) destination Customer’s Facility with Good Product as Required

Inputs:
Receipt Verification from S1.2 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria.

Outputs:
Receipt Verification to S1.4 Transfer Product Acknowledgement that the product received conforms to specified requirements and criteria. Receipt Verification to ES.1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria.

Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria.

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S1.4 Transfer Product
The transfer of accepted product to the appropriate stocking location within the supply chain. This includes all of the activities associated with repackaging, staging, transferring and stocking product. For service this is the transfer or application of service to the final customer or end user. Metrics (see Appendix A for metrics attributes):
% Product Transferred On-Time to Demand The number of product orders / lines that are transferred on-time to Requirement demand requirements divided by the total orders / lines transferred in the measurement period % Product Transferred without Transaction The number of transactions processed without error divided by the total Errors transactions processed in the measurement period Cost to Transfer Product The sum of the costs associated with transferring product to Make or Deliver processes Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw materials & WIP, plant FG, field FG, field samples, other) ÷ (COGS ÷ 365). Total gross value of inventory at standard cost before reserves for excess and obsolescence. Only includes inventory on company books, future liabilities should not be included Transfer Product Cycle Time The average time associated transfer until product is moved to the next process.

Best Practices:
Capability Transfer to Organization Drive Deliveries Directly to Stock or PointOf-Use in Manufacturing to Reduce Costs and Cycle Time None identified Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence

Inputs:
Finished Goods Inventory Location from ED.4 Manage Finished Goods Inventories Product Inventory Location from ES.4 Manage Product Inventory The physical storage location where Finished Product inventory is held in stock prior to use or shipment. The physical storage location where product inventory is held in stock prior to use or shipment.

Receipt Verification from S1.3 Verify Product Acknowledgement that the product received conforms to specified requirements and criteria. Replenishment Signal from M2.2 Issue Sourced/In-Process Product Replenishment Signal from M1.2 Issue Material Replenishment Signal from M3.3 Issue Sourced/In-Process Product Replenishment Signal from D1.3 Reserve Inventory & Determine Delivery Date WIP Inventory Location from EM.6 Manage Transportation Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Location of inventory that is specified as “work in progress“. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products.

Outputs:
Daily Replenishment Requirements to D4.1 Resources needed to meet Item stocking schedule requirement. Generate Stocking Schedule
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Existing Inventory Data to ES.4 Manage Product Inventory

Available data that characterizes and quantifies raw material, work in process, and finished goods inventories

Inventory Availability to P2.2 Identify, Those stocks or items on hand used to support production (raw materials Assess, And Aggregate Product Resources and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Inventory Availability to ES.4 Manage Product Inventory Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts).

Inventory Availability to D4.2 Receive Product at Store

Inventory Availability to D1.8 Receive Product from Source or Make

Inventory Availability to D1.3 Reserve Inventory & Determine Delivery Date

Inventory Availability to M3.3 Issue Sourced/In-Process Product

Inventory Availability to M1.2 Issue Material Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Inventory Availability to M2.2 Issue Sourced/In-Process Product Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Customer selected retail finished goods transferred to the point of sale. Product being transferred to the appropriate stocking location within the supply chain.

Loaded Retail Cart or Pallet to D4.4 Stock Shelf Transferred Product to S1.5 Authorize Supplier Payment

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S1.5 Authorize Supplier Payment
The process of authorizing payments and paying suppliers for product or services. This process includes invoice collection, invoice matching and the issuance of checks. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes):
Authorize Supplier Payment Cycle Time Cost to Authorize Supplier Payment The average time associated with authorizing payment to suppliers. The sum of the costs associated with authorizing supplier payment.

Best Practices:
Pay on Receipt Electronic Invoice Processing

Inputs:
Payment Terms from ES.9 Manage Supplier The process of authorizing payments and paying suppliers for product or Agreements services. This process includes invoice collection, invoice matching and the issuance of checks. Transferred Product from S1.4 Transfer Product Product being transferred to the appropriate stocking location within the supply chain.

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S2 Source Make-to-Order Product
The procurement and delivery of product that is built to a specific design or configured based on the requirements of a particular customer order. The Category S2 includes five Level 3 Elements:
S2.1 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. The requirements for product deliveries are determined based on the detailed sourcing plan. This includes all aspects of managing the contract schedule including prototypes, qualifications or service deployment. The process and associated activities of receiving product to contract requirements. The process and actions required determining product conformance to requirements and criteria. The transfer of accepted product to the appropriate stocking location within the supply chain. This includes all of the activities associated with repackaging, staging, transferring, and stocking product and or application of service. The process of authorizing payments and paying suppliers for product or services. This process includes invoice collection, invoice matching and the issuance of checks.

S2.2 Receive Product S2.3 Verify Product S2.4 Transfer Product

S2.5 Authorize Supplier Payment

Metrics (see Appendix A for metrics attributes):
Cost to Source Inventory Days of Supply (Raw Material ) Order Fulfillment Cycle Time Perfect Order Fulfillment The sum of the costs associated with Source. Value of raw materials ÷ (COGS ÷ 365). The average actual cycle time consistently achieved to fulfill customer orders. The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. Components include all items and quantities on-time using the customer’s definition of on-time, and documentation - packing slips, bills of lading, invoices, etc. Product acquisition costs include costs incurred for the production of product: sum of product management and planning, supplier quality engineering, inbound freight and duties, receiving and product storage, incoming inspection, product process engineering and tooling costs. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. This includes the fixed assets used in Plan, Source, Make, Deliver, and Return. The levels of aggregation can be at any element associated with a supply chain asset. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Components include accounts receivable, accounts payable, inventory, supply chain revenue, cost of goods sold and supply chain management costs. The average time associated with Source Processes

Product Acquisition Costs

Return on Supply Chain Fixed Assets

Return on Working Capital

Source Cycle Time

Best Practices:
Automated Statistical Process Control (SPC)None identified Joint Service Agreements (JSA) Collaborative Planning Systems Postponement Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes, such as assembly or packaging, to the last possible supply chain location.

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6 Manage Incoming Product Production Schedule from M3. © Copyright 2006 Supply-Chain Council. 850.1 Schedule Production Activities Production Schedule from M1.3 Issue Sourced/In-Process Product Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Any signal that indicates when to produce or transport Items in a pull replenishment system. # of days each schedule change impacts the delivery date divided by the total # of changes. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. This includes all aspects of managing the contract schedule including prototypes. 856 & 862 transactions Inputs: Logistics Selection from ES. Any signal that indicates when to produce or transport Items in a pull replenishment system. Cycle time for implementing change notices divided by total number of changes. Metrics (see Appendix A for metrics attributes): % Schedules Changed within Supplier’s Lead Time Average Days per Engineering Change Average Days per Schedule Change Average Release Cycle of Changes Cost to Schedule Product Deliveries Schedule Product Deliveries Cycle Time The number of schedules that are changed within the suppliers lead-time divided by the total number of schedules generated within the measurement period # of days each engineering change impacts the delivery date divided by the total # of changes. Inc.S2.3 Reserve Resources & Determine Delivery Date Replenishment Signal from M3. The sum of the costs associated with scheduling product deliveries. The average time associated with scheduling the shipment of the return of MRO product Best Practices: Advanced Ship Notices Allow for Tight Synchronization between Source and Make Processes Consignment Agreements Are Used to Reduce Assets and Cycle Time While Increasing the Availability of Critical Items Mechanical (Kanban) Pull Signals Are Used to Notify Suppliers of the Need to Deliver Product Utilize EDI Transactions to Reduce Cycle Time and Costs Blanket order support with scheduling interfaces to external supplier systems Consignment inventory management Electronic Kanban support EDI interface for 830.1 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. qualifications or service deployment. Any signal that indicates when to produce or transport Items in a pull replenishment system. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. The requirements for product deliveries are determined based on the detailed sourcing plan.2 Issue Sourced/In-Process Product Replenishment Signal from D2. 78 June 2006 .2 Schedule Production Activities Production Schedule from M2.1 Schedule Production Activities Replenishment Signal from M2.

Production Activities © Copyright 2006 Supply-Chain Council.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. Scheduled Receipts to M1. quality.4 The process of receipt and verification of the returned item against the Transfer MRO Product return authorization and other documentation and prepares the item for transfer.9 Manage Supplier Product on order with a selected source. Return Inventory Transfer Data from DR2. Assess. Product on order with a selected source. based on an agreed set of measurements. Inc. Production Activities Scheduled Receipts to M3.4 The process of receipt and verification of the returned item against the Transfer Defective Product return authorization and other documentation and prepares the item for transfer.Replenishment Signal from M1. And Aggregate Product Resources Product On Order to ES. Supplier Performance from ES. Outputs: Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull replenishment system.1 Schedule Product due to arrive.2 Issue Material Any signal that indicates when to produce or transport Items in a pull replenishment system. Production Activities Scheduled Receipts to M2. Agreements Scheduled Receipts to S2.2 Assess The results of measuring the actual supplier performance on cost. Product On Order to P2. Supplier Performance engineering. Source Execution Data from M2.2 Schedule Product due to arrive. purchasing. 79 June 2006 . Return Inventory Transfer Data from DR1. or the signal that sends the estimated need of parts or services to the supplier.1 Schedule Product due to arrive. and so on.4 The process of receipt and verification of the returned item against the Transfer Excess Product return authorization and other documentation and prepares the item for transfer.2 Identify. Return Inventory Transfer Data from DR3.2 Issue Sourced/In-Process Product Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Sourcing Plans from P2.2 Receive Product Product due to arrive.

S2.Product serial number used as identifier . 80 June 2006 .4 Transfer Excess Product MRO Products from DR2. Repair and Overhaul spare parts used to support of operations and maintenance.2 Receive Product The process and associated activities of receiving product to contract requirements. payment terms. Product due to arrive. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. Maintenance. Inc. and other conditions. Material in excess of the current requirements.Electronic Tag tracking to Point of Use (POU) destination (Dock to Line or End Destination) Vendor Managed Inventory VMI is a concept for planning and control of inventory. Repair and Overhaul spare parts used to support of operations and maintenance.1 Schedule Product Deliveries Maintenance. Inputs: Defective Products from DR1.Generate bar coded receiving documents .RFID Carrier agreements are agreements between a company and its domestic and global carriers (for both.Bar code interface for data collection devices . in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. The on-site inventory is counted. None identified Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Skip lot/sampling inspection logic Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use . and the inventory is restocked to predefined levels.4 Transfer Defective Product Excess Products from DR3. © Copyright 2006 Supply-Chain Council.4 Transfer MRO Product Product from Source: Supplier Scheduled Receipts from S2. damaged or outdated goods are removed. Outputs: Receipt Verification to ES. information or services. The end object of a transformation process that includes physical objects. inbound raw materials and outbound finished goods) specifying service levels.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria. Metrics (see Appendix A for metrics attributes): % Orders/ Lines Processed Complete % Orders/ Lines Received On-Time To Demand Requirement % Orders/ Lines Received with Correct Shipping Documents Cost to Receive Product Receiving Product Cycle Time The number of orders / lines that are processed complete divided by the total orders / lines processed within the measurement period The number of orders / lines that are received on-time to the demand requirements divided by the total orders / lines for the demand requirements in the measurement period The number of orders / lines that are received on-time with correct shipping documents divided by the total orders / lines processed in the measurement period The sum of the costs associated with receiving product. Total elapsed time from time product is received to time it is passed to next process Best Practices: Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Carrier Agreement .

81 June 2006 .8 Manage Import/Export Requirements Receipt Verification to ES.Receipt Verification to ES. Inc. Acknowledgement that the product received conforms to specified requirements and criteria.3 Verify Product Acknowledgement that the product received conforms to specified requirements and criteria.8 Manage Import/Export Requirements Receipt Verification to S2. Acknowledgement that the product received conforms to specified requirements and criteria.6 Manage Incoming Product Receipt Verification to ES.1 Manage Sourcing Business Rules Receipt Verification to ED. Acknowledgement that the product received conforms to specified requirements and criteria. © Copyright 2006 Supply-Chain Council. Acknowledgement that the product received conforms to specified requirements and criteria.

1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria.Bar code interface for data collection devices . The sum of the costs associated with raw material verification. © Copyright 2006 Supply-Chain Council.RFID None identified Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Skip lot/sampling inspection logic Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use Electronic Tag tracking to Point of Use (POU) destination Electronic Tag tracking to Point of Use (POU) destination Supplier Replaces Defective Material at Customer’s Facility with Good Product as Required Inputs: Receipt Verification from S2.Generate bar coded receiving documents . The average time associated with verifying raw material product Best Practices: Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy . Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria.S2.Product serial number used as identifier .3 Verify Product The process and actions required determining product conformance to requirements and criteria. 82 June 2006 .4 Transfer Product Acknowledgement that the product received conforms to specified requirements and criteria. Outputs: Receipt Verification to S2. Inc.2 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria. Metrics (see Appendix A for metrics attributes): % Orders/ Lines Received Defect Free Cost to Verify Product Verify Product Cycle Time The number of orders / lines that are received defect free divided by the total orders / lines processed in the measurement period. Receipt Verification to ES.

Any signal that indicates when to produce or transport Items in a pull replenishment system.3 Issue Sourced/In-Process Product Replenishment Signal from M1. Best Practices: Capability Transfer to Customer Drive Deliveries Directly to Stock or PointOf-Use in Manufacturing to Reduce Costs and Cycle Time None identified Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence Inputs: Finished Goods Inventory Location from ED. and stocking product and or application of service. © Copyright 2006 Supply-Chain Council. The physical storage location where product inventory is held in stock prior to use or shipment. staging. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products. 83 June 2006 .3 Verify Product Acknowledgement that the product received conforms to specified requirements and criteria. future liabilities should not be included Transfer Product Cycle Time The average time associated transfer until product is moved to the next process. plant FG. Any signal that indicates when to produce or transport Items in a pull replenishment system. Inc. Any signal that indicates when to produce or transport Items in a pull replenishment system. Total gross value of inventory at standard cost before reserves for excess and obsolescence. Receipt Verification from S2. Replenishment Signal from M2. Only includes inventory on company books. field FG.4 Manage Finished Goods Inventories Product Inventory Location from ES.2 Issue Sourced/In-Process Product Replenishment Signal from D1.2 Issue Material WIP Inventory Location from EM. Metrics (see Appendix A for metrics attributes): % Product Transferred On-Time to Demand The number of product orders / lines that are transferred on-time to Requirement demand requirements divided by the total orders / lines transferred in the measurement period % Product Transferred without Transaction The number of transactions processed without error divided by the total Errors transactions processed in the measurement period Cost to Transfer Product The sum of the costs associated with transferring product to Make or Deliver processes Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw materials & WIP. field samples.6 Manage Transportation Any signal that indicates when to produce or transport Items in a pull replenishment system. This includes all of the activities associated with repackaging.4 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain.4 Manage Product Inventory The physical storage location where Finished Product inventory is held in stock prior to use or shipment. other) ÷ (COGS ÷ 365).3 Reserve Inventory & Determine Delivery Date Replenishment Signal from M3. Location of inventory that is specified as “work in progress“. transferring.S2.

Inventory Availability to D2.4 Manage Product Inventory Inventory Availability to M2.9 Pick Product Inventory Availability to M1. repairs and operating supplies). and customer service (finished goods and spare parts). and customer service (finished goods and spare parts). and customer service (finished goods and spare parts). supporting activities (maintenance. and customer service (finished goods and spare parts). supporting activities (maintenance. repairs and operating supplies). © Copyright 2006 Supply-Chain Council. and customer service (finished goods and spare parts). Transferred Product to S2. Inventory Availability to M3. repairs and operating supplies).5 Authorize Supplier Payment Product being tranferred to the appropriate stocking location within the supply chain. repairs and operating supplies). Inc. supporting activities (maintenance. repairs and operating supplies).3 Reserve Resources & Determine Delivery Date Inventory Availability to D2.4 Manage Product Inventory Those stocks or items on hand used to support production (raw materials and work in process items). Inventory Availability to ES.3 Issue Sourced/In-Process Product Inventory Availability to P2. 84 June 2006 . supporting activities (maintenance. repairs and operating supplies).2 Issue Sourced/In-Process Product Available data that characterizes and quantifies raw material.2 Identify. and customer service (finished goods and spare parts). repairs and operating supplies). Those stocks or items on hand used to support production (raw materials and work in process items). And Aggregate Product Resources and work in process items). supporting activities (maintenance. Those stocks or items on hand used to support production (raw materials Assess. and finished goods inventories Those stocks or items on hand used to support production (raw materials and work in process items). and customer service (finished goods and spare parts). supporting activities (maintenance. Those stocks or items on hand used to support production (raw materials and work in process items).Outputs: Existing Inventory Data to ES.2 Issue Material Those stocks or items on hand used to support production (raw materials and work in process items). work in process. supporting activities (maintenance. Those stocks or items on hand used to support production (raw materials and work in process items).

The sum of the costs associated with authorizing supplier payment. invoice matching and the issuance of checks. Best Practices: Pay on Receipt Electronic Invoice Processing Inputs: Payment Terms from ES. © Copyright 2006 Supply-Chain Council.5 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services.S2. This process includes invoice collection. Transferred Product from S2. This process includes invoice collection. Metrics (see Appendix A for metrics attributes): Authorize Supplier Payment Cycle Time Cost to Authorize Supplier Payment The average time associated with authorizing payment to suppliers.4 Transfer Product Product being tranferred to the appropriate stocking location within the supply chain. invoice matching and the issuance of checks. 85 June 2006 . Inc.9 Manage Supplier The process of authorizing payments and paying suppliers for product or Agreements services.

5 Verify Product The process and actions required determining product conformance to requirements and criteria. Value of raw materials ÷ (COGS ÷ 365). The requirements for product deliveries are determined based on the detailed sourcing plan.2 Select Final Supplier(s) and Negotiate The identification of the final supplier(s) based on the evaluation of RFQs. S3. cost of goods sold and supply chain management costs. Metrics (see Appendix A for metrics attributes): Cost to Source Inventory Days of Supply (Raw Material ) Order Fulfillment Cycle Time Product Acquisition Costs The sum of the costs associated with Source. Source. S3. The average time associated with Source Processes Return on Supply Chain Fixed Assets Return on Working Capital Source Cycle Time Best Practices: Joint Service Agreements (JSA) Collaborative Planning Systems © Copyright 2006 Supply-Chain Council. Inc. procurement and delivery of engineer-to-order assemblies or specialized product or services that are designed and built based on the requirements or specifications of a particular customer order or contract. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Deliver. supplier quality engineering. inventory. 86 June 2006 . product process engineering and tooling costs. staging. This process includes invoice collection. This includes the fixed assets used in Plan. supplier qualifications and the generation of a contract defining the costs and terms and conditions of product availability. receiving and product storage.S3 Source Engineer-to-Order Product The negotiation. and stocking product. S3. The average actual cycle time consistently achieved to fulfill customer orders. Product acquisition costs include costs incurred for the production of product: sum of product management and planning. accounts payable. Components include accounts receivable.7 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services.4 Receive Product The process and associated activities of receiving product to contract requirements. transferring.1 Identify Sources of Supply The identification and qualification of potential suppliers capable of designing and delivering product that will meet all of the required product specifications. The Category S3 includes seven Level 3 Elements: S3. S3. S3. Make.6 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain. The levels of aggregation can be at any element associated with a supply chain asset. supply chain revenue. invoice matching and the issuance of checks. This includes all aspects of managing the contract schedule including prototypes and qualifications. S3. inbound freight and duties. incoming inspection. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. This includes all of the activities associated with repackaging.3 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. and Return.

2 Select Final Supplier(s) and Negotiate ETO Request for Proposal to Supplier A document used to solicit vendor responses when the functional requirements and features are known. © Copyright 2006 Supply-Chain Council. and of the procedure to determine if the requirements are met. item or service.4 Establish Sourcing Plans Supplier Data from ES. Metrics (see Appendix A for metrics attributes): . None identified None identified None identified . . product. information.3 Maintain Source Data . Cost to Identify Sources of Supply Identify Sources of Supply Cycle Time The sum of the costs associated with identifying sources of supply. .1 Manage Sourcing Business Rules Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities.1 Identify Sources of Supply The identification and qualification of potential suppliers capable of designing and delivering product that will meet all of the required product specifications. Current Inventory Source Data from ES. Sourcing business rules include: supplier selection and negotiation processes. . Data or information about the supplier. 87 June 2006 . Sourcing Plans from P2. None identified Inputs: .S3. Structured supplier data is needed to set up and implement ERP or similar systems. Inc. Concurrent Engineering is Used to Tightly Link Sourcing into the Product Development Process Make/Buy Decision Process (Outsourcing vs. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Business Rules for Source Processes from ES. ETO Spec or Design from Source: Company . Workflow to S3. complete and accurate statement or drawing of the technical requirements of a material. An aggregate material requirements plan used to schedule material deliveries to meet production plan. . This data can be organizational. The average time associated with the identification of sources of supply Best Practices: . In Sourcing) Electronic Data Interchange is Used to Send Technical Information to and from Potential Suppliers On Line RFQ Processes Linked into the Document Management Process Reduces Cycle Time and Product Management Costs Product Data Management & Electronic Document Management Are Used to Manage Technical Documents and Requirements for Engineer to Order Product Supplier Development Programs Are Used to Get Local Suppliers to Invest in Developing New Technologies None identified . fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership.7 Manage Supplier Network Outputs: . . . A clear. financial.

Inc. . Metrics (see Appendix A for metrics attributes): .3 Data which will provide measurement of actual supplier Maintain Source Data performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Workflow from S3. . . Sourcing business rules include: supplier selection and negotiation processes. Cost to Select Final Supplier(s) and Negotiate Select Final Supplier(s) and Negotiate Cycle Time The sum of the costs associated with selecting final suppliers and negotiating supplier agreements.. . part programs. Structured supplier data is needed to set up and implement ERP or similar systems. None identified Internet web sites for financial evaluation None identified None identified Inputs: . . Electronic Data Interchange Can Be Used To Send Rfqs and Technical Information to and from Potential Suppliers to Determine Supplier Capability to Fulfill Requirements So that They May Be Added to Supplier Network On Line Document Management and Automated Supplier Approval Processes Can Reduce the Cycle Time and Costs Associated With Managing Supplier Evaluations and Get Them into the Supplier Network Faster On Line RFQ Processes Linked into the Document Management Process Reduces Cycle Time and Product Management Costs On-Line Availability to Supplier Financials to Determine Potential Supplier Viability to be Added to Supplier Network Supplier Certification Programs Can Reduce the Cycle Time for Certifying Existing Suppliers to Provide New Technologies Utilize Concurrent Engineering with Suppliers to Allow Them to Provide Engineering and Product Performance Test Data Electronic Data Interchange .1 Manage Sourcing Business Rules business within the enterprise and other legal entities. . information. specifications. . product. Current Inventory Source Data from ES. . formulas. etc.2 Select Final Supplier(s) and Negotiate The identification of the final supplier(s) based on the evaluation of RFQs. © Copyright 2006 Supply-Chain Council. The average time associated with scheduling the shipment of the return of MRO product Best Practices: . financial. This data can be organizational. ERP . that describe requirements of a product Data or information about the supplier. supplier qualifications and the generation of a contract defining the costs and terms and conditions of product availability.1 Identify Sources of Supply Business Rules for Source Processes from Rules that are translated into guidelines and policies for conducting ES. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. 88 June 2006 .S3. ETO Proposal from Source: Supplier Supplier Data from ES.7 Manage Supplier Network A proposal that may contain final drawings.

An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. 89 June 2006 . Supplier Agreement to ES. such as purchase order or supplier contract. . © Copyright 2006 Supply-Chain Council. such as purchase order or supplier contract. such as purchase order or supplier contract.3 Schedule Product Deliveries . An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull replenishment system. Inc.Outputs: .6 Manage Transportation Supplier Agreement to S3. or the signal that sends the estimated need of parts or services to the supplier. .9 Manage Supplier Agreements Supplier Agreement to EM. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise.

Any signal that indicates when to produce or transport Items in a pull replenishment system. . This includes all aspects of managing the contract schedule including prototypes and qualifications. . . . . The sum of the costs associated with scheduling product deliveries. The average time associated with scheduling the shipment of the return of MRO product Best Practices: .1 Schedule Production Activities Production Schedule from M1. Any signal that indicates when to produce or transport Items in a pull replenishment system.S3. 850. . Advanced Ship Notices Allow for Tight Synchronization between Source and Make Processes Consignment Agreements Are Used to Reduce Assets and Cycle Time While Increasing the Availability of Critical Items Mechanical (Kanban) Pull Signals Are Used to Notify Suppliers of the Need to Deliver Product Utilize EDI Transactions to Reduce Cycle Time and Costs Blanket order support with scheduling interfaces to external supplier systems Consignment inventory management Electronic Kanban support EDI interface for 830. Any signal that indicates when to produce or transport Items in a pull replenishment system. Inc. Commit Resources & Launch Program Return Inventory Transfer Data from DR3. Cycle time for implementing change notices divided by total number of changes. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. .2 Issue Sourced/In-Process Product Replenishment Signal from M3. The requirements for product deliveries are determined based on the detailed sourcing plan. Any signal that indicates when to produce or transport Items in a pull replenishment system. . . % Schedules Changed within Supplier’s Lead Time Average Days per Engineering Change Average Days per Schedule Change Average Release Cycle of Changes Cost to Schedule Product Deliveries Schedule Product Deliveries Cycle Time The number of schedules that are changed within the suppliers lead-time divided by the total number of schedules generated within the measurement period # of days each engineering change impacts the delivery date divided by the total # of changes.3 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract.3 Enter Order. Metrics (see Appendix A for metrics attributes): . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . 856 & 862 transactions Inputs: . .3 Issue Sourced/In-Process Product Replenishment Signal from D3. Logistics Selection from ES. .2 Issue Material Replenishment Signal from M2. . The process of receipt and verification of the returned item against June 2006 © Copyright 2006 Supply-Chain Council.4 90 Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.2 Schedule Production Activities Replenishment Signal from M1. . # of days each schedule change impacts the delivery date divided by the total # of changes. .1 Schedule Production Activities Production Schedule from M3. . .6 Manage Incoming Product Production Schedule from M2.

Transfer Excess Product . and so on. Outputs: . purchasing. Product due to arrive. Product On Order to ES. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise.1 Schedule Production Activities Scheduled Receipts to M3. .4 Transfer MRO Product Sourcing Plans from P2. or the signal that sends the estimated need of parts or services to the supplier. Assess.1 Schedule Production Activities Scheduled Receipts to S3. 91 June 2006 . The results of measuring the actual supplier performance on cost. such as purchase order or supplier contract. . . Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull replenishment system. Product due to arrive. An aggregate material requirements plan used to schedule material deliveries to meet production plan.4 Receive Product © Copyright 2006 Supply-Chain Council. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.2 Select Final Supplier(s) and Negotiate Supplier Performance from ES. quality. .2 Assess Supplier Performance the return authorization and other documentation and prepares the item for transfer. based on an agreed set of measurements. Product due to arrive.4 Establish Sourcing Plans Supplier Agreement from S3. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.4 Transfer Defective Product Return Inventory Transfer Data from DR2. Return Inventory Transfer Data from DR1. .2 Identify. Product due to arrive. Product on order with a selected source. .9 Manage Supplier Agreements Product On Order to P2. . Inc. . . . engineering. Product on order with a selected source. And Aggregate Product Resources Scheduled Receipts to M1.2 Schedule Production Activities Scheduled Receipts to M2.

.3 Schedule Product Deliveries The end object of a transformation process that includes physical objects. % Orders/ Lines Processed Complete % Orders/ Lines Received On-Time To Demand Requirement % Orders/ Lines Received with Correct Shipping Documents Cost to Receive Product Receiving Product Cycle Time The number of orders / lines that are processed complete divided by the total orders / lines processed within the measurement period The number of orders / lines that are received on-time to the demand requirements divided by the total orders / lines for the demand requirements in the measurement period The number of orders / lines that are received on-time with correct shipping documents divided by the total orders / lines processed in the measurement period The sum of the costs associated with receiving product.4 Receive Product The process and associated activities of receiving product to contract requirements.S3. © Copyright 2006 Supply-Chain Council. . Metrics (see Appendix A for metrics attributes): .1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria. .Generate bar coded receiving documents . Outputs: . Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. . None identified Skip lot/sampling inspection logic Electronic Tag tracking to Point of Use (POU) destination VMI is a concept for planning and control of inventory. Product from Source: Supplier Scheduled Receipts from S3. 92 June 2006 . Product due to arrive.8 Manage Import/Export Requirements Receipt Verification to ES. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. and the inventory is restocked to predefined levels.2 Assess Supplier Performance Receipt Verification to ES. Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Carrier Agreement .RFID Carrier agreements are agreements between a company and its domestic and global carriers (for both.Bar code interface for data collection devices . . Acknowledgement that the product received conforms to specified requirements and criteria. . . Total elapsed time from time product is received to time it is passed to next process Best Practices: . . . and other conditions. . payment terms. . The on-site inventory is counted. information or services. Inc. inbound raw materials and outbound finished goods) specifying service levels. Acknowledgement that the product received conforms to specified requirements and criteria.Product serial number used as identifier . Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use (Dock to Line or End Destination) Vendor Managed Inventory Inputs: . . Receipt Verification to ES. damaged or outdated goods are removed.

6 Manage Incoming Product Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. Receipt Verification to S3. 93 June 2006 .. Inc. . Acknowledgement that the product received conforms to specified requirements and criteria. .8 Manage Import/Export Requirements Receipt Verification to ES.5 Verify Product Receipt Verification to ED. © Copyright 2006 Supply-Chain Council.

The average time associated with verifying raw material product Best Practices: .Generate bar coded receiving documents . . Metrics (see Appendix A for metrics attributes): .5 Verify Product The process and actions required determining product conformance to requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. . Inputs: .6 Transfer Product Receipt Verification to ES. % Orders/ Lines Received Defect Free Cost to Verify Product Verify Product Cycle Time The number of orders / lines that are received defect free divided by the total orders / lines processed in the measurement period. .S3.Bar code interface for data collection devices .2 Assess Supplier Performance Receipt Verification to ES. © Copyright 2006 Supply-Chain Council. 94 June 2006 . Outputs: . .Product serial number used as identifier . . Inc. Acknowledgement that the product received conforms to specified requirements and criteria. Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Supplier Certification Programs Are Used to Reduce (Skip Lot) or Eliminate Receiving Inspection Supplier Delivers Directly to Point of Use Supplier Replaces Defective Material at Customer’s Facility with Good Product as Required .4 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria.1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria. . The sum of the costs associated with raw material verification. Receipt Verification to S3.RFID None identified Skip lot/sampling inspection logic Electronic Tag tracking to Point of Use (POU) destination Electronic Tag tracking to Point of Use (POU) destination . . Receipt Verification from S3.

field FG.5 Verify Product Replenishment Signal from M3. Acknowledgement that the product received conforms to specified requirements and criteria.4 Manage Product Inventory Receipt Verification from S3.S3.6 Manage Transportation The physical storage location where Finished Product inventory is held in stock prior to use or shipment. . Transfer Product Cycle Time Best Practices: . . The physical storage location where product inventory is held in stock prior to use or shipment. . Any signal that indicates when to produce or transport Items in a pull replenishment system. Inc. . field samples.4 Manage Finished Goods Inventories Product Inventory Location from ES. . This includes all of the activities associated with repackaging. Only includes inventory on company books. % Product Transferred On-Time to Demand Requirement % Product Transferred without Transaction Errors Cost to Transfer Product Inventory Days of Supply The number of product orders / lines that are transferred on-time to demand requirements divided by the total orders / lines transferred in the measurement period The number of transactions processed without error divided by the total transactions processed in the measurement period The sum of the costs associated with transferring product to Make or Deliver processes Five point annual average of the sum of all gross inventories (raw materials & WIP. . transferring. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products. other) ÷ (COGS ÷ 365). Total gross value of inventory at standard cost before reserves for excess and obsolescence. 95 June 2006 . Metrics (see Appendix A for metrics attributes): . . . Any signal that indicates when to produce or transport Items in a pull replenishment system. .3 Issue Sourced/In-Process Product Replenishment Signal from M2. staging. . future liabilities should not be included The average time associated transfer until product is moved to the next process. plant FG.3 Reserve Inventory & Determine Delivery Date Replenishment Signal from M1. and stocking product. Any signal that indicates when to produce or transport Items in a pull replenishment system. Finished Goods Inventory Location from ED. Location of inventory that is specified as “work in progress“.2 Issue Sourced/In-Process Product Replenishment Signal from D1. Any signal that indicates when to produce or transport Items in a pull replenishment system. Capability Transfer to Organization Drive Deliveries Directly to Stock or PointOf-Use in Manufacturing to Reduce Costs and Cycle Time None identified Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence Inputs: . Outputs: © Copyright 2006 Supply-Chain Council. .2 Issue Material WIP Inventory Location from EM. .6 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain.

Assess.3 Issue Sourced/In-Process Product .2 Identify. supporting activities (maintenance.. 96 June 2006 . Transferred Product to S3.7 Authorize Supplier Payment © Copyright 2006 Supply-Chain Council. supporting activities (maintenance. And Aggregate Product Resources . repairs and operating supplies). repairs and operating supplies). Inventory Availability to P2. and customer service (finished goods and spare parts). Inventory Availability to M1. Inventory Availability to M3. supporting activities (maintenance. . work in process. repairs and operating supplies). supporting activities (maintenance.4 Manage Product Inventory Inventory Availability to D3. repairs and operating supplies). and customer service (finished goods and spare parts). and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items). Inventory Availability to M2. Those stocks or items on hand used to support production (raw materials and work in process items). and customer service (finished goods and spare parts). Existing Inventory Data to ES. Product being tranferred to the appropriate stocking location within the supply chain. Those stocks or items on hand used to support production (raw materials and work in process items).2 Issue Sourced/In-Process Product . and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items). Inc.9 Pick Product Available data that characterizes and quantifies raw material. repairs and operating supplies). supporting activities (maintenance.2 Issue Material . . and finished goods inventories Those stocks or items on hand used to support production (raw materials and work in process items).

Best Practices: . The sum of the costs associated with authorizing supplier payment. Inc. invoice matching and the issuance of checks. Pay on Receipt Electronic Invoice Processing Inputs: . Authorize Supplier Payment Cycle Time Cost to Authorize Supplier Payment The average time associated with authorizing payment to suppliers. This process includes invoice collection.S3.7 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services. © Copyright 2006 Supply-Chain Council. This process includes invoice collection. 97 June 2006 .6 Transfer Product The process of authorizing payments and paying suppliers for product or services. Payment Terms from ES. Product being tranferred to the appropriate stocking location within the supply chain. . invoice matching and the issuance of checks. Metrics (see Appendix A for metrics attributes): .9 Manage Supplier Agreements Transferred Product from S3. .

2 Assess Supplier Performance ES.9 Manage Supplier Agreements © Copyright 2006 Supply-Chain Council. which are used to operate the supply chain. maintaining and dispositioning an organization’s <capital assets> located at a supplier’s facility and/or outside source. the management of a supplier certification process. Also.g.1 Manage Sourcing Business Rules The process of defining requirements and establishing.ES Enable SOURCE Enable Processes prepare. spend analysis at various levels of the enterprise. sorting. tracking deliveries and import. Also. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. ES.6 Manage Incoming Product ES. physical inventories and inventory reconciliation. Sourcing business rules include: supplier selection and negotiation processes. government). defining hierarchy and managing configuration control of supplier information and source data that are required to make sourcing and related planning and manufacturing decisions. This includes establishment of a new supplier or maintaining an existing supplier and all the tasks and activities associated with identifying and qualifying the supplier and finalizing on the sourcing terms and conditions. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. the management of a supplier certification process. financials. The process of collecting. Inc. 98 June 2006 . The process of defining and maintaining a unique network of suppliers to deliver a specific product set. The business strategy defines the criteria for sourcing business rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. or manage information or relationships on which planning and execution processes rely. quality and delivery performance. cycle counting. including both physical and electronic goods and services. For Services. goals and objectives. which includes certifying new suppliers and maintaining the current status of existing suppliers. This includes carrier selection and management. enforcing terms and conditions and maintaining an accurate status for existing purchase orders or contracts.5 Manage Capital Assets ES. from major business units to material part number. in alignment with business strategy. resolving issues. maintain. The process of acquiring. Source data to be maintained includes supplier profile data. This includes warehouse management. The process of defining and maintaining the information that characterizes inbound logistics management of all supplier deliveries.8 Manage Import/Export Requirements ES. The process of establishing and maintaining physical inventories and inventory information.3 Maintain Source Data ES. this may include tracking the number of service providers and the financial resources committed at any given point in time. This includes managing volume/step pricing.7 Manage Supplier Network ES. The management of existing purchase orders or supplier contracts. maintaining and enforcing decision support criteria. The process of identifying and complying with import/export regulatory documentation and process standards set by external entities (e.4 Manage Product Inventory ES. which includes certifying new suppliers and maintaining the current status of existing suppliers.. The Category ES includes nine Level 3 Elements: ES. The process of measuring actual supplier performance against internal and/or external standards.

1 Manage Sourcing Business Rules The process of defining requirements and establishing.2 Receive Product Receipt Verification from S1. financial. Web based access to preferred and recommended suppliers.3 Verify Product Receipt Verification from S1. Collaborative Review and Agreement of Business Rules Prior to Contract Execution Electronic Sourcing and Negotiation Enterprise Level Policies/Rules with Local Execution Enterprise Level Spend Analysis Long Term Supplier Agreements/Partnerships Optimized Supply-Chain Processes. Fab & Hold Agreements. goals and objectives. . . . . © Copyright 2006 Supply-Chain Council. Receipt Verification from S3. part type. Data or information about the supplier. in alignment with business strategy. Acknowledgement that the product received conforms to specified requirements and criteria. . Acknowledgement that the product received conforms to specified requirements and criteria. Optimized Supplier Count. maintaining and enforcing decision support criteria. The business strategy defines the criteria for sourcing business rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. information . . fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership.3 Verify Product Receipt Verification from S2. Cost to Manage Sourcing Business Rules Manage Sourcing Business Rules Cycle Time The sum of the costs associated with Source business rules. Inc. Acknowledgement that the product received conforms to specified requirements and criteria.ES.4 Receive Product Supplier Data from ES. . process type Inputs: . supplier performance data & spend data stratified by commodity. Acknowledgement that the product received conforms to specified requirements and criteria. The average time associated with managing source business rules Best Practices: . product. Supplier and Part Rationalization Web based access to current spend data available from enterprise to part level Business Rules for electronic sourcing process and hierarchy Web based access to enterprise level business rules None identified Electronic rules for business relationships and transactions: Vendor-managed Inventory Agreements. . . Sourcing business rules include: supplier selection and negotiation processes. Just-In-Time Agreements. Metrics (see Appendix A for metrics attributes): . business unit/site. Structured supplier data is needed to set up and implement ERP or similar systems. This data can be organizational .7 Manage Supplier Network Acknowledgement that the product received conforms to specified requirements and criteria. . 99 June 2006 .5 Verify Product Receipt Verification from S2. .2 Receive Product Receipt Verification from S3. supplier. . Acknowledgement that the product received conforms to specified requirements and criteria.

2 Select Final Supplier(s) and Negotiate . Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. 100 June 2006 . Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. Inc.1 Identify Sources of Supply © Copyright 2006 Supply-Chain Council. Sourcing business rules include: supplier selection and negotiation processes. Business Rules for Source Processes to S3. Sourcing business rules include: supplier selection and negotiation processes. given service requirements by supply chain stakeholders/trading partners. Business Rules for Source Processes to ES. i.7 Manage Supplier Network Rules for conducting business. Business Rules for Return Processes to ES. goals. developing and maintaining customer and channel performance standards of an return processes such as service levels. Business Rules for Source Processes to S3. Sourcing business rules include: supplier selection and negotiation processes. and objectives.Outputs: . Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. Business rules align Return process policies with business strategy.4 Manage Product Inventory . fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. .e. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership.

. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs.4 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. and other conditions. . inbound raw materials and outbound finished goods) specifying service levels. The sum of the costs associated with assessing supplier performance. . . . Acknowledgement that the product received conforms to specified requirements and criteria. Assess Supplier Performance Cycle Time Cost to Assess Supplier Performance The average time associated with assessing the performance of supplier processes. 101 June 2006 . Implemented and Measured on a Periodic Basis Performance Expectations and Business Rules Are Clearly Communicated Prior to the Initiation of Business with the Supplier Supplier “Cost of Nonconformance“ Data is Collected. Software application with data analysis capability None identified None identified Web based access / availability to business rules and performance criteria Software application to automate data collection and reporting “Assess Supplier Performance” is the process of measuring actual supplier performance against internal and/or external standards. Receipt Verification from S1. . . Acknowledgement that the product received conforms to specified requirements and criteria. Web based relational database / management application None identified . .2 Assess Supplier Performance The process of measuring actual supplier performance against internal and/or external standards. Analyzed and Reported to Suppliers Online and Real-Time through Extranet Applications Suppliers Are Evaluated. . Supplier Performance Data is Collected. Best Practices: . Analyzed and Used in Performance Reporting Supplier Performance Assessment System . Comparative Analysis of Supplier Performance is Used in Sourcing Decisions Continuous Improvement and Development is Driven and Measured through the Performance Review Process Cost Reduction and or Cost Avoidance Are Opportunities Are Identified. Selected and Qualified with Criteria Matched to Business Requirements and Competitive Needs Inputs: .2 Receive Product Receipt Verification from S1. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs.5 Verify Product Receipt Verification from S2. payment terms.3 Verify Product Receipt Verification from S3. Inc. .2 Receive Product Receipt Verification from S3. © Copyright 2006 Supply-Chain Council.ES. Carrier Agreement Carrier agreements are agreements between a company and its domestic and global carriers (for both. Metrics (see Appendix A for metrics attributes): . . Acknowledgement that the product received conforms to specified requirements and criteria.

engineering. Receipt Verification from S2. © Copyright 2006 Supply-Chain Council. . The results of measuring the actual supplier performance on cost. based on an agreed set of measurements. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. quality. product quality. This data can be organizational . Quality and Delivery Performance to ES. logistic quality) and to delivery specification (in time. based on an agreed set of measurements.1 Schedule Product Deliveries . The results of measuring the actual supplier performance on cost.. based on an agreed set of measurements. quality. Outputs: . and so on. information .1 Schedule Product Deliveries Supplier Performance to S2. engineering. quality. the extent to which the supplier delivers according to quality specification (e. purchasing. . and so on.g. The results of measuring the actual supplier performance on cost. product. purchasing. based on an agreed set of measurements. engineering. and so on. and so on. . Data or information about the supplier.7 Manage Supplier Network Acknowledgement that the product received conforms to specified requirements and criteria.3 Schedule Product Deliveries Supplier Performance to ES.7 Manage Supplier Network Supplier Performance to S1. engineering. quality. Or. Supplier Performance to S3. correct packaging etc). financial. 102 June 2006 . . Structured supplier data is needed to set up and implement ERP or similar systems. Inc. purchasing. purchasing. Sometimes these two metrics are connected in one.3 Verify Product Supplier Data from ES.“ The results of measuring the actual supplier performance on cost.3 Maintain Source Data “The process of measuring actual supplier performance against internal and/or external standards.

from major business units to material part number. financial. Inc.“ An aggregate material requirements plan used to schedule material deliveries to meet production plan. Automated Update of Supplier Performance Information Data Accessibility across the Enterprise for Visibility by Discrete Business Units On Demand Access of Supplier/Source Data Supplier and Material Rationalization None identified Web based access to various levels of enterprise data Web based access to current supplier/source data Web based access to supplier/source data Inputs: . Metrics (see Appendix A for metrics attributes): . information . product quality. . sorting. The average time associated with maintaining source data Best Practices: .7 Manage Product Life Cycle © Copyright 2006 Supply-Chain Council. correct packaging etc). . quality and delivery performance. . . spend analysis at various levels of the enterprise. Cost to Maintain Source Data Maintain Source Data Cycle Time The sum of the costs associated with maintaining supplier data.1 Identify Sources of Supply .ES. Current Inventory Source Data to ED. defining hierarchy and managing configuration control of supplier information and source data that are required to make sourcing and related planning and manufacturing decisions.2 Select Final Supplier(s) and Negotiate . product. Current Inventory Source Data to S3. Source data to be maintained includes supplier profile data. Sometimes these two metrics are connected in one. Quality and Delivery Performance from ES. . Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Or. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. This data can be organizational .2 Assess Supplier Performance “The process of measuring actual supplier performance against internal and/or external standards.g. . Current Inventory Source Data to ES. Sourcing Plans from P2. 103 June 2006 .4 Establish Sourcing Plans Supplier Data from ES.7 Manage Supplier Network Outputs: . . logistic quality) and to delivery specification (in time. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs.7 Manage Supplier Network Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. Structured supplier data is needed to set up and implement ERP or similar systems. financials. Current Inventory Source Data to S3. Data or information about the supplier.3 Maintain Source Data The process of collecting. the extent to which the supplier delivers according to quality specification (e.

Existing Inventory Data from S2. Available data that characterizes and quantifies raw material. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. which provides an indicative measure of entire inventory population. This includes warehouse management. The on-site inventory is counted. and customer service (finished goods and spare parts). Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. Cost to Manage Product Inventory Inventory Days of Supply The sum of the Cost to Manage Product Inventory Five point annual average of the sum of all gross inventories (raw materials & WIP. repairs and operating supplies). damaged or outdated goods are removed. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. supporting activities (maintenance.4 Transfer Product . Periodic Review of Metrics and Strategy with Comparisons to Industry Benchmarks Real Time Data on Current Status Statistical Test Count Real time view of data. Furthermore. Vendor Managed Inventory Inputs: . other) ÷ (COGS ÷ 365). repairs and operating supplies). with extrapolation the net and gross percentage of error is determined. Sourcing business rules include: supplier selection and negotiation processes.4 Transfer Product © Copyright 2006 Supply-Chain Council. and customer service (finished goods and spare parts). future liabilities should not be included The average time associated with managing raw material inventory . work in process. 104 June 2006 . and finished goods inventories Available data that characterizes and quantifies raw material. work in process. field FG. Business Rules for Source Processes from ES.ES. . physical inventories and inventory reconciliation. . Metrics (see Appendix A for metrics attributes): .4 Manage Product Inventory The process of establishing and maintaining physical inventories and inventory information. and finished goods inventories Available data that characterizes and quantifies raw material.6 Transfer Product Existing Inventory Data from S1. For Services. . This sample is then extrapolated across the inventory population. VMI is a concept for planning and control of inventory. Those stocks or items on hand used to support production (raw materials and work in process items). . Total gross value of inventory at standard cost before reserves for excess and obsolescence. The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically counting and reconciling a statistical sample of the entire inventory population. . work in process. field samples. . and finished goods inventories Those stocks or items on hand used to support production (raw materials and work in process items).4 Transfer Product Inventory Availability from S1. cycle counting. Dynamic calculation of safety stock based on actual sales. .1 Manage Sourcing Business Rules Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. this may include tracking the number of service providers and the financial resources committed at any given point in time. . and the inventory is restocked to predefined levels. Manage Product Inventory Cycle Time Best Practices: . Only includes inventory on company books. supporting activities (maintenance. plant FG. Inc. Inventory Availability from S2.4 Transfer Product Existing Inventory Data from S3.

and asset management. . . cost. . 105 June 2006 . The physical storage location where product inventory is held in stock prior to use or shipment.g. reservations. Parts and Services Consumed from EM. raw material. Inc. . backorders. delivery reliability.4 Transfer Product Product Inventory Location to S1.4 Transfer Product Product Inventory Location to S3. The physical storage location where product inventory is held in stock prior to use or shipment. . .2 Identify.g. And Aggregate Product Resources Supply-Chain Performance Metrics to EP. work in progress and finished goods. An aggregate material requirements plan used to schedule material deliveries to meet production plan.4 Establish Sourcing Plans The items and services utilized to manufacture a product. © Copyright 2006 Supply-Chain Council.6 Transfer Product Product Inventory Target Levels to P2. MRO Parts Availability to EM.5 Manage Equipment and Facilities Product Inventory Location to S2. e. The physical storage location where product inventory is held in stock prior to use or shipment. including e. The target for the total product inventory.5 Manage Equipment and Facilities Sourcing Plans from P2. Assess.2 Manage Performance of Supply Chain The on-hand MRO inventory balance minus allocations.. and (usually) quantities held for quality problems. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. Outputs: . flexibility and responsiveness.

and measurement tool. such as purchase order or supplier contract. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. Changeover Reduction / Continuous Improvement Program Changeover process flow element identification. .9 Manage Supplier Agreements Requirements established by a government or trading areas (i.8 Manage Import/Export Requirements Physical objects that are held by an organization for its production potential and that costs more than some threshold value (APICS) © Copyright 2006 Supply-Chain Council. instructional directions to conduct changeover. electronic equipment repair history. Metrics (see Appendix A for metrics attributes): . . . Shop floor access to electronic data base of equipment line drawings.8 Manage Import/Export Requirements Parts and Services Consumed from EM. Capital Assets to ES. . Facility & Equipment Environmental / Safety Audit System Removal of Obsolete Capital Assets Total Preventative Maintenance Program Inputs: . Outputs: . .5 Manage Capital Assets The process of acquiring. Software to identify operational constraints to the MAKE processes to assist in directing resources toward bottleneck functional areas. Cost to Manage Source Capital Assets Manage Capital Assets Cycle Time The sum of the Costs to Manage Source Capital Assets The average time associated with managing capital assets Best Practices: . The items and services utilized to manufacture a product. part stores inventory & reorder points. 106 June 2006 . maintaining and dispositioning an organization’s <capital assets> located at a supplier’s facility and/or outside source.5 Manage Equipment and Facilities Supplier Agreement from ES.e EU. parts listings.ES. which are used to operate the supply chain. parts listing reference guide and part cost lists. electrical wiring diagrams. System software to list checklist items. Import/Export Requirements from ES. report results of audit & forward actions to be taken Automated Calculation of ABC Velocity Movement Automatically generated TPM repair schedules integrated with MRP systems. which can be used to prioritize and track results of improvement efforts. Inc. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. automatic store room parts purchases. .

. Outputs: © Copyright 2006 Supply-Chain Council. Acknowledgement that the product received conforms to specified requirements and criteria.) Based on Customer Service Requirements Real-Time Shipment Tracking. . NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. . Warehouse Management.e EU. .2 Receive Product Receipt Verification from S3.2 Receive Product Receipt Verification from S1. Inc. tracking deliveries and import. Cost to Manage Incoming Product Manage Incoming Product Cycle Time The sum of the costs associated with managing incoming product. Rating & Routing Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management . . Ground Parcel. Inputs: . and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics.6 Manage Incoming Product The process of defining and maintaining the information that characterizes inbound logistics management of all supplier deliveries. Acknowledgement that the product received conforms to specified requirements and criteria. Metrics (see Appendix A for metrics attributes): .4 Receive Product The rates charged by a carrier that does not serve the general public.8 Manage Import/Export Requirements Import/Export Requirements from ES.8 Manage Import/Export Requirements Receipt Verification from S2. Product. . . Acknowledgement that the product received conforms to specified requirements and criteria. . . This includes carrier selection and management. but provides transportation for hire for one or a limited number of shippers under a specific contract. The average time associated with managing inbound raw material Best Practices: . Requirements established by a government or trading areas (i. . (via internet) Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Pooling Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management . etc. LTL. . Contract Carrier Rates from ES. 107 June 2006 . .ES. Cost. . including both physical and electronic goods and services. GL Charging Internet Pooling (Electronic Brokerage of Shipments) Manage Information Across 100% of Shipments Measurement of Carrier Performance for On-time Delivery and Completeness Real-Time Optimized Shipment Method Selection (Air Parcel. Appointment Scheduling for Pickup and Delivery of Customer Shipments Automated Documentation for International Shipments Backhaul Trading Exchange Capture and Maintain Mode Specific Data Electronic Manifest and Electronic Billing Integrated Order Management.

Logistics Selection to S2. .1 Schedule Product Deliveries Logistics Selection to S3. .. Inc.3 Schedule Product Deliveries Logistics Selection to S1. 108 June 2006 .1 Schedule Product Deliveries Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) © Copyright 2006 Supply-Chain Council.

accessible to any buyer and focused on new Internet-enabled purchasing models like spot buys or reverse. On Line Document Management and ERP Automated Supplier Approval Processes Can Reduce the Cycle Time and Costs Associated With Managing Supplier Evaluations and Get Them into the Supplier Network Faster On-Line Availability to Supplier Financials to Internet web sites for financial evaluation Determine Potential Supplier Viability to be Added to Supplier Network Supplier Certification Programs Can Reduce None identified the Cycle Time for Certifying Existing Suppliers to Provide New Technologies Carrier Agreement © Copyright 2006 Supply-Chain Council. Exchanges are an open procurement network. payment terms. The average time associated with managing the supplier network Best Practices: Carrier agreements are agreements between a company and its domestic and global carriers (for both. Create and Maintain Multiple Suppliers and None Identified Multiple Supplier Sites to Record Information about Individuals and Companies from Whom You Want to Purchase Catalogue Goods and Services Electronic Data Interchange Can Be Used Electronic Data Interchange To Send Rfqs and Technical Information to and from Potential Suppliers to Determine Supplier Capability to Fulfill Requirements So that They May Be Added to Supplier Network Establishment of Criteria to Rank Suppliers Utilize supplier delivery. Exchanges will also support more traditional catalog-based sales. Metrics (see Appendix A for metrics attributes): Cost to Manage Supplier Network Manage Supplier Network Cycle Time The sum of the costs associated with managing the supplier network. 109 June 2006 . quality. price performance as well as any other criteria such as terms and conditions Evaluate Supplier Network for Duplicates Supplier Merge Programs for duplicates Consignment Inventory Management Identification of Suppliers Who Will Participate in Consignment Inventory Programs Identification of Suppliers Who Will Electronic Kanban Support Participate in Kanban Programs Identification of Suppliers Who Will None identified Participate in Procurement Split (Two or More Suppliers Sharing Purchase Requirements) Programs Supplier managed inventories with scheduling interfaces to external Identification of Suppliers Who Will supplier systems to replenish Participate in Vendor Managed Inventory (VMI) Programs Internet Exchanges Internet Exchanges are a hosted. buyer-driven auctions. This includes establishment of a new supplier or maintaining an existing supplier and all the tasks and activities associated with identifying and qualifying the supplier and finalizing on the sourcing terms and conditions. and other conditions. Inc. which includes certifying new suppliers and maintaining the current status of existing suppliers.7 Manage Supplier Network The process of defining and maintaining a unique network of suppliers to deliver a specific product set. Also. business-to-business trading network. the management of a supplier certification process.ES. inbound raw materials and outbound finished goods) specifying service levels.

1 Manage Sourcing Business Rules Supplier Data to S3. Current Inventory Source Data from ES.1 Identify Sources of Supply Data or information about the supplier. i. Data or information about the supplier.Supplier Certification Programs Can Reduce None identified the Cycle Time for Initial Certification of New Suppliers or Certifying Existing Suppliers that Wish to Provide New Technologies Utilize Concurrent Engineering with Internet. Structured supplier data is needed to set up and implement ERP or similar systems. This data can be organizational .e. Structured supplier data is needed to set up and implement ERP or similar systems. Business rules align Return process policies with business strategy. 110 June 2006 . An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. financial. Supplier Data to ES. © Copyright 2006 Supply-Chain Council. This data can be organizational . This data can be organizational . financial. financial. quality. Data or information about the supplier.3 Maintain Source Data Supplier Agreement from ES. product. This data can be organizational . This data can be organizational .1 Manage Sourcing Business Rules Rules for conducting business. developing and maintaining customer and channel performance standards of an return processes such as service levels. such as purchase order or supplier contract. The results of measuring the actual supplier performance on cost. information . information . Structured supplier data is needed to set up and implement ERP or similar systems. financial. information . and so on.9 Manage Supplier Agreements Supplier Data to S3. given service requirements by supply chain stakeholders/trading partners. based on an agreed set of measurements. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs.2 Assess Supplier Performance Outputs: Supplier Data to ES. goals. Data or information about the supplier. information . product.3 Maintain Source Data Data or information about the supplier. and objectives. purchasing. This data can be organizational . information . FAX Suppliers to Allow Them to Provide Engineering and Product Performance Test Data to Qualify as Part of Potential Supplier Network Inputs: Business Rules for Return Processes from ES. product. product. engineering. Structured supplier data is needed to set up and implement ERP or similar systems. information . Inc. EDI. financial. product.9 Manage Supplier Agreements Supplier Performance from ES. financial. Structured supplier data is needed to set up and implement ERP or similar systems.2 Select Final Supplier(s) and Negotiate Data or information about the supplier. product. Supplier Data to ES.2 Assess Supplier Performance Supplier Data to ES. Structured supplier data is needed to set up and implement ERP or similar systems.

e EU. Capital Assets from ES.g. Inputs: . Acknowledgement that the product received conforms to specified requirements and criteria.4 Receive Product Receipt Verification from S2. . . Requirements established by a government or trading areas (i. . . Ability to Track Component/Sub-Component Manufacturing Country of Origin Assessing Export/Import Requirements during Time of Product Development/Manufacture Direct Connection to Customs Clearance Direct Transfer of Documents to Recipient and Forwarder Documents Generated Automatically During Shipment Preparation. . Inc. The rates charged by a carrier that does not serve the general public. . Electronic documentation submission via EDI and/or internet. Outputs: . Contract Carrier Rates to ES. government). but provides transportation for hire for one or a limited number of shippers under a specific contract. Requirements established by a government or trading areas (i.8 Manage Import/Export Requirements The process of identifying and complying with import/export regulatory documentation and process standards set by external entities (e. . Component/lot tracking (lot trace-ability) Multi-country Export/Import documentation compliance Electronic documentation submission via EDI and/or internet. but provides transportation for hire for one or a limited number of shippers under a specific contract.6 Manage Transportation Import/Export Requirements to ES. © Copyright 2006 Supply-Chain Council.2 Receive Product Receipt Verification from S1. . . . Metrics (see Appendix A for metrics attributes): .ES. .9 Manage Supplier Agreements The rates charged by a carrier that does not serve the general public. Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. .6 Manage Incoming Product Contract Carrier Rates to ED.2 Receive Product Physical objects that are held by an organization for its production potential and that costs more than some threshold value (APICS) The items and services utilized to manufacture a product. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. 111 June 2006 . NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries.5 Manage Capital Assets Parts and Services Consumed from EM. Electronic documentation submission via EDI and/or internet.e EU.5 Manage Equipment and Facilities Receipt Verification from S3. Cost to Manage Import/Export Requirements Customs Clearance Cycle Time Manage Import/Export Requirements Cycle Time The sum of the costs associated with the management of import/export requirements The average time associated with clearing an order through customs The average time associated with managing import/export requirements Best Practices: . ..5 Manage Capital Assets Import/Export Requirements to ES.

6 Manage Incoming Product Requirements established by a government or trading areas (i.. Import/Export Requirements to ES. Inc.e EU. © Copyright 2006 Supply-Chain Council. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. 112 June 2006 .

. enforcing terms and conditions and maintaining an accurate status for existing purchase orders or contracts. . Payment Terms to S2. information . . Business Rules for electronic sourcing process and hierarchy Web based access to enterprise level business rules None identified Electronic rules for business relationships and transactions: Vendor-managed Inventory Agreements.7 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services. 113 June 2006 . This data can be organizational . . The process of authorizing payments and paying suppliers for product or services.1 Schedule Product Deliveries Product On Order from S3. Fab & Hold Agreements.7 Manage Supplier Network Requirements established by a government or trading areas (i.1 Schedule Product Deliveries Supplier Agreement from S3. Data or information about the supplier. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. Optimized Supplier Count. inbound raw materials and outbound finished goods) specifying service levels. . and other conditions.2 Select Final Supplier(s) and Negotiate Supplier Data from ES. financial. Outputs: . . payment terms. . Carrier Agreement Carrier agreements are agreements between a company and its domestic and global carriers (for both. the management of a supplier certification process. Product on order with a selected source. . Cost to Manage Supplier Agreements Manage Supplier Agreements Cycle Time The sum of the costs associated with managing supplier agreements. Import/Export Requirements from ES. such as purchase order or supplier contract. Product on order with a selected source. supplier. Product on order with a selected source.5 Authorize Supplier Payment Payment Terms to S3. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries.3 Schedule Product Deliveries Product On Order from S1. Supplier and Part Rationalization Inputs: . . .9 Manage Supplier Agreements The management of existing purchase orders or supplier contracts.8 Manage Import/Export Requirements Product On Order from S2. supplier performance data & spend data stratified by commodity. Just-In-Time Agreements. Metrics (see Appendix A for metrics attributes): . This includes managing volume/step pricing.e EU. invoice matching and the issuance of checks. © Copyright 2006 Supply-Chain Council.ES. Web based access to preferred and recommended suppliers. product. business unit/site. This process includes invoice collection. which includes certifying new suppliers and maintaining the current status of existing suppliers. The average time associated with managing supplier agreements Best Practices: . Electronic Sourcing and Negotiation Enterprise Level Policies/Rules with Local Execution Enterprise Level Spend Analysis Long Term Supplier Agreements/Partnerships Optimized Supply-Chain Processes. invoice matching and the issuance of checks. Inc. Structured supplier data is needed to set up and implement ERP or similar systems. part type. Also. . This process includes invoice collection. resolving issues. process type .

5 Manage Capital Assets Supplier Agreement to ES. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise.5 Authorize Supplier Payment Supplier Agreement to ES. such as purchase order or supplier contract. . Payment Terms to S1. © Copyright 2006 Supply-Chain Council.7 Manage Supplier Network The process of authorizing payments and paying suppliers for product or services. . such as purchase order or supplier contract. invoice matching and the issuance of checks. Inc. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. 114 June 2006 .. This process includes invoice collection.

M1 Make-to-Stock The process of manufacturing in a make to stock environment adds value to products through mixing. Products that are made to order may remain in the holding location to await shipment per the associated customer order. The average time associated with Make Processes 115 June 2006 . Scheduling includes sequencing. materials) and indirect costs (overhead). forming. The selection and physical movement of sourced/in-process product (e. Issuing product includes the corresponding system transaction. The movement of packaged products into a temporary holding location to await movement to a finished goods location. creating certificate of analysis. products.. and are generally produced in accordance with a sales forecast. and chemical processes. The sum of the costs associated with make. The Category M1 includes six Level 3 Elements: M1.g. testing. Inc. any standards for setup and run. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). Cost of Goods Sold Cost to Make Downside Make Adaptability Make Cycle Time © Copyright 2006 Supply-Chain Council.“ are completed prior to receipt of a customer order. stockroom.6 Release Product to Deliver Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . In general. machining.3 Produce and Test M1. and.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. Make to stock products are intended to be shipped from finished goods or “off the shelf. This cost includes direct costs (labor. depending on the factory layout. fabricated components. required ingredients or intermediate formulations) from a stocking location (e. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. raw materials. and sign-off by the quality organization. The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties. packaging may include cleaning or sterilization. separating. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. or certification required prior to delivery of finished product to customer.g.5 Stage Product M1. the scheduling of the operations to be performed in accordance with these plans. laboratory tests for potency or purity.1 Schedule Production Activities Given plans for the production of specific parts.. Examples include assembly of batch records for regulatory agencies. The movement to finished goods is part of the Deliver process. or formulations in specified quantities and planned availability of required sourced products. For services. The series of activities that containerize completed products for storage or sale to end-users. subassemblies. Within certain industries.2 Issue Material M1. M1. a location on the production floor. a supplier) to a specific point of use location. Activities associated with post-production documentation.4 Package M1. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. The cost associated with buying raw materials and producing finished goods. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements.

The ratio of usable output from a process to its input. Make. Self-Directed Work Force. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. Flat Management Structure. accounts payable. This includes the fixed assets used in Plan. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Inc. to the last possible supply chain location. replenishment signals. and operator instructions Electronic dispatch and data collection with external interface to internet.) based on rate schedules and user-defined minimum/maximum trigger points Use a team based systematic approach to identifying and eliminating wasteful. CrossFunctional Work Teams Paperless Order Tracking and Customer Visibility of Orders Paperless Production Order and Inventory Tracking Electronic document management that maintains current Standard Operating Procedures (SOP) Electronic batch recording/configuration Manufacturing is broken into work cells Support of demand-pull mechanisms (Kanban. report writing. Use of web-based Readily Available to Employees technologies for dissemination of information. Production Level Loading Capacity planning Provide Continuous Formal Training to Examples would be TQM. The number of days required to achieve an unplanned sustainable 20% increase in production with the assumption of no raw material constraints. compensations systems. Scheduling) and Information systems that are easily accessible. 116 June 2006 . Allow customer access to production status and inventories using internet technologies and web site features. Build Subassemblies to Forecast at the Highest Generic Level in the Bill of Material/Recipe/Formula Organize to Enhance Flexibility: Few Job Classifications. cost of goods sold and supply chain management costs. and Return. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. etc. such as assembly or packaging. supply chain revenue. Employees © Copyright 2006 Supply-Chain Council. Performance Results that Are Compared to Data warehouse.Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Upside Make Adaptability Upside Make Flexibility Yield The average actual cycle time consistently achieved to fulfill customer orders. inventory. Electronic dispatch and data collection. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. report writing. Posted Performance Results Data warehouse. Including Active Reduction of Manufacturing Systems Time and WIP Through the Use of DemandPull Mechanisms and Visual Controls Lean Manufacturing Link Individual Performance to Organizational and Divisional Goals Migrate From Build to Stock to Configure to Order. real time data base and EI systems Postponement Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. or non-value adding activities within your manufacturing organization None identified None identified Support for modular skills inventory with links to training databases. real time database and Executive Benchmarks (ie Capacity. Six Sigma. Components include accounts receivable. Deliver. The levels of aggregation can be at any element associated with a supply chain asset. Best Practices: Accurate and Approved Work Instructions/Process Plans Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Cellular Manufacturing Demand-Pull Manufacturing. Source.

Vendor Managed Inventory VMI is a concept for planning and control of inventory. damaged or outdated goods are removed. 117 June 2006 . © Copyright 2006 Supply-Chain Council. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. and the inventory is restocked to predefined levels. Inc. The on-site inventory is counted. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer.

and.M1. The average time associated with scheduling production activities . HR/certification support Support of demand-pull mechanisms (Kanban. and product specifications linked to production order Allow dynamic re-synchronization of MAKE activities by tying in real time status information to scheduler Allow dynamic re-synchronization of MAKE activities by tying in real time status information to scheduler. . constraining processes. The sum of the costs associated with scheduling production activities. depending on the factory layout. Required production resources included in routing/process instructions Schedule undated by on line reporting and status systems and resequence activities .1 Schedule Production Activities Given plans for the production of specific parts. . etc. Inventory Levels. products. and Finished Goods Inventory and Test Activities Schedule Includes Preventative Maintenance Program Schedule Minimizes Changeover Costs Schedule Optimizes Use of Shared Resources Such as Tooling and Production Equipment Schedule Reflects Current Plant Status (Equipment Availability. engineering. 118 June 2006 . Some factors that should be considered are internal manufacturing capacity. . Cost to Schedule Production Activities Schedule Achievement . Note: overshipments do not make up for under-shipments. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. replenishment signals. Inc. Additional Capacity for Overflow Demand Cross Training/Certification Demand-Pull Manufacturing. . the scheduling of the operations to be performed in accordance with these plans. Detailed production model that synchronizes PLAN and MAKE activities in real time. Interface between maintenance management system and scheduling system Detailed production scheduling model and simulation capabilities Scheduling utilizing optimization techniques. Order entry. Scheduling includes sequencing.) based on rate schedules and user-defined minimum/maximum trigger points (DBR. or formulations in specified quantities and planned availability of required sourced products. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. . The percentage of time that a plant achieves its production schedule. Inputs: © Copyright 2006 Supply-Chain Council. In general. . . Raw Materials. any standards for setup and run. Including Active Reduction of Manufacturing Systems Time and WIP Through the Use of DemandPull Mechanisms and Visual Controls Drum-Buffer-Rope Scheduling Technique Maintain Data and System Integrity by Ensuring Production Data. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. . . direct labor availability and key components/materials availability. Schedule Production Activities Cycle Time Best Practices: . and Schedule Requirements Are 99+% Accurate Produce Products to Unique Customer Specification Provide Scheduling Output Back to Material and Labor Planning Systems Real Time Feedback from Production. . Metrics (see Appendix A for metrics attributes): . This calculation is based on the number of scheduled end-items or total volume for a specific period. Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet. .

(Well cared for equipment and facilities will last longer and cause fewer problems.) A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.2 Identify.2 Issue Material Information Feedback from M1.3 Schedule Product Deliveries Production Schedule to S1. .2 Issue Material A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . . Production Schedule to P3.4 Package Information Feedback from M1.e. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.2 Receive Product at Store Production Schedule to D1. the established frequency to change and maintain parts.4 Establish Production Plans . .5 Stage Product Information Feedback from M1. The flow of information back into the control system so that actual performance can be compared with planned performance.1 Schedule Product Deliveries Production Schedule to D4.. The flow of information back into the control system so that actual performance can be compared with planned performance. 119 .6 Release Product to Deliver Preventative Maintenance and Calibration Schedule from EM. .3 Reserve Inventory & Determine Delivery Date Production Schedule to M1. Also. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. and Aggregate Production Resources Production Schedule to S2. The flow of information back into the control system so that actual performance can be compared with planned performance. . that forestall machine and facility breakdowns. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.1 Schedule Product Deliveries Outputs: . Scheduled Receipts from S1. including adjustments. and basic cleanliness. . Assess. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. .1 Schedule Product Deliveries Production Schedule to S3.3 Produce and Test Information Feedback from M1. Product due to arrive.3 Schedule Product Deliveries Scheduled Receipts from S2.5 Manage Equipment and Facilities Time-phased plans of present and future load (capacity required) on all resources (Equipment and Facilities) based on the planned and released supply authorizations (i. Production Plan includes production capability. . with frequency set per part or machine type. Product due to arrive. orders) and the planned capacity (capacity available) of these resources over a span of time. . replacements. Equipment and Facilities Schedules and Plans from EM. Planned and scheduled activities.1 Schedule Product Deliveries Scheduled Receipts from S3. Product due to arrive. The flow of information back into the control system so that actual performance can be compared with planned performance. . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . .5 Manage Equipment and Facilities Information Feedback from M1. The flow of information back into the control system so that actual performance can be compared with planned performance. Production Plans from P3. June 2006 © Copyright 2006 Supply-Chain Council.. . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . based on failure consequences. Inc.

Inc.. Production Schedule to D1. 120 June 2006 .8 Receive Product from Source or Make A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. © Copyright 2006 Supply-Chain Council.

Those stocks or items on hand used to support production (raw materials and work in process items). Back Flush Material at Order Completion Complete Lot History Demand-Pull Mechanisms. . . in inventory.6 Transfer Product .6 Manage Transportation . . and movement inventory.2 Issue Material The selection and physical movement of sourced/in-process product (e. repairs and operating supplies).4 Manage In-Process Products (WIP) WIP Location Rules from EM.4 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). 121 June 2006 . and customer service (finished goods and spare parts). Metrics (see Appendix A for metrics attributes): . and customer service (finished goods and spare parts). and customer service (finished goods and spare parts). The rules for handling WIP items in the production and repair process. a supplier) to a specific point of use location. . repairs and operating supplies). or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials. subassemblies.. . These rules include the movement and accounting for inprocess items between work locations. fabricated components.g. Issuing product includes the corresponding system transaction.g. The average time associated with the issuance of material to production Best Practices: . Production Schedule from M1. stockroom. . © Copyright 2006 Supply-Chain Council. . a location on the production floor. Inc. supporting activities (maintenance. Items. required ingredients or intermediate formulations) from a stocking location (e. Intermediate Products. Cost to Issue Material Issue Material Cycle Time The sum of the costs associated with issuing material.. or Subassemblies to Decouple Sourced Product Issuance Cycle Time from Supplier Lead Time Supplier Delivery to Production Process at Point of Use Flexible back flush logic Inventory by lot of sourced/in-process or discrete order /usage reporting by lot or discrete order None identified Automated process control and/or barcode data collection Use of safety stock algorithms to minimize stock levels. Kanban Replenishment Signals from Stockroom. EDI link to supplier’s sales order and inventory systems Inputs: .4 Transfer Product .1 Schedule Production Activities WIP Handling Rules. supporting activities (maintenance. supporting activities (maintenance. Inventory Availability from S3. repairs and operating supplies). Inventory Availability from S1. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . raw materials. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). Move Information and Methods from EM. Those stocks or items on hand used to support production (raw materials and work in process items). Inventory Availability from S2.M1.

4 Transfer Product Replenishment Signal to S2. Any signal that indicates when to produce or transport Items in a pull replenishment system. .4 Transfer Product Replenishment Signal to S3. repairs and operating supplies).1 Schedule Production Activities Inventory Availability to D1. Any signal that indicates when to produce or transport Items in a pull replenishment system.6 Manage Transportation Replenishment Signal to S3. . Any signal that indicates when to produce or transport Items in a pull replenishment system. Attributes of the product’s storage location. Those stocks or items on hand used to support production (raw materials and work in process items). 122 June 2006 . .6 Transfer Product Replenishment Signal to S2.3 Produce and Test Information Feedback to M1. supporting activities (maintenance.1 Schedule Product Deliveries . Workflow to M1. .3 Reserve Inventory & Determine Delivery Date The flow of information back into the control system so that actual performance can be compared with planned performance. repairs and operating supplies). © Copyright 2006 Supply-Chain Council. . . . Inc. . .3 Schedule Product Deliveries Replenishment Signal to S1. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Assess. Inventory Availability to P3.1 Schedule Product Deliveries Replenishment Signal to S1.2 Identify. Those stocks or items on hand used to support production (raw materials and work in process items). and customer service (finished goods and spare parts).Outputs: . supporting activities (maintenance. Any signal that indicates when to produce or transport Items in a pull replenishment system. and Aggregate Production Resources Product Location Information to EM. and customer service (finished goods and spare parts).

. . . The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. Some factors that should be considered are internal manufacturing capacity. Cost to Produce and Test Fill Rate . . Six Sigma. For services. The sum of the costs associated with production and test. Electronic collection of quality data and on-line SPC. scrap. . The condition that occurs when the output of a process is not consistently repeatable either in quantity. . 123 June 2006 . direct labor availability and key components/materials availability. . Accurate and Approved Process Plans/Specifications Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Authorize Each Operation to Assess the Quality of the Previous Operations Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Just-In-Time Demand Flow Techniques Maintain Accurate Lot/Batch History Information Measuring Process Metrics and Feedback to Operators Paperless Production Control Provide Continuous Formal Training to Employees Real Time quality control techniques Real Time Statistical Control Techniques Reduce Chances of Operator Error Reduce Non-Value Added Activities. Produce and Test Cycle Time Warranty and Returns . Electronic collection of defect data and on-line SPC. either expressed or implied. Including Queue. Electronic data collection of completion. Move. and labor data Electronic work instructions © Copyright 2006 Supply-Chain Council. . . or combination of these. this metric is the proportion for services that are filled so that the service is completed within 24 hours The average time associated with production and test Number of returns within the warranty period. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. . and Set-Up Times Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specifications Electronic document management Electronic batch recording/configuration None identified Machine productivity and downtime monitoring Demand-pull mechanisms Electronic data collection of employee actions and sourced/inprocess product lot used Electronic data collection of completion.3 Produce and Test The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. .M1. Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. . . Warranty is a commitment. labor and equipment data and dissemination of information on factory floor Electronic dispatch of operations Examples would be TQM. . . Metrics (see Appendix A for metrics attributes): . scrap. Automatic download of production equipment with batch recipes/part programs Use principals of Lean Manufacturing. . quality. Warranty costs include materials. Warranty Costs Yield Yield Variability Best Practices: . quality. constraining processes. Inc. . quality. . . The ratio of usable output from a process to its input. lot tractability. . that a certain fact regarding the subject matter of a contract is presently true or will be true. labor and problem diagnosis for product defects.

124 June 2006 . Inc.© Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. .2 Issue Material Outputs: .Inputs: . Inc.1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. Workflow to M1.4 Package Information Feedback to M1. Workflow from M1. 125 June 2006 .

constraining processes.4 Package The series of activities that containerize completed products for storage or sale to end-users. Accurate and Approved Process Plans. Some factors that should be considered are internal manufacturing capacity. or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion. direct labor availability and key components/materials availability. Warranty is a commitment. scrap. Within certain industries. changeover.3 Produce and Test Outputs: . Warranty Costs Best Practices: . .5 Stage Product Information Feedback to M1. . 126 June 2006 . Metrics (see Appendix A for metrics attributes): . Workflow to M1. . Specifications and Procedures Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Automatic Label and Seal Verification Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Minimize Operator Induced Errors Packaging Operation is an Integral Part of the Overall Production Process Paperless Production Control Postponement and Pre-Kitting Of Accessories into Modular Packages that Allow Flexibility While Maintaining Control Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specification for Each Unique Production Event/Demand Electronic document management Electronic batch recording/configuration Automatic interface to inspection systems Machine productivity and downtime monitoring Automatic download of production equipment with setup parameters Graphical display of setup. . .1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. packaging may include cleaning or sterilization. Number of returns within the warranty period.M1. and labor data Electronic Work Instructions Inputs: . Workflow from M1. lot tractability. Inc. . that a certain fact regarding the subject matter of a contract is presently true or will be true. . Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. . quality. labor and problem diagnosis for product defects. . Warranty costs include materials. The sum of the costs associated with product packaging. . © Copyright 2006 Supply-Chain Council. either expressed or implied. Routings. . Cost to Package Package Cycle Time Warranty and Returns . . . .

127 June 2006 . Cost to Stage Finished Product Stage Finished Product Cycle Time The sum of the costs associated with staging finished goods. . Metrics (see Appendix A for metrics attributes): . Outputs: .4 Establish Production Plans A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Direct Ship from Factory to Customer/Channel Electronic Material Move Transactions Share production status with customers and transportation providers via web-based tools. Automated process control and/or barcode data collection Inputs: . . © Copyright 2006 Supply-Chain Council.4 Establish Delivery Plans Production Plans from P3. The movement to finished goods is part of the Deliver process. . Workflow from M1.5 Stage Product The movement of packaged products into a temporary holding location to await movement to a finished goods location. . . Inc.1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. The average time associated with staging finished product Best Practices: .4 Package Delivery Plans from P4. Auto-Tendering for direct ship utilizing EDI/XML protocols.M1. Products that are made to order may remain in the holding location to await shipment per the associated customer order.6 Release Product to Deliver Information Feedback to M1. Production Plan includes production capability. Workflow to M1.

. . Inc. . © Copyright 2006 Supply-Chain Council.5 Stage Product Outputs: . Examples include assembly of batch records for regulatory agencies. creating certificate of analysis. Accurate and Low Cost Batch Records for Regulatory Compliance Automated Notification of Laboratory Regarding Sample Availability Review Batch Records by Exception Electronic batch records Interface between production system and LIMS Electronic batch records linked to process plans/recipes and exceptions flagged Inputs: .2 Receive Product at Store Finished Product Release to D1. Cost to Release Finished Product to Deliver Release Finished Product to Deliver Cycle Time The sum of the costs associated with releasing finished goods to deliver processes. . laboratory tests for potency or purity. testing.6 Release Product to Deliver Activities associated with post-production documentation. or certification required prior to delivery of finished product to customer. Finished Product Release to D4. and signoff by the quality organization. Metrics (see Appendix A for metrics attributes): .1 Schedule Production Activities The authorization to ship a finished product that has been ordered. . The authorization to ship a finished product that has been ordered.8 Receive Product from Source or Make Information Feedback to M1. 128 June 2006 . Workflow from M1. The average time associated with releasing finished product to deliver Best Practices: .M1. The flow of information back into the control system so that actual performance can be compared with planned performance.

testing. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. For services. a location on the production floor. packaging may include cleaning or sterilization. fabricated components.5 Stage Finished Product M2. stockroom. This cost includes direct costs (labor. The cost associated with buying raw materials and producing finished goods. and sign-off by the quality organization. In general. Products that are made to order may remain in the holding location to await shipment per the associated customer order. creating certificate of analysis. or formulations in specified quantities and planned availability of required sourced products. machining. The Category M2 includes six Level 3 Elements: M2. 129 June 2006 . The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties. products. Scheduling includes sequencing. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. any standards for setup and run. M2.2 Issue Sourced/In-Process Product M2. required ingredients or intermediate formulations) from a stocking location (e. Inc. Total value of Work in Process ÷ (COGS ÷ 365). The movement to finished goods is part of the Deliver process. The selection and physical movement of sourced/in-process product (e. raw materials. Within certain industries.M2 Make-to-Order The process of manufacturing in a make to order environment adds value to products through mixing. a supplier) to a specific point of use location. depending on the factory layout. Activities associated with post-production documentation. subassemblies.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. A make to order environment is one in which products are completed after receipt of a customer order and are built or configured only in response to a customer order.1 Schedule Production Activities Given plans for the production of specific parts. separating. The movement of packaged products into a temporary holding location to await movement to a finished goods location.g.4 Package M2.3 Produce and Test M2. Issuing product includes the corresponding system transaction. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s).. The sum of the costs associated with make. the scheduling of the operations to be performed in accordance with these plans. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. or certification required prior to delivery of finished product to customer.. materials) and indirect costs (overhead). The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. and. and chemical processes. forming.g. Cost of Goods Sold Cost to Make Downside Make Adaptability Inventory Days of Supply (WIP) © Copyright 2006 Supply-Chain Council. The series of activities that containerize completed products for storage or sale to end-users. laboratory tests for potency or purity.6 Release Finished Product to Deliver Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . Examples include assembly of batch records for regulatory agencies.

Six Sigma. cost of goods sold and supply chain management costs. report writing. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Order entry specifications linked to manufacturing order Capacity planning Examples would be TQM. Flat Management Structure. inventory.packing slips. and operator instructions Electronic dispatch and data collection with external interface to internet. supply chain revenue. Components include all items and quantities on-time using the customer’s definition of on-time. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. etc. bills of lading. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. invoices. collaborative data-sharing environment. None identified Support for modular skills inventory with links to training databases. accounts payable. and documentation . This includes the fixed assets used in Plan. to the last possible supply chain location. CrossFunctional Work Teams Paperless Order Tracking and Customer Visibility of Orders Posted Performance Results Postponement Electronic document management that maintains current Standard Operating Procedures (SOP) Electronic batch recording/configuration None identified Support for cellular and demand pull manufacturing execution Web-based access to plant scheduling status. such as assembly or packaging. real time data base and EI systems Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. Best Practices: Accurate and Approved Work Instructions/Process Plans Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Build Subassemblies/Products to Forecast at Highest Generic Level to Minimize Make Cycle Time Cellular and Demand Pull Manufacturing Delivery Schedules Are Collaboratively Developed with Customers Link Individual Performance to Organizational and Divisional Goals Organize to Enhance Flexibility: Few Job Classifications. Deliver. Make. The levels of aggregation can be at any element associated with a supply chain asset.Make Cycle Time Order Fulfillment Cycle Time Perfect Order Fulfillment Return on Supply Chain Fixed Assets Return on Working Capital Upside Make Adaptability Upside Make Flexibility Yield The average time associated with Make Processes The average actual cycle time consistently achieved to fulfill customer orders. 130 June 2006 . Self-Directed Work Force. The number of days required to achieve an unplanned sustainable 20% increase in production with the assumption of no raw material constraints. Data warehouse. The ratio of usable output from a process to its input. Components include accounts receivable. Source. The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. and Return. Produce Products to Unique Customer Requirements Production Level Loading Provide Continuous Formal Training to Employees © Copyright 2006 Supply-Chain Council. compensations systems. Inc.

. Inc. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. . and. products.) based on rate schedules and user-defined minimum/maximum trigger points (DBR. . Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. . engineering. depending on the factory layout.1 Schedule Production Activities Given plans for the production of specific parts. 131 June 2006 . The sum of the costs associated with scheduling production activities. . Additional Capacity for Overflow Demand Cross Training/Certification Demand Pull Mechanisms Demand-Pull Manufacturing. Detailed production model that synchronizes PLAN and MAKE activities in real time. In general. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. Metrics (see Appendix A for metrics attributes): . . Including Active Reduction of Manufacturing Systems Time and WIP Through the Use of DemandPull Mechanisms and Visual Controls Drum-Buffer-Rope Scheduling Technique Maintain Data and System Integrity by Ensuring Production Data.M2. © Copyright 2006 Supply-Chain Council. and Schedule Requirements Are 99+% Accurate Produce Products to Unique Customer Specification Schedule Includes Preventative Maintenance Program Schedule Minimizes Changeover Costs Schedule Optimizes Use of Shared Resources Such as Tooling and Production Equipment Schedule Reflects Current Plant Status (Equipment Availability. Inputs: . Order entry. Note: overshipments do not make up for under-shipments. any standards for setup and run. . . Equipment and Facilities Schedules and Plans from EM. Required production resources included in routing/process instructions Schedule undated by on line reporting and status systems and resequence activities .5 Manage Equipment and Facilities Time-phased plans of present and future load (capacity required) on all resources (Equipment and Facilities) based on the planned and released supply authorizations (i. constraining processes. Scheduling includes sequencing. replenishment signals. Inventory Levels. etc. or formulations in specified quantities and planned availability of required sourced products. This calculation is based on the number of scheduled end-items or total volume for a specific period. Schedule Production Activities Cycle Time Best Practices: . direct labor availability and key components/materials availability. Cost to Schedule Production Activities Schedule Achievement . . orders) and the planned capacity (capacity available) of these resources over a span of time. Some factors that should be considered are internal manufacturing capacity. the scheduling of the operations to be performed in accordance with these plans.. HR/certification support Repetitive scheduling and sequencing Support of demand-pull mechanisms (Kanban. The average time associated with scheduling production activities . The percentage of time that a plant achieves its production schedule.e. . and product specifications linked to production order Interface between maintenance management system and scheduling system Detailed production scheduling model and simulation capabilities Scheduling utilizing optimization techniques.

A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.3 Schedule Product Deliveries Outputs: . Planned and scheduled activities. Product due to arrive. The flow of information back into the control system so that actual performance can be compared with planned performance.9 Pick Product Production Schedule to M2. .5 Stage Finished Product Information Feedback from M2. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . Product due to arrive.4 Establish Production Plans .2 Identify. .1 Schedule Product Deliveries Production Schedule to D2. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.3 Produce and Test Information Feedback from M2. the established frequency to change and maintain parts. 132 June 2006 . . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.1 Schedule Product Deliveries Scheduled Receipts from S2. The flow of information back into the control system so that actual performance can be compared with planned performance. The flow of information back into the control system so that actual performance can be compared with planned performance. Production Schedule to D2. that forestall machine and facility breakdowns. Scheduled Receipts from S1. . . Assess. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.1 Schedule Product Deliveries A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.6 Release Finished Product to Deliver Preventative Maintenance and Calibration Schedule from EM. (Well cared for equipment and facilities will last longer and cause fewer problems.4 Package Information Feedback from M2. .3 Reserve Resources & Determine Delivery Date Production Schedule to S3. including adjustments. Production Plan includes production capability.) A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. . .3 Schedule Product Deliveries Production Schedule to S2. . © Copyright 2006 Supply-Chain Council.. Information Feedback from M2. . Production Plans from P3.2 Issue Sourced/In-Process Product Production Schedule to P3.1 Schedule Product Deliveries Scheduled Receipts from S3. and Aggregate Production Resources Production Schedule to S1. based on failure consequences. . . and basic cleanliness. with frequency set per part or machine type. The flow of information back into the control system so that actual performance can be compared with planned performance. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . Inc. replacements. Product due to arrive.5 Manage Equipment and Facilities The flow of information back into the control system so that actual performance can be compared with planned performance. Also.2 Issue Sourced/In-Process Product Information Feedback from M2.

6 Transfer Product . . . Issuing product includes the corresponding system transaction. in inventory.6 Manage Transportation . The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). supporting activities (maintenance. a location on the production floor. repairs and operating supplies). . repairs and operating supplies). A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item..4 Manage In-Process Products (WIP) WIP Location Rules from EM. Move Information and Methods from EM.g. 133 June 2006 . and customer service (finished goods and spare parts). Cost to Issue Sourced/In-Process Product Issue Sourced/In-Process Product Cycle Time The sum of the costs associated with issuing sourced or in-process material. Production Schedule from M2. and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items).M2. subassemblies. and movement inventory. Metrics (see Appendix A for metrics attributes): . required ingredients or intermediate formulations) from a stocking location (e. © Copyright 2006 Supply-Chain Council. Inventory Availability from S1. EDI link to supplier’s sales order and inventory systems Inputs: . Inventory Availability from S2. or Subassemblies to Decouple Sourced Product Issuance Cycle Time from Supplier Lead Time Supplier Delivery to Production Process at Point of Use Flexible back flush logic Inventory by lot of sourced/in-process or discrete order /usage reporting by lot or discrete order None identified Automated process control and/or barcode data collection Use of safety stock algorithms to minimize stock levels. Those stocks or items on hand used to support production (raw materials and work in process items). Intermediate Products. Back Flush Material at Order Completion Complete Lot History Demand-Pull Mechanisms.1 Schedule Production Activities WIP Handling Rules.. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. Kanban Replenishment Signals from Stockroom. The rules for handling WIP items in the production and repair process. Inc. fabricated components. Items. stockroom. . . The average time associated with the issuance of material to production Best Practices: . repairs and operating supplies). . supporting activities (maintenance. and customer service (finished goods and spare parts). . a supplier) to a specific point of use location. or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials. raw materials.4 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). supporting activities (maintenance.g. Inventory Availability from S3.4 Transfer Product .2 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e. These rules include the movement and accounting for inprocess items between work locations. .

. Assess.3 Schedule Product Deliveries Replenishment Signal to S2. Any signal that indicates when to produce or transport Items in a pull replenishment system. . Any signal that indicates when to produce or transport Items in a pull replenishment system. Inventory Availability to P3. Any signal that indicates when to produce or transport Items in a pull replenishment system.1 Schedule Product Deliveries Replenishment Signal to S3. supporting activities (maintenance. 134 June 2006 . Information Feedback to M2.6 Manage Transportation Production Schedule to M2.4 Transfer Product Replenishment Signal to S1. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system.3 Produce and Test Replenishment Signal to S1. and customer service (finished goods and spare parts). Inc.Outputs: . .9 Pick Product The flow of information back into the control system so that actual performance can be compared with planned performance. repairs and operating supplies).1 Schedule Product Deliveries Replenishment Signal to S2. and customer service (finished goods and spare parts). Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs.1 Schedule Production Activities Inventory Availability to D2. Attributes of the product’s storage location. .6 Transfer Product Replenishment Signal to S3. . © Copyright 2006 Supply-Chain Council. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.4 Transfer Product Source Execution Data to S2. Any signal that indicates when to produce or transport Items in a pull replenishment system.2 Identify. repairs and operating supplies).1 Schedule Product Deliveries . . . Those stocks or items on hand used to support production (raw materials and work in process items). Those stocks or items on hand used to support production (raw materials and work in process items). supporting activities (maintenance. . . . and Aggregate Production Resources Product Location Information to EM.

. . and labor data Electronic work instructions Outputs: . quality. The average time associated with production and test Warranty costs include materials. constraining processes. Workflow to M2. Some factors that should be considered are internal manufacturing capacity.1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. lot tractability. . . . and Set-Up Times Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specifications Electronic document management Electronic batch recording/configuration None identified Machine productivity and downtime monitoring Demand-pull mechanisms Electronic data collection of employee actions and sourced/inprocess product lot used Electronic dispatch of operations Electronic collection of qualityt data and on-line SPC.4 Package Information Feedback to M2. . . . Move. Electronic collection of defect data and on-line SPC. quality. Automatic download of production equipment with batch recipes/part programs Use principals of Lean Manufacturing.3 Produce and Test The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. . Including Queue. . . The sum of the costs associated with production and test. . direct labor availability and key components/materials availability. . Inc. . . labor and problem diagnosis for product defects. © Copyright 2006 Supply-Chain Council. Accurate and Approved Process Plans/Specifications Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Authorize Each Operation to Assess the Quality of the Previous Operations Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Just-In-Time Demand Flow Techniques Maintain Accurate Lot/Batch History Information Paperless Production Control Real Time quality control techniques Real Time Statistical Control Techniques Reduce Chances of Operator Error Reduce Non-Value Added Activities. The ratio of usable output from a process to its input.M2. 135 June 2006 . Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. . The condition that occurs when the output of a process is not consistently repeatable either in quantity. Metrics (see Appendix A for metrics attributes): . or combination of these. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. Electronic data collection of completion. scrap. . Cost to Produce and Test Produce and Test Cycle Time Warranty Costs Yield Yield Variability Best Practices: . . .

. Warranty costs include materials. © Copyright 2006 Supply-Chain Council. Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. Inc. scrap. constraining processes. Cost to Package Package Cycle Time Warranty Costs Best Practices: . 136 June 2006 . quality. Metrics (see Appendix A for metrics attributes): . . . . .M2. . . Accurate and Approved Process Plans. . lot tractability. . .1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion. Within certain industries.3 Produce and Test Outputs: . changeover. The sum of the costs associated with product packaging. Some factors that should be considered are internal manufacturing capacity.4 Package The series of activities that containerize completed products for storage or sale to end-users. . Specifications and Procedures Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking Automatic Label and Seal Verification Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Minimize Operator Induced Errors Packaging Operation is an Integral Part of the Overall Production Process Paperless Production Control Postponement and Pre-Kitting Of Accessories into Modular Packages that Allow Flexibility While Maintaining Control Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specification for Each Unique Production Event/Demand Electronic document management Electronic batch recording/configuration Automatic interface to inspection systems Machine productivity and downtime monitoring Automatic download of production equipment with setup parameters Graphical display of setup. labor and problem diagnosis for product defects. and labor data Electronic Work Instructions Inputs: . Workflow from M2. . Routings. direct labor availability and key components/materials availability. . Workflow to M2. .5 Stage Finished Product Information Feedback to M2. packaging may include cleaning or sterilization.

Cost to Stage Finished Product Stage Finished Product Cycle Time The sum of the costs associated with staging finished goods. Metrics (see Appendix A for metrics attributes): . The movement to finished goods is part of the Deliver process. Automated process control and/or barcode data collection Inputs: .M2. © Copyright 2006 Supply-Chain Council. Workflow from M2.6 Release Finished Product to Deliver Information Feedback to M2. Direct Ship from Factory to Customer/Channel Electronic Material Move Transactions Share production status with customers and transportation providers via web-based tools. Products that are made to order may remain in the holding location to await shipment per the associated customer order. Workflow to M2. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.5 Stage Finished Product The movement of packaged products into a temporary holding location to await movement to a finished goods location. Inc. Auto-Tendering for direct ship utilizing EDI/XML protocols. . . .4 Establish Delivery Plans Production Plans from P3. The average time associated with staging finished product Best Practices: . 137 June 2006 . .4 Establish Production Plans A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements.1 Schedule The flow of information back into the control system so that actual Production Activities performance can be compared with planned performance.4 Package Delivery Plans from P4. Production Plan includes production capability. . Outputs: .

Finished Product Release to D2.9 Pick Product Information Feedback to M2.6 Release Finished Product to Deliver Activities associated with post-production documentation. . creating certificate of analysis. laboratory tests for potency or purity. . The average time associated with releasing finished product to deliver Best Practices: . Cost to Release Finished Product to Deliver Release Finished Product to Deliver Cycle Time The sum of the costs associated with releasing finished goods to deliver processes. Accurate and Low Cost Batch Records for Regulatory Compliance Automated Notification of Laboratory Regarding Sample Availability Review Batch Records by Exception Electronic batch records Interface between production system and LIMS Electronic batch records linked to process plans/recipes and exceptions flagged Inputs: . Examples include assembly of batch records for regulatory agencies. or certification required prior to delivery of finished product to customer.1 Schedule Production Activities The authorization to ship a finished product that has been ordered. testing. 138 June 2006 . . Workflow from M2. © Copyright 2006 Supply-Chain Council. The flow of information back into the control system so that actual performance can be compared with planned performance. .5 Stage Finished Product Outputs: . and signoff by the quality organization.M2. Inc. Metrics (see Appendix A for metrics attributes): .

testing.M3 Engineer-to-Order The process of manufacturing distinct items. and manufactured in response to a specific customer request.g. etc. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. specifications. Scheduling includes sequencing. depending on the factory layout.3 Issue Sourced/In-Process Product M3. Given plans for the production of specific parts. such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. the scheduling of the operations to be performed in accordance with these plans. products. The movement to finished goods is part of the Deliver process.g. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product.. part programs.1 Finalize Production Engineering Engineering activities required after acceptance of order. or certification required prior to delivery of finished product to customer. The selection and physical movement of sourced/in-process product (e. but before product can be produced. and.6 Stage Finished Product M3.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. Within certain industries. May include generation and delivery of final drawings. In general. and sign-off by the quality organization. any standards for setup and run. stockroom. Activities associated with post-production documentation. The Category M3 includes seven Level 3 Elements: M3. Engineer to Order includes custom products that are designed. © Copyright 2006 Supply-Chain Council. laboratory tests for potency or purity. developed. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). a supplier) to a specific point of use location. packaging may include cleaning or sterilization.5 Package M3. Products that are made to order may remain in the holding location to await shipment per the associated customer order. 139 June 2006 .7 Release Product to Deliver Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . or formulations in specified quantities and planned availability of required sourced products. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. While Make to Order includes standard products built only in response to a customer order or products configured in response to a customer order. For services. fabricated components.4 Produce and Test M3. Issuing product includes the corresponding system transaction. M3.. formulas. Inc. In general. subassemblies. required ingredients or intermediate formulations) from a stocking location (e. the last step in the completion of any preliminary engineering work done as part of the quotation process. Examples include assembly of batch records for regulatory agencies. The movement of packaged products into a temporary holding location to await movement to a finished goods location. raw materials. a location on the production floor. The series of activities that containerize completed products for storage or sale to end-users. creating certificate of analysis.2 Schedule Production Activities M3.

This cost includes direct costs (labor. 140 June 2006 . real time data base and EI systems On-line design tools facilitated by internet connections. CrossFunctional Work Teams Paperless Order Tracking and Customer Visibility of Orders Posted Performance Results Product Design Collaboration with Customers Manufacturing is broken into work cells Web-based access to plant scheduling status. and operator instructions Electronic dispatch and data collection with external interface to internet. Total value of Work in Process ÷ (COGS ÷ 365). The levels of aggregation can be at any element associated with a supply chain asset. report writing. Deliver. Best Practices: Cellular Manufacturing Delivery Schedules Are Collaboratively Developed with Customers Demand-Pull Manufacturing. Including Active Reduction of Manufacturing Systems Time and WIP Through the Use of DemandPull Mechanisms and Visual Controls Organize to Enhance Flexibility: Few Job Classifications. inventory. Source. The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties.Cost of Goods Sold Cost to Make Downside Make Adaptability Inventory Days of Supply (WIP) Make Cycle Time Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Upside Make Adaptability Upside Make Flexibility Yield The cost associated with buying raw materials and producing finished goods. Inc. materials) and indirect costs (overhead). Flat Management Structure. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. collaborative data-sharing environment. Components include accounts receivable. etc. Support of demand-pull mechanisms (Kanban. The sum of the costs associated with make. © Copyright 2006 Supply-Chain Council. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. and Return. The number of days required to achieve an unplanned sustainable 20% increase in production with the assumption of no raw material constraints. This includes the fixed assets used in Plan. replenishment signals. Make. compensations systems. Self-Directed Work Force. The ratio of usable output from a process to its input.) based on rate schedules and user-defined minimum/maximum trigger points Support for modular skills inventory with links to training databases. Data warehouse. accounts payable. The average time associated with Make Processes The average actual cycle time consistently achieved to fulfill customer orders. cost of goods sold and supply chain management costs. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. supply chain revenue.

such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order. procedures and processes required to produce distinct items. . process. May include generation and delivery of final drawings. Metrics (see Appendix A for metrics attributes): . but before product can be produced. so the order can be finalized and entered into the order system. The design process consists of translating a set of functional requirements into an operational product.3 Enter Order. part programs. Inc. Procedures.M3. developed. specifications. part programs. .2 Schedule Production Activities Methods. . specifications. Engineering Design from Source: Company Final drawings. Methods. 141 June 2006 .1 Finalize Production Engineering Engineering activities required after acceptance of order. or service. the last step in the completion of any preliminary engineering work done as part of the quotation process. Automated Configuration Management Automated Conversion of Engineering Drawings into Product Specifications Configuration None identified Inputs: . Processes to M3. and produced in response to a specific customer request. . formulas. © Copyright 2006 Supply-Chain Council. The average time associated with the finalization of production engineering Best Practices: . formulas. The function encompasses receiving and entering all data necessary on orders. etc. Commit Resources & Launch Program Outputs: . including custom products that are designed. Cost to Finalize Production Engineering ECO Cost Finalize Production Engineering Cycle Time The sum of the costs associated with finalizing production engineering.that describe requirements of a product. etc. In general. Order Information from D3.

None identified . Maintain Flexibility While Minimizing Cycle Time and Inventory Position Cellular Manufacturing Cross Training/Certification Demand Pull Mechanisms Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Drum-Buffer-Rope Scheduling Technique Maximize Data Integrity and System Accuracy by Ensuring 99%+ Accuracy of BOM Configuration. Required production resources included in routing/process instructions Schedule undated by on line reporting and status systems and resequence activities Inputs: © Copyright 2006 Supply-Chain Council. Metrics (see Appendix A for metrics attributes): . direct labor availability and key components/materials availability. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. depending on the factory layout. and ideal job sequences (eg. . Note: overshipments do not make up for under-shipments. . Interface between maintenance management system and scheduling system Algorithms that manage set up times/costs. and. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. Additional Capacity for Overflow Demand Build Subassemblies to Forecast at Highest Generic Level in Bill of Material. Scheduling includes sequencing. . Manufacturing is broken into work cells HR/certification support Repetitive scheduling and sequencing Machine productivity and downtime monitoring (DBR. Some factors that should be considered are internal manufacturing capacity. This calculation is based on the number of scheduled end-items or total volume for a specific period. In general. Cost to Schedule Production Activities Schedule Achievement . 142 June 2006 . . Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet. and Schedule Requirements Schedule Includes Preventative Maintenance Program Schedule Minimizes Changeover Costs between Products Schedule Optimizes Use of Shared Resources Such as Tooling and Production Equipment Schedule Reflects Current Plant Status (Equipment Availability. . The percentage of time that a plant achieves its production schedule. None identified . color sequencing light to dark) Scheduling utilizing optimization techniques. . .M3. The sum of the costs associated with scheduling production activities. Schedule Production Activities Cycle Time Best Practices: . The average time associated with scheduling production activities . cleaning times. or formulations in specified quantities and planned availability of required sourced products. the scheduling of the operations to be performed in accordance with these plans. Inc. constraining processes. products.2 Schedule Production Activities Given plans for the production of specific parts. . any standards for setup and run. Inventory Levels. . . intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product.

Inc. the established frequency to change and maintain parts..) A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.4 Establish Production Plans .5 Manage Equipment and Facilities . The flow of information back into the control system so that actual performance can be compared with planned performance. . Production Schedule to D3. .5 Manage Equipment and Facilities Information Feedback from M3.6 Stage Finished Product Methods. Preventative Maintenance and Calibration Schedule from EM.1 Schedule Product Deliveries Scheduled Receipts from S3. The flow of information back into the control system so that actual performance can be compared with planned performance. Scheduled Receipts from S2. .3 Schedule Product Deliveries A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Production Plan includes production capability. Product due to arrive. . Procedures.1 Finalize Production Engineering Time-phased plans of present and future load (capacity required) on all resources (Equipment and Facilities) based on the planned and released supply authorizations (i. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.4 Produce and Test Information Feedback from M3. .9 Pick Product Production Schedule to S2. . including adjustments. replacements. © Copyright 2006 Supply-Chain Council. Planned and scheduled activities. . and basic cleanliness. . Also.1 Schedule Product Deliveries Production Schedule to S3. developed. . The flow of information back into the control system so that actual performance can be compared with planned performance. Methods. procedures and processes required to produce distinct items.e. Product due to arrive. orders) and the planned capacity (capacity available) of these resources over a span of time. with frequency set per part or machine type. . . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.3 Issue Sourced/In-Process Product Information Feedback from M3. and produced in response to a specific customer request.3 Schedule Product Deliveries Scheduled Receipts from S1.5 Package Information Feedback from M3. 143 June 2006 . Product due to arrive.1 Schedule Product Deliveries Outputs: . including custom products that are designed. (Well cared for equipment and facilities will last longer and cause fewer problems. Processes from M3. based on failure consequences. such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order.1 Schedule Product Deliveries Production Schedule to S1. The flow of information back into the control system so that actual performance can be compared with planned performance. that forestall machine and facility breakdowns.7 Release Product to Deliver Information Feedback from M3. Equipment and Facilities Schedules and Plans from EM. . Production Plans from P3. The flow of information back into the control system so that actual performance can be compared with planned performance.

and Aggregate Production Resources Production Schedule to D3. Commit Resources & Launch Program A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.. © Copyright 2006 Supply-Chain Council. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Production Schedule to M3. .3 Issue Sourced/In-Process Product Production Schedule to P3. Assess. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. .3 Enter Order.2 Identify. Inc. 144 June 2006 .

2 Schedule Production Activities WIP Handling Rules. . © Copyright 2006 Supply-Chain Council. Move Information and Methods from EM. required ingredients or intermediate formulations) from a stocking location (e.4 Manage In-Process Products (WIP) WIP Location Rules from EM. or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials.. Items. Activity Usage Type: Metrics (see Appendix A for metrics attributes): . and customer service (finished goods and spare parts). supporting activities (maintenance. and customer service (finished goods and spare parts). Cost to Issue Sourced/In-Process Product Issue Sourced/In-Process Product Cycle Time The sum of the costs associated with issuing sourced or in-process material. raw materials. . The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. in inventory. and movement inventory. Inc. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). repairs and operating supplies). Kanban Replenishment Signals from Stockroom.. supporting activities (maintenance. .g. .4 Transfer Product . Those stocks or items on hand used to support production (raw materials and work in process items). Production Schedule from M3. . Inventory Availability from S2. a supplier) to a specific point of use location. The average time associated with the issuance of material to production Best Practices: . Inventory Availability from S1. stockroom. or Subassemblies to Decouple Sourced Product Issuance Cycle Time from Supplier Lead Time Supplier Delivery to Production Process at Point of Use Two-Bin Floor Stock Located at Work Center for “B“ And “C“ Components Controlled by Operators and Replenished When One Bin is Empty Flexible back flush logic None identified Automated process control and/or barcode data collection Use of safety stock algorithms to minimize stock levels.3 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e. supporting activities (maintenance. 145 June 2006 . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. . fabricated components. Issuing product includes the corresponding system transaction. repairs and operating supplies). EDI link to supplier’s sales order and inventory systems None identified Inputs: . subassemblies.M3. Those stocks or items on hand used to support production (raw materials and work in process items).g.6 Manage Transportation . a location on the production floor. repairs and operating supplies). Inventory Availability from S3.6 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). Back Flush Material at Order Completion Demand-Pull Mechanisms. Intermediate Products. and customer service (finished goods and spare parts).4 Transfer Product . The rules for handling WIP items in the production and repair process. . . These rules include the movement and accounting for inprocess items between work locations.

146 June 2006 .© Copyright 2006 Supply-Chain Council. Inc.

supporting activities (maintenance. . . Assess. and customer service (finished goods and spare parts). Workflow to M3. Any signal that indicates when to produce or transport Items in a pull replenishment system. Those stocks or items on hand used to support production (raw materials and work in process items). © Copyright 2006 Supply-Chain Council.9 Pick Product The flow of information back into the control system so that actual performance can be compared with planned performance. Any signal that indicates when to produce or transport Items in a pull replenishment system. supporting activities (maintenance. repairs and operating supplies).4 Transfer Product Replenishment Signal to S3. . and Aggregate Production Resources Product Location Information to EM.4 Produce and Test Information Feedback to M3. Those stocks or items on hand used to support production (raw materials and work in process items).2 Identify. . .6 Transfer Product Replenishment Signal to S1. 147 June 2006 .4 Transfer Product Replenishment Signal to S1. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system. Any signal that indicates when to produce or transport Items in a pull replenishment system.6 Manage Transportation Replenishment Signal to S3.1 Schedule Product Deliveries Replenishment Signal to S2.1 Schedule Product Deliveries . . repairs and operating supplies).2 Schedule Production Activities Inventory Availability to D3. Attributes of the product’s storage location. and customer service (finished goods and spare parts). . . Inventory Availability to P3.Outputs: . . Any signal that indicates when to produce or transport Items in a pull replenishment system. Inc.3 Schedule Product Deliveries Replenishment Signal to S2.

. quality. Move. . lot tractability. and labor data Electronic work instructions Inputs: . . Six Sigma. or combination of these. constraining processes. Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. Electronic collection of qualityt data and on-line SPC. Use principals of Lean Manufacturing. . . The condition that occurs when the output of a process is not consistently repeatable either in quantity. Including Queue. The sum of the costs associated with production and test.5 Package Information Feedback to M3. quality.M3.3 Issue Sourced/In-Process Product Outputs: . 148 June 2006 . Some factors that should be considered are internal manufacturing capacity. scrap. .4 Produce and Test The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. Workflow to M3. Electronic data collection of completion. . . Inc. © Copyright 2006 Supply-Chain Council. The ratio of usable output from a process to its input. direct labor availability and key components/materials availability. Workflow from M3. . . and Set-Up Times Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specifications None identified Machine productivity and downtime monitoring Demand-pull mechanisms None identified Electronic data collection of employee actions and sourced/inprocess product lot used Electronic dispatch of operations Examples would be TQM. Electronic collection of defect data and on-line SPC.2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. . . . . The average time associated with production and test Warranty costs include materials. . . Authorize Each Operation to Assess the Quality of the Previous Operations Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Implement Employee Involvement Programs Just-In-Time Demand Flow Techniques Link Individual Performance to Organizational and Divisional Goals Maintain Accurate Lot/Batch History Information Paperless Production Control Provide Continuous Formal Training to Employees Real Time quality control techniques Real Time Statistical Control Techniques Reduce Non-Value Added Activities. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. . . Cost to Produce and Test Produce and Test Cycle Time Warranty Costs Yield Yield Variability Best Practices: . . labor and problem diagnosis for product defects. Metrics (see Appendix A for metrics attributes): .

Automatic Label and Seal Verification Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Minimize Operator Induced Errors Packaging Operation is an Integral Part of the Overall Production Process Paperless Production Control Postponement and Pre-Kitting Of Accessories into Modular Packages that Allow Flexibility While Maintaining Control Reduce Non-Value Added Paperwork While Still Measuring Process Metrics Up-to-Date Shop Packet/Specification for Each Unique Production Event/Demand Automatic interface to inspection systems Machine productivity and downtime monitoring Automatic download of production equipment with setup parameters Graphical display of setup. lot tractability.4 Produce and Test Outputs: . . Some factors that should be considered are internal manufacturing capacity. Within certain industries. changeover. Inc. 149 June 2006 . . . quality. . . labor and problem diagnosis for product defects.6 Stage Finished Product Information Feedback to M3. constraining processes. Asset Turns Capacity Utilization Total gross product revenue ÷ Total net assets A measure of how intensively a resource is being used to produce a good or service. . Metrics (see Appendix A for metrics attributes): .M3. scrap. or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion. . and labor data Electronic Work Instructions Inputs: .5 Package The series of activities that containerize completed products for storage or sale to end-users. The sum of the costs associated with product packaging. . Cost to Package Package Cycle Time Warranty Costs Best Practices: . . packaging may include cleaning or sterilization. Workflow to M3. Warranty costs include materials.2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. . direct labor availability and key components/materials availability. © Copyright 2006 Supply-Chain Council. . . Workflow from M3.

Cost to Stage Finished Product Stage Finished Product Cycle Time The sum of the costs associated with staging finished goods. Inc. Workflow to M3. Outputs: .5 Package Delivery Plans from P4.4 Establish Production Plans A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. . Workflow from M3. .7 Release Product to Deliver Information Feedback to M3. . . .6 Stage Finished Product The movement of packaged products into a temporary holding location to await movement to a finished goods location. 150 June 2006 . Auto-Tendering for direct ship utilizing EDI/XML protocols. Automated process control and/or barcode data collection Inputs: . Products that are made to order may remain in the holding location to await shipment per the associated customer order. Metrics (see Appendix A for metrics attributes): . The average time associated with staging finished product Best Practices: . A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service.M3. Production Plan includes production capability.2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. © Copyright 2006 Supply-Chain Council.4 Establish Delivery Plans Production Plans from P3. Direct Ship from Factory to Customer/Channel Electronic Material Move Transactions Share production status with customers and transportation providers via web-based tools. The movement to finished goods is part of the Deliver process.

2 Schedule Production Activities The authorization to ship a finished product that has been ordered. Workflow from M3. creating certificate of analysis. 151 June 2006 . Metrics (see Appendix A for metrics attributes): . . and signoff by the quality organization.7 Release Product to Deliver Activities associated with post-production documentation. . The flow of information back into the control system so that actual performance can be compared with planned performance. laboratory tests for potency or purity. Finished Product Release to D3. © Copyright 2006 Supply-Chain Council. testing. . or certification required prior to delivery of finished product to customer. The average time associated with releasing finished product to deliver Best Practices: . .6 Stage Finished Product Outputs: . Accurate and Low Cost Batch Records for Regulatory Compliance Automated Notification of Laboratory Regarding Sample Availability Review Batch Records by Exception Electronic batch records Interface between production system and LIMS Electronic batch records linked to process plans/recipes and exceptions flagged Inputs: . Cost to Release Finished Product to Deliver Release Finished Product to Deliver Cycle Time The sum of the costs associated with releasing finished goods to deliver processes.9 Pick Product Information Feedback to M3.M3. Examples include assembly of batch records for regulatory agencies. Inc.

7 Manage Production Network EM. bills of materials/formulas. The process of managing. This process element includes repairs. processes. The information to be managed includes production.6 Manage Transportation EM. replenishment models. maintaining. This includes management of the activities associated with in transit handling and movement of In-Process Product (WIP).4 Manage In-Process Products (WIP) EM.1 Manage Production Rules The process of establishing. and communicating information to support MAKE planning and execution processes. order and process data.g. This process allows the development and implementation of a course of action to achieve targeted performance. equipment requirements. maintaining. Inc.2 Manage Production Performance EM. government) EM. alterations. goals. or manage information or relationships on which planning and execution processes rely. and enforcing rules for managing production details in line with business strategy. The process of specifying maintaining and dispositioning MAKE’s capital assets to operate the supply chain production processes.5 Manage Equipment and Facilities EM. routings. and other information specifying the method of production for a particular product. The process of transporting In-Process Product (WIP). Production details include part/item master.8 Manage Regulatory Compliance © Copyright 2006 Supply-Chain Council. The Category EM includes eight Level 3 Elements: EM.EM Enable MAKE Enable Processes prepare. The process of identifying and complying with regulatory documentation and process standards set by external entities (e. tooling. ownership. maintain. collecting. The process of identifying and maintaining a network of intra-company production units that deliver specific semi-finished materials or product sets to the final production site. product mix and stocking locations for In-Process Product (WIP). The process of establishing and maintaining limits or levels. calibration and other miscellaneous items to maintain production capabilities of the manufacturing fixed asset base. and objectives.3 Manage MAKE Information EM. The process of developing and maintaining performance standards and analysis methods to compare actual production performance against the established standards. Management of the activities associated with handling/storage/movement of materials used to support production. 152 June 2006 . The ongoing management of the activities associated with ensuring equipment and facilities are kept in proper order.

4 Manage Integrated Supply Chain Inventory Product Design from Source: Company Production Capacity from EP. Inc. processes. specifications. Corporate objectives are the goals and mission of an organization. recipes/formulas. and enforcing rules for managing production details in line with business strategy. Metrics (see Appendix A for metrics attributes): Cost to Manage Production Rules Manage Production Rules Cycle Time The sum of the costs to manage production rules. worker effort. equipment requirements. cost and profit. sustainable output rate which can be achieved with the current product specifications. product mix. 153 June 2006 .EM. Corporate Objectives and Strategies from Source: Company Inventory Capacity from EP. to all users Genealogy Tracking Where-used listing of as-planned vs.based engineering specifications system Automated Links To Existing CAD & CAM Electronic hypertext or links to existing database of detail/parts/setup Information sketches/drawings Automatic Generation / Configuration Of Parametric driven (Group Technology . and objectives.based) manufacturing design Tooling / Set-Up Instructions system Automatic Link to Recipe Management. PLC Seamless application interface to manufacturing planning documentation Program. tooling. and equipment. CNC Program Systems. This process develops objectives usually accompanied by budgets. goals. to and CAM systems Deliver New Manufacturing Documentation Automatic Notification When to Begin and Workflow/Groupware When to Complete Design For Production Table of manufacturing capacities or design envelops (capacities. bills of materials/formulas. and other information specifying the method of production for a particular product. Etc. and a cash flow statement. tank. activity. revise and access information Electronic Documentation and Imaging Graphical display of drawings. as-built documentation On Line Access and Notification of Tooling Delivery of tooling and equipment details drawings and Equipment Information Pre-Defined Manufacturing Design Rules Libraries of manufacturing capabilities or design envelopes Storage and Configuration Management for Product data management (PDM) or Electronic Data Management (EDM) feature set Release and Revision Control of Final Documents Attribute-Based Process Planning Automated Engineering Specifications Inputs: Business Plan from Source: Company A document resulting from a process of linking the long-range strategy with projections of revenue. Production details include part/item master. envelop sizes. diagrams.. The average time associated with managing production rules Best Practices: Computer aided process planning / recipe management Automated Intelligence (Heuristic) .. projected balance sheet.5 Manage Integrated Supply Chain Capital Assets © Copyright 2006 Supply-Chain Council. routings. The highest. etc. vessel or batch sizes) Document Control Control who can create. instructions. Maximum rate of output for the inventory management and warehouse process The product design is the translation of a set of functional requirements into an operational product that meets both the enterprise and customer expectations. plant. maintaining.1 Manage Production Rules The process of establishing.

Production Plan includes production capability.Production Plans from P3. Production Rules to Make Production Rules to Source Production Rules to Plan © Copyright 2006 Supply-Chain Council. Integrated Supply Chain Transportation Outputs: Production Rules to Deliver The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products.6 Manage The capability of a trasportation system to perform it’s function. 154 June 2006 . Transportation Capacity from EP. Inc.4 Establish Production Plans A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products.

worker effort. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. and cost. plant. customer/supplier alignment agreements. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. industry standards. projected balance sheet.EM. and a cash flow statement. Maximum rate of output for the inventory management and warehouse process A product design approach that uses quality measures to capture the extent to which the design meets the needs of the target market (customer attributes).6 Manage The capability of a trasportation system to perform it’s function. a percentage of parts produced without a need for adjustment or repair. and equipment. activity. For example.4 Manage Integrated Supply Chain Inventory Product Design/Quality from Source: Company Production Capacity from EP.5 Manage Equipment and Facilities The operational techniques and planned and systematic activities used to fulfill requirements for quality in the production process. as defined by the company. The production policy indicates standard rules on how the production quality should be secured. Corporate objectives are the goals and mission of an organization. or the quality of the production. Integrated Supply Chain Transportation Outputs: Production Quality and Policies to EM. Transportation Capacity from EP. Production Rules to Deliver © Copyright 2006 Supply-Chain Council. Corporate Objectives and Strategies from Source: Company Inventory Capacity from EP. aesthetics. sustainable output rate which can be achieved with the current product specifications. as well as its actual performance.4 Establish Production Plans Production Plan includes production capability. This process develops objectives usually accompanied by budgets. product mix.5 Manage Integrated Supply Chain Capital Assets Production Plans from P3. visibility of key performance indicators Inputs: Business Plan from Source: Company A document resulting from a process of linking the long-range strategy with projections of revenue. The highest. Internal/external benchmarking. This process allows the development and implementation of a course of action to achieve targeted performance.2 Manage Production Performance The process of developing and maintaining performance standards and analysis methods to compare actual production performance against the established standards. The average time associated with managing production performance Best Practices: Periodic Review of Standards Real Time Performance Measurement Reporting Systems Standards and Measurements Aligned to Maximize Supply Chain Performance Process for establishing and maintaining review schedules Systems to collect production information online generate reports upon request by operators. and track progress against schedule and standards. Metrics (see Appendix A for metrics attributes): Cost to Manage Production Performance Manage Production Performance Cycle Time The sum of the costs to manage production performance. cost and profit. 155 June 2006 . Inc.

and asset management. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. delivery reliability. Production Rules to Make Production Rules to Plan Supply-Chain Performance Metrics to EP. cost.g. 156 June 2006 . flexibility and responsiveness. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. Inc.2 Manage Performance of Supply Chain © Copyright 2006 Supply-Chain Council.Production Rules to Source The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. e.

Information Needs Analysis from Source: Make Information Needs Analysis from Source: Source Information Needs Analysis from Source: Deliver Specifying the inputs. processing. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. Production Schedules and Inventory Status by Internal Operations and Customers Utilize Enterprise Information Systems Enter. The information to be managed includes production. Magnetic Stripe. and dissemination of information for planning. This could include using PLC. so that the data yields an understanding not available from any single data element. but without expressing computer alternatives and technical details. collecting. Radio Frequency Identification. business rules and outputs for a new system. processing. and communicating information to support MAKE planning and execution processes. files. Specifying the inputs. Specifying the inputs. Inc. files. order and process data. so that the data yields an understanding not available from any single data element. Radio Frequency Communication. cause and effect analysis. bar code. but without expressing computer alternatives and technical details. but without expressing computer alternatives and technical details. business rules and outputs for a new system. so that the data yields an understanding not available from any single data element. and control. 157 June 2006 . © Copyright 2006 Supply-Chain Council. files. to enable data collection On-Demand Access to Available to Promise None identified (ATP). so that the data yields an understanding not available from any single data element. Smart Cards. and Deliver information about the manufacturing process to management using information systems that span the enterprise Continuous Improvement Inputs: Information from Business Processes from Source: Make Information from Business Processes from Source: Plan Information from Business Processes from Source: Source Information from Business Processes from Source: Deliver Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome.EM. Machine Interface. maintaining. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. processing. business rules and outputs for a new system.3 Manage MAKE Information The process of managing.. Information Needed to Create and Maintain Interrelated computer hardware and software along with people and IT from Source: Company processes designed for the collection. etc. decision making. processing. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. and Key Performance Indicators Scheduling reviews of processes for possible improvements On-Demand Access of Production Data Collection and Display Systems designed for efficient performance of Information value-added operations in production. Metrics (see Appendix A for metrics attributes): Cost to Manage MAKE Information Manage MAKE Information Cycle Time The sum of the Cost to Manage MAKE Information The average time associated with managing production information Best Practices: Historical trending. Process.

collecting. files. arranging or presenting the data so that they yield an understanding not available from any single data element. Collecting data and organizing. arranging or presenting the data so that they yield an understanding not available from any single data element. Information Infrastructure Plan to Source Reports. processing. and Documents to Plan Reports. and communicating information and master data to support planning and execution processes. Information. and Documents to Deliver Reports. maintaining. The capability of a system to perform its expected function The capability of a system to perform its expected function Outputs: Information Infrastructure Plan to Plan A plan outlining the processes required for managing. Information.Information Needs Analysis from Source: Plan Systems Capability from Source: Make Systems Capability from Source: Source Specifying the inputs. maintaining. and communicating information and master data to support planning and execution processes. Inc. A plan outlining the processes required for managing. and Documents to Make Reports. Collecting data and organizing. but without expressing computer alternatives and technical details. Information. and Documents to Source © Copyright 2006 Supply-Chain Council. Collecting data and organizing. arranging or presenting the data so that they yield an understanding not available from any single data element. Information. business rules and outputs for a new system. 158 June 2006 . Collecting data and organizing. collecting. arranging or presenting the data so that they yield an understanding not available from any single data element.

Data concerning product on order and due to be delivered to location agreed in the order. VMI is a concept for planning and control of inventory. Incoming Product Information from Source: Source Production Orders Planned & Actual Reports A statement of the output of a production facility for a specified period. product mix and stocking locations for In-Process Product (WIP). No packing and unpacking time required. The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically counting and reconciling a statistical sample of the entire inventory population. No discarded material. plant FG. Capacity requirements are usually expressed in terms of hours of work or. The on-site inventory is counted. when units consume similar resources at the same rate. field samples. Total gross value of inventory at standard cost before reserves for excess and obsolescence. Recyclable or no containers where appropriate. the system should provide the frequency of picks by part number so that high frequency picks can be moved to convenient locations or part pick quantities increased. from Source: Plan comparing planned to actual production. Inc. and the inventory is restocked to predefined levels. genealogy WIP Storage Management System Efficient Space Utilization Implementing Pull Systems Move high frequency used inventory close to point of use. Management of the activities associated with handling/storage/movement of materials used to support production.EM. For example. replenishment models. damaged or outdated goods are removed. Part / WIP location by date received for those parts that must be stocked or staged in a holding area Tracking. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. Furthermore. with extrapolation the net and gross percentage of error is determined. Only includes inventory on company books. Best practice is to remove the dunnage as soon as possible unless part / product damage will result. which provides an indicative measure of entire inventory population. Metrics (see Appendix A for metrics attributes): Cost to Manage In-Process Products (WIP) The sum of the costs associated with managing in-process products (WIP). ownership.4 Manage In-Process Products (WIP) The process of establishing and maintaining limits or levels. 159 June 2006 . in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw materials & WIP.First Out In-Process Product (WIP) Handling Rules Minimizing In-Process Product (WIP) Minimum Product Handling Optimize Packing Statistical Test Count Vendor Managed Inventory Inputs: Capacity Requirements from Source: Plan The resources needed to produce the projected level of work required from a facility over a time horizon. First In . © Copyright 2006 Supply-Chain Council. This sample is then extrapolated across the inventory population. future liabilities should not be included Manage In-Process Products (WIP) Cycle The average time associated with managing WIP inventory Time Best Practices: Dunnage Control System data field to specify where the part / product shipping container should be removed. Reuse of intermediate WIP containers for finished goods. field FG. other) ÷ (COGS ÷ 365). units of production.

excess inventory and/or serviceable or obsolete products. Methods to EM. Methods to M3. Methods to M2. Inc. in inventory. in inventory. WIP Handling Rules.3 Issue Sourced/In-Process These rules include the movement and accounting for in-process items Product between work locations. WIP Handling Rules. and movement inventory. or MRO product. in inventory.Returned Product Information from Source: Deliver Data concerning the return and disposition of defective products. WIP Handling Rules. and movement inventory. 160 June 2006 . Outputs: WIP Handling Rules. Methods to Plan These rules include the movement and accounting for in-process items between work locations. Move Information and The rules for handling WIP items in the production and repair process.2 Issue Material These rules include the movement and accounting for in-process items between work locations.6 Manage Transportation These rules include the movement and accounting for in-process items between work locations. Move Information and The rules for handling WIP items in the production and repair process.2 Issue Sourced/In-Process These rules include the movement and accounting for in-process items between work locations. and movement inventory. Methods to M1. in inventory. Move Information and The rules for handling WIP items in the production and repair process. WIP Handling Rules. Move Information and The rules for handling WIP items in the production and repair process. Move Information and The rules for handling WIP items in the production and repair process. and movement inventory. Move Information and The rules for handling WIP items in the production and repair process. and movement inventory. and movement inventory. in inventory. in inventory. Methods to Deliver These rules include the movement and accounting for in-process items between work locations. and movement inventory. Move Information and The rules for handling WIP items in the production and repair process. Methods to Source These rules include the movement and accounting for in-process items between work locations. Product WIP Handling Rules. WIP Handling Rules. © Copyright 2006 Supply-Chain Council. in inventory.

track maintenance completed. Company © Copyright 2006 Supply-Chain Council. that are recommended by the manufacturer to forestall Schedules & Specifications from Source: machine breakdowns. Equipment and Facilities Monitoring Information from Source: Company Manufacturer’s Recommended Maintenance The scheduled activities. report results of audit & forward Audit System actions to be taken Factory Floor Electronic Decision Making Software to capture actual performance history / costs of operations with Information System capability of predicting “best cost action plans“ relating to maintaining equipment and facilities. Data gathered by measuring. and basic cleanliness. Inc. Metrics (see Appendix A for metrics attributes): Actual Asset Life Maintenance Cost as % of Measure of total lifecycle maintenance cost of an asset compared to its Replacement Value replacement cost. The ongoing management of the activities associated with ensuring equipment and facilities are kept in proper order.5 Manage Equipment and Facilities The process of specifying maintaining and dispositioning MAKE’s capital assets to operate the supply chain production processes. and measurement tool. The budget serves as a pattern for and a control over future operations. Database for equipment to contain expected results of analysis. Total Preventative Maintenance Program Automatically generated TPM repair schedules integrated with MRP systems. Cost to Manage MAKE Equipment and The sum of the costs associated with managing Make equipment and Facilities facilities. Lubrication Composition & Vibration) of test readings. which can be used to prioritize and track results of improvement efforts. Minimize Capital Assets Required and Outsourcing strategies including the use of Application Service Providers Maintenance Costs (ASPs). Predictive Maintenance Monitoring (Heat. Shop floor access to electronic data base of equipment line drawings. and have capability of generating desired reports. Facility & Equipment Environmental / Safety System software to list checklist items. contain a help-file to be consulted Supplier Managed Inventory of Parts E. or gauging one or more characteristics of equipment and facilities and comparing it to planned. examining.D. alterations. which could highlight suggested actions based upon readings obtained. calibration and other miscellaneous items to maintain production capabilities of the manufacturing fixed asset base. web-based maintenance/diagnostic assistance and MRO parts. instructional directions to conduct changeover. Software to identify operational constraints to the MAKE processes to assist in directing resources toward bottleneck functional areas. replacements. testing. 161 June 2006 .I. Manage MAKE Equipment and Facilities The average time associated with managing production equipment and Cycle Time facilities Best Practices: Changeover Reduction / Continuous Improvement Program Changeover process flow element identification. electrical wiring diagrams. Inputs: Budgets from Source: Make A plan that includes an estimate of future costs and revenues related to expected activities. parts listings. electronic equipment repair history. automatic store room parts purchases. part stores inventory & reorder points. This ratio is based maintenance cost to-date so that that replacement or upgrade cost can be evaluated as the asset ages on an ongoing basis. This process element includes repairs. including adjustments. linkage of Inventory Information Systematic Disposition Of Equipment Rules for deciding appropriate disposition.EM. parts listing reference guide and part cost lists. allow entry Noise.

2 Identify. The operational techniques and planned and systematic activities used to fulfill requirements for quality in the production process. Equipment and Facilities Schedules and Time-phased plans of present and future load (capacity required) on all Plans to M3.6 Manage Transportation Equipment and Facilities Schedules and Time-phased plans of present and future load (capacity required) on all Plans to M2.MRO Parts Availability from ES. with frequency set per part or machine type. based on failure consequences. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. For example. The production policy indicates standard rules on how the production quality should be secured. Production Quality and Policies from EM. alterations. and Aggregate Production Resources Equipment and Facilities Replacement and Disposition Plans to EM. reservations.e. servicing. Equipment and Facilities Schedules and Time-phased plans of present and future load (capacity required) on all Plans to M1.e. Assess.2 Schedule Production Activities resources (Equipment and Facilities) based on the planned and released supply authorizations (i. as defined by the company. orders) and the planned capacity (capacity available) of these resources over a span of time. financing and disposition of capital outlays for such purposes as the purchase of new equipment.) © Copyright 2006 Supply-Chain Council.. including adjustments. the established frequency to change and maintain parts.8 Manage Import/Export Requirements Preventative Maintenance and Calibration Schedule to Source The items and services utilized to manufacture a product. that forestall machine and facility breakdowns. Also. the introduction of new product lines. and basic cleanliness. servicing. calibration. backorders. calibration. a percentage of parts produced without a need for adjustment or repair. Inc.2 Manage Production Performance Outputs: Equipment and Facilities Maintenance History to Source The process of documenting of the timing and maintenance of equipment and facilities including required repairs..4 Manage Product Inventory Production Plans from P3. replacements. The items and services utilized to manufacture a product. and the modernization of plant facilities Equipment and Facilities Maintenance History to Make Equipment and Facilities Replacement and Disposition Plans to P3. Production Plan includes production capability. replacement of parts and other miscellaneous items to maintain production capability of the manufacturing fixed asset base The process of documenting of the timing and maintenance of equipment and facilities including required repairs. or the quality of the production.4 Establish Production Plans The on-hand MRO inventory balance minus allocations. Parts and Services Consumed to ES.1 Schedule Production Activities resources (Equipment and Facilities) based on the planned and released supply authorizations (i. (Well cared for equipment and facilities will last longer and cause fewer problems. The items and services utilized to manufacture a product. 162 June 2006 . and the modernization of plant facilities Actions relating to the planning. and (usually) quantities held for quality problems.e. financing and disposition of capital outlays for such purposes as the purchase of new equipment. alterations.4 Manage Product Inventory Parts and Services Consumed to ES. replacement of parts and other miscellaneous items to maintain production capability of the manufacturing fixed asset base Actions relating to the planning. Planned and scheduled activities.5 Manage Capital Assets Parts and Services Consumed to ES. orders) and the planned capacity (capacity available) of these resources over a span of time.1 Schedule Production Activities resources (Equipment and Facilities) based on the planned and released supply authorizations (i. orders) and the planned capacity (capacity available) of these resources over a span of time. the introduction of new product lines..

that forestall machine and facility breakdowns. that forestall machine and facility breakdowns. the established frequency to change and maintain parts. with frequency set per part or machine type. or an indication of how far in the production process a specific part has progressed Preventative Maintenance and Calibration Schedule to M1. and basic cleanliness. Also. that forestall machine and facility breakdowns. (Well cared for equipment and facilities will last longer and cause fewer problems.) Planned and scheduled activities. based on failure consequences. Also. replacements. that forestall machine and facility breakdowns. the established frequency to change and maintain parts. with frequency set per part or machine type. 163 June 2006 . including adjustments.7 Manage Production Network © Copyright 2006 Supply-Chain Council. replacements.) Planned and scheduled activities. based on failure consequences. (Well cared for equipment and facilities will last longer and cause fewer problems.Preventative Maintenance and Calibration Schedule to M3. replacements. (Well cared for equipment and facilities will last longer and cause fewer problems.1 Schedule Production Activities Production Status to EM. Also. including adjustments. based on failure consequences. and basic cleanliness. including adjustments.2 Schedule Production Activities Planned and scheduled activities.1 Schedule Production Activities Preventative Maintenance and Calibration Schedule to Plan Preventative Maintenance and Calibration Schedule to M2. with frequency set per part or machine type.) Feedback on the production schedule allowing for corrective action to a production problem. the established frequency to change and maintain parts. replacements. based on failure consequences. and basic cleanliness.) Planned and scheduled activities. including adjustments. the established frequency to change and maintain parts. Inc. (Well cared for equipment and facilities will last longer and cause fewer problems. and basic cleanliness. with frequency set per part or machine type. Also.

The policy is sometimes stated as “our quoted delivery time.5 Manage Equipment and Facilities Product Location Information from M2. reduction of handling steps. should the parts be shipped one by one or in bulks etc. in inventory. Equipment and Facilities Replacement and Disposition Plans from EM.2 Issue Material Product Location Information from M3.EM.6 Manage Transportation The process of transporting In-Process Product (WIP). This software then needs to provide a report based on the cubic feet of material times distance moved by part number. © Copyright 2006 Supply-Chain Council. WIP Handling Rules. Methods from Source: Source These rules include the movement and accounting for in-process items between work locations. AGVs and ASRS) and process improvement (i. comparing planned to actual production.7 The company’s goal for the time to ship the product after the receipt of a Manage Production Network customer’s order. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes): Cost to Manage Transportation (WIP) Manage Transportation (WIP) Cycle Time The sum of the costs associated with managing WIP Transportation The average time associated with managing (WIP) transportation Best Practices: Reduce In-Process Product (WIP) Handling Reduction of WIP handling through automation (i.3 Issue Sourced/In-Process Product Product Location Information from Source: Deliver Production Orders Planned & Actual Reports from Source: Company Projected Delivery Requirements from EM. Attributes of the product’s storage location. Move Information and The rules for handling WIP items in the production and repair process. 164 June 2006 .“ or an estimate of the customer delivery requirements of a product or service. and movement inventory. units of production. Inputs: Capacity Requirements from Source: Plan The resources needed to produce the projected level of work required from a facility over a time horizon. Attributes of the product’s storage location. Capacity requirements are usually expressed in terms of hours of work or. Supplier Agreement from S3. which kind of packaging. shorter move paths) Short Move Paths Software that allows for input of the distance that particular parts/WIP need to be moved. and the modernization of plant facilities Attributes of the product’s storage location. financing and disposition of capital outlays for such purposes as the purchase of new equipment.e. in inventory. Attributes of the product’s storage location.e. A statement of the output of a production facility for a specified period.2 Issue Sourced/In-Process Product Product Location Information from M1. Methods from Source: Plan These rules include the movement and accounting for in-process items between work locations. the introduction of new product lines. WIP Handling Rules.2 Select Final Supplier(s) and Negotiate An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. such as purchase order or supplier contract. and movement inventory. when units consume similar resources at the same rate. Move Information and The rules for handling WIP items in the production and repair process. Inc. e. This includes management of the activities associated with in transit handling and movement of In-Process Product (WIP).g. Actions relating to the planning.

Location of inventory that is specified as “work in progress“. in inventory. WIP Move Information and Methods to Deliver The process of recording and tracking the movement of WIP items through the production and repair process. Inc. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations.WIP Handling Rules.2 Issue Material Location of inventory that is specified as “work in progress“. This process includes item stocking and accounting requirements. Products (WIP) Outputs: WIP Inventory Location to S2. Move Information and The rules for handling WIP items in the production and repair process.2 Issue Sourced/In-Process Product WIP Location Rules to M1.4 Manage In-Process between work locations. Move Information and The rules for handling WIP items in the production and repair process. © Copyright 2006 Supply-Chain Council. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products.3 Issue Sourced/In-Process Product WIP Location Rules to M2.6 Transfer Product WIP Location Rules to D2. WIP Move Information and Methods to Source The process of recording and tracking the movement of WIP items through the production and repair process. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations.4 Transfer Product WIP Inventory Location to S3.9 Pick Product WIP Location Rules to M3. This process includes item stocking and accounting requirements. and movement inventory. and movement inventory. WIP Move Information and Methods to Plan The process of recording and tracking the movement of WIP items through the production and repair process.4 Transfer Product WIP Inventory Location to S1. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. This process includes item stocking and accounting requirements. WIP Handling Rules. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. Methods from Source: Deliver These rules include the movement and accounting for in-process items between work locations. WIP Handling Rules. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products. in inventory. in inventory. This process includes item stocking and accounting requirements. Move Information and The rules for handling WIP items in the production and repair process. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products. and movement inventory. 165 June 2006 . These rules include the movement and accounting for in-process items Methods from EM. WIP Move Information and Methods to MakeThe process of recording and tracking the movement of WIP items through the production and repair process. Methods from Source: Make These rules include the movement and accounting for in-process items between work locations. Location of inventory that is specified as “work in progress“.

“ or an estimate of the customer delivery requirements of a product or service.g. Outputs: Cost to Produce to Plan Internal Capacity to Source Internal Capacity to Plan Projected Delivery Requirements to Plan The cost to produce and item during a given period of time. The policy is sometimes stated as “our quoted delivery time.5 Manage Equipment and Facilities Supply Chain Plans from Source: Plan Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels.“ or an estimate of the customer delivery requirements of a product or service. which kind of packaging. on-line communications between source and demand Real time monitoring of production status and In-Process Product (WIP) Inputs: Planning Data from Source: Plan Production Status from EM. Projected Delivery Requirements to EM. and allocated overhead.“ or an estimate of the customer delivery requirements of a product or service. Metrics (see Appendix A for metrics attributes): Cost to Manage Production Network Manage Production Network Cycle Time The sum of the costs to manage the production network The average time associated with managing the production network Best Practices: Collaborative Planning/Scheduling JIT Environment Production Reporting/Status Interactive. Capacity planning systems with accurate production capability data. The policy is sometimes stated as “our quoted delivery time. should the parts be shipped one by one or in bulks etc. should the parts be shipped one by one or in bulks etc. © Copyright 2006 Supply-Chain Council. e. which kind of packaging. e.6 Manage Transportation Projected Delivery Requirements to Deliver The company’s goal for the time to ship the product after the receipt of a customer’s order. The organic capability of an organization to produce output per time period. The policy is sometimes stated as “our quoted delivery time. should the parts be shipped one by one or in bulks etc. Schedule visibility. which kind of packaging. 166 June 2006 . e. The company’s goal for the time to ship the product after the receipt of a customer’s order.g. or an indication of how far in the production process a specific part has progressed Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. The company’s goal for the time to ship the product after the receipt of a customer’s order. on-line planning/scheduling systems. direct labor. Feedback on the production schedule allowing for corrective action to a production problem.EM. Inc. The organic capability of an organization to produce output per time period. Includes: the amount of direct materials.7 Manage Production Network The process of identifying and maintaining a network of intra-company production units that deliver specific semi-finished materials or product sets to the final production site.g.

e.e. etc. etc. External Regulatory Information from Source: Documentation and process standards set by external entities (i. including holding of product until requirements are met Software specific to industry regulations and standards (e. Electronic Document Management System features.8 Manage Regulatory Compliance The process of identifying and complying with regulatory documentation and process standards set by external entities (e. 167 June 2006 . Claims are marketing information provided as to performance. trade officials. Claims from the users of the product indicate a need to change the product design Outputs: Conformance Plan to Source Conformance Plan to Make Conformance Rules to Make Courses of action and processes that are established to meet the requirements placed on production by external entities. Source government. government) Metrics (see Appendix A for metrics attributes): Cost to Manage MAKE Regulatory Compliance Manage MAKE Regulatory Compliance Cycle Time The sum of the Cost to Manage MAKE Regulatory Compliance The average time associated with managing compliance to the make regulatory environment Best Practices: Automated Conformance Monitoring And Control Automatic Generation And Submission Of Conformance Documents Maintaining Repository of Current Regulatory Requirements Internal automatic notification of conformance. trade officials. Make government. Plan government.) Electronic subscription and publication of conformance documentation.) External Regulatory Information from Source: Documentation and process standards set by external entities (i.e.) External Regulatory Information from Source: Documentation and process standards set by external entities (i.g. Inputs: Corporate Objectives and Strategies from Corporate objectives are the goals and mission of an organization.EM.g. etc. trade officials. etc. or FDA requirements. Source: Company Equipment and Facilities Characteristics from Equipment and facility traits and specifications required to meet external Source: Company entities requirements. etc. Inc. may be software to produce MSDS documents. An affirmative indication or judgment that a product or service has met criteria translated into rules for meeting external regulatory requirements © Copyright 2006 Supply-Chain Council. Courses of action and processes that are established to meet the requirements placed on production by external entities.) Product Design/Claims from Source: Company The product design is the translation of a set of functional requirements into an operational product that meets both the enterprise and customer expectations.

6 Route Shipments Loads are consolidated and routed by mode. recording product receipt. Inc. For services.3 Reserve Inventory & Determine Inventory and/or planned capacity (both on hand and scheduled) is Delivery Date identified and reserved for specific orders and a delivery date is committed and scheduled. Orders can be received through phone. the process of preparing.8 Receive Product from Source or Make The activities such as receiving product. or electronic media.5 Build Loads Transportation modes are selected and efficient loads are built. D1. The product is fully functional upon completion. picking the product. D1. and delivering the products to the shipping area for loading. Payment is received from the customer within the payment terms of the invoice. lane and location. paste labels. D1. D1.15 Invoice A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. D1. fax. Optionally accept payment. D1. customer.D1 Deliver Stocked Product The process of delivering product that is maintained in a finished goods state prior to the receipt of a firm customer order. D1. © Copyright 2006 Supply-Chain Council.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. “Technically“ examine orders to ensure an orderable configuration and provide accurate price. D1. D1. May include quality inspection. Check the customer’s credit. The Category D1 includes fifteen Level 3 Elements: D1. verifying. packing / kitting the products.12 Ship Product The process of shipping the product to the customer site.10 Pack Product The activities such as sorting / combining the products. recording the pick and delivering product to shipping in response to an order.2 Receive.14 Install Product When necessary. D1. determining inventory availability. D1. 168 June 2006 .7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are rated and tendered. carrier and government needs. D1. D1. Enter & Validate Order Receive orders from the customer and enter them into a company’s order processing system. building the pick wave..13 Receive & Verify Product by Customer The process of receiving the shipment by the customer site (either at customer site or at shipping area in case of self-collection) and verifying that the order was shipped complete and that the product meets delivery terms. D1.9 Pick Product The series of activities including retrieving orders to pick.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding .1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. determining put-away location. putting away and recording location that a company performs at its own warehouses. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. testing and installing the product at the customer site. barcodes etc.11 Load Vehicle & Generate Shipping The series of tasks including placing/loading product onto modes of Documentation transportation and generating the documentation necessary to meet internal.

VMI. and documentation . Deployment.packing slips. 169 June 2006 . etc. Quick Response Electronic Catalogues/Malls Internet Ordering Postponement Demand Planning. The sum of the costs associated with deliver The average time associated with Deliver Processes The reduction in delivered quantities sustainable at 30 days prior to delivery with no inventory or cost penalties. Make. Components include all items and quantities on-time using the customer’s definition of on-time. The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the assumption of no other constraints. Scheduling None identified None identified Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. and Return. such as assembly or packaging. Deliver. The aggregation of the following cost elements (contained in this glossary): The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. Inc. cost of goods sold and supply chain management costs. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). supply chain revenue. This includes the fixed assets used in Plan.Return on Working Capital Cost to Deliver Deliver Cycle Time Downside Deliver Adaptability Finished Goods Inventory Days of Supply Order Fulfillment Cycle Time Order Management Costs Perfect Order Fulfillment Return on Supply Chain Fixed Assets Upside Deliver Adaptability Upside Deliver Flexibility Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. None identified Rapid Replenishment. to the last possible supply chain location. inventory. The levels of aggregation can be at any element associated with a supply chain asset. Source. bills of lading. The average actual cycle time consistently achieved to fulfill customer orders. EDI © Copyright 2006 Supply-Chain Council. Best Practices: Efficient Consumer Response (ECR). The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. Components include accounts receivable. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. accounts payable. invoices.

cost. availability. © Copyright 2006 Supply-Chain Council. terms of sale. a bid.D1. and description of goods or services offered by a supplier to a prospective purchaser. a bid. When given in response to an inquiry. cost. it is usually considered an offer to sell. and description of goods or services offered by a supplier to a prospective purchaser. Inc. without Reserving None identified Inventory.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. Enter & Validate Order A statement of price. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes): Cost to Process Inquiry & Quote Process Inquiry & Quote Cycle Time The sum of the costs associated with processing inquiry and quotes. When given in response to an inquiry. and requests for quotes. Which Can Be Converted into an Order in a Single Step Single Point of Contact for All Order None identified Inquiries (Including Order Entry) Inputs: Customer Inquiry from Source: Customer General customer inquiries for information concerning products. it is usually considered an offer to sell. availability. 170 June 2006 . terms of sale. and requests for quotes.2 Receive. A statement of price. The average time associated with processing inquiries and quotes It is associated with deliverables: Deliverable: Customer Inquiry Deliverable: Order Quote (Customer) General customer inquiries for information concerning products. Outputs: Customer Quote to D1. Best Practices: Quote Capability.

Confirmation. Shipments. Scheduled Material Receipts. Integrated Order Management by Customer by EDLP. and interplant operations. For make-to-order Customer products. Customers) Order Entry None identified Capability Value Pricing Based on “Cost to Serve“. “Technically“ examine orders to ensure an orderable configuration and provide accurate price. Enter & Validate Order Best Practices: Automatic Multi-level Credit Checking: Dollar Integrated Order/Financial Management Limits. Telemetry to Automatically Communicate Replenishment of Chemicals Electronic Commerce (Customer Visibility of EDI applications and integrated order management Stock Availability. Customer Credit History. It is often referred to as an actual demand to distinguish it from a forecasted demand. distribution centers. Order Rules from ED. © Copyright 2006 Supply-Chain Council. Receive. Metrics (see Appendix A for metrics attributes): The sum of the costs associated with receiving.D1. POS. When given in response to an inquiry. Enter & Validate Order Cycle Time The average time associated with receiving and verifying an order at the customer site Cost to Receive. entering. often as represented by the master schedule available-to-promise. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. or electronic media. terms of sale. and promising orders from customers. Cost Plus Pricing Line Item Inputs: Customer Order from Source: Customer An order from a customer for a particular product or a number of products.1 Manage Deliver Business Rules Rules for the function that encompasses receiving. Customer Replenish Signal from Source: A requirement for product from a distribution location to a source location. and description of goods or services & Quote offered by a supplier to a prospective purchaser. which is imposed by customer requirements. this usually involves a check of uncommitted material and availability of capacity. On-Line Stock Check and Reservation of Inventory None identified Enable Real-Time Visibility into Backlog. 171 June 2006 . This kind of idle time should not be deducted from Order Fulfillment Cycle Time.2 Receive. Order Status. and Current Inventory Positions Remote (Sales. Customer movement data Vendor Managed Inventory. entering and validating a customer order.1 Process Inquiry A statement of price. Customer Quote from D1. Credit Approval). Margin Testing Integrated demand/deployment planning to customer location driven by Continuous Replenishment Programs. Order Fulfillment Dwell Time Any lead time during the order fulfillment process where no activity takes place. Orders can be received through phone. Customer Deliver Contract Terms from Source: The process of making a delivery commitment. Days Sales Outstanding. Activity Based Costing. Inc. Enter & Validate Order Receive orders from the customer and enter them into a company’s order processing system. Optionally accept payment. fax. a bid. it is usually considered an offer to sell. Use of Hand-Held Terminals for Direct Order Entry. Check the customer’s credit. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization.

status. these criteria determine type of carrier and Class to ED.e. Note 1 . purchase or production. the Determine Delivery Date information that the order contains is accurate . status. credit and purchase Deliver Information histories. and Aggregate Return Requirements Amount of past sales spanning any specified period of time (weeks. Customer Address Data to ED. 172 June 2006 . internal . which includes address data. Customer Order to ED. Inc. which include address data.1 Assess. and delivery requirements. and delivery requirements. Customer Order Size. etc. etc. week. etc.this order could be customer. Validated Order to D1.this does not make the order ““committed““ there may be other tasks to be performed before a commitment can be made.3 Manage Deliver The amount of purchased products for a certain time in history per specific Information intervals Shipping Preferences to ED.7 Manage Customer profile.Outputs: Actual Sales History to P5. and delivery requirements. Information indicating the ability to pay in a timely manner in the future. Credit History to ED. customer preferences including shipping. etc.3 Reserve Inventory & An order that has had the instructions / requirements validated i. © Copyright 2006 Supply-Chain Council. etc. credit and Product Life Cycle purchase histories. Performance It is often referred to as an actual demand to distinguish it from a forecasted demand. Note 2 . etc.3 Manage Deliver Customer profile.) Contract Status to ED. which includes address and location data. credit and purchase histories. and delivery Deliver Information requirements. status.3 Manage Customer profile. years. Optional Payment to Company Payment at the time of order.3 Manage Customer preferences including shipping. credit and purchase Information histories. customer preferences including shipping. maybe partial or in full. which include address data. consistent with previous information and does not violate business policies or rules. and customer profile.2 Assess Delivery An order from a customer for a particular product or a number of products. customer preferences including shipping. status. and Freight Coupled with cube and route..6 Manage Transportation cost of shipment Location of Customers to ED. year. month.3 Manage Deliver Report that portrays a potential customer’s payment history and debt. months.) and expressed in any specified increments (per day. Weight. Purchase History to ED.

supporting activities (maintenance. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. repairs and operating supplies). with FIFO Allocation for All Others Inputs: Delivery Plans from P4. and customer service (finished goods and spare parts). supporting activities (maintenance.3 Reserve Inventory & Determine Delivery Date Inventory and/or planned capacity (both on hand and scheduled) is identified and reserved for specific orders and a delivery date is committed and scheduled. 173 June 2006 . None identified EDI Links between Manufacturing and Distributor to Achieve Visibility of Complete Finished Goods Inventory and Expected Shipments None identified Inventory Allocation Exception Process is Clearly Defined and Jointly Owned by Manufacturing and Sales Priority-Based Inventory Reservations. Delivery Performance to Customer Commit The percentage of orders that are fulfilled on the customer’s original Date commit date Fill Rate The percentage of ship-from-stock orders shipped within 24 hours of order receipt. Metrics (see Appendix A for metrics attributes): % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% Cost to Reserve Resources & Determine The sum of the costs associated with reserving resources and determining Delivery Date a delivery date.D1. Those stocks or items on hand used to support production (raw materials and work in process items). this metric is the proportion for services that are filled so that the service is completed within 24 hours Order Fulfillment Dwell Time Any lead time during the order fulfillment process where no activity takes place. This kind of idle time should not be deducted from Order Fulfillment Cycle Time.4 Establish Delivery Plans Inventory Availability from M1. Real-time inventory management Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a customer order. repairs and operating supplies). for None identified Key Customers. Those stocks or items on hand used to support production (raw materials and work in process items).4 Transfer Product A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements.2 Issue Material Inventory Availability from S1. Reserve Inventory & Determine Delivery The average time associated with reserving inventory and determining a Date Cycle Time delivery date Best Practices: Automatic Reservation of Inventory and Dynamic Sourcing of Product for Single Shipment to Customer Available-to-Promise (ATP) Integrated order management system that treats each order line as a separate order with integration to inventory source and status. © Copyright 2006 Supply-Chain Council. which is imposed by customer requirements. and customer service (finished goods and spare parts). For services. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization. Inc.

Determination of the time required from the receipt of the order until the item should be delivered. Production Schedule from M1. Prioritize.this order could be customer. 174 June 2006 . and Orders that have been received and entered into the order processing Aggregate Delivery Requirements system and are in a queue waiting to be processed and shipped. Replenishment Signal to S3. consistent with previous Validate Order information and does not violate business policies or rules.2 Receive.Production Plans from P3. supporting activities (maintenance. and Transactions related to sending the product to the customer. Aggregate Supply Chain Requirements © Copyright 2006 Supply-Chain Council. and Aggregate Delivery and work in process items). and Orders that have been received and entered into the order processing Aggregate Supply Chain Requirements system and are in a queue waiting to be processed and shipped. Validated Order from D1. Prioritize. Inc. the information that the order contains is accurate . Shipments to P1. repairs and Resources and Capabilities operating supplies).2 Those stocks or items on hand used to support production (raw materials Identify.1 Identify. internal .4 Consolidate Orders Those stocks or items on hand used to support production (raw materials and work in process items). Note 1 . supporting activities (maintenance.4 Transfer Any signal that indicates when to produce or transport Items in a pull Product replenishment system.1 Schedule Any signal that indicates when to produce or transport Items in a pull Product Deliveries replenishment system. Enter & An order that has had the instructions / requirements validated i.1 Identify. Sourcing Plans from P2. repairs and operating supplies). Replenishment Signal to S1.e. Replenishment Signal to S2. Outputs: Delivery Date to D1.1 Schedule A plan that authorizes the factory to manufacture or repair a certain Production Activities quantity of a specific item. Note 2 . Assess. Inventory Availability/Delivery Date to P4.4 Transfer Any signal that indicates when to produce or transport Items in a pull Product replenishment system. Order Backlog to P4. and customer service (finished goods and spare parts).4 Establish Production Plans A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Replenishment Signal to S1.this does not make the order ““committed““ there may be other tasks to be performed before a commitment can be made. Prioritize. purchase or production.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan.1 Identify. Order Backlog to P1. Determination of the time required from the receipt of the order until the item should be delivered. Production Plan includes production capability.6 Transfer Any signal that indicates when to produce or transport Items in a pull Product replenishment system. and customer service (finished goods and spare parts).

Outputs: Daily Shipment Volume to Carrier Daily Shipment Volume categorized by customer. Carrier. None identified Integrated load planning and building with warehouse management Inputs: Delivery Date from D1. traffic lane.D1. Etc.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation.5 Build Loads Daily Shipment Volume categorized by customer. supporting activities (maintenance. Metrics (see Appendix A for metrics attributes): Consolidate Orders Cycle Time Cost to Consolidate Orders The average time required for customer order consolidation. etc.3 Reserve Inventory & Those stocks or items on hand used to support production (raw materials Determine Delivery Date and work in process items). The sum of the costs associated with consolidating customer orders. carrier. Source. Determination of the time required from the receipt of the order until the item should be delivered. source. Daily Shipment Volume to D1. traffic lane. carrier. etc. repairs and operating supplies). Traffic Lane. © Copyright 2006 Supply-Chain Council. Best Practices: Combine Consolidation Needs with Other Products/Divisions/Companies Consolidate Orders by Customer. and customer service (finished goods and spare parts). Inc. 175 June 2006 . source.

i. Best Practices: Build Load in Stop Sequence Consolidation of Inbound and Outbound Requirements CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems Vendor Managed Inventory VMI is a concept for planning and control of inventory. carrier. customer.6 Route Shipments Plan and Build Loads Information to SR2. items. © Copyright 2006 Supply-Chain Council. Transportation modes are selected and efficient loads are built. Integrated inbound/outbound transportation planning Inputs: Daily Shipment Volume from D1. destinations. etc. i. damaged or outdated goods are removed. Transportation modes are selected and efficient loads are built. Metrics (see Appendix A for metrics attributes): Build Loads Cycle Time Cost to Build Loads The average time associated with building shipment loads. traffic lane. Inc. and Aggregate Delivery Resources and Capabilities Load Information to D1. etc Information relative to a load that is built and shipped. items.e. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. The sum of the costs associated with building transportation loads. source. etc.4 Consolidate Orders Daily Shipment Volume categorized by customer. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. customer. Outputs: Load Information to P4. and the inventory is restocked to predefined levels. etc Transportation modes are selected and efficient loads are built. 1st truck destination loaded last. Assess. Integrated inbound/outbound transportation planning (i. 176 June 2006 .D1.5 Build Loads Transportation modes are selected and efficient loads are built.e.4 Schedule MRO Shipment Plan and Build Loads Information to SR3. weight.4 Schedule Excess Product Shipment Plan and Build Loads Information to SR1.).2 Identify. The on-site inventory is counted. destinations.4 Schedule Defective Product Shipment Information relative to a load that is built and shipped.e. weight.

customer. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. lane and location. for shipments. Inputs: Load Information from D1. etc. GPS. carrier selection. mode.6 Route Shipments Loads are consolidated and routed by mode. Listing or routes. etc. © Copyright 2006 Supply-Chain Council. Routing & Scheduling with Advanced Ship Notice (ASN) Satellite communications. i. damaged or outdated goods are removed. Metrics (see Appendix A for metrics attributes): Cost to Route Shipments Route Shipments Cycle Time The sum of the costs associated with routing shipments. Outputs: Shipment Routes to D1. lane. etc Contract rates and tariffs from carriers by commodity. 177 June 2006 . and rating Transportation modeling and rate analysis Integrated Load Building. RFID VMI is a concept for planning and control of inventory. Information used to select modes. Inc. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer.5 Build Loads Rated Carrier Data from Source: Carrier Routing Guide from Source: Carrier Information relative to a load that is built and shipped. destinations. carriers & rates. items. weight. The on-site inventory is counted.D1.e.7 Select Carriers & Rate Shipments Routes for shipping by consolidating loads. and the inventory is restocked to predefined levels. The average time associated with routing shipments Best Practices: Carrier/Route Optimization Based on Continuous Movement and Consolidation/Pooling Consolidation of Carriers CRP/VMI Shipment Tracking and Tracing Vendor Managed Inventory Route scheduling. available carriers. transportation lanes.

Outputs: Scheduled Deliveries to Plan Scheduled Deliveries to D1. © Copyright 2006 Supply-Chain Council. The average time associated with selecting carriers and rating shipments Best Practices: Select Carriers by Least Cost per Shipment Rules based carrier selection and actual rate database and Rate Using Actual Rates Prior to Release to Billing Inputs: Shipment Routes from D1. Metrics (see Appendix A for metrics attributes): Cost to Select Carriers & Rate Shipments Select Carriers & Rate Shipments Cycle Time The sum of the costs associated with selecting carriers and rating shipments. Inc. The required or agreed time or rate of delivery of goods or services purchased for a future period. 178 June 2006 .7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are rated and tendered.9 Pick Product The required or agreed time or rate of delivery of goods or services purchased for a future period.D1.6 Route Shipments Routes for shipping by consolidating loads.

Inputs: Authorization to Return to Service from SR2. Permission to return to service an item that has been repaired and found to be within specifications and operable.2 Disposition Excess Product Authorization to Scrap from SR1. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. and rules based put away logic Control. Cross docking actively links the receiving and shipping processes. at a plant or a supplier) as well as make-to-order items. Zoned Put Away. stock locator. In a traditional DC.D1.g. Quality Assurance.2 Disposition Excess Product Authorization to Scrap from SR3.2 Disposition MRO Product Finished Product Release from M1. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. recording product receipt. ABC Frequency of Access Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment. & Advanced Ship Notices for Integration with Procurement Systems & Electronic Commerce with Automated Receiving and Put Away Vendors Dynamic Location Assignment Including Lot Real time inventory control. Merging is usually performed in a shipper’s distribution center (DC) or in a carrier’s terminal. Permission to return to service an item that has been repaired and found to be within specifications and operable. items on stock elsewhere (e. putting away and recording location that a company performs at its own warehouses. © Copyright 2006 Supply-Chain Council. verifying.6 Release Product to Deliver Permission to return to service an item that has been repaired and found to be within specifications and operable.2 Disposition Defective Product Authorization to Return to Service from SR3. Download P. determining put-away location. The items to be merged are cross-docked from inbound receipt to outbound shipping. both cross docking (no storage) and traditional (with storage) operations might take place. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical.2 Disposition Defective Product Authorization to Scrap from SR2. This includes items on stock in the distribution center. May include quality inspection. items on stock in other distribution centers. In a DC. Metrics (see Appendix A for metrics attributes): Cost to Receive Product from Source or The sum of the costs associated with transferring product from source or Make make activities.2 Disposition MRO Product Authorization to Return to Service from SR1.8 Receive Product from Source or Make The activities such as receiving product.O. 179 June 2006 . Inc. Receive Product from Source or Make Cycle The average time associated with receiving a transfer of product to deliver Time processes from source or make Best Practices: Automatic Identification Cross-Docking Bar Coding & Radio Frequency Communications Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. from which the shipment is sent. The authorization to ship a finished product that has been ordered.

work in process. 180 June 2006 . and finished goods inventories Those stocks or items on hand used to support production (raw materials and work in process items).1 Schedule Product Deliveries Outputs: Existing Inventory Data to ED. Production Schedule from M1. © Copyright 2006 Supply-Chain Council.Inventory Availability from S1. repairs and operating supplies). supporting activities (maintenance.4 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). and customer service (finished goods and spare parts).9 Pick Product Available data that characterizes and quantifies raw material. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. and customer service (finished goods and spare parts). repairs and operating supplies).1 Schedule Production Activities Scheduled Receipts from S1.4 Manage Finished Goods Inventories Inventory Availability to D1. supporting activities (maintenance. Product due to arrive. Inc.

determining inventory availability. or any other criteria that makes sense for the DC operation.10 Pack Product © Copyright 2006 Supply-Chain Council. Metrics (see Appendix A for metrics attributes): Cost to Pick Product Fill Rate Pick Product Cycle Time The sum of the costs associated with picking product. geography. Inc. stock locator.g. from which the shipment is sent.9 Pick Product The series of activities including retrieving orders to pick. 181 June 2006 . picking the product. Those stocks or items on hand used to support production (raw materials and work in process items). Zoned Picking. For services. and Time Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment. building the pick wave. items on stock in other distribution centers.7 Select Carriers & Rate Shipments Inventory Availability from D1. This includes items on stock in the distribution center. In some DC’s. Merging is usually performed in a shipper’s distribution center (DC) or in a carrier’s terminal. Use of Speed Racks for Automated Material None identified Handling Wave picking A practice used in many DC operations to increase labor picking productivity and reduce the labor cost per pick. Quality Assurance Rules based picking logic and simulation Dynamic Simulation of Picking Requirements Optimized for Labor. and rules based picking logic Control. this metric is the proportion for services that are filled so that the service is completed within 24 hours The average time associated with product pick Best Practices: Dynamic Location Assignment Including Lot Real time inventory control. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. at a plant or a supplier) as well as make-to-order items. Inputs: Scheduled Deliveries from D1. items on stock elsewhere (e.D1. Wave picking consolidates orders into “waves“ where multiple orders with similar characteristics are picked at one time. orders are scheduled to be picked when they are received. supporting activities (maintenance. The items to be merged are cross-docked from inbound receipt to outbound shipping. and customer service (finished goods and spare parts).8 Receive Product from Source or Make The required or agreed time or rate of delivery of goods or services purchased for a future period. Outputs: Workflow to D1. recording the pick and delivering product to shipping in response to an order. Cost. repairs and operating supplies). Orders can be consolidated by customer.

9 Pick Product Outputs: Workflow to D1. and delivering the products to the shipping area for loading.10 Pack Product The activities such as sorting / combining the products.11 Load Vehicle & Generate Shipping Documentation © Copyright 2006 Supply-Chain Council.D1. Inputs: Workflow from D1. packing / kitting the products. 182 June 2006 . Inc. The average time associated with packing a product for shipment. paste labels. barcodes etc. Metrics (see Appendix A for metrics attributes): Cost to Pack Product Pack Product Cycle Time The sum of the costs associated with product packaging.

integrated transportation/warehouse management Carrier agreements are agreements between a company and its domestic and global carriers (for both. Outputs: Delivered End Items to Customer Load. marking.8 Manage Import/Export Requirements Shipping Parameters and Documentation from ED. way bill. and Credit Information to SR1. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. Shipping parameters. both cross docking (no storage) and traditional (with storage) operations might take place. Cross docking actively links the receiving and shipping processes.g.11 Load Vehicle & Generate Shipping Documentation The series of tasks including placing/loading product onto modes of transportation and generating the documentation necessary to meet internal. Metrics (see Appendix A for metrics attributes): Cost to Load Product & Generate Shipping Documentation Delivery Performance to Customer Commit Date Documentation Accuracy The sum of the costs associated with loading product & generating shipping documentation. © Copyright 2006 Supply-Chain Council. export papers. etc. customer. Legal documentation of the contents of a shipment (e.D1. components. inbound raw materials and outbound finished goods) specifying service levels. Also. and products. size. bill of lading. carrier and government needs. None identified None identified Interface to supplier’s shipping system to financials None identified Electronic Generation and Download of Shipping Documents Full Visibility of Credit History by Shipping Personnel Integrated Credit Checking Shipment Tracking Inputs: Shipping Export Parameters and Documentation from ED. etc. and other conditions. bills of lading. 183 June 2006 . [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The average time associated with product loading and the generation of shipping documentation Load Product & Generate Shipping Documentation Cycle Time Best Practices: Advanced Shipping Notices & UCC128 Container Labeling Carrier Agreement Cross-Docking Bar coding. and loading for shipment. verify the shipment and customer credit information. Shipping. Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. weighing. EDI. Verify.6 Manage Transportation Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. In a DC. The function that performs tasks for the outgoing shipment of parts. The percentage of orders that are fulfilled on the customer’s original commit date Percentage of orders with on time and accurate documentation supporting the order. It includes packaging. Inc.5 Return Defective Product Products that have been acknowledged as received by the customer.) are required. invoices. cube and route decide carrier and cost. In a traditional DC. such as weight. payment terms. including packing slips.

and Credit Information to SR2. weighing. and loading for shipment.. export papers. bill of lading. and loading for shipment. and Orders that have been received and entered into the order processing Aggregate Supply Chain Requirements system and are in a queue waiting to be processed and shipped. Shipping Documents to Customer Legal documentation of the contents of a shipment (e.1 Identify.. etc. Shipping.. Also. marking.. way bill.5 Return MRO Product The function that performs tasks for the outgoing shipment of parts. Shipments to P1. bill of lading. Prioritize. Shipping History to ED. 184 June 2006 . and Transactions related to sending the product to the customer.). Inc. Load.g. weighing.Load.. © Copyright 2006 Supply-Chain Council. Prioritize.). way bill. export papers.. components. Information to SR3. verify the shipment and customer credit information. Aggregate Supply Chain Requirements Shipping Documents to Government Legal documentation of the contents of a shipment (e. Shipping. Order Backlog to P1. It includes packaging. It includes packaging. Verify.. export papers.). and Credit The function that performs tasks for the outgoing shipment of parts. marking. Verify.5 Return Excess Product components. etc.1 Identify.8 Manage The transaction history of the physical shipment of an item to another Import/Export Requirements internal location or to a customer. and products. Shipping Documents to Carrier Legal documentation of the contents of a shipment (e.g.g. bill of lading. and products. verify the shipment and customer credit information. way bill. etc.. Also..

None identified Shipment Tracking Inputs: Workflow from D1. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. In a DC. Inc. Delivery Performance to Customer Commit The percentage of orders that are fulfilled on the customer’s original Date commit date Ship Product Cycle Time The average time associated with shipping product Best Practices: Cross-Docking Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency.13 Receive & Verify Product by Customer © Copyright 2006 Supply-Chain Council. both cross docking (no storage) and traditional (with storage) operations might take place.D1. Cross docking actively links the receiving and shipping processes. In a traditional DC. Metrics (see Appendix A for metrics attributes): % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% Cost to Ship Product The sum of the costs associated with shipping products. 185 June 2006 .12 Ship Product The process of shipping the product to the customer site.11 Load Vehicle & Generate Shipping Documentation Outputs: Workflow to D1.

Delivery Performance to Customer Commit The percentage of orders that are fulfilled on the customer’s original Date commit date Perfect Condition Percentage of orders delivered in an undamaged state that meet specification. are faultlessly installed (as applicable).14 Install Product The end object of a transformation process that includes physical objects.D1. Metrics (see Appendix A for metrics attributes): % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% Cost to Receive & Verify Product by The sum of the costs associated with receipt and verification at customer Customer site. © Copyright 2006 Supply-Chain Council. EDI.12 Ship Product Outputs: Product to D1. have the correct configuration. integrated transportation/warehouse management Inputs: Workflow from D1.13 Receive & Verify Product by Customer The process of receiving the shipment by the customer site (either at customer site or at shipping area in case of self-collection) and verifying that the order was shipped complete and that the product meets delivery terms. information or services. Inc. and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% Receive & Verify Product by Customer The average time associated with receiving and verifying an order at the Cycle Time customer site Best Practices: Advanced Shipping Notices & UCC128 Container Labeling Bar coding. 186 June 2006 .

The standalone product is fully functional upon completion. The product is fully functional upon completion. Marketing and Order Management) Inputs: Product from D1. have the correct configuration.D1.13 Receive & Verify Product The end object of a transformation process that includes physical objects. by Customer information or services. and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% Best Practices: Joint Service Agreements to Document Acceptable Service Levels in Terms of Installation Costs. Outputs: Installed Product to D1. Inc.15 Invoice The process of preparing. are faultlessly installed (as applicable).14 Install Product When necessary. 187 June 2006 . Manufacturing. and between internal functions such as Field Service. the process of preparing. The sum of the costs associated with product installation. © Copyright 2006 Supply-Chain Council. but there may be requirement for subsequent integration. The average time associated with product installation Percentage of orders delivered in an undamaged state that meet specification. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes): % of Faultless Installations Cost to Install Product Install Product Cycle Time Perfect Condition Number of Faultless Installations divided by Total Number of Units Installed. Collaborative planning tools with the Source suppliers (This would be effective between customer and supplier. Installation Cycle Time. testing and installing the product at the customer site. testing and installing the product at the customer site. Etc.

discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date The sum of the costs associated with invoicing.. part number. Inc. bills of lading. but there may be requirement for subsequent integration. The standalone product is fully functional upon completion.. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The average time associated with the the generation and issuance of an invoice Cost to Invoice Documentation Accuracy Invoice Cycle Time Best Practices: Electronic Transfer of Shipment Information None identified to Finance Provide Visibility to and Quickly Escalate Integrated accounts receivables Delinquent Accounts for Resolution Utilize EDI and EFT for Payment to Speed EDI transaction and network services Closing of Receivables and to Reduce Processing Costs Inputs: Installed Product from D1.g. testing and installing the product at the customer site. Metrics (see Appendix A for metrics attributes): % of Faultless Invoices The number of invoices processed without issues and or errors divided by the total number of invoices. including packing slips. product description) Wrong Price (e.14 Install Product The process of preparing.. address. invoices.15 Invoice A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. telephone number) Wrong Product Information (e. © Copyright 2006 Supply-Chain Council.g. Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. Outputs: Payment to Company Receipt of payment for goods and services per contract or purchase order. Payment is received from the customer within the payment terms of the invoice. etc. 188 June 2006 .D1. name. Percentage of orders with on time and accurate documentation supporting the order.g.

May include quality inspection.10 Pack Product The activities such as sorting / combining the products.13 Receive & Verify Product by Customer The process of receiving the shipment at the customer (either at customer site or at shipping area in case of self-collection) site and verifying that the order was shipped complete and that the product meets delivery terms. based on standard available parts or options. ande delivering the products to the shipping area for loading.9 Pick Product The series of activities including retrieving orders to pick. or through electronic media. Optionally accept payment. Configure. and a delivery date is committed and scheduled. D2. Enter and Validate Receive orders from the customer and enter them into a company’s order Order processing system.2 Receive. D2.5 Build Loads Transportation modes are selected and efficient loads are built. Manufacture. packing / kitting the products. “Technically“ examine order to ensure an orderable configuration and provide accurate price.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. assembled or configured from standard parts or subassemblies. verifying inventory availability. 189 June 2006 . putting away and recording location that a company performs at its own warehouses. The Category D2 includes fifteen Level 3 Elements: D2. D2. D2. barcodes etc.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials.8 Receive Product from Source or Make The activities such as receiving product.7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are rated and tendered.3 Reserve Resources & Determine Inventory and/or planned capacity is identified and reserved for specific Delivery Date orders.14 Install Product When necessary.. D2. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . customer. Check the customer’s credit. D2.11 Load Product & Generate Shipping The series of tasks including placing/loading product onto modes of Documentation transportation and generating the documentation necessary to meet internal. verifying. the process of preparing. D2. © Copyright 2006 Supply-Chain Council. D2. fax. D2. D2. D2.D2 Deliver Make-to-Order Product The process of delivering product that is manufactured. For services. determining put-away location. paste labels. Inc. recording product receipt. recording the pick and delivering product to packing area in response to an order. carrier and government needs. testing and installing the product at the customer site. picking the product.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. lane and location. D2.12 Ship Product The process of shipping the product to the customer site. Configure your product to the customer’s specific needs.15 Invoice A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. Orders can be received through phone. D2. D2. The product is fully functional upon completion.6 Route Shipments Loads are consolidated and routed by mode. assembly or configuration will begins only after the receipt and validation of a firm customer order. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. building the pick wave. Payment is received from the customer within the payment terms of the invoice.

accounts payable. and Return. etc. Components include accounts receivable. invoices. The levels of aggregation can be at any element associated with a supply chain asset. The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the assumption of no other constraints. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. © Copyright 2006 Supply-Chain Council. such as assembly or packaging. cost of goods sold and supply chain management costs. Inc. inventory.Cost to Deliver Deliver Cycle Time Downside Deliver Adaptability Finished Goods Inventory Days of Supply Order Fulfillment Cycle Time Perfect Order Fulfillment Return on Supply Chain Fixed Assets Return on Working Capital Upside Deliver Adaptability Upside Deliver Flexibility The sum of the costs associated with deliver The average time associated with Deliver Processes The reduction in delivered quantities sustainable at 30 days prior to delivery with no inventory or cost penalties. bills of lading. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). Deliver. Make. The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. Best Practices: Postponement Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. This includes the fixed assets used in Plan.packing slips. supply chain revenue. 190 June 2006 . to the last possible supply chain location. Source. The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. and documentation . The average actual cycle time consistently achieved to fulfill customer orders. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. Components include all items and quantities on-time using the customer’s definition of on-time.

. Order Quote (Customer) to Customer A statement of price. When given in response to an inquiry. and description of goods or services offered by a supplier to a prospective purchaser. Order Quote (Customer) to D2. a bid. terms of sale. But Does Not Generate Build Signal or Reserve Inventory Capacity Single Point of Contact for All Order Inquiries (Including Order Entry) None identified None identified . terms of sale. it is usually considered an offer to sell. Metrics (see Appendix A for metrics attributes): . without Reserving Inventory. it is usually considered an offer to sell. without Reserving Inventory. . Quote Capability. and requests for quotes. and description of goods or services offered by a supplier to a prospective purchaser.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. Customer Inquiry from Source: Customer General customer inquiries for information concerning products. A statement of price. Cost to Process Inquiry & Quote Process Inquiry & Quote Cycle Time The sum of the costs associated with processing inquiry and quotes. availability. cost. Outputs: . 191 June 2006 . The average time associated with processing inquiries and quotes Best Practices: . a bid. When given in response to an inquiry. Enter and Validate Order © Copyright 2006 Supply-Chain Council.2 Receive. Configure. Which Can Be Converted into an Order in a Single Step Quote Capability. Which Can be Converted into an Order. None identified Inputs: . Inc. .D2.

Inc. Shipments. Cost to Receive. Confirmation. None identified Activity Based Costing. or through electronic media. which includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. and Current Inventory Positions Order Entry is Organized by Customer Segment Customers Receive Differentiated Service Based on Volume of Business Customer Team is Empowered to Fully Service Customer Requests. EDLP. Margin Testing Continuous Replenishment Programs. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. Enter and Validate Order Receive orders from the customer and enter them into a company’s order processing system. None identified . Configuration Rules from ED.1 Manage Deliver Business Rules The rules for the management of product configuration. . Receive. Cost Plus Pricing Configuration Integrated Order/Financial Management Integrated demand/deployment planning to customer location driven by POS. Check the customer’s credit.D2. None identified . On-Line Stock Check and Reservation of Inventory Enable Real-Time Visibility into Backlog. Scheduled Material Receipts. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization. entering and validating a customer order. Days Sales Outstanding. Telemetry to Automatically Communicate Replenishment of Chemicals Electronic Commerce (Customer Visibility of Stock Availability. . Metrics (see Appendix A for metrics attributes): . Credit Approval). Customers) Order Entry Capability Value Pricing Based on “Cost to Serve“. . Integrated Order Management by Customer by Line Item Inputs: . Use of Hand-Held Terminals for Direct Order Entry. Configure. . Configure your product to the customer’s specific needs. Order Status. This kind of idle time should not be deducted from Order Fulfillment Cycle Time. rationalization. Enter & Validate Order Order Fulfillment Dwell Time The sum of the costs associated with receiving. Automated Configuration Management Automatic Multi-level Credit Checking: Dollar Limits. Customer Credit History. The average time associated with receiving and verifying an order at the customer site . Configure. Customer movement data EDI applications and integrated order management .2 Receive. Including Formal Orders and Ad Hoc Requests Customers Have One Point of Contact for All Products Remote (Sales. fax. © Copyright 2006 Supply-Chain Council. Orders can be received through phone. “Technically“ examine order to ensure an orderable configuration and provide accurate price. . Vendor Managed Inventory. which is imposed by customer requirements. Any lead time during the order fulfillment process where no activity takes place. and bill of materials. Enter & Validate Order Cycle Time Best Practices: . based on standard available parts or options. 192 June 2006 . routings. Optionally accept payment.

1 Manage Deliver Business Rules Outputs: . . . . credit and purchase histories. and delivery requirements.7 Manage Product Life Cycle Optional Payment to Company Purchase History to ED. When given in response to an inquiry. distribution centers. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment. etc. Booked Order to ED. 193 June 2006 . Rules for the function that encompasses receiving. credit and purchase histories. and Aggregate Return Requirements Booked Order to D2. etc. Report that portrays a potential customer’s payment history and debt.3 Manage Deliver Information Credit History to ED. etc. years.) The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. entering. and interplant operations. Report that portrays a potential customer’s payment history and debt.3 Manage Deliver Information Customer Order Size. a bid. and delivery requirements.3 Manage Deliver Information . year. maybe partial or in full. Actual Sales History to P5. including design efforts for make-to-order products Customer profile.3 Manage Deliver Information Customer Address Data to ED. status. .1 Assess. The commitment should be based on the available-to-promise line (ATP) in the master schedule. Weight. credit and purchase histories. . terms of sale. these criteria determine type of carrier and cost of shipment Customer profile. and promising orders from customers. and Freight Class to ED. which includes address and location data. Order Rules from ED. status.. .1 Process Inquiry & Quote All the provisions and agreements of a contract. indicating the ability to pay in a timely manner in the future. The commitment should be based on the available-to-promise line (ATP) in the master schedule. © Copyright 2006 Supply-Chain Council. months. Contract Terms from Source: Customer Credit History from Source: Customer Order Quote (Customer) from D2. Inc. and description of goods or services offered by a supplier to a prospective purchaser. including design efforts for make-to-order products The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. or it might be a more complicated series of activities. The amount of purchased products for a certain time in history per specific intervals .3 Manage Deliver Information . customer preferences including shipping. etc. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment. . status. Contract Status to ED. which include address data.) and expressed in any specified increments (per day. indicating the ability to pay in a timely manner in the future.6 Manage Transportation Location of Customers to ED. . Customer profile. it is usually considered an offer to sell. week.3 Reserve Resources & Determine Delivery Date Amount of past sales spanning any specified period of time (weeks. . month. Coupled with cube and route. Payment at the time of order. or it might be a more complicated series of activities. customer preferences including shipping. etc. and delivery requirements. which include address data. customer preferences including shipping. A statement of price.

credit and purchase histories. Inc.. and delivery requirements. © Copyright 2006 Supply-Chain Council. Shipping Preferences to ED.3 Manage Deliver Information Customer preferences including shipping. which includes address data. and customer profile.. 194 June 2006 . etc. status.

. . 195 June 2006 . Real-time inventory management Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a customer order.4 Transfer Product . or it might be a more complicated series of activities. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. Enter and Validate Order The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. Delivery Plans from P4. This kind of idle time should not be deducted from Order Fulfillment Cycle Time. Booked Order from D2. Automatic Reservation of Inventory and Dynamic Sourcing of Product for Single Shipment to Customer Available-to-Promise (ATP) Dynamic Deployment Based on Constraint Based Planning and Optimal Scheduling Integrated order management system that treats each order line as a separate order with integration to inventory source and status. repairs and operating supplies). and customer service (finished goods and spare parts). A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. .2 Receive. and resource optimization Inputs: . The average time associated with reserving resources and determining a delivery date . and a delivery date is committed and scheduled. Cost to Reserve Resources & Determine Delivery Date Delivery Performance to Customer Commit Date Order Fulfillment Dwell Time . including design efforts for make-to-order products A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Configure. . This can be as simple as creating shipping documents for finished goods in a make-to-stock environment. Production Plans from P3.4 Establish Production Plans © Copyright 2006 Supply-Chain Council. cost. The percentage of orders that are fulfilled on the customer’s original commit date Any lead time during the order fulfillment process where no activity takes place.3 Reserve Resources & Determine Delivery Date Inventory and/or planned capacity is identified and reserved for specific orders. . Metrics (see Appendix A for metrics attributes): . supporting activities (maintenance. The commitment should be based on the available-to-promise line (ATP) in the master schedule. Advanced planning and scheduling logic with constraint. Reserve Resources & Determine Delivery Date Cycle Time Best Practices: . which is imposed by customer requirements. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization.D2. . Those stocks or items on hand used to support production (raw materials and work in process items). % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the costs associated with reserving resources and determining a delivery date. Production Plan includes production capability. Inc.4 Establish Delivery Plans Inventory Availability from S2.

1 Identify. Assess. and Aggregate Delivery Resources and Capabilities .4 Establish Sourcing Plans A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Determination of the time required from the receipt of the order until the item should be delivered.1 Identify.1 Identify.1 Schedule Production Activities Sourcing Plans from P2.1 Schedule Product Deliveries © Copyright 2006 Supply-Chain Council. Order Backlog to P4. and customer service (finished goods and spare parts). Those stocks or items on hand used to support production (raw materials and work in process items). A periodic report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products that are covered in the stock status report. Production Schedule from M2. . Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. . and Aggregate Production Requirements Order Signal to P2. Inc. Inventory Status to Source . An aggregate material requirements plan used to schedule material deliveries to meet production plan.2 Identify. supporting activities (maintenance. Those stocks or items on hand used to support production (raw materials and work in process items). Prioritize. repairs and operating supplies). A periodic report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products that are covered in the stock status report. Inventory Status to Deliver .2 Assess Delivery Performance Delivery Date to D2. ATP includes on-hand inventory less customer orders that are due and overdue An order from a customer for a particular product or a number of products. . .. Reserved inventory and/or planned capacity and delivery date for a specific order. Prioritize. . Outputs: . A periodic report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products that are covered in the stock status report. 196 June 2006 . A periodic report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products that are covered in the stock status report. Inventory Status to Make . Inventory Status to Plan . repairs and operating supplies). Prioritize. and Aggregate Delivery Requirements Order Signal to P3. . Inventory Availability/Delivery Date to P4. and Aggregate Product Requirements Replenishment Signal to S2. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. Determination of the time required from the receipt of the order until the item should be delivered. Customer Order to ED. Available to Promise Date to Make The uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customerorder promising. Reserved inventory and/or planned capacity and delivery date for a specific order. It is often referred to as an actual demand to distinguish it from a forecasted demand.4 Consolidate Orders . and customer service (finished goods and spare parts). Any signal that indicates when to produce or transport Items in a pull replenishment system. In the first period. supporting activities (maintenance.

Outputs: .4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. Traffic Lane. The sum of the costs associated with consolidating customer orders. Consolidate Orders Cycle Time Cost to Consolidate Orders The average time required for customer order consolidation. Integrated load planning and building with warehouse management Inputs: . Delivery Date from D2. Consolidate Orders by Customer. Carrier. © Copyright 2006 Supply-Chain Council. repairs and operating supplies).3 Reserve Resources & Determine Delivery Date Those stocks or items on hand used to support production (raw materials and work in process items). . supporting activities (maintenance. and customer service (finished goods and spare parts). Determination of the time required from the receipt of the order until the item should be delivered.D2. 197 June 2006 .5 Build Loads The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. Metrics (see Appendix A for metrics attributes): . Etc. Inc. Source. Consolidated Orders to D2. Best Practices: .

. Load Information to D2.6 Route Shipments Information relative to a load that is built and shipped. etc. . Best Practices: . destinations. Build Loads Cycle Time Cost to Build Loads The average time associated with building shipment loads. Integrated inbound/outbound transportation planning Integration with CRP/VMI vendor systems Inputs: . Metrics (see Appendix A for metrics attributes): . items. Outputs: . Build Load in Stop Sequence Consolidation of Inbound and Outbound Requirements CRP & VMI Loads Optimized for Utilization Integrated inbound/outbound transportation planning (i. 198 June 2006 .e.). i. Inc. . Consolidated Orders from D2. etc © Copyright 2006 Supply-Chain Council.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation.e. weight.D2.5 Build Loads Transportation modes are selected and efficient loads are built. 1st truck destination loaded last. customer. The sum of the costs associated with building transportation loads.

carrier selection. . lane and location. mode. Routes for shipping by consolidating loads.e.5 Build Loads Rated Carrier Data from Source: Company Routing Guide from Source: Company Information relative to a load that is built and shipped. Information used to select modes. Load Information from D2. . 199 June 2006 . lane. Listing or routes. etc. etc. The on-site inventory is counted. Routing & Scheduling with Advanced Ship Notice (ASN) Satellite communications. . Metrics (see Appendix A for metrics attributes): . transportation lanes.6 Route Shipments Loads are consolidated and routed by mode.7 Select Carriers & Rate Shipments The required or agreed time or rate of delivery of goods or services purchased for a future period. . . Inc. Carrier/Route Optimization Based on Continuous Movement and Consolidation/Pooling Consolidation of Carriers CRP/VMI Shipment Tracking and Tracing Vendor Managed Inventory Route scheduling.D2. RFID VMI is a concept for planning and control of inventory. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. customer. items. Cost to Route Shipments Route Shipments Cycle Time The sum of the costs associated with routing shipments. © Copyright 2006 Supply-Chain Council. The average time associated with routing shipments Best Practices: . Inputs: . weight. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. i. . and the inventory is restocked to predefined levels. carriers & rates. Scheduled Deliveries to Plan Shipment Routes to D2. damaged or outdated goods are removed. available carriers. and rating Transportation modeling and rate analysis Integrated Load Building. destinations. . GPS. etc Contract rates and tariffs from carriers by commodity. for shipments. . Outputs: .

Inc. 200 June 2006 .6 Route Shipments Routes for shipping by consolidating loads. Outputs: . Metrics (see Appendix A for metrics attributes): . The average time associated with selecting carriers and rating shipments Best Practices: .7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are rated and tendered. Shipment Routes from D2. Cost to Select Carriers & Rate Shipments Select Carriers & Rate Shipments Cycle Time The sum of the costs associated with selecting carriers and rating shipments.D2.9 Pick Product © Copyright 2006 Supply-Chain Council. . Select Carriers by Least Cost per Shipment and Rate Using Actual Rates Prior to Release to Billing Rules based carrier selection and actual rate database Inputs: . Workflow to D2.

O. stock locator. Cost to Receive Product from Source or Make Receive Product from Source or Make Cycle Time The sum of the costs associated with transferring product from source or make activities. recording product receipt. May include quality inspection.D2. determining put-away location. both cross docking (no storage) and traditional (with storage) operations might take place. In a traditional DC.9 Pick Product © Copyright 2006 Supply-Chain Council. Download P. Zoned Picking. Metrics (see Appendix A for metrics attributes): . Integration with Procurement Systems & Electronic Commerce with Vendors Real time inventory control. 201 June 2006 . the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. & Advanced Ship Notices for Automated Receiving and Put Away Dynamic Location Assignment Including Lot Control. Cross docking actively links the receiving and shipping processes. Automatic Identification Cross-Docking Bar Coding & Radio Frequency Communications Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency.8 Receive Product from Source or Make The activities such as receiving product. . and rules based picking logic . verifying. In a DC. putting away and recording location that a company performs at its own warehouses. Inc. . Workflow to D2. The average time associated with receiving a transfer of product to deliver processes from source or make Best Practices: . . Quality Assurance Outputs: .

4 Transfer Those stocks or items on hand used to support production (raw Product materials and work in process items). 202 June 2006 .6 Manage Transportation Outputs: .10 Pack Product © Copyright 2006 Supply-Chain Council. Release Finished Product to Deliver Inventory Availability from S2. and rules based picking logic Rules based picking logic and simulation None identified Inputs: . Quality Assurance Dynamic Simulation of Picking Requirements Optimized for Labor. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. Inc. recording the pick and delivering product to packing area in response to an order. supporting activities (maintenance. Cost to Pick Product Pick Product Cycle Time The sum of the costs associated with picking product. Zoned Picking. picking the product.2 Issue Sourced/In-Process Product Those stocks or items on hand used to support production (raw materials and work in process items). . repairs and operating supplies). and customer service (finished goods and spare parts). . Workflow to D2.6 The authorization to ship a finished product that has been ordered. Production Schedule from M2. . . repairs and operating supplies). Metrics (see Appendix A for metrics attributes): . . . The average time associated with product pick Best Practices: . . Inventory Availability from M2. . and Time Use of Speed Racks for Automated Material Handling Real time inventory control.7 Select Carriers & Rate Shipments Workflow from D2.8 Receive Product from Source or Make Finished Product Release from M2. Workflow from D2.D2. verifying inventory availability. and customer service (finished goods and spare parts). Dynamic Location Assignment Including Lot Control. stock locator. supporting activities (maintenance. . building the pick wave. Cost.9 Pick Product The series of activities including retrieving orders to pick. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.1 Schedule Production Activities WIP Location Rules from EM.

9 Pick Product Outputs: . packing / kitting the products. barcodes etc.10 Pack Product The activities such as sorting / combining the products. paste labels. Workflow from D2. Workflow to D2.11 Load Product & Generate Shipping Documentation © Copyright 2006 Supply-Chain Council. 203 June 2006 . and delivering the products to the shipping area for loading. Metrics (see Appendix A for metrics attributes): . The average time associated with packing a product for shipment. Inc. Cost to Pack Product Pack Product Cycle Time The sum of the costs associated with product packaging. Inputs: . .D2.

. Inc. . Load Product & Generate Shipping Documentation Cycle Time Best Practices: . bills of lading. The percentage of orders that are fulfilled on the customer’s original commit date Percentage of orders with on time and accurate documentation supporting the order. and other conditions. . Cross-Docking .12 Ship Product Advanced Ship Notice to D2.D2. customer.13 Receive & Verify Product by Customer Delivered End Items to Customer An EDI notification of shipment of product. Advanced Shipping Notices & UCC128 Container Labeling Carrier Agreement Bar coding. 204 June 2006 . Legal documentation of the contents of a shipment (e. including packing slips. Outputs: .11 Load Product & Generate Shipping Documentation The series of tasks including placing/loading product onto modes of transportation and generating the documentation necessary to meet internal. Metrics (see Appendix A for metrics attributes): . bill of lading. . size. Shipping parameters. . Electronic Generation and Download of Shipping Documents Full Visibility of Credit History by Shipping Personnel Integrated Credit Checking Inputs: . EDI. . cube and route decide carrier and cost. .10 Pack Product Shipping Export Parameters and Documentation from ED. both cross docking (no storage) and traditional (with storage) operations might take place. such as weight. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The average time associated with product loading and the generation of shipping documentation . way bill. Workflow to D2. Products that have been acknowledged as received by the customer. Cost to Load Product & Generate Shipping Documentation Delivery Performance to Customer Commit Date Documentation Accuracy The sum of the costs associated with loading product & generating shipping documentation.) are required. © Copyright 2006 Supply-Chain Council. . Workflow from D2. .8 Manage Import/Export Requirements Shipping Parameters and Documentation from ED. Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. invoices. payment terms. integrated transportation/warehouse management Carrier agreements are agreements between a company and its domestic and global carriers (for both. None identified None identified Interface to supplier’s shipping system to financials . etc. In a DC. In a traditional DC. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes.g. etc. Cross docking actively links the receiving and shipping processes.6 Manage Transportation Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. inbound raw materials and outbound finished goods) specifying service levels. carrier and government needs. export papers.

etc. © Copyright 2006 Supply-Chain Council.8 Manage Import/Export Requirements Legal documentation of the contents of a shipment (e. Shipping Documents to Carrier Shipping History to ED. 205 June 2006 ... . The transaction history of the physical shipment of an item to another internal location or to a customer.g. bill of lading.). Inc. way bill. export papers...

Metrics (see Appendix A for metrics attributes): . % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the costs associated with shipping products.D2.11 Load Product & Generate Shipping Documentation Outputs: . both cross docking (no storage) and traditional (with storage) operations might take place.13 Receive & Verify Product by Customer © Copyright 2006 Supply-Chain Council. 206 June 2006 . .12 Ship Product The process of shipping the product to the customer site. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. The percentage of orders that are fulfilled on the customer’s original commit date The average time associated with shipping product . Cost to Ship Product Delivery Performance to Customer Commit Date Ship Product Cycle Time Best Practices: . Cross docking actively links the receiving and shipping processes. Cross-Docking Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. Shipment Tracking Inputs: . Inc. In a DC. Workflow from D2. Workflow to D2. None identified . . In a traditional DC.

14 Install Product The end object of a transformation process that includes physical objects. Cost to Receive & Verify Product by Customer Delivery Performance to Customer Commit Date Perfect Condition The sum of the costs associated with receipt and verification at customer site. © Copyright 2006 Supply-Chain Council. and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% The average time associated with receiving and verifying an order at the customer site . The percentage of orders that are fulfilled on the customer’s original commit date Percentage of orders delivered in an undamaged state that meet specification. .11 Load Product & Generate Shipping Documentation An EDI notification of shipment of product. Metrics (see Appendix A for metrics attributes): . Receive & Verify Product by Customer Cycle Time Best Practices: . Inc. are faultlessly installed (as applicable). . . integrated transportation/warehouse management None identified Inputs: . have the correct configuration. Advanced Shipping Notices & UCC128 Container Labeling Shipment Tracking Bar coding. 207 June 2006 .13 Receive & Verify Product by Customer The process of receiving the shipment at the customer (either at customer site or at shipping area in case of self-collection) site and verifying that the order was shipped complete and that the product meets delivery terms. Workflow from D2.12 Ship Product Advanced Ship Notice from D2. EDI. information or services. Outputs: . Product to D2. .D2.

Product from D2. % of Faultless Installations Cost to Install Product Install Product Cycle Time Perfect Condition Number of Faultless Installations divided by Total Number of Units Installed. 208 June 2006 . Installed Product to D2. Manufacturing. Outputs: . Marketing and Order Management) Inputs: . testing and installing the product at the customer site. information or services.14 Install Product When necessary. have the correct configuration. The sum of the costs associated with product installation. . Metrics (see Appendix A for metrics attributes): . testing and installing the product at the customer site. Inc. The standalone product is fully functional upon completion. The process of preparing. The standalone product is fully functional upon completion. Collaborative planning tools with the Source suppliers (This would be effective between customer and supplier. the process of preparing. Installed Product to Customer © Copyright 2006 Supply-Chain Council. and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% Best Practices: . .15 Invoice The process of preparing.D2. Joint Service Agreements to Document Acceptable Service Levels in Terms of Installation Costs. and between internal functions such as Field Service. but there may be requirement for subsequent integration. . . are faultlessly installed (as applicable). but there may be requirement for subsequent integration. The product is fully functional upon completion. The average time associated with product installation Percentage of orders delivered in an undamaged state that meet specification.13 Receive & Verify Product by Customer The end object of a transformation process that includes physical objects. Installation Cycle Time. testing and installing the product at the customer site. Etc.

including packing slips. etc.. The standalone product is fully functional upon completion. invoices. Electronic Transfer of Shipment Information to Finance Provide Visibility to and Quickly Escalate Delinquent Accounts for Resolution Utilize EDI and EFT for Payment to Speed Closing of Receivables and to Reduce Processing Costs None identified Integrated accounts receivables EDI transaction and network services Inputs: .15 Invoice A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received.. . 209 June 2006 . telephone number) Wrong Product Information (e. product description) Wrong Price (e. . . testing and installing the product at the customer site. Payment is received from the customer within the payment terms of the invoice.g.D2. bills of lading. discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date 5 point annual average of gross accounts receivable ÷ (total gross annual sales ÷ 365) The average time associated with Deliver Processes Percentage of orders with on time and accurate documentation supporting the order.g.g. Metrics (see Appendix A for metrics attributes): . Payment to Company Receipt of payment for goods and services per contract or purchase order. address. % of Faultless Invoices The number of invoices processed without issues and or errors divided by the total number of invoices.. but there may be requirement for subsequent integration. .14 Install Product The process of preparing. Customer Invoicing/ Accounting Costs Days Sales Outstanding Deliver Cycle Time Documentation Accuracy Best Practices: . Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. part number. . [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% . © Copyright 2006 Supply-Chain Council. Outputs: . Installed Product from D2. Inc. name.

4 Schedule Installation D3. Commit Resources & Launch Program D3. product performance) and finalizing the contract.13 Receive & Verify Product by Customer . The Category D3 includes fifteen Level 3 Elements: . The process of shipping the product to the customer site The process of receiving the shipment (either at customer site or at shipping area in case of self-collection) and verifying that the order was shipped complete and that the product meets delivery terms. .9 Pick Product © Copyright 2006 Supply-Chain Council. Inc.g. verifying. establishing price). A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. the process of preparing. picking the product. . Optionally accept payment. D3.5 Build Loads D3. recording product receipt. The product is fully functional upon completion. D3. . . manufactured.15 Invoice . ande delivering the products to the shipping area for loading. putting away and recording location that a company performs at its own warehouses. and assembled from a bill of materials that includes one or more custom parts. carrier and government needs. approving the planned resources (e. determining put-away location. barcodes etc. evaluating the request (estimating the schedule. The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule. The series of activities including retrieving orders to pick.12 Ship Product D3. . building the pick wave. manufacturing. . lane. . D3. Specific carriers are selected by lowest cost per route and shipments are rated and tendered.6 Route Shipments D3. etc. 210 June 2006 . and location. D3. developing costs estimates. engineering. schedule.14 Install Product D3. testing and installing the product at the customer site.) and officially launching the program. May include quality inspection.11 Load Product & Generate Ship Documents D3. and responding to the potential customer. The process of consolidating and routing shipments by mode. . customer.7 Select Carriers and Rate Shipments D3. recording the pick and delivering product to packing area in response to an order. . The process of entering/finalizing the customers order.1 Obtain and Respond to RFP/RFQ The process of receiving a request for proposal or request for quote. .3 Enter Order. paste labels.10 Pack Product D3.. packing / kitting the products. Design will begin only after the receipt and validation of a firm customer order.g. generating the documentation necessary to meet internal. price.D3 Deliver Engineer-to-Order Product The process of delivering a product that is designed. The process of negotiating order details with customer (e. verifying inventory availability. The activities such as receiving product.2 Negotiate & Receive Contract D3.8 Receive Product from Source or Make . D3. . When necessary. The activities such as sorting / combining the products. Payment is received from the customer within the payment terms of the invoice.. The series of tasks including placing product onto vehicles. Transportation loads are selected and efficient loads are built.

and documentation . Deliver. 211 June 2006 . bills of lading. Components include accounts receivable. . . inventory. . . Components include all items and quantities on-time using the customer’s definition of on-time. etc. accounts payable. This includes the fixed assets used in Plan.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the assumption of no other constraints.Metrics (see Appendix A for metrics attributes): . Return on Working Capital . Inc. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. . Return on Supply Chain Fixed Assets . invoices. The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. Upside Deliver Adaptability Upside Deliver Flexibility © Copyright 2006 Supply-Chain Council. . cost of goods sold and supply chain management costs. Cost to Deliver Deliver Cycle Time Downside Deliver Adaptability Finished Goods Inventory Days of Supply Order Fulfillment Cycle Time Order Management Costs Perfect Order Fulfillment The sum of the costs associated with deliver The average time associated with Deliver Processes The reduction in delivered quantities sustainable at 30 days prior to delivery with no inventory or cost penalties. Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . . . The levels of aggregation can be at any element associated with a supply chain asset. Source.packing slips. For services. Make. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). The average actual cycle time consistently achieved to fulfill customer orders. and Return. supply chain revenue. The aggregation of the following cost elements (contained in this glossary): The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage.

A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors. Cost and Manufacturing Process None identified None identified Inputs: . and delivery requirements. The amount of purchased products for a certain time in history per specific intervals Customer preferences including shipping. Outputs: . evaluating the request (estimating the schedule. © Copyright 2006 Supply-Chain Council.1 Obtain and Respond to RFP/RFQ The process of receiving a request for proposal or request for quote. Report that portrays a potential customer’s payment history and debt. status. and delivery requirements. indicating the ability to pay in a timely manner in the future. Partnership with Outside Design Firms to Provide Skills and Capacity. status.3 Manage Deliver Information Purchase History to ED.3 Manage Deliver Information Shipping Preferences to ED. Cost to Obtain & Respond to Request for Quote (RFQ) / Request for Proposal (RFP) Obtain & Respond to Request for Quote (RFQ) / Request for Proposal (RFP) Cycle Time The sum of the costs associated with obtaining and responding to Request for Quote (RFQ) / Request for Proposal (RFP). customer preferences including shipping.A document used to solicit vendor responses when the functional requirements and features are known but no specific product is in mind. Metrics (see Appendix A for metrics attributes): . which includes address data.3 Manage Deliver Information Customer Address Data to ED. status. which include address data.2 Negotiate & Receive Contract Contract Status to ED. . . customer preferences including shipping. 212 June 2006 . Inc. and responding to the potential customer. establishing price). credit and purchase histories. . Completed Proposal to D3. Completed Proposal to Customer A document submitted in response to the a request for proposal from a customer with all the terms and conditions of sale of a product or service A document submitted in response to the a request for proposal from a customer with all the terms and conditions of sale of a product or service Customer profile. developing costs estimates. RFQ/RFP from Source: Customer Request for Quote . etc. The average time associated with obtaining and responding to RFQs/RFPs Best Practices: .D3. . which include address data. Request for Proposal . etc. . as Needed Use of CAD/CAE Applications to Simulate Design. .3 Manage Deliver Information . credit and purchase histories. credit and purchase histories. .3 Manage Deliver Information Credit History to ED. Customer profile.. etc. and customer profile. and delivery requirements.

Approved Contract to D3. An order from a customer for a particular product or a number of products.3 Enter Order. maybe partial or in full. Weight. Cost to Negotiate & Receive Contract Negotiate & Receive Contract Cycle Time The sum of the costs associated with negotiating and receiving contracts The average time associated with negotiating and receiving a contract Inputs: . status. which includes address and location data. Payment at the time of order. Completed Proposal from D3.7 Manage Product Life Cycle Optional Payment to Company . and interplant operations. . .g. Coupled with cube and route.2 Assess Delivery Performance Customer Order Size. credit and purchase histories. A contract may be oral or written. Commit Resources & Launch Program Acceptance of an agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise.6 Manage Transportation Location of Customers to ED. Metrics (see Appendix A for metrics attributes): . etc. .1 Manage Deliver Business Rules A document submitted in response to the a request for proposal from a customer with all the terms and conditions of sale of a product or service Rules for the function that encompasses receiving. . these criteria determine type of carrier and cost of shipment Customer profile.2 Negotiate & Receive Contract The process of negotiating order details with customer (e. . customer preferences including shipping. Customer Order to ED. It is often referred to as an actual demand to distinguish it from a forecasted demand. entering. schedule.. © Copyright 2006 Supply-Chain Council.1 Obtain and Respond to RFP/RFQ Order Rules from ED.D3. Outputs: . product performance) and finalizing the contract. and Freight Class to ED. 213 June 2006 . price. Inc. and delivery requirements. Optionally accept payment. and promising orders from customers. distribution centers.

month. .) and officially launching the program. months. etc. Inc. committing resources and program launch Any lead time during the order fulfillment process where no activity takes place. Prioritize. .2 Negotiate & Receive Contract Acceptance of an agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. and Aggregate Return Requirements Customer Order to D3. etc. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. . . approving the planned resources (e. This kind of idle time should not be deducted from Order Fulfillment Cycle Time. . A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. . Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the costs associated with entering the order. A contract may be oral or written. Actual Sales History to P5.4 Establish Production Plans . which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization.3 Enter Order. Commit Resources & Launch Program Cycle Time Order Fulfillment Dwell Time Inputs: . .g. . Metrics (see Appendix A for metrics attributes): .4 Establish Delivery Plans Production Plans from P3. The percentage of orders that are fulfilled on the customer’s original commit date The average time associated with entering an order. and Aggregate Delivery Requirements Amount of past sales spanning any specified period of time (weeks. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. manufacturing.1 Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Production Schedule from M3. 214 June 2006 . © Copyright 2006 Supply-Chain Council.D3. Approved Contract from D3. which is imposed by customer requirements. week. year. . Production Plan includes production capability. engineering. It is often referred to as an actual demand to distinguish it from a forecasted demand.4 Schedule Installation Order Backlog to P4..4 Establish Sourcing Plans Outputs: . committing resources & launching a program.1 Identify. Cost to Enter Order.) and expressed in any specified increments (per day. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Commit Resources & Launch Program The process of entering/finalizing the customers order.) An order from a customer for a particular product or a number of products. Commit Resources & Launch Program Delivery Performance to Customer Commit Date Enter Order.2 Schedule Production Activities Sourcing Plans from P2. etc. Delivery Plans from P4. years.

. . and Aggregate Delivery Resources and Capabilities The function encompasses receiving and entering all data necessary on orders.1 Finalize Production Engineering Order Signal to P2. .. and Aggregate Production Requirements Replenishment Signal to S3. © Copyright 2006 Supply-Chain Council. Prioritize. The capability of a system or resource to produce a quantity of output in a particular time period.1 Identify.3 Schedule Product Deliveries Resource Availability to P4. Reserved inventory and/or planned capacity and delivery date for a specific order. Any signal that indicates when to produce or transport Items in a pull replenishment system. Prioritize. . 215 June 2006 . so the order can be finalized and entered into the order system.2 Identify. Assess. and Aggregate Product Requirements Order Signal to P3.1 Identify. Order Information to M3. or the available resources at a point in time able to generate an output. Inc. Reserved inventory and/or planned capacity and delivery date for a specific order.

Outputs: . 216 June 2006 . Cost to Schedule Installation Schedule Installation Cycle Time The sum of the costs associated with scheduling product installation. Scheduled Installation to D3. It is often referred to as an actual demand to distinguish it from a forecasted demand.3 Enter Order.5 Build Loads © Copyright 2006 Supply-Chain Council.4 Schedule Installation The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule.D3. Commit Resources & Launch Program An order from a customer for a particular product or a number of products. Scheduled Installation to Customer The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule. The average time associated with scheduling the installation of product Inputs: . Customer Order from D3. Metrics (see Appendix A for metrics attributes): . . Inc. . The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule.

D3.5 Build Loads
Transportation loads are selected and efficient loads are built. Metrics (see Appendix A for metrics attributes):
. . Build Loads Cycle Time Cost to Build Loads The average time associated with building shipment loads. The sum of the costs associated with building transportation loads.

Best Practices:
. . . . Build Load in Stop Sequence Consolidation of Inbound and Outbound Requirements CRP & VMI Loads Optimized for Utilization Vendor Managed Inventory Integrated inbound/outbound transportation planning (i.e. 1st truck destination loaded last, etc.). Integrated inbound/outbound transportation planning Integration with CRP/VMI vendor systems VMI is a concept for planning and control of inventory, in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels.

Inputs:
. Scheduled Installation from D3.4 Schedule Installation The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule.

Outputs:
. . Load Information to D3.6 Route Shipments Scheduled Deliveries to Plan Information relative to a load that is built and shipped, i.e. customer, items, destinations, weight, etc The required or agreed time or rate of delivery of goods or services purchased for a future period.

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D3.6 Route Shipments
The process of consolidating and routing shipments by mode, lane, and location. Metrics (see Appendix A for metrics attributes):
. . Cost to Route Shipments Route Shipments Cycle Time The sum of the costs associated with routing shipments. The average time associated with routing shipments

Best Practices:
. . . . . Carrier/Route Optimization Based on Continuous Movement and Consolidation/Pooling Consolidation of Carriers CRP/VMI Select Carriers by Least Cost per Shipment and Rate Using Actual Rates Prior to Release to Billing Shipment Tracking and Tracing Route scheduling, carrier selection, and rating Transportation modeling and rate analysis Integrated Load Building; Routing & Scheduling with Advanced Ship Notice (ASN) Rules based carrier selection and actual rate database Satellite communications, GPS, RFID

Inputs:
. . . Load Information from D3.5 Build Loads Rated Carrier Data from Source: Company Routing Guide from Source: Company Information relative to a load that is built and shipped, i.e. customer, items, destinations, weight, etc Contract rates and tariffs from carriers by commodity, lane, mode, etc. for shipments. Information used to select modes, transportation lanes, available carriers, etc. Listing or routes, carriers & rates.

Outputs:
. Workflow to D3.7 Select Carriers and Rate Shipments

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D3.7 Select Carriers and Rate Shipments
Specific carriers are selected by lowest cost per route and shipments are rated and tendered. Metrics (see Appendix A for metrics attributes):
. . Cost to Select Carriers & Rate Shipments Select Carriers & Rate Shipments Cycle Time The sum of the costs associated with selecting carriers and rating shipments. The average time associated with selecting carriers and rating shipments

Best Practices:
. Select Carriers by Least Cost per Shipment and Rate Using Actual Rates Prior to Release to Billing Rules based carrier selection and actual rate database

Inputs:
. Workflow from D3.6 Route Shipments

Outputs:
. Workflow to D3.9 Pick Product

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D3.8 Receive Product from Source or Make
The activities such as receiving product, verifying, recording product receipt, determining put-away location, putting away and recording location that a company performs at its own warehouses. May include quality inspection. Metrics (see Appendix A for metrics attributes):
. . Cost to Receive Product from Source or Make Receive Product from Source or Make Cycle Time The sum of the costs associated with transferring product from source or make activities. The average time associated with receiving a transfer of product to deliver processes from source or make

Best Practices:
. . Automatic Identification Cross-Docking Bar Coding & Radio Frequency Communications Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. In a traditional DC, the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. Cross docking actively links the receiving and shipping processes. In a DC, both cross docking (no storage) and traditional (with storage) operations might take place. Integration with Procurement Systems & Electronic Commerce with Vendors Real time inventory control, stock locator, and rules based put away logic

. .

Download P.O. & Advanced Ship Notices for Automated Receiving and Put Away Dynamic Location Assignment Including Lot Control, Zoned Put Away, Quality Assurance, ABC Frequency of Access

Outputs:
. Workflow to D3.9 Pick Product

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D3.9 Pick Product
The series of activities including retrieving orders to pick, verifying inventory availability, building the pick wave, picking the product, recording the pick and delivering product to packing area in response to an order. Metrics (see Appendix A for metrics attributes):
. . Cost to Pick Product Pick Product Cycle Time The sum of the costs associated with picking product. The average time associated with product pick

Best Practices:
. . Dynamic Location Assignment Including Lot Control, Zoned Picking, Quality Assurance Dynamic Simulation of Picking Requirements Optimized for Labor, Cost, and Time Real time inventory control, stock locator, and rules based picking logic Rules based picking logic and simulation

Inputs:
. . . . Workflow from D3.7 Select Carriers and Rate Shipments Workflow from D3.8 Receive Product from Source or Make Finished Product Release from M3.7 The authorization to ship a finished product that has been ordered. Release Product to Deliver Inventory Availability from M3.3 Issue Those stocks or items on hand used to support production (raw Sourced/In-Process Product materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). Inventory Availability from S3.6 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items), supporting activities (maintenance, repairs and operating supplies), and customer service (finished goods and spare parts). A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.

.

.

Production Schedule from M3.2 Schedule Production Activities

Outputs:
. Workflow to D3.10 Pack Product

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D3.10 Pack Product
The activities such as sorting / combining the products, packing / kitting the products, paste labels, barcodes etc. ande delivering the products to the shipping area for loading. Metrics (see Appendix A for metrics attributes):
. . Cost to Pack Product Pack Product Cycle Time The sum of the costs associated with product packaging. The average time associated with packing a product for shipment.

Inputs:
. Workflow from D3.9 Pick Product

Outputs:
. Workflow to D3.11 Load Product & Generate Ship Documents

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D3.11 Load Product & Generate Ship Documents
The series of tasks including placing product onto vehicles, generating the documentation necessary to meet internal, customer, carrier and government needs. Metrics (see Appendix A for metrics attributes):
. . Cost to Load Product & Generate Shipping Documentation Documentation Accuracy The sum of the costs associated with loading product & generating shipping documentation. Percentage of orders with on time and accurate documentation supporting the order, including packing slips, bills of lading, invoices, etc. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The average time associated with product loading and the generation of shipping documentation

.

Load Product & Generate Shipping Documentation Cycle Time

Best Practices:
. . Advanced Shipping Notices & UCC128 Container Labeling Carrier Agreement Bar coding; EDI; integrated transportation/warehouse management Carrier agreements are agreements between a company and its domestic and global carriers (for both, inbound raw materials and outbound finished goods) specifying service levels, payment terms, and other conditions. Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. In a traditional DC, the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. Cross docking actively links the receiving and shipping processes. In a DC, both cross docking (no storage) and traditional (with storage) operations might take place. None identified None identified Interface to supplier’s shipping system to financials

.

Cross-Docking

. . .

Electronic Generation and Download of Shipping Documents Full Visibility of Credit History by Shipping Personnel Integrated Credit Checking

Inputs:
. . Workflow from D3.10 Pack Product Shipping Export Parameters and Documentation from ED.8 Manage Import/Export Requirements Shipping Parameters and Documentation from ED.6 Manage Transportation Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. Shipping parameters, such as weight, size, cube and route decide carrier and cost. Legal documentation of the contents of a shipment (e.g. way bill, bill of lading, export papers, etc.) are required.

.

Outputs:
. . . Workflow to D3.12 Ship Product Shipping Documents to Carrier Shipping History to ED.8 Manage Import/Export Requirements Legal documentation of the contents of a shipment (e.g. way bill, bill of lading, export papers, etc....). The transaction history of the physical shipment of an item to another internal location or to a customer.

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D3.12 Ship Product
The process of shipping the product to the customer site Metrics (see Appendix A for metrics attributes):
. % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the costs associated with shipping products. The percentage of orders that are fulfilled on the customer’s original commit date The average time associated with shipping product

. . .

Cost to Ship Product Delivery Performance to Customer Commit Date Ship Product Cycle Time

Best Practices:
. Cross-Docking Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. In a traditional DC, the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. Cross docking actively links the receiving and shipping processes. In a DC, both cross docking (no storage) and traditional (with storage) operations might take place. None identified

.

Shipment Tracking

Inputs:
. Workflow from D3.11 Load Product & Generate Ship Documents

Outputs:
. Workflow to D3.13 Receive & Verify Product by Customer

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D3.13 Receive & Verify Product by Customer
The process of receiving the shipment (either at customer site or at shipping area in case of selfcollection) and verifying that the order was shipped complete and that the product meets delivery terms. Metrics (see Appendix A for metrics attributes):
. % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the costs associated with receipt and verification at customer site. The percentage of orders that are fulfilled on the customer’s original commit date Percentage of orders delivered in an undamaged state that meet specification, have the correct configuration, are faultlessly installed (as applicable), and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% The average time associated with receiving and verifying an order at the customer site

. . .

Cost to Receive & Verify Product by Customer Delivery Performance to Customer Commit Date Perfect Condition

.

Receive & Verify Product by Customer Cycle Time

Best Practices:
. . Advanced Shipping Notices & UCC128 Container Labeling Shipment Tracking Bar coding; EDI; integrated transportation/warehouse management None identified

Inputs:
. Workflow from D3.12 Ship Product

Outputs:
. Product to D3.14 Install Product The end object of a transformation process that includes physical objects, information or services.

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D3.14 Install Product
When necessary, the process of preparing, testing and installing the product at the customer site. The product is fully functional upon completion. Metrics (see Appendix A for metrics attributes):
. . . Cost to Install Product Install Product Cycle Time Perfect Condition The sum of the costs associated with product installation. The average time associated with product installation Percentage of orders delivered in an undamaged state that meet specification, have the correct configuration, are faultlessly installed (as applicable), and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100%

It initiates event:
. Product Installed for D3.15 Invoice

Inputs:
. Product from D3.13 Receive & Verify Product by Customer The end object of a transformation process that includes physical objects, information or services.

Outputs:
. . Workflow to D3.15 Invoice Installed Product to Customer The process of preparing, testing and installing the product at the customer site. The standalone product is fully functional upon completion, but there may be requirement for subsequent integration.

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. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The average time associated with the the generation and issuance of an invoice . Electronic Transfer of Shipment Information to Finance Provide Visibility to and Quickly Escalate Delinquent Accounts for Resolution Utilize EDI and EFT for Payment to Speed Closing of Receivables and to Reduce Processing Costs None identified Integrated accounts receivables EDI transaction and network services It is initiated by event: ..14 Install Product Inputs: . . Payment to Company Receipt of payment for goods and services per contract or purchase order. Percentage of orders with on time and accurate documentation supporting the order. Product Installed from D3.D3. address. part number.g. bills of lading.15 Invoice A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. Inc. Cost to Invoice Documentation Accuracy . Metrics (see Appendix A for metrics attributes): ..g.. Workflow from D3. . Payment is received from the customer within the payment terms of the invoice.14 Install Product Outputs: . Invoice Cycle Time Best Practices: . Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e.g. name. product description) Wrong Price (e. © Copyright 2006 Supply-Chain Council. including packing slips. discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date The sum of the costs associated with invoicing. 227 June 2006 . invoices. telephone number) Wrong Product Information (e. % of Faultless Invoices The number of invoices processed without issues and or errors divided by the total number of invoices. etc.

4 Stock Shelf D4. Make. A retail store is a physical location that sells products (and services) direct to the consumer using a point of sale process (manual or automated) to collect payment. and recording the appropriate inventory transaction. Deliver. Typical set of tasks associated with product selection. and end of sale activities.Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials. credit application and approval.2 Receive Product at Store D4. Merchandising at a store level is the stocking and restocking of products in designated storage locations to generate sales in a retail store. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services. merchandise. the tasks associated with identifying the item location.3 Pick Product from Backroom The process of scheduling resources to support item-stocking requirements. The processes and tasks associated with product checkout including scanning. The product is fully functional upon completion. and sell finished goods at a retail store. The Category D4 includes seven Level 3 Elements: D4. accounts payable. Components include accounts receivable. recording the resulting inventory transaction. and/or invoice or receipt. stock placement. recording product receipt. For services. The process of preparing and installing the product at the customer site.5 Fill Shopping Cart D4.6 Checkout D4. Cost to Deliver Deliver Cycle Time Downside Deliver Adaptability Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The sum of the costs associated with deliver The average time associated with Deliver Processes The reduction in delivered quantities sustainable at 30 days prior to delivery with no inventory or cost penalties. Inc. and delivering the product to point of stock For restocks.1 Generate Stocking Schedule D4. putting away and recording location that a company performs at its own stores. 228 June 2006 . May include quality inspection. The average actual cycle time consistently achieved to fulfill customer orders. For promotional items and stock repositioning the tasks associated with shelf and point of sale preparation. determining inventory availability. service agreement. The activities such as receiving product. storage and movement through to checkout. supply chain revenue. This includes the fixed assets used in Plan. The process of retrieving restocking orders to pick. order confirmation. verifying. determining put-away location. and Return. The levels of aggregation can be at any element associated with a supply chain asset. stocking the shelf according to merchandise plans. Source. building a pick wave. cost of goods sold and supply chain management costs.D4 Deliver Retail Product Deliver Retail Products are the processes used to acquire. inventory. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. D4. method of payment. picking item and quantity from a designated backroom warehouse location. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets.7 Deliver and/or Install Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . Return on Working Capital © Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. 229 June 2006 .Upside Deliver Adaptability Upside Deliver Flexibility The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. Inc. The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the assumption of no other constraints.

© Copyright 2006 Supply-Chain Council.1 Generate Stocking Schedule The process of scheduling resources to support item-stocking requirements. Outputs: . work in process. .4 Establish Delivery Plans . Workflow to D4. Store Allocation Instructions from P4. Daily Replenishment Requirements from S1.D4. or the available resources at a point in time able to generate an output. Requirements for the triggering of material movement to a work center only when that work center is ready to begin the next job.2 Receive Product at Store Inputs: . Inc. hedge. or finished products. System prioritization of items coming off trucks vs. The average time associated with the generating a stocking schedule Best Practices: . . .2 Receive Product at Store Stocking Schedule to D4. . Metrics (see Appendix A for metrics attributes): Cost to Generate Stocking Schedule Generate Stocking Schedule Cycle Time The sum of the costs associated with generating a stocking schedule. and service parts. Demand for inventory may be dependant or independent. buffer or reserve). . fluctuation (safety. . cycle (lot size).4 Stock Shelf A timetable for the planned movement of material from a bulk storage area to an order pick storage area. whether raw materials. It initiates event: . transportation (pipeline). Shipping Schedules (internal or 3PL) from Source: Company Stocking Requirements from P4. The activities and techniques of determining the desired levels of items. Workforce management solution with flexible rules. and Aggregate Delivery Requirements Vendor/DC inventory availability from Vendor/DC inventory available to a customer to supply demands. picked from back room. Inventory functions are anticipation. Automated Pick List Labor Scheduling that Matches Product Flow Push Product on Trailer Arrival System generated pick-lists based on picking / batching rules. Source: Company (Where the customer has access to the supplier’s inventory and the supplier has access to the customer’s requirements and inventory or vendor managed inventory).4 Transfer Product On-demand Replenishment Requirements from Source: Company Resource Availability from Source: Company Resources needed to meet Item stocking schedule requirement. . Scheduling of direct deliveries of material to a specified location on a plant floor near the operation where it is to be used. Prioritize. The capability of a system or resource to produce a quantity of output in a particular time period. Item Stocking Resources Scheduled for D4.1 Identify. 230 June 2006 . .

Metrics (see Appendix A for metrics attributes): . Item Pick Sheet for Stocking Schedule to D4. . . Item Stocking Requirements from P4.2 Receive Product at Store The activities such as receiving product.1 Schedule Product Deliveries Outputs: . Inc. and customer service (finished goods and spare parts). Product due to arrive. . recording product receipt. whether raw materials. . supporting activities (maintenance. Release Product to Deliver Inventory Availability from S1. Prioritize. work in process.D4. .4 Transfer Those stocks or items on hand used to support production (raw Product materials and work in process items). Demand for inventory maybe dependant or independent. buffer or reserve). Automated Pick List Labor Scheduling that Matches Product Flow Push Product on Trailer Arrival System generated pick-lists based on picking / batching rules. picked from back room. . May include quality inspection. Workforce management solution with flexible rules. or finished products. 231 June 2006 .3 Pick Product from Backroom © Copyright 2006 Supply-Chain Council. Inventory functions are anticipation.1 Generate Stocking Schedule Finished Product Release from M1. . and customer service (finished goods and spare parts). determining put-away location. transportation (pipeline). Workflow from D4. System prioritization of items coming off trucks vs. verifying.6 The authorization to ship a finished product that has been ordered. Production Schedule from M1. repairs and operating supplies). hedge.1 Identify.1 Generate Stocking Schedule Inputs: . Item Stocking Resources Scheduled from D4. putting away and recording location that a company performs at its own stores. an service parts. It is initiated by event: . Cost to Receive Product at Store Receive Product at Store Cycle Time The sum of the costs associated with receiving product at the store. supporting activities (maintenance.3 Pick Product from Backroom Those stocks or items on hand used to support production (raw materials and work in process items). fluctuation (safety. Inventory Availability to D4. cycle (lot size). and Aggregate Delivery Requirements The activities and techniques of determining the desired levels of items. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. .1 Schedule Production Activities Scheduled Receipts from S1. The average time associated with receiving product at the customer store Best Practices: . A document that lists the material to be picked to meet the schedule for the planned movement of material from a bulk storage area to an order pick storage area. . repairs and operating supplies).

Automated Directed Picking Automated Replenishment of Back Stock Based on Minimum Stocking Levels Defined Stocking Levels and Criteria Staging Based on In-store Zones A pick list displayed on a handheld device that directs picks and relieves inventory from backroom locations None identified None identified Items are staged for re-stocking based on zones within the store. and customer service (finished goods and spare parts). . The average time associated with product pick from backroom Best Practices: . This minimizes restocking effort. picking item and quantity from a designated backroom warehouse location. In a fixed-reorder quantity system of inventory control. .4 Stock Shelf The function of physically separating a homogeneous subgroup from a heterogeneous population of items Customer selected retail finished goods transferred to the point of sale. determining inventory availability.2 Receive Product at Store On-Order/Backorder from Source: Company . . supporting activities (maintenance. . Inc.3 Pick Product from Backroom The process of retrieving restocking orders to pick. . Cost to Pick Product from Backroom Pick Product from Backroom Cycle Time The sum of the costs associated with picking product from backroom. . A document that lists the material to be picked to meet the schedule for the planned movement of material from a bulk storage area to an order pick storage area. Workflow from Source: Company Inventory Availability from D4. © Copyright 2006 Supply-Chain Council. Inventory in Stock from Source: Company Item Pick Sheet for Stocking Schedule from D4. repairs and operating supplies). 232 June 2006 . and delivering the product to point of stock Metrics (see Appendix A for metrics attributes): . as distinguished from stores. Assorted by Shelf Order to Company Loaded Retail Cart or Pallet to D4. building a pick wave. recording the resulting inventory transaction.2 Receive Product at Store Those stocks or items on hand used to support production (raw materials and work in process items). which are usually components or raw materials. . Stored products or service parts ready for sale. . Replenishment Quantities from Source: Company Outputs: . Inputs: . the fixed quantity that should be ordered each time the available stock (onhand plus on-order) falls to or below the reorder point. An unfilled customer order or commitment.D4. A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand. .

Prioritize. . Full Shelf Locations to D4.1 Generate Stocking Schedule Vendor Merchandising / Co-op advertising agreements from Source: Company Outputs: . . For promotional items and stock repositioning the tasks associated with shelf and point of sale preparation. advertising. components. . Metrics (see Appendix A for metrics attributes): . . None identified Each area of the store has its own stocking plan and items are routed specifically to that area. Loaded Retail Cart or Pallet from D4. and end of sale activities. Customer selected retail finished goods transferred to the point of sale. . The majority of stocking is completed with minimal impact to or visibility from the customer. or finished goods that are there when needed. the tasks associated with identifying the item location.3 Pick Product from Backroom Loaded Retail Cart or Pallet from S1. periodic or annual basis. Cost to Stock Shelf In-Stock % Stock Shelf Cycle Time The sum of the costs associated with stocking shelves. The average time associate with stocking shelves Best Practices: . and Aggregate Delivery Requirements Determination of the best retail locations for implementation of full shelf equipment. Physical inventories can be taken on a continuous.4 Stock Shelf For restocks. . Scan using handheld and match with ad. by product number. A timetable for the planned movement of material from a bulk storage area to an order pick storage area. . Inc. Stocking Schedule from D4. Data required to develop and build a Plan-O-Gram display to help minimize setup time by showing specific placement of all items. on the display. . © Copyright 2006 Supply-Chain Council. and other tools to persuade customers to purchase the product offering. The determination of inventory quantity by actual count. . Percentage of materials. 233 June 2006 . sales promotions. stock placement.D4. stocking the shelf according to merchandise plans. Scan store shelves / bar codes to confirm put-a-way. Item/Shelf Scanning Upon Put-A-Way Off Peak Stocking Proof of Performance (Promotion Management) Scan Displays for Promotion Conformance Stocking is Completed in Zones Scan store shelves / bar codes to confirm put-a-way. The plan for a promotional product offering and how it is communicated to the customer and includes public relations.5 Fill Shopping Cart Store Shelf Inventory Counts to P4. .1 Identify. and recording the appropriate inventory transaction.4 Transfer Product Plan-o-gram Data from Source: Company Customer selected retail finished goods transferred to the point of sale. . Inputs: .

Customer Data (preference) from Source: Company Full Shelf Locations from D4. or hardware malfunctions. budgets. Metrics (see Appendix A for metrics attributes): . status. the part number and a text description of the product) and the relationships to other items in the product family and linked / related SKU’s. . storage and movement through to checkout. and/or substitution. opportunity and issue analysis. cross-sell. Use for comparison to previous sales activity/track new consumers.D4. and delivery requirements.4 Stock Shelf Lost or Dropped Shopping Carts from Source: Company Merchandising Plan (Supplier) from Source: Company Customer profile.5 Fill Shopping Cart Typical set of tasks associated with product selection. period ago. and pro forma profit and loss statement and management controls. advertising. Product Data (linked/related SKU’s) from Source: Company Promotional Plan from Source: Company . % Item Location Accuracy Cost to Fill Shopping Cart Fill Shopping Cart Cycle Time The sum of the costs associated with filling a shopping cart. Location specific product labeling. projects. The merchandising plan includes the current market position. The properties and characteristics of a product (e. On-line orders that are missing due to internet. . © Copyright 2006 Supply-Chain Council. Inc. Outputs: . etc. . programs. Up and Cross Selling and/or Substitution Inputs: . and/or substitution See Up and cross selling Trained staff or automated systems (Internet) that recommend upsell. DSS or portal tool that shows previous period performance and comparison for store management (whether it is a year ago.g. Items Are Relieved from Inventory When Item is Removed from Shelf Loyalty Card Data Measured and Compared with Same Activity Previous Period Multiple Locations Throughout Store Substitution RFID. The average time associated with “filling the shopping cart“ Best Practices: . Determination of the best retail locations for implementation of full shelf equipment. Trained staff or automated systems (Internet) that recommend upsell. and other tools to persuade customers to purchase the product offering . Planned and tracked via a plan-o-gram system.6 Checkout Customer selected goods transferred to the point of sale. smart cart or customer self-service reduces system inventory upon item pick. . Full Cart Ready for Checkout to D4. etc. 234 June 2006 . . merchandising objectives and strategies. sales promotions. etc.). cross-sell. . which includes history. . software. . customer preferences. action plans. . . The plan for a promotional product offering and how it is communicated to the customer and includes public relations.

235 June 2006 . smart cart or customer self-service charges goods to card upon store departure. Customer selected goods transferred to the point of sale. Best Practices: . recurring.1 Identify.5 Fill Shopping Cart Promotion Event Calendar from Source: Company Customer profile. . . Prioritize.7 Deliver and/or Install Customer Loyalty / Recurring Visits to Company Full Cart (Empty Cart) to Company Loyalty Customer Profile Changes to Company Point of Sale Data (Daily) to P4.D4. . quality. The relief of inventory and computation of sales data at the time and place of the sales.6 Checkout The processes and tasks associated with product checkout including scanning. status. etc. which includes history. . higher average ring. . Completion of customer checkout. Inc. . . . and Aggregate Delivery Requirements Satisfied Customer to Company Input to customer profile. Automatic Customer Payment Customer Profile Drive Recognition Upon Checkout Notification of Existing/Future Event or Promotions RFID. or magnetic media and equipment. cart transitions from full to empty. customer preferences. time frame. © Copyright 2006 Supply-Chain Council. advertising. Checkout Completed for D4. credit application and approval. More units. Workflow to D4. . Metrics (see Appendix A for metrics attributes): . Customers who are satisfied with the product or service delivered by the suppliers. frequency of visits. sales promotions. Measure of customer satisfaction with products and service. sale of the selected goods. etc. etc. and/or invoice or receipt. Checkout Cycle Time Cost to Checkout The average time required for customer checkout. Time phased promotion / event tasks where the product offering is communicated to the customer and includes public relations.7 Deliver and/or Install Inputs: . and delivery requirements. order confirmation. None identified None identified It initiates event: . Outputs: . service agreement. method of payment. The sum of the costs associated with product checkout. what purchased. numbers and rings. cost. and other tools to persuade customers to purchase the product offering during the year. including the aspects such as time. Customer Profile/Data from Source: Company Full Cart Ready for Checkout from D4. generally (may be manual) through the use of bar-coding. .

© Copyright 2006 Supply-Chain Council. Goals / Performance Plans Measurement. Monitoring and Adjustment of Service or Product Installation Provide Product or Service Training to Employees or FAQ’s Online Stage Product or Service Adoption None identified None identified None identified None identified It is initiated by event: . 236 June 2006 . The product is fully functional upon completion. and the product is fully functional. Workflow from D4. Best Practices: . The installation of product is completed at the customer site. Indication of product and service quality.6 Checkout Outputs: . i. .7 Deliver and/or Install The process of preparing and installing the product at the customer site. .6 Checkout Inputs: . . Consistently High Adoption Rates to Company High Customer Services Satisfaction Levels to Company Low Rates of Failure to Company Successful Installation / Live System to Company Indication of product and service quality. Cost to Deliver and/or Install Deliver and/or Install Cycle Time The sum of the costs associated with deliver and/or install The average time required to deliver and install product. Indication of quality in workmanship and design. .e. . Inc.D4. . Metrics (see Appendix A for metrics attributes): . Checkout Completed from D4. . customer satisfaction.

(Include distribution channel rules) The process of defining the requirement and monitoring the performance of the delivery of product to a customer. The process of establishing and maintaining finished goods. or manage information or relationships on which planning and execution processes rely. establish letters of credit terms and conditions. maintaining. status. route. The process of defining and maintaining the distribution channel/ network for a specific product line (no capital asset or transportation management).(customer preference. credit. 237 June 2006 .CAPITAL ASSETS) and 2) the management of transporters. Acquisition. history. ED.8 Manage Import/Export Requirements © Copyright 2006 Supply-Chain Council. customer experience. and disposition of order management. and equipment. The process of collecting. terminals. product mix. stocking locations. The process of 1) defining and maintaining the information which characterizes product.2 Assess Delivery Performance The process of defining and maintaining rules which affect the acceptance of an order. method of delivery.). warehouse. rates/tariffs and backhaul opportunity (Characterization include information necessary to support maintenance of internal Outbound Transportation equipment . replenishment models. Determine material handling (inventory) pick pack & ship methods (inventory). and communicating information to support deliver planning and execution processes. transportation data. vehicle. which constrain the ordering and delivering of product.1 Manage Deliver Business Rules ED. regulations. warehouse data. and transportation capital assets. The process of recording and maintaining regulations and rates. maintenance. maintain.6 Manage Transportation ED.ED Enable DELIVER Enable Processes prepare. and delivery requirements. When physical delivery is outsourced the performance is passed on to source for contract administration. containerization. etc. etc. Determine customs requirements.4 Manage Finished Goods Inventories ED. ownership. based on quantity. etc. inventory limits or levels.5 Manage Deliver Capital Assets ED. The Category ED includes eight Level 3 Elements: ED. and deliver data.7 Manage Product Life Cycle ED. The information to be managed includes: order data . Inc.3 Manage Deliver Information ED.

Order Rules to ED. Rules for the function that encompasses receiving.4 Manage Finished Goods Inventories Order Rules to D2. Rules for the function that encompasses receiving. etc. credit. entering. flexibility and responsiveness. and interplant operations. distribution centers. based on quantity. and interplant operations. method of delivery. distribution centers. which includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. entering. . and promising orders from customers.2 Assess Delivery Performance Planning Decision Policies from Source: Plan Supply-Chain Performance Metrics from ED. approved. and promising orders from customers.2 Assess Delivery Performance . Any company policies that affect how a planning process is defined. Enter and Validate Order The rules for the management of product configuration. entering. © Copyright 2006 Supply-Chain Council. Rules for the function that encompasses receiving. entering. Enter & Validate Order Order Rules to D3. or service are achieved.2 Receive. rationalization. Rules for the function that encompasses receiving.2 Receive. Enter and Validate Order Order Rules to D1. customer experience. . cost. Cost to Manage Deliver Business Rules Manage Deliver Business Rules Cycle Time The sum of the Costs to Manage Deliver Business Rules The average time associated with managing deliver business rules Best Practices: . and promising orders from customers. . and interplant operations.2 Receive. e. Reports which provide management with the process information required to evaluate prescribed activities to ensure that the stated objectives of a project. and interplant operations. . routings. rationalization. routings. Configure. . Integrated Edit at Order Entry Time On-Line Rule Base Customer Master Record None identified Inputs: . and asset management. 238 June 2006 . and interplant operations. and bill of materials. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. and promising orders from customers. (Include distribution channel rules) Metrics (see Appendix A for metrics attributes): . entering. and promising orders from customers. Management Process Reports from ED.g. Outputs: . . distribution centers. Inc.5 Manage Deliver Capital Assets Order Rules to ED. which includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. Configure. manufactured good. Rules for the function that encompasses receiving.2 Negotiate & Receive Contract . distribution centers.1 Manage Deliver Business Rules The process of defining and maintaining rules which affect the acceptance of an order. . . Configuration Rules from Source: Company The rules for the management of product configuration. and bill of materials. and performed. Configuration Rules to D2.ED. delivery reliability. distribution centers.

It is often referred to as an actual demand to distinguish it from a forecasted demand. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. Inc. An order from a customer for a particular product or a number of products. are faultlessly installed (as applicable). invoices.ED. bills of lading.2 Receive. Delivery Performance from ED. Enter & Validate Order Customer Order from D2. An order from a customer for a particular product or a number of products. . Carrier Contracts (Customer) from Source: Source .2 Negotiate & Receive Contract Delivery Performance from ED. The process of measuring actual supplier performance against internal and/or external standards.5 Manage Deliver Capital Assets . Assess Delivery Performance Cycle Time Cost to Assess Delivery Performance Documentation Accuracy The average time associated with assessing the performance of deliver processes. Customer manages carrier selection. . etc. It is often referred to as an actual demand to distinguish it from a forecasted demand. When physical delivery is out-sourced the performance is passed on to source for contract administration. Customer Initiated Package Tracking Real Time Package Tracking WEB based Shared systems Tracking and tracing Inputs: . The sum of the costs associated with assessing delivery performance. including packing slips. shipment of purchased product. functions. Metrics (see Appendix A for metrics attributes): . . . . [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% Percentage of orders delivered in an undamaged state that meet specification. have the correct configuration. It is often referred to as an actual demand to distinguish it from a forecasted demand.6 Manage Transportation © Copyright 2006 Supply-Chain Council. and payment of carrier. Benchmark Data from Source: Company A set of measurements (or metrics) that is used to establish goals for improvements in processes. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. Perfect Condition Best Practices: .2 Assess Delivery Performance The process of defining the requirement and monitoring the performance of the delivery of product to a customer. and so on Benchmark measures are often derived from other firms that display “best in class“ achievement Contracts that customers have with specific freight carriers through which suppliers have to work for the delivery of products. . and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% . products. . 239 June 2006 . An order from a customer for a particular product or a number of products. Percentage of orders with on time and accurate documentation supporting the order.3 Reserve Resources & Determine Delivery Date Customer Order from D3. Customer Order from D1. The process of measuring actual supplier performance against internal and/or external standards.

240 June 2006 . cost. sales forecasts and actual orders/backorders. . manufactured good.g. sales forecasts and actual orders/backorders. flexibility and responsiveness. and asset management. or service are achieved. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs.1 Manage Deliver Business Rules Supply-Chain Performance Metrics to ED. Supply chain requirements related to the customer’s needs.g. cost.1 Manage Deliver Business Rules Supply-Chain Performance Metrics to EP. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. including service requirements. © Copyright 2006 Supply-Chain Council. delivery reliability.2 Manage Performance of Supply Chain Supply-Chain Performance Metrics to ED. and asset management. . and asset management. .4 Manage Finished Goods Inventories The process of measuring actual supplier performance against internal and/or external standards. e. flexibility and responsiveness. flexibility and responsiveness. Management Process Reports to ED. including service requirements. Delivery Performance from ED. e. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. Outputs: . delivery reliability. delivery reliability. Inc.6 Manage Transportation Customer Service Requirements to Plan Supply chain requirements related to the customer’s needs. Customer Service Requirements to ED.. e. Reports which provide management with the process information required to evaluate prescribed activities to ensure that the stated objectives of a project.5 Manage Deliver Capital Assets . . cost. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes.g.

which include address data. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment. . maintaining. . 241 June 2006 . Report that portrays a potential customer’s payment history and debt. Customer profile.2 Receive. status. Enter & Validate Order . credit and purchase histories. status. etc.). Report that portrays a potential customer’s payment history and debt. Enter and Validate Order The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. etc. status. Customer Access to Online Tracking of Order Status and Shipping Information Customer Service Data Validation Including Geo-Coding Online Real-Time Customer Entry and Edit None identified Internet-enabled package/shipment tracking None identified On-line Customer Service Module CRM (Customer resource Management) software is getting a big push in the E-Commerce/EBusiness areas and generally provides a means to fulfill this requirement Secure E-Commerce Server and integrated Order Management System (OMS) Warehouse Management System (WMS) and Transportation Management System (TMS) . The information to be managed includes: order data . Comprehensive History of Customer Interactions Including Order History. Customer profile. which include address data. Contract Status from D3.2 Receive. Provide Single Source of Information on the Customer (Single Group / Owner Responsible for Accuracy / Quality of Customer Data) Inputs: . customer preferences including shipping. credit and purchase histories. Enter & Validate Order Credit History from D3. customer preferences including shipping. and delivery requirements. warehouse data. Etc. and communicating information to support deliver planning and execution processes.(customer preference. including design efforts for make-to-order products Customer profile. The commitment should be based on the available-to-promise line (ATP) in the master schedule. or it might be a more complicated series of activities.2 Receive. . status. .ED. Configure. history. indicating the ability to pay in a timely manner in the future. . .1 Obtain and Respond to RFP/RFQ Contract Status from D2. Claims.3 Manage Deliver Information The process of collecting. and delivery requirements. and delivery requirements. and delivery requirements. Inc. Report that portrays a potential customer’s payment history and debt. customer preferences including shipping. transportation data. etc. Cost to Manage Deliver Information Manage Deliver Information Cycle Time The sum of the Cost to Manage Deliver Information The average time associated with managing deliver information Best Practices: .2 Receive. © Copyright 2006 Supply-Chain Council. which include address data.2 Receive. Problems. . . Configure. Enter and Validate Order Credit History from D1. credit and purchase histories. and deliver data. . Metrics (see Appendix A for metrics attributes): .1 Obtain and Respond to RFP/RFQ Credit History from D2. indicating the ability to pay in a timely manner in the future. Booked Order from D2. Enter and Validate Order Contract Status from D1. Configure. indicating the ability to pay in a timely manner in the future. etc.

. Enter and Validate Order Purchase History from D1. . customer preferences including shipping. Enter & Validate Order Customer profile. etc. Customer Address Data from D1. etc. 242 June 2006 . credit and purchase histories. Customer profile.2 Receive.1 Obtain and Respond to RFP/RFQ Purchase History from D2. etc. Enter & Validate Order Purchase History from D3. credit and purchase histories. and delivery requirements. and delivery requirements. Configure.1 Obtain and Respond to RFP/RFQ Customer Address Data from D2. etc. credit and purchase histories. Customer profile. customer preferences including shipping.2 Receive. which include address data. status.. status. includes customer profiles.. © Copyright 2006 Supply-Chain Council. Customer preferences including shipping. and customer profile. and delivery requirements. which include address data. which includes address data. credit and purchase histories. status. Customer preferences including shipping. and delivery requirements. status. status. .. Enter and Validate Order Shipping Preferences from D3. . which include address data. The amount of purchased products for a certain time in history per specific intervals The amount of purchased products for a certain time in history per specific intervals The amount of purchased products for a certain time in history per specific intervals Customer preferences including shipping. which includes address data. credit and purchase histories.4 Manage Finished Goods Inventories This database contains all information relative to customers as a group or singly and is updated when ever new information is received about a customer.1 Obtain and Respond to RFP/RFQ Shipping Preferences from D2. Configure. credit and purchase histories. which includes address data. . . status. Enter & Validate Order Customer Address Data from D3. Configure. etc. and delivery requirements. Enter and Validate Order Shipping Preferences from D1. Customer Master Database/Up to Date to ED.2 Receive. and customer profile. etc.. and delivery requirements.2 Receive.2 Receive. Inc.2 Receive. . . Outputs: . and customer profile. customer preferences including shipping.

or finished products including order quantities and safety stock levels. Inc. product mix. other) ÷ (COGS ÷ 365). . representing a projected appropriation of supply chain resource to meet supply-chain requirements as they affect the customer. . Available data that characterizes and quantifies raw material. Metrics (see Appendix A for metrics attributes): . inventory limits or levels. Only includes inventory on company books.3 Manage Deliver Information Existing Inventory Data from D1. . Furthermore. with extrapolation the net and gross percentage of error is determined. . % of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The sum of the Costs to Manage Finished Good Inventory Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). and promising orders from customers. The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically counting and reconciling a statistical sample of the entire inventory population. . whether raw materials. plant FG. Rules for the function that encompasses receiving. Inputs: .4 Manage Finished Goods Inventories The process of establishing and maintaining finished goods. The rules that determining the desired levels of items. Dynamic calculation of safety stock based on actual sales. Order Rules from ED. entering. Five point annual average of the sum of all gross inventories (raw materials & WIP.ED. . Manage Finished Goods Inventories Cycle Time Best Practices: . work in process. field FG. which provides an indicative measure of entire inventory population. . stocking locations. Inventory Rules from Source: Plan . and interplant operations. field samples.8 Receive Product from Source or Make Integrated Supply Chain Plan from Source: Plan This database contains all information relative to customers as a group or singly and is updated when ever new information is received about a customer. includes customer profiles. distribution centers. 243 June 2006 . Total gross value of inventory at standard cost before reserves for excess and obsolescence. This sample is then extrapolated across the inventory population. replenishment models. Cost to Manage Finished Goods Inventories Finished Goods Inventory Days of Supply Inventory Days of Supply . Periodic Review of Metrics and Strategy with Comparisons to Industry Benchmarks Real Time Data on Current Status Statistical Test Count Real time view of data. ownership.1 Manage Deliver Business Rules © Copyright 2006 Supply-Chain Council. future liabilities should not be included The average time associated with managing finished good inventory . Customer Master Database/Up to Date from ED. and finished goods inventories Communication of courses of action over the appropriate timedefined planning horizon and interval. work in process.

© Copyright 2006 Supply-Chain Council. including failure information. . The rules that determining the desired levels of items. and Aggregate Delivery Resources and Capabilities Finished Goods Inventory Location to S3. characteristics and information relating to returns. excess. the equivalent of the maximum. The physical storage location where Finished Product inventory is held in stock prior to use or shipment. obsolete. Returns Data from ED. customer. . etc. Finish Goods Inventory Target Levels to P4. The physical storage location where Finished Product inventory is held in stock prior to use or shipment. Assess. In a min-max inventory system. 244 June 2006 . MRO. . . Product Mix and Plans from Source: Plan The proportion of individual products that make up the total production or sales volume and plan that authorizes the factory to manufacture a certain quantity of a specific item. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. work in process. Inc.4 Transfer Product Inventory Rules to ED. .4 Transfer Product Finished Goods Inventory Location to S1.. The target inventory is equal to the order point plus a variable order quantity.8 Manage Import/Export Requirements Outputs: .2 Assess Delivery Performance The process of measuring actual supplier performance against internal and/or external standards. Delivery Performance to ED. or finished products including order quantities and safety stock levels.5 Manage Deliver Capital Assets . or the portfolio of products the company has to cover the targeted customer need and the plans of how to manage that portfolio.6 Transfer Product Finished Goods Inventory Location to S2.8 Manage Import/Export Requirements Scrap Authorization from ED. The physical storage location where Finished Product inventory is held in stock prior to use or shipment. The properties. .2 Identify. whether raw materials.

Determine material handling (inventory) pick pack & ship methods (inventory). . and security personnel. . Automated Data Entry Facility Master Plan Measure Customer Service Removal of Obsolete Stock Standard Operating Procedures and Methodology Storage Location Zoning Scanning with RFID/Bar-codes systems Automated Item Cubing and Weighting systems Advanced Shipping Notices (ASN)Parcel and Container Routing and Rating Compliance Labeling Real time shipment tracking Automated Calculation of ABC Velocity Movement None identified Automated or Optimized Slotting (Storage Location) Systems Inputs: . etc. Typically. flexibility and responsiveness. .2 Assess Delivery Performance The process of measuring actual supplier performance against internal and/or external standards. Outputs: . warehouse. it contains identifying and descriptive data and control values (lead times. work in process. building maintenance. Metrics (see Appendix A for metrics attributes): . Rules for the function that encompasses receiving. A plan that includes an estimate of future costs and revenues related to expected activities. . planned orders. or finished products including order quantities and safety stock levels. The rules that determining the desired levels of items. Warehouse constraints are those storage items that impact on the supply chain efficiency. and disposition of order management. work in process.1 Manage Deliver Business Rules Supply-Chain Performance Metrics from ED. and equipment.ED. . Warehouse Operating Constraints to Plan © Copyright 2006 Supply-Chain Council. .) and may contain data on inventory status.g. . thus defining the bill of material. Inc. including material handling equipment and personnel. and asset management. or finished products including order quantities and safety stock levels. and interplant operations. Cost to Manage Deliver Capital Assets Manage Deliver Capital Assets Cycle Time The sum of the Costs to Manage Deliver Capital Assets The average time associated with managing deliver capital assets Best Practices: . Delivery Performance to ED. The rules that determining the desired levels of items. entering.4 Manage Finished Goods Inventories Inventory Rules from Source: Plan . and costs. Inventory Rules from ED. distribution centers. . whether raw materials. delivery reliability. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. and transportation capital assets. . The budget serves as a pattern for and a control over future operations.5 Manage Deliver Capital Assets Acquisition. maintenance. Approved Item Master from Source: Plan The “master“ record for an item. e. equipment maintenance.2 Assess Delivery Performance . and promising orders from customers. 245 June 2006 . requirements. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. cost. Order Rules from ED. Item records are linked by bill of material records (or product structure records). whether raw materials. Budgets from Source: Plan . lot sizes.

246 June 2006 .© Copyright 2006 Supply-Chain Council. Inc.

. Metrics (see Appendix A for metrics attributes): . . . and Freight Class from D1. Warehouse Management. Rating & Routing Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management . route. these criteria determine type of carrier and cost of shipment Coupled with cube and route. Product. Cost..2 Receive. .ED.6 Manage Transportation The process of 1) defining and maintaining the information which characterizes product. © Copyright 2006 Supply-Chain Council.CAPITAL ASSETS) and 2) the management of transporters. Appointment Scheduling for Pickup and Delivery of Customer Shipments Automated Documentation for International Shipments Backhaul Trading Exchange Capture and Maintain Mode Specific Data Electronic Manifest and Electronic Billing Integrated Order Management. The rates charged by a carrier that does not serve the general public. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. regulations. . vehicle. Air. . GL Charging Internet Pooling (Electronic Brokerage of Shipments) Manage Information Across 100% of Shipments Measurement of Carrier Performance for On-time Delivery and Completeness Real-Time Optimized Shipment Method Selection (Air Parcel. . these criteria determine type of carrier and cost of shipment Coupled with cube and route. Configure. . Cost to Manage Transportation Manage Transportation Cycle Time The sum of the costs associated with managing Finished Good Transportation The average time associated with managing transportation Best Practices: . and Freight Class from D2. . Product. Weight.. or freight.2 Negotiate & Receive Contract Customer Order Size. rates/tariffs and backhaul opportunity (Characterization include information necessary to support maintenance of internal Outbound Transportation equipment . Ground Parcel. (via internet) View for Analysis for All Orders and Shipments the Following Data: Logistics. and Freight Class from D3. . these criteria determine type of carrier and cost of shipment June 2006 .2 Receive. but provides transportation for hire for one or a limited number of shippers under a specific contract. Weight. terminals. LTL. Enter 247 Rates charged by common carriers to move goods. Cost. . Enter & Validate Order Customer Order Size. Ground. Weight. GL Charging Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Pooling Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management Transportation Management System (TMS) Maintenance Management . . . Coupled with cube and route. etc. containerization. Inputs: .) Based on Customer Service Requirements Real-Time Shipment Tracking. .8 Manage Import/Export Requirements Customer Order Size. . Inc.Carrier Rate Tables from Source: Company Contract Carrier Rates from ES.

) are required. © Copyright 2006 Supply-Chain Council. export papers. .11 Load Vehicle & Generate Shipping Documentation Shipping Parameters and Documentation to D3. Shipping parameters. . should the parts be shipped one by one or in bulks etc. The policy is sometimes stated as “our quoted delivery time. way bill. e. Legal documentation of the contents of a shipment (e.11 Load Product & Generate Shipping Documentation Shipping Parameters and Documentation to D1. The company’s goal for the time to ship the product after the receipt of a customer’s order. Standard Practices/Rules from Source: Plan Outputs: . bill of lading.11 Load Product & Generate Ship Documents . which kind of packaging. rules. bill of lading. including service requirements. such as weight. export papers. such as weight. Delivery Performance to ED. . etc. cube and route decide carrier and cost.g. size. Legal documentation of the contents of a shipment (e. Industry established common practices. etc. and Validate Order Customer Service Requirements from ED. etc. Legal documentation of the contents of a shipment (e. .2 Assess Delivery Performance Projected Delivery Requirements from Source: Make Supply chain requirements related to the customer’s needs.) are required.2 Assess Delivery Performance The process of measuring actual supplier performance against internal and/or external standards. such as weight. cube and route decide carrier and cost. Inc. size. 248 June 2006 . way bill.) are required. Shipping parameters. and methods of doing business.g. cube and route decide carrier and cost.g. bill of lading. Shipping parameters..g. size.“ or an estimate of the customer delivery requirements of a product or service. Shipping Parameters and Documentation to D2. export papers. way bill. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. sales forecasts and actual orders/backorders.

Metrics (see Appendix A for metrics attributes): . credit and purchase histories. The budget serves as a pattern for and a control over future operations. Enter and Validate Order Location of Customers from D3. © Copyright 2006 Supply-Chain Council. status. Configure. . Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer’s needs. and delivery requirements. Requirements established by a government which must be met before allowing the shipping. credit and purchase histories. credit and purchase histories. The proportion of individual products that make up the total production or sales volume and plan that authorizes the factory to manufacture a certain quantity of a specific item. . Budgets from Source: Plan A plan that includes an estimate of future costs and revenues related to expected activities. inputs. . etc. which includes address and location data. Government Constraints from ED. . delivery of a product or manufacture of an item. . customer preferences including shipping. which includes address and location data. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. status. Enter & Validate Order Product Mix and Plans from Source: Plan .8 Manage Import/Export Requirements Location of Customers from D2. Integrated Facility Management Operations and Network Analysis Standard Operating Procedures and Methodology None identified None identified None identified Inputs: .7 Manage Product Life Cycle The process of defining and maintaining the distribution channel/ network for a specific product line (no capital asset or transportation management). status.ED. Revised Business Assumptions from Source: Plan Outputs: .2 Receive. Enterprise Distribution Model to Plan Model of the distribution enterprise including the flows. 249 June 2006 . Inc. Customer profile. Customer profile.2 Receive. which includes address and location data. and delivery requirements. and best business practices.3 Maintain Source Data . Current Inventory Source Data from ES. metrics. Customer profile. Cost to Manage Product Life Cycle Manage Product Life Cycle Time The sum of the Cost to Manage Product Life Cycle The average time associated with managing the product life cycle Best Practices: . customer preferences including shipping. or the portfolio of products the company has to cover the targeted customer need and the plans of how to manage that portfolio. processes. outputs.2 Negotiate & Receive Contract Location of Customers from D1. An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. . . . customer preferences including shipping. etc. and delivery requirements. etc.

The transaction history of the physical shipment of an item to another internal location or to a customer. which constrain the ordering and delivering of product.2 Receive Product Receipt Verification from S3. Acknowledgement that the product received conforms to specified requirements and criteria. Acknowledgement that the product received conforms to specified requirements and criteria. . . .11 Load Product & Generate Shipping Documentation Tariffs and Duties from Source: Company Documents the implement law and requirements concerning the import and export of items and the manufacture of item. . Electronic documentation submission via EDI and/or internet. Government Regulations from Source: Government Receipt Verification from S1. . . None identified Inputs: . Determine customs requirements. etc. Charges established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. . Acknowledgement that the product received conforms to specified requirements and criteria.ED. . 250 June 2006 . Ability to Track Component/Sub-Component Manufacturing Country of Origin Assessing Export/Import Requirements during Time of Product Development/Manufacture Direct Connection to Customs Clearance Direct Transfer of Documents to Recipient and Forwarder Documents Generated Automatically During Shipment Preparation. Inc.11 Load Product & Generate Ship Documents Shipping History from D2.8 Manage Import/Export Requirements The process of recording and maintaining regulations and rates. Electronic documentation submission via EDI and/or internet. . . Cost to Manage Import/Export Requirements Customs Clearance Cycle Time Manage Import/Export Requirements Cycle Time The sum of the costs associated with the management of import/export requirements The average time associated with clearing an order through customs The average time associated with managing import/export requirements Best Practices: . Multi-country Export/Import documentation compliance Component/lot tracking (lot trace-ability) Multi-country Export/Import documentation compliance Electronic documentation submission via EDI and/or internet.11 Load Vehicle & Generate Shipping Documentation Shipping History from D3. The transaction history of the physical shipment of an item to another internal location or to a customer. establish letters of credit terms and conditions.2 Receive Product Receipt Verification from S2. Metrics (see Appendix A for metrics attributes): . Outputs: © Copyright 2006 Supply-Chain Council. . . . . The transaction history of the physical shipment of an item to another internal location or to a customer.4 Receive Product Shipping History from D1.

. Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. The properties.. . delivery of a product or manufacture of an item. delivery of a product or manufacture of an item. characteristics and information relating to returns.4 Manage Finished Goods Inventories Scrap Authorization to ED. Government Constraints to ED. Inc. Requirements established by a government which must be met before allowing the shipping. including failure information. MRO. obsolete. excess. . 251 June 2006 .11 Load Vehicle & Generate Shipping Documentation Shipping Export Parameters and Documentation to D3. Requirements established by a government which must be met before allowing the shipping.7 Manage Product Life Cycle Returns Data to ED. Duty Drawback Claims to Company Government Constraints to Plan Claims for the refund of duties as a result of a ruling by a government agency. customer. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries.4 Manage Finished Goods Inventories Shipping Export Parameters and Documentation to D2.11 Load Product & Generate Ship Documents . © Copyright 2006 Supply-Chain Council. Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. etc.11 Load Product & Generate Shipping Documentation Shipping Export Parameters and Documentation to D1. . . .

preparing scheduling documentation and managing overall scheduling administration. and handles the defective product in preparation for shipping in accord with pre-determined conditions. from Authorization last known holder or designated return center. SR1. SR1. Components include accounts receivable. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Inc. 252 June 2006 .SR1 Source Return Defective Product The process. inventory. and Return.2 Disposition Defective Product The process of the customer determining whether to return the defective item and the appropriate source contact for a return authorization. Additionally.5 Return Defective Product The process where the customer packages. business rules and product operating conditions inspection as criteria to identify and confirm that material is excess to requirements defective. accounts payable. This includes the fixed assets used in Plan. The average actual cycle time consistently achieved to fulfill customer orders. Make. preparing the item for transfer. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center. supply chain revenue. The Category SR1 includes five Level 3 Elements: SR1. the customer and last known holder or designated return center would discuss enabling conditions such as return replacement or credit. for the return of defective product. The levels of aggregation can be at any element associated with a supply chain asset. Process includes: customer identification that an action is required and determining what that action should be. cost of goods sold and supply chain management costs.4 Schedule Defective Product Shipment The process where the customer develops the schedule for a carrier to pick-up for delivery of the defective product. The average time associated with Source Return Processes Return on Working Capital Source Return Cycle Time © Copyright 2006 Supply-Chain Council. packaging. Activities include selecting the carrier and rates. Source. SR1.3 Request Defective Return The process of a customer requesting and obtaining authorization. SR1. Metrics (see Appendix A for metrics attributes): Cost to Source Return Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The sum of the costs associated with Source Return. and physically returning of the excess product. transportation and import / export requirements to facilitate the efficient return of the defective product. generating return documentation.1 Identify Defective Product Condition The process where the customer utilizes planned policies. of returning material deemed defective by to the last known holder or designated return center. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. communicating with the last known holder. handling. Deliver. initiated by the customer.

repair or credit because the product received did not meet a commitment.) when planning for the Return and Recovery of Assets. business rules and product operating conditions inspection as criteria to identify and confirm that material is excess to requirements defective. etc. Warranty Data from ER.e. 253 June 2006 . concerning a certain fact regarding the product . The process of identifying and complying with regulatory documentation and process standards set by external entities (i.SR1.8 Manage Return Regulatory Requirements . goals.1 Manage Business Rules for Return Processes Rules for conducting business. © Copyright 2006 Supply-Chain Council. trade officials. Enterprise Level Policies/Rules with Local Execution Web based access to enterprise level business rules Inputs: .e.2 Disposition Defective Product Product being returned that is in a defective condition. Inc. Business Rules for Return Processes from ER. Manage Regulatory Return Policy from ER. government. . Returned Defective Product to SR1. and objectives. All data relevant to a warranty claim for a customer for replacement.8 Manage Return Regulatory Requirements Outputs: . Business rules align Return process policies with business strategy. given service requirements by supply chain stakeholders/trading partners. developing and maintaining customer and channel performance standards of an return processes such as service levels. Metrics (see Appendix A for metrics attributes): . Cost of Identifying the Defective Condition as a % of Total Source Return Cost Value of Defective Inventory in Identification Stage/ Total Inventory Value Best Practices: . i. either expressed or implied.1 Identify Defective Product Condition The process where the customer utilizes planned policies.

Product being returned that is in a defective condition. Return Plans from P5.3 Request Defective Return Authorization Permission to return to service an item that has been repaired and found to be within specifications and operable. Drive Returns Directly to Return Stock Point of Disposition to Reduce Cost and Cycle Time None identified . Inc. . Authorization to Return to Service to D1. . . 254 June 2006 . Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical.SR1.8 Receive Product from Source or Make Authorization to Scrap to D1.4 Manage Return Inventory Return Product Location to ER.4 Establish and Communicate Return Plans Returned Defective Product from SR1. Especially Those Who Are New to the Process Confirm Changes in Condition Code Policies Are Promptly Communicated to All Employees and Supply-Chain Partners. Outputs: . The physical location where the returned product inventory is held prior to disposition Product being returned that is in a defective condition. Defective Product Disposition Costs as % Total Source Return Cost Value of Defective Inventory in Disposition Inventory Awaiting Return Stage/ Total Inventory Value Best Practices: .4 Manage Return Inventory Returned Defective Product to SR1.1 Identify Defective Product Condition Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Metrics (see Appendix A for metrics attributes): . None identified Specify return disposition location and time. . .8 Receive Product from Source or Make Return Inventory Availability to ER. .2 Disposition Defective Product The process of the customer determining whether to return the defective item and the appropriate source contact for a return authorization. Inputs: . Inventory relative to return process available for use. . Confirm Asset Return Condition Codes Are Clearly Understood by All Employees. © Copyright 2006 Supply-Chain Council.

1 Authorize Defective Product Return Return Inventory Availability from ER.3 Request Defective Return Authorization The process of a customer requesting and obtaining authorization. such as the return history on a similar product.1 Authorize Defective Product Return Historical Return Rates to P5. . packaging. repair of the repairable item. Clarification as to who will pay in-bound and out-bound freight cost. Weight. © Copyright 2006 Supply-Chain Council. for the return of defective product. .2 Schedule Defective Return Receipt Returned Defective Product from SR1.1 Assess. . . A list of operations and procedures for scheduling the return of product. . the customer and last known holder or designated return center would discuss enabling conditions such as return replacement or credit. Credit/ Exchange Options to SR1. and using the past pattern to predict future returns. receipt of a serviceable item from stock. . . Outputs: . . Defective Product Return Authorization Response from DR1. Additionally. .4 Manage Return Inventory Return Schedule Instructions from DR1. Metrics (see Appendix A for metrics attributes): .SR1. Cost per Request Authorization Ratio of Authorization Cost to Total Source Return cost Value of Defective Product Inventory in Inventory awaiting return authorization. None identified Inputs: . A judgmental forecasting technique based upon the a return history that is analogous to a present situation. from last known holder or designated return center. unserviceable products and/or serviceable or obsolete products as defined by the terms and conditions of a customer/supplier contract. credit for the cost of the item. .1 Authorize Defective Product Return Defective Product Return Authorization Request to DR1. The customer request for disposition instructions for a defective product from the appropriate source. handling.2 Disposition Defective Product The approved or disapproved Return Product Authorization (RPA) for excess inventory. Inventory relative to return process available for use. Clarify Point of Contact and Return Location Develop and Clarify Mutually Understood Cycle Times to Process Return Authorizations Enable Customer-Service Representatives to Complete the Bill Of Lading for the Customer Including Carrier Routing. Description and Class to Minimize Guesswork & Wrong Estimates Long-Term Return Agreements / Partnerships Electronic rules for business relationships and transactions. . transportation and import / export requirements to facilitate the efficient return of the defective product.4 Schedule Defective Product Shipment Defective Product Disposition Request to DR1. Product being returned that is in a defective condition. Request Return Authorization Stage/ Total Defective Product Inventory Value Best Practices: . Clarification of policy if authorizations are not processed within the expected cycle time. The customer request for disposition instructions for a defective product from the appropriate source. 255 June 2006 . Inc. and Aggregate Return Requirements The options available on the return of a repairable item.

© Copyright 2006 Supply-Chain Council.. 256 June 2006 . Returned Defective Product to SR1. Data about the destination of a retun delivery.4 Schedule Defective Product Shipment Product being returned that is in a defective condition. . A validated and approved Return Product Authorization (RPA). .4 Schedule Defective Product Shipment Validated Return Material Authorization to SR1.4 Schedule Defective Product Shipment Ship-to Data to SR1. Inc.

.1 Authorize Defective Data about the destination of a retun delivery.4 Inventory relative to return process available for use. .3 Request Defective Return Authorization Plan and Build Loads Information from D1. . .3 Request Defective Return Authorization Returned Defective Product from SR1.5 Return Defective Product Product being returned that is in a defective condition.SR1.3 Request Defective Return Authorization Ship-to Data from SR1. . Returned Defective Product to SR1. . . and rating Outbound logistics software to assist with route. % Defective Product Scheduling Cost to Total Source Return Cost % Shipping Schedules that Support Customer Required Return by Date Value of Defective Product Inventory in Scheduling Stage/ Total Defective Product Inventory Value Best Practices: .5 Transportation modes are selected and efficient loads are built. preparing scheduling documentation and managing overall scheduling administration. Planned or scheduled returning of material deemed defective for some certain time or times © Copyright 2006 Supply-Chain Council. Activities include selecting the carrier and rates. Metrics (see Appendix A for metrics attributes): . Inc.5 Return Defective Product Scheduled Defective Product Return to SR1. carrier selection. Carrier Selection Based on Performance Criteria at Least Cost Consolidation of Return Carriers Transportation Modeling and Rate Analysis Scheduling. .3 Request Defective Return Authorization Credit/ Exchange Options from SR1.4 Schedule Defective Product Shipment The process where the customer develops the schedule for a carrier to pick-up for delivery of the defective product. None identified Inputs: . 257 June 2006 . . preparing the item for transfer. . Validated Return Material Authorization from SR1. . Build Loads Return Inventory Availability from ER. Manage Return Inventory Ship-to Data from DR1. Product Return Outputs: .

etc. . Information from D1. . Satellite communications. 258 June 2006 . Legal documentation of the contents of a shipment (e. Generate Shipping Documentation weighing. marking.. © Copyright 2006 Supply-Chain Council. .). Metrics (see Appendix A for metrics attributes): .).. RFID Inputs: . .). etc. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center. and Credit The function that performs tasks for the outgoing shipment of parts.. . GPS.SR1. export papers. Also. . Legal documentation of the contents of a shipment (e. . etc. bill of lading. . Inc. and products. Return Inventory Availability from ER.11 Load Vehicle & components. Legal documentation of the contents of a shipment (e. . way bill.g. .. export papers.3 Receive Defective Product Shipment Documents to Government Shipment Documents to Customer Shipment Documents to Carrier Product being returned that is in a defective condition. Verify. It includes packaging.g. and handles the defective product in preparation for shipping in accord with pre-determined conditions.4 Schedule Defective Product Shipment Returned Defective Product from SR1.5 Return Defective Product The process where the customer packages.. way bill. Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. Shipping. verify the shipment and customer credit information. % Error-Free Returns Shipped Cost per Request Authorization Return Shipments Shipped on Time Return Transportation Costs Value of Defective Product Inventory in Physical Return and Transportation Stage/ Total Defective Inventory Value Best Practices: .4 Manage Return Inventory Inventory relative to return process available for use.. bill of lading.. and loading for shipment. way bill. Outputs: .4 Schedule Defective Product Shipment Load. bill of lading. Returned Defective Product to DR1.. export papers.. . Scheduled Defective Product Return from SR1.g.

.4 Transfer Defective Product Metrics (see Appendix A for metrics attributes): . Cost to Deliver Return Deliver Return Cycle Time Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The average time associated with returns. The process includes communication between the customer and last known holder or known return center and the generation of associated documentation. . The scheduling activity would also inform Receiving when to expect the shipment and where to send the product. This includes the fixed assets used in Plan. The levels of aggregation can be at any element associated with a supply chain asset.2 Schedule Defective Return Receipt . Accepting the request would include negotiating the conditions of the return with the customer. 259 June 2006 . and Return. Source. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Return on Working Capital . The process where the last known holder or designated return center receives and verifies the returned defective product against the return authorization and other documentation and prepares the item for transfer. accounts payable.3 Receive Defective Product .1 Authorize Defective Product Return The process where the last known holder or designated return center receives a defective product return authorization request from a customer. The average actual cycle time consistently achieved to fulfill customer orders. including authorizing return replacement or credit. for disposition.DR1 Deliver Return Defective Product The processes of the last known holder or designated return center authorizing and scheduling the defective product return and the physical receipt of the item by the last known holder or known return center and their transfer of the item for final disposition determination. Rejecting the request would include providing a reason for the rejection to the customer. The process where the last known holder or designated return center transfers the defective product to the appropriate process to implement the disposition decision. cost of goods sold and supply chain management costs. The process where the last known holder or designated return center evaluates the defective product handling requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the product. DR1. upon receipt. Value of Defective Product Inventory in Deliver Return Process/ Total Defective Product Inventory Value © Copyright 2006 Supply-Chain Council. Deliver. Components include accounts receivable. DR1. Make. DR1. Inc. . The Category DR1 includes four Level 3 Elements: . DR1. supply chain revenue. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. . inventory. . determines if the item can be accepted and communicates decision to the customer.

Return Plans from P5.DR1. determines if the item can be accepted and communicates decision to the customer. The customer request for disposition instructions for a defective product from the appropriate source. Business rules align Return process policies with business strategy. Accepting the request would include negotiating the conditions of the return with the customer. Defective Product Return Authorization Response to SR1. unserviceable products and/or serviceable or obsolete products as defined by the terms and conditions of a customer/supplier contract.3 Request Defective Return Authorization Defective Product Return Authorization Request from SR1. . Business Rules for Return Processes from ER.e.1 Manage Business Rules for Return Processes Rules for conducting business. 260 June 2006 .4 Establish and Communicate Return Plans . Inc. and. including authorizing return replacement or credit. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. developing and maintaining customer and channel performance standards of an return processes such as service levels. . . and objectives. Metrics (see Appendix A for metrics attributes): . Value of Defective Product Inventory in Authorization Stage/ Total Defective Product Inventory Value Best Practices: . The customer request for disposition instructions for a defective product from the appropriate source. . . Communicate with Customer before the Return to Establish What Types of Returns Are Acceptable Set Up Electronic or Pre-authorized Returns Use an Exchange System Where Customer is Issued a Serviceable Item Upon Submitting an Unserviceable Item None identified None identified None identified Inputs: .3 Request Defective Return Authorization The approved or disapproved Return Product Authorization (RPA) for excess inventory. i. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products The capability of a system or resources to produce a quantity output in a particular time period. . Defective Product Disposition Request from SR1.4 Establish and Communicate Return Plans Outputs: . Authorize Defective Product Return Cycle Time Cost to Authorize Defective Product Return The average time associated with authorizing the return of defective product. . © Copyright 2006 Supply-Chain Council. The ability the supply chain has to return products in a valid and accurate way.4 Manage Integrated Supply Chain Inventory Product Return Capabilities from P5.3 Request Defective Return Authorization Manage Integrated Supply Chain Inventory Information from EP.1 Authorize Defective Product Return The process where the last known holder or designated return center receives a defective product return authorization request from a customer. . goals. The sum of the costs associated with authorizing the return of defective product. given service requirements by supply chain stakeholders/trading partners. Rejecting the request would include providing a reason for the rejection to the customer.

Manage Integrated Supply Chain Inventory Information to EP.2 Schedule Defective Return Receipt © Copyright 2006 Supply-Chain Council.4 Manage Integrated Supply Chain Inventory Ship-to Data to SR1. . . 261 June 2006 . such as the return history on a similar product.4 Schedule Defective Product Shipment Valid Returns Request to DR1.1 Assess. and Aggregate Return Requirements A judgmental forecasting technique based upon the a return history that is analogous to a present situation.. Historical Return Rates to P5. Inc. Requests for returns that are valid. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products Data about the destination of a retun delivery. and using the past pattern to predict future returns. .

3 Request Defective Return Authorization Return Schedule Instructions to DR1. Inc. It is initiated by event: . Integrate Return Planning with Maintenance and Inventory Planning to Optimize the System Both customer and Service Provider departments are alerted at the same time and viewing the same information. Valid Returns Request from DR1.DR1. for disposition.1 Authorize Defective Product Return Requests for returns that are valid.1 Authorize Defective Product Return Inputs: . Metrics (see Appendix A for metrics attributes): .3 Receive Defective Product A list of operations and procedures for scheduling the return of product.2 Schedule Defective Return Receipt The process where the last known holder or designated return center evaluates the defective product handling requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the product. . © Copyright 2006 Supply-Chain Council. upon receipt. Return Schedule Instructions to SR1. Outputs: . A list of operations and procedures for scheduling the return of product. The scheduling activity would also inform Receiving when to expect the shipment and where to send the product. Cost to Schedule Defective Product Receipt Schedule Defective Return Receipt Cycle Time The sum of the costs associated with scheduling defective product receipt. . Fault Found from DR1. 262 June 2006 . The average time associated with scheduling the receipt of the return of defective product Best Practices: .

packaging. Cost to Receive Defective Product Receive Defective Product Cycle Time The sum of the costs associated with receiving defective product returns. . Return schedule and shipping documents. . Product being returned that is in a defective condition.3 Receive Defective Product The process where the last known holder or designated return center receives and verifies the returned defective product against the return authorization and other documentation and prepares the item for transfer. packaging.DR1. . including: damage. A list of operations and procedures for scheduling the return of product.Bar code interface for data collection devices . Minimize time spent in product movement. The average time associated with receiving defective product returns from the customer Best Practices: .Generate bar coded receiving documents .Push inspection to SOURCE . None Identified . . . quantity. .4 Manage Return Inventory Receipt Data from ER. .Product serial number used as identifier . . quantity.e. Return requirements dictated by process standards set by external entities (i.3 Manage Return Data Collection Return Regulatory Requirements from ER.). government. Notification of a discrepancy relating to a receipt. etc. Inc. . . A collection of related receipt data records organized in a specific manner. etc. . © Copyright 2006 Supply-Chain Council. etc. quantity. Receipt Data from ER. policies and agreements for the transportation activities around return process.6 Manage Return Transportation Returned Defective Product from SR1.8 Manage Return Regulatory Requirements Return Schedule Instructions from DR1. including: damage. etc.Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver. . & Agreements from ER. Notification of a discrepancy relating to a receipt. packaging.5 Return Defective Product A collection of related receipt data records organized in a specific manner. .2 Schedule Defective Return Receipt Return Transportation Guidelines.RFID Electronically link Return authorization. including: damage. Metrics (see Appendix A for metrics attributes): . Receipt Discrepancy Notification to Enable Return Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt. 263 June 2006 . Policies. Outputs: . Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Customer Sends Receiving Advanced Shipment Notification Prior to Shipment Develop Local Receiving Process Close to Repair Electronically Track Shipment from Customer to Service Provider Pre-Certify Supplier Capability to Send Return Products Correctly to Minimize the Need for Receipt Verification Receivers on the Dock Communicate Directly with the Buyer to Efficiently Resolve Any Discrepancies . trade officials. Inputs: . . Guidelines.

Return Inventory Transfer Data to ER. . Assess. Product being returned that is in a defective condition. 264 June 2006 . and Aggregate Return Resources Returned Defective Product to DR1.4 Manage Return Inventory Return Inventory Transfer Data to P5. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Inc.4 Transfer Defective Product The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. .2 Identify.. © Copyright 2006 Supply-Chain Council.

4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination. . .3 Schedule Product Deliveries Return Inventory Transfer Data to ER. Make. Outputs: . Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment.4 Manage Return Inventory Return Inventory Transfer Data to S2. Metrics (see Appendix A for metrics attributes): . and Aggregate Return Resources Return Inventory Transfer Data to S1. can be funded. Repair and Overhaul spare parts used to support of operations and maintenance. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Best Practices: . . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.1 Schedule Product Deliveries Return Inventory Transfer Data to S3. . . or Deliver) on Return Authorization Receiving Equipment and Packaging Materials to Transfer Product Are Planned for In Advance and Readily Available When Needed Return Process Electronically Tracks Transfer from Station to Station Review Transfer Cycle Time Trends and Determine If Equipment Capacity is Properly Balanced with Projected Usage Utilize electronic links Include packaging materials in inventory management system and treat as any other inventory to minimize potential of stock-out.2 Identify. if needed. 265 June 2006 . . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Defective Products to S1. An aggregate material requirements plan used to schedule material deliveries to meet production plan.DR1. Inc. Repair and Overhaul spare parts used to support of operations and maintenance. Return Inventory for Transfer from ER. . Defective Products Scheduling Identifies Next Destination (Source.2 Receive Product Defective Products to S2.4 Transfer Defective Product The process where the last known holder or designated return center transfers the defective product to the appropriate process to implement the disposition decision.2 Receive Product Return Inventory Transfer Data to P5. Product being returned that is in a defective condition. . Assess.3 Receive Defective Product Sourcing Plans from P2.4 Manage Return Inventory Returned Defective Product from DR1. .1 Schedule Product Deliveries Maintenance. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. © Copyright 2006 Supply-Chain Council. . Inputs: . Maintenance. Cost to Transfer Defective Product Transfer Defective Product Cycle Time The sum of the costs associated transferring defective product for disposition The average time associated transfer until product is moved to the next process. . .

SR2. Outputs include a decision to: (1) send a return authorization request to a service provider. and Return.3 Request MRO Return Authorization SR2. The levels of aggregation can be at any element associated with a supply chain asset. The process where the customer develops the schedule for a carrier to pick-up and deliver the MRO product. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the service provider. Source. This includes the fixed assets used in Plan. inventory. (2) send the product back into service without requiring a return authorization request. or (3) discard the item. initiated by the customer. Includes operating failures and planned maintenance requirements. supply chain revenue. The process of the customer determining whether to service the item. and physically returning or disposing of the product. The sum of the costs associated with the return of raw materials to the supplier. Make. repair. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. overhaul or disposal. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. Activities include selecting the carrier and rates.5 Return MRO Product Metrics (see Appendix A for metrics attributes): Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The average actual cycle time consistently achieved to fulfill customer orders. from a service provider.1 Identify MRO Product Condition The process where the customer utilizes pre-determined MRO policies. generating return documentation. what service is required. accounts payable.SR2 Source Return MRO Product The process.2 Disposition MRO Product SR2. and overhaul items to a service provider. 266 June 2006 . Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. business rules and product operating conditions as criteria to identify and confirm that an item requires maintenance. Inc. for the return of an MRO product. Deliver. preparing scheduling documentation and managing overall scheduling administration. repair. The process of a customer requesting and obtaining authorization. and handles the MRO product in preparation for shipping in accord with pre-determined conditions. handling. The process where the customer packages. preparing the item for transfer. Process includes: customer identification that an action is required and determining what that action should be. cost of goods sold and supply chain management costs. communicating with the service provider. Return on Working Capital Total Source Return Costs © Copyright 2006 Supply-Chain Council. packaging. In addition to discussing the MRO issue. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets.4 Schedule MRO Shipment SR2. The Category SR2 includes five Level 3 Elements: SR2. the customer and service provider would discuss enabling conditions such as return replacement or credit. Components include accounts receivable. of returning maintenance. and who the appropriate service provider would be to service the item.

business rules and product operating conditions as criteria to identify and confirm that an item requires maintenance. .e. repair. Warranty Data from ER. All data relevant to a warranty claim for a customer for replacement. © Copyright 2006 Supply-Chain Council. repair or credit because the product received did not meet a commitment. . Returned MRO Product to SR2. developing and maintaining customer and channel performance standards of an return processes such as service levels.2 Disposition MRO Product Product being returned for maintenance. Cost of Identifying the MRO Condition as a % of Total Source Return Cost Total Number of Confirmed MRO Conditions / Total Number of MRO Service Requests Initiated Value of Unserviceable MRO Inventory In Identification Stage/Total MRO Inventory Value Inputs: . overhaul or disposal. The process of identifying and complying with regulatory documentation and process standards set by external entities (i. given service requirements by supply chain stakeholders/trading partners. and objectives. Includes operating failures and planned maintenance requirements.e.) when planning for the Return and Recovery of Assets. Metrics (see Appendix A for metrics attributes): . repair.8 Manage Return Regulatory Requirements .SR2. Business rules align Return process policies with business strategy. Manage Regulatory Return Policy from ER. or overhaul.1 Manage Business Rules for Return Processes Rules for conducting business. Inc. government. 267 June 2006 . Business Rules for Return Processes from ER. etc.1 Identify MRO Product Condition The process where the customer utilizes pre-determined MRO policies.8 Manage Return Regulatory Requirements Outputs: . i. goals. trade officials. either expressed or implied. concerning a certain fact regarding the product .

Outputs include a decision to: (1) send a return authorization request to a service provider. (2) send the product back into service without requiring a return authorization request. or (3) discard the item. . . % Identified MRO Products Returned to Service MRO Disposition Costs as % Total Source Return Cost Value of Defective Inventory in Disposition Inventory Awaiting Return Stage/ Total Inventory Value Inventory awaiting disposition Value of Unserviceable MRO Inventory In Disposition Stage/ Total MRO Inventory Value Inputs: .4 Manage Return Inventory Permission to return to service an item that has been repaired and found to be within specifications and operable. . Metrics (see Appendix A for metrics attributes): . what service is required.8 Receive Product from Source or Make Return Inventory Availability to ER. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical.4 Establish and Communicate Return Plans Returned MRO Product from SR2. Outputs: . . Inventory relative to return process available for use.3 Request MRO Return Authorization Returned Product Location to ER.8 Receive Product from Source or Make Authorization to Scrap to D1. .1 Identify MRO Product Condition Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. or overhaul.2 Disposition MRO Product The process of the customer determining whether to service the item.SR2. and who the appropriate service provider would be to service the item. .4 Manage Return Inventory Returned MRO Product to SR2. . Inc. or overhaul. . repair. © Copyright 2006 Supply-Chain Council. Authorization to Return to Service to D1. Product being returned for maintenance. Return Plans from P5. repair. 268 June 2006 . Product being returned for maintenance. The storage location of those items being returned.

the customer and service provider would discuss enabling conditions such as return replacement or credit. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received.2 Schedule MRO Return Receipt Returned MRO Product from SR2.3 Request MRO Return Authorization The process of a customer requesting and obtaining authorization. such as the return history on a similar product. A judgmental forecasting technique based upon the a return history that is analogous to a present situation. MRO Return Authorization Response from DR2. repair. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. Product being returned for maintenance. . .4 Schedule MRO Shipment Historical Return Rates to P5. repair of the repairable item. receipt of a serviceable item from stock. Returned MRO Product to SR2. Outputs: .1 Authorize MRO Product Return MRO Return Authorization Request to DR2. . transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. . or overhaul. . for the return of an MRO product Inventory relative to return process available for use. Product being returned for maintenance. . A list of operations and procedures for scheduling the return of product. Workflow to SR2. . Request disposition instructions for an MRO item from the Supplier.1 Authorize MRO Product Return Return Inventory Availability from ER. handling.4 Schedule MRO Shipment Credit Exchange Options to SR2. repair. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Metrics (see Appendix A for metrics attributes): . 269 June 2006 .4 Schedule MRO Shipment © Copyright 2006 Supply-Chain Council. MRO Disposition Request to DR2. . or overhaul. from a service provider. packaging. . the customer and service provider would discuss enabling conditions such as return replacement or credit. In addition to discussing the MRO issue. from a service provider.1 Assess. and using the past pattern to predict future returns. % Authorization Requests Transmitted Error-Free / Total Authorizations Requested Cost per Request Authorization Ratio of Authorization Cost To Total Source Return Cost Inventory awaiting return authorization Value of Unserviceable MRO Inventory in Request Return Authorization Stage/ Total MRO Inventory Value Inputs: . credit for the cost of the item.4 Schedule MRO Shipment Ship-to Data to SR2. handling.SR2. packaging. for the return of an MRO product.4 Manage Return Inventory Return Schedule Instructions from DR2. . In addition to discussing the MRO issue.2 Disposition MRO Product The process of a customer obtaining authorization. Inc. and Aggregate Return Requirements The options available on the return of a repairable item. . Data about the destination of a return delivery. The process of a customer requesting authorization from a service provider.1 Authorize MRO Product Return . for the return of an MRO product.

270 June 2006 . . . Carrier Selection Based on Performance Criteria at Least Cost Consolidation of Return Carriers Transportation Modeling and Rate Analysis Scheduling. and rating Outbound logistics software to assist with route. . Workflow from SR2. Returned MRO Product to SR2. repair. Build Loads Return Inventory Availability from ER. preparing scheduling documentation and managing overall scheduling administration. Product Return Outputs: . preparing the item for transfer.3 Request MRO Return Authorization Returned MRO Product from SR2.3 Request MRO Return Authorization Ship-to Data from SR2. % MRO Scheduling Cost to Total Source Return Cost % Shipping Schedules that Support Customer Required Return by Date Value of Unserviceable MRO inventory in Scheduling Stage/ Total MRO Inventory Value Best Practices: . .3 Request MRO Return Authorization Plan and Build Loads Information from D1. . . carrier selection. © Copyright 2006 Supply-Chain Council.4 Inventory relative to return process available for use. . . .5 Transportation modes are selected and efficient loads are built.5 Return MRO Product Product being returned for maintenance.3 Request MRO Return Authorization Credit Exchange Options from SR2. . Manage Return Inventory Ship-to Data from DR2.5 Return MRO Product Scheduled MRO Return to SR2. .4 Schedule MRO Shipment The process where the customer develops the schedule for a carrier to pick-up and deliver the MRO product. None identified Inputs: . Inc. Planned or scheduled act of installing something for some certain time or times. Activities include selecting the carrier and rates. or overhaul.1 Authorize MRO Data about the destination of a return delivery.SR2. Metrics (see Appendix A for metrics attributes): .

.4 Schedule MRO Shipment Load.4 Schedule MRO Shipment Scheduled MRO Return from SR2. Legal documentation of the contents of a shipment (e. % Error-Free Returns Shipped Cost per Request Authorization Return Shipments Shipped on Time Return Transportation Costs Value of Unserviceable MRO Inventory in Physical Return and Transportation Stage/ Total MRO Inventory Value Best Practices: .4 Manage Return Inventory Inventory relative to return process available for use. or overhaul. Satellite communications. Generate Shipping Documentation weighing.SR2.). and loading for shipment.g.. .g.. It includes packaging. Returned MRO Product from SR2. export papers. way bill. .). Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. verify the shipment and customer credit information. . Also. . and Credit The function that performs tasks for the outgoing shipment of parts. export papers.5 Return MRO Product The process where the customer packages.3 Receive MRO Product Shipment Documents to Government Shipment Documents to Carrier Shipment Documents to Customer Product being returned for maintenance. . Information from D1. etc. export papers. Shipping. Returned MRO Product to DR2. . Verify.). . .11 Load Vehicle & components. etc. Return Inventory Availability from ER. bill of lading. marking. way bill. . etc. Legal documentation of the contents of a shipment (e.. and handles the MRO product in preparation for shipping in accord with pre-determined conditions.. bill of lading. Outputs: .... RFID Inputs: . Inc. Legal documentation of the contents of a shipment (e. Metrics (see Appendix A for metrics attributes): . repair. way bill. 271 June 2006 .g. GPS. © Copyright 2006 Supply-Chain Council. bill of lading. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the service provider. . and products. ..

Upside Deliver Return Adaptability The maximum sustainable percentage increase in returns of finished goods from customers that can be achieved in 30 days. within Schedule. supply chain revenue. Source. upon receipt. inventory. cost of goods sold and supply chain management costs. This includes the fixed assets used in Plan. accounts payable. Order Fulfillment Cycle Time The average actual cycle time consistently achieved to fulfill customer orders. Make. Upside Deliver Return Flexibility The number of days required to achieve an unplanned sustainable 20% increase in the return of finished goods from customers.4 Transfer MRO Product Metrics (see Appendix A for metrics attributes): % of MRO Returns Delivered to the Correct Service Provider Location.1 Authorize MRO Product Return The process where a service provider receives an MRO product return authorization request from a customer. for induction or storage. and Return. Inc. The scheduling activity would also inform Receiving when to expect the shipment and where to send the part.3 Receive MRO Product DR2. The levels of aggregation can be at any element associated with a supply chain asset. Deliver. The process includes communication between the customer and service provider and the generation of associated documentation. 272 June 2006 .DR2 Deliver Return MRO Product The processes of the service provider authorizing and scheduling the MRO return product and the physical receipt of the item by the service provider and their transfer of the item for final disposition determination. Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Accepting the request would include negotiating the conditions of the return with the customer. Return on Working Capital Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. The Category DR2 includes four Level 3 Elements: DR2. with the Correct Part and Documentation Cost to Deliver Return Deliver Return Cycle Time The average time associated with returns. Components include accounts receivable. determines if the item can be accepted for MRO and communicates their decision to the customer. Rejecting the request would include providing a reason for the rejection to the customer. The process where the service provider evaluates the MRO service requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the part. Value of Unserviceable MRO Inventory in Deliver Return Process/ Total MRO Inventory Value © Copyright 2006 Supply-Chain Council. DR2. The process where the service provider transfers the MRO product to the appropriate process to implement the disposition decision. including authorizing return replacement or credit.2 Schedule MRO Return Receipt DR2. The process where the service provider receives and verifies the returned MRO item against the return authorization and other documentation and prepares the item for transfer (includes verify).

3 Request MRO Return Authorization . Manage Integrated Supply Chain Inventory Information from EP. .DR2. The capability of a system or resources to produce a quantity output in a particular time period.e. Communicate with Customer before the Return to Establish What Types of Returns Are Acceptable Set Up Electronic or Pre-authorized Returns Use an Exchange System Where Customer is Issued a Serviceable Item Upon Submitting an Unserviceable Item None identified None identified None identified Inputs: . i. The process of a customer requesting authorization from a service provider. the customer and service provider would discuss enabling conditions such as return replacement or credit. handling. or overhauled. including authorizing return replacement or credit. Business rules align Return process policies with business strategy. given service requirements by supply chain stakeholders/trading partners. Metrics (see Appendix A for metrics attributes): . and.3 Request MRO Return Authorization MRO Return Authorization Request from SR2. 273 June 2006 . The ability the supply chain has to return products in a valid and accurate way.4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. for the return of an MRO product. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products Request disposition instructions for an MRO item from the Supplier. developing and maintaining customer and channel performance standards of an return processes such as service levels. . Rejecting the request would include providing a reason for the rejection to the customer. Best Practices: . . repaired. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. goals. Inc. determines if the item can be accepted for MRO and communicates their decision to the customer.4 Establish and Communicate Return Plans .4 Manage Integrated Supply Chain Inventory MRO Disposition Request from SR2. In addition to discussing the MRO issue. and objectives. . Product Return Capabilities from P5. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. Business Rules for Return Processes from ER. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Authorize MRO Product Return Cycle Time Cost to Authorize MRO Product Return The average time associated with authorizing the return of MRO product.1 Authorize MRO Product Return The process where a service provider receives an MRO product return authorization request from a customer.1 Manage Business Rules for Return Processes Rules for conducting business. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. packaging. Accepting the request would include negotiating the conditions of the return with the customer. . The sum of the costs associated with authorizing the return of product to be maintained. Return Plans from P5. .

Requests for returns that are valid. such as the return history on a similar product. Inc. 274 June 2006 . Historical Return Rates to P5.3 Request MRO Return Authorization Ship-to Data to SR2. . . and using the past pattern to predict future returns. Manage Integrated Supply Chain Inventory Information to EP.Outputs: . from a service provider. for the return of an MRO product Data about the destination of a retun delivery. .1 Assess.4 Schedule MRO Shipment Valid Returns Request to DR2. . and Aggregate Return Requirements A judgmental forecasting technique based upon the a return history that is analogous to a present situation.4 Manage Integrated Supply Chain Inventory MRO Return Authorization Response to SR2. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products The process of a customer obtaining authorization.2 Schedule MRO Return Receipt © Copyright 2006 Supply-Chain Council.

Return Schedule Instructions to SR2. Outputs: .1 Authorize MRO Product Return Requests for returns that are valid. Integrate Return Planning with Maintenance and Inventory Planning to Optimize the System Both customer and Service Provider departments are alerted at the same time and viewing the same information. .3 Receive MRO Product A list of operations and procedures for scheduling the return of product. Valid Returns Request from DR2.2 Schedule MRO Return Receipt The process where the service provider evaluates the MRO service requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the part. A list of operations and procedures for scheduling the return of product. Cost to Schedule MRO Product Receipt Schedule MRO Return Receipt Cycle Time The sum of the costs associated with scheduling MRO product receipt. Inc. The average time associated with scheduling the receipt of the return of MRO product Best Practices: . for induction or storage. . © Copyright 2006 Supply-Chain Council. 275 June 2006 . Metrics (see Appendix A for metrics attributes): .DR2. Inputs: . The scheduling activity would also inform Receiving when to expect the shipment and where to send the part. upon receipt.3 Request MRO Return Authorization Return Schedule Instructions to DR2.

packaging. . Minimize time spent in product movement. Notification of a discrepancy relating to a receipt. None Identified . A list of operations and procedures for scheduling the return of product. Policies. etc.Generate bar coded receiving documents . . etc. Cost to Receive MRO Product Receive MRO Product Cycle Time The sum of the costs associated with receiving MRO product returns. Receipt Discrepancy Notification to Enable Return Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt.4 Manage Return Inventory Receipt Data from ER. .2 Schedule MRO Return Receipt Return Transportation Guidelines. including: damage.e. Return schedule and shipping documents. Guidelines. . . 276 June 2006 . including: damage. Notification of a discrepancy relating to a receipt. .Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver.RFID Electronically link Return authorization. quantity. & Agreements from ER. quantity. .3 Receive MRO Product The process where the service provider receives and verifies the returned MRO item against the return authorization and other documentation and prepares the item for transfer (includes verify). A collection of related receipt data records organized in a specific manner. etc. The average time associated with receiving MRO product returns from the customer Best Practices: .Push inspection to SOURCE .DR2. quantity.Product serial number used as identifier .Bar code interface for data collection devices . Metrics (see Appendix A for metrics attributes): .5 Return MRO Product A collection of related receipt data records organized in a specific manner. .).3 Manage Return Data Collection Return Regulatory Requirements from ER. .6 Manage Return Transportation Returned MRO Product from SR2. government. packaging. including: damage. packaging. . Outputs: .8 Manage Return Regulatory Requirements Return Schedule Instructions from DR2. . Receipt Data from ER. repair. . © Copyright 2006 Supply-Chain Council. Product being returned for maintenance. . . or overhaul. Inc. etc. Inputs: . policies and agreements for the transportation activities around return process. Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Customer Sends Receiving Advanced Shipment Notification Prior to Shipment Develop Local Receiving Process Close to Repair Electronically Track Shipment from Customer to Service Provider Pre-Certify Supplier Capability to Send Return Products Correctly to Minimize the Need for Receipt Verification Receivers on the Dock Communicate Directly with the Buyer to Efficiently Resolve Any Discrepancies . trade officials. Return requirements dictated by process standards set by external entities (i.

277 June 2006 . or overhaul.2 Identify. Assess. © Copyright 2006 Supply-Chain Council. and Aggregate Return Resources Returned MRO Product to DR2. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Return Inventory Transfer Data to ER. Product being returned for maintenance.4 Transfer MRO Product The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. .. .4 Manage Return Inventory Return Inventory Transfer Data to P5. repair. Inc.

2 Receive Product Return Inventory Transfer Data to S2. Repair and Overhaul spare parts used to support of operations and maintenance. Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment. Outputs: .1 Schedule Product Deliveries Return Inventory Transfer Data to S1. 278 June 2006 . Inputs: . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. . . or overhaul. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. © Copyright 2006 Supply-Chain Council. . An aggregate material requirements plan used to schedule material deliveries to meet production plan. Maintenance. . . Best Practices: . . MRO Products to S2.DR2. . . Product being returned for maintenance. Assess.4 Manage Return Inventory Return Inventory Transfer Data to P5. Repair and Overhaul spare parts used to support of operations and maintenance. Metrics (see Appendix A for metrics attributes): .4 Manage Return Inventory Returned MRO Product from DR2.1 Schedule Product Deliveries Return Inventory Transfer Data to ER. can be funded. MRO Scheduling Identifies Next Destination (Stores or Repair Station) on Return Authorization Receiving Equipment and Packaging Materials to Transfer Product Are Planned for In Advance and Readily Available When Needed Return Process Electronically Tracks Transfer from Station to Station Review Transfer Cycle Time Trends and Determine If Equipment Capacity is Properly Balanced with Projected Usage Utilize electronic links Include packaging materials in inventory management system and treat as any other inventory to minimize potential of stock-out.2 Receive Product MRO Products to S1. . Cost to Transfer MRO Product Transfer MRO Product Cycle Time The sum of the costs associated transferring MRO product for disposition The average time associated transfer until product is moved to the next process. Inc.2 Identify. Return Inventory for Transfer from ER. repair. if needed. .4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination.4 Transfer MRO Product The process where the service provider transfers the MRO product to the appropriate process to implement the disposition decision. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.3 Receive MRO Product Sourcing Plans from P2. and Aggregate Return Resources Maintenance.

Inc. 279 June 2006 . Return Inventory Transfer Data to S3.3 Schedule Product Deliveries The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. © Copyright 2006 Supply-Chain Council..

from the designated return center. Components include accounts receivable. and Return. preparing scheduling documentation and managing overall scheduling administration.1 Identify Excess Product Condition The process where the customer utilizes planned policies. cost of goods sold and supply chain management costs. 280 June 2006 . inventory. Inc. SR3.2 Disposition Excess Product The process of the customer determining whether to return the excess material and identification of a designated return center a return authorization. Activities include selecting the carrier and rates. and handles the excess product in preparation for shipping in accord with pre-determined conditions. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center. SR3. SR3. The levels of aggregation can be at any element associated with a supply chain asset. determining what that action should be. Additionally.4 Schedule Excess Product Shipment The process where the customer develops the schedule for a carrier to pick-up the excess product. accounts payable. the customer and designated return center would negotiate enabling conditions such as return credit or cash discount. packaging.5 Return Excess Product The process where the customer packages. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Deliver. and physically returning the excess product. The Category SR3 includes five Level 3 Elements: SR3. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. The sum of the costs associated with the receipt of returned excess products from the customer Return on Working Capital Source Return Cycle Time Total Excess Material Return Costs Value of Excess Inventory/ Total Inventory Value © Copyright 2006 Supply-Chain Council. SR3. supply chain revenue. This includes the fixed assets used in Plan. Process includes: customer identification that an action is required. generating return documentation. with the correct part and documentation The average actual cycle time consistently achieved to fulfill customer orders. Make. according to the schedule. of returning material deemed in excess of current requirements to the designated return center. business rules and product inspection as criteria to identify and confirm that material is in excess of the current requirements. handling. initiated by the customer. for the return of excess product. Source. preparing the item for transfer. transportation and import / export requirements to facilitate the efficient return of the excess product.SR3 Source Return Excess Product The process.3 Request Excess Return Authorization The process of a customer requesting and obtaining authorization. Metrics (see Appendix A for metrics attributes): % of Excess Product Returns Delivered Complete to the Designated Return Center Average Age of Excess Inventory Cost to Source Return Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets Correct destination. requesting authorization from the designated return center.

Returned Excess Product to SR3. developing and maintaining customer and channel performance standards of an return processes such as service levels. Manage Regulatory Return Policy from ER. Best Practices: . Inc. goals. cost of goods sold and supply chain management costs. Metrics (see Appendix A for metrics attributes): . etc.SR3. The process of identifying and complying with regulatory documentation and process standards set by external entities (i. inventory. © Copyright 2006 Supply-Chain Council. Value of Excess Inventory in Identification Stage/ Total Inventory Value . business rules and product inspection as criteria to identify and confirm that material is in excess of the current requirements. . Cost of Identifying the Excess Condition as a % of Total Source Return Cost Number of Occurrences Where Excess Inventory is Returned and Subsequently Followed by an Expedite Request Return on Working Capital Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Web based access to enterprise level business rules Inputs: . Automated Inventory Visibility and Planning System to Highlight Inventory in Excess of Requirements Enterprise Level Policies/Rules with Local Execution Automated inventory planning package linked to real time demand data and inventory business rules. . . 281 June 2006 . given service requirements by supply chain stakeholders/trading partners. government. trade officials. accounts payable.e. Business Rules for Return Processes from ER. i. supply chain revenue.2 Disposition Excess Product Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale.8 Manage Return Regulatory Requirements Outputs: . Business rules align Return process policies with business strategy.1 Manage Business Rules for Return Processes Rules for conducting business.1 Identify Excess Product Condition The process where the customer utilizes planned policies. and objectives.) when planning for the Return and Recovery of Assets. . Components include accounts receivable.e.

Inc. .8 Receive Product from Source or Make Authorization to Scrap to D1. Excess Product Disposition Costs as % Total Source Return Cost Number of Occurrences of Incorrect Designated Return Center Value of Excess Inventory in Disposition Inventory Awaiting Return Stage/ Total Inventory Value Best Practices: . Authorization to Return to Service to D1. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. The physical location where the returned product inventory is held prior to disposition Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. Return Plans from P5. Metrics (see Appendix A for metrics attributes): . Automated Registry of Inventory Return Locations by Item to Speed Identification of Proper Return Location Drive Returns Directly to Return Stock Point of Disposition to Reduce Cost and Cycle Time None identified Specify return disposition location and time. . Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. © Copyright 2006 Supply-Chain Council.8 Receive Product from Source or Make Return Inventory Availability to ER.1 Identify Excess Product Condition Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.2 Disposition Excess Product The process of the customer determining whether to return the excess material and identification of a designated return center a return authorization. Outputs: . .4 Manage Return Inventory Return Product Location to ER.4 Manage Return Inventory Returned Excess Product to SR3.4 Establish and Communicate Return Plans Returned Excess Product from SR3. .3 Request Excess Return Authorization Permission to return to service an item that has been repaired and found to be within specifications and operable. Inputs: . . 282 June 2006 . . . . Inventory relative to return process available for use.SR3.

Request disposition instructions for an excess item from the Supplier.SR3. from a service provider. © Copyright 2006 Supply-Chain Council. . Weight. . 283 June 2006 . None identified Inputs: . . .3 Request Excess Return Authorization The process of a customer requesting and obtaining authorization.4 Manage Return Inventory Return Schedule Instructions from DR3. credit for the cost of the item. repair of the repairable item. . from the designated return center. packaging. . Excess Product Return Authorization Response from DR3. Credit/ Exchange Options to SR3. Outputs: . Description and Class to Minimize Guesswork & Wrong Estimates Long-Term Return Agreements / Partnerships Electronic rules for business relationships and transactions. Additionally.2 Schedule Excess Return Receipt Returned Excess Product from SR3. receipt of a serviceable item from stock.2 Disposition Excess Product The process of a customer obtaining authorization. A list of operations and procedures for scheduling the return of product. the customer and designated return center would negotiate enabling conditions such as return credit or cash discount. Clarify Point of Contact and Return Location Develop and Clarify Mutually Understood Cycle Times to Process Return Authorizations Enable Customer-Service Representatives to Complete the Bill Of Lading for the Customer Including Carrier Routing.1 Authorize Excess Product Return Return Inventory Availability from ER. Metrics (see Appendix A for metrics attributes): . . Inc.4 Schedule Excess Product Shipment Excess Product Disposition Request to DR3. transportation and import / export requirements to facilitate the efficient return of the excess product. for the return of excess product Inventory relative to return process available for use. handling.1 Authorize Excess Product Return The options available on the return of a repairable item. % Authorization Requests Transmitted Error-Free / Total Authorizations Requested Cost per Request Authorization Ratio of Authorization Cost to Total Source Return cost Value of Excess Product Inventory in Inventory Awaiting Return Authorization Request Return Authorization Stage/ Total Excess Product Inventory Value Best Practices: . Clarification as to who will pay in-bound and out-bound freight cost. Clarification of policy if authorizations are not processed within the expected cycle time. Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. . . for the return of excess product. .

Inc. packaging. .4 Schedule Excess Product Shipment Ship-to Data to SR3. Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. A validated and approved Return Product Authorization (RPA). Returned Excess Product to SR3.1 Authorize Excess Product Return The process of a customer requesting authorization from a service provider. © Copyright 2006 Supply-Chain Council. A judgmental forecasting technique based upon the a return history that is analogous to a present situation. Excess Product Return Authorization Request to DR3. and using the past pattern to predict future returns. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Historical Return Rates to P5. such as the return history on a similar product. In addition to discussing the excess.. Data about the destination of a return delivery.1 Assess. 284 June 2006 . . for the return of excess. handling. the customer and service provider would discuss enabling conditions such as return replacement or credit.4 Schedule Excess Product Shipment .4 Schedule Excess Product Shipment Validated Return Material Authorization to SR3. and Aggregate Return Requirements . transportation and import / export requirements to facilitate the efficient return of excess to the service provider.

.5 Return Excess Product Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. Metrics (see Appendix A for metrics attributes): . Validated Return Material Authorization from SR3.5 Transportation modes are selected and efficient loads are built. .3 Request Excess Return Authorization Plan and Build Loads Information from D1. and rating Outbound logistics software to assist with route. Manage Return Inventory Ship-to Data from DR3.5 Return Excess Product Scheduled Excess Product Return to SR3. .3 Request Excess Return Authorization Credit/ Exchange Options from SR3. . Arrange for Shipping Insurance in Case Of In-Transit Loss or Damage Carrier Selection Based on Performance Criteria at Least Cost Consolidation of Return Carriers Transportation Modeling and Rate Analysis Preventative management Scheduling. % Excess Product Scheduling Cost to Total Source Return Cost % Shipping Schedules that Support Customer Required Return by Date Value of Excess Product Inventory in Scheduling Stage/ Total Excess Product Inventory Value Best Practices: . © Copyright 2006 Supply-Chain Council. . Build Loads Return Inventory Availability from ER. . preparing scheduling documentation and managing overall scheduling administration.3 Request Excess Return Authorization Returned Excess Product from SR3. preparing the item for transfer.3 Request Excess Return Authorization Ship-to Data from SR3.SR3. Inc.1 Authorize Excess Data about the destination of a retun delivery. Product Return Outputs: . None identified Inputs: . 285 June 2006 .4 Schedule Excess Product Shipment The process where the customer develops the schedule for a carrier to pick-up the excess product. . Returned Excess Product to SR3. . Activities include selecting the carrier and rates. carrier selection. Planned or scheduled returning of material deemed in excess of current requirements for some certain time or times. .4 Inventory relative to return process available for use. . . .

The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center. . etc. Legal documentation of the contents of a shipment (e...g. .g. . Legal documentation of the contents of a shipment (e.SR3. and products. way bill. bill of lading.5 Return Excess Product The process where the customer packages. Also.4 Schedule Excess Product Shipment Load. . GPS. export papers. bill of lading.. way bill. It includes packaging... . Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. . . way bill. © Copyright 2006 Supply-Chain Council. Generate Shipping Documentation weighing. etc. export papers. .). Satellite communications. % Error-Free Returns Shipped Cost per Request Authorization Return Shipments Shipped on Time Return Transportation Costs Value of Excess Product Inventory in Physical Return and Transportation Stage/ Total Excess Inventory Value Best Practices: .4 Manage Return Inventory Inventory relative to return process available for use.4 Schedule Excess Product Shipment Returned Excess Product from SR3. Scheduled Excess Product Return from SR3... Returned Excess Product to DR3. Shipping. . Outputs: . and Credit The function that performs tasks for the outgoing shipment of parts. .)..g. . Legal documentation of the contents of a shipment (e. verify the shipment and customer credit information. Metrics (see Appendix A for metrics attributes): .. 286 June 2006 . Information from D1. marking. and loading for shipment.3 Receive Excess Product Shipment Documents to Government Shipment Documents to Carrier Shipment Documents to Customer Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. Inc. etc. RFID Inputs: . Return Inventory Availability from ER.). export papers.11 Load Vehicle & components. bill of lading. and handles the excess product in preparation for shipping in accord with pre-determined conditions. Verify.

including authorizing credit or cash discount. Rejecting the request would include providing a reason for the rejection to the customer. The scheduling activity would also inform the Return Center’s Receiving department when to expect the shipment and where to send the product.DR3 Deliver Return Excess Product The processes of the designated return center authorizing and scheduling the excess product return. accounts payable. The number of days required to achieve an unplanned sustainable 20% increase in the return of finished goods from customers. cost of goods sold and supply chain management costs. Inc. DR3. The process where the designated return center evaluates an authorized excess material return to determine packaging and handling requirements. with the correct part and documentation The average actual cycle time consistently achieved to fulfill customer orders. Administrate any discrepancies that arise. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. determines if the item can be accepted and communicates their decision to the customer. The Category DR3 includes four Level 3 Elements: DR3. The process where the designated return center transfers the excess product to the appropriate process to implement the disposition decision. Make. and Return.3 Receive Excess Product DR3.2 Schedule Excess Return Receipt DR3. The process where the designated return center receives and verifies the returned excess product and associated documentation against the return authorization and other documentation and prepares the item for transfer. Deliver. This includes the fixed assets used in Plan. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. inventory. supply chain revenue. upon receipt. The maximum sustainable percentage increase in returns of finished goods from customers that can be achieved in 30 days. The levels of aggregation can be at any element associated with a supply chain asset. Source. the physical receipt of the item by the designated return center and transfer of the item for final disposition The process includes communication between the customer and designated return center and the generation of associated documentation.1 Authorize Excess Product Return The process where the designated return center receives an excess product return authorization request from a customer. This assessment will lead to the development of a return disposition decision and a return schedule with terms and conditions that will tell the Customer how and when to ship the product.4 Transfer Excess Product Metrics (see Appendix A for metrics attributes): % of Excess Product Returns Delivered Complete to the Designated Return Center Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets Correct destination. for disposition. Components include accounts receivable. Return on Working Capital Upside Deliver Return Adaptability Upside Deliver Return Flexibility © Copyright 2006 Supply-Chain Council. Accepting the request would include negotiating the conditions of the return with the customer. 287 June 2006 . according to the schedule.

i. including authorizing credit or cash discount. Excess Product Disposition Request from SR3. Authorize Excess Product Return Cycle Time Cost to Authorize Excess Product Return The average time associated with authorizing the return of excess product. Request disposition instructions for an excess item from the Supplier. Accepting the request would include negotiating the conditions of the return with the customer. . Manage Integrated Supply Chain Inventory Information from EP. .1 Manage Business Rules for Return Processes Rules for conducting business. handling.3 Request Excess Return Authorization . packaging. for the return of excess. . . Communicate with Customer before the Return to Establish What Types of Returns Are Acceptable Set Up Electronic or Pre-authorized Returns None identified None identified Inputs: . The process of a customer requesting authorization from a service provider. and.3 Request Excess Return Authorization Excess Product Return Authorization Request from SR3. given service requirements by supply chain stakeholders/trading partners. Inc. Business Rules for Return Processes from ER. developing and maintaining customer and channel performance standards of an return processes such as service levels.e. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal.1 Authorize Excess Product Return The process where the designated return center receives an excess product return authorization request from a customer.4 Establish and Communicate Return Plans . goals. Rejecting the request would include providing a reason for the rejection to the customer. 288 June 2006 . Return Plans from P5. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Best Practices: .4 Manage Integrated Supply Chain Inventory Product Return Capabilities from P5. Metrics (see Appendix A for metrics attributes): . The sum of the costs associated with authorizing the return of excess product. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. the customer and service provider would discuss enabling conditions such as return replacement or credit.DR3. transportation and import / export requirements to facilitate the efficient return of excess to the service provider. In addition to discussing the excess. and objectives. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products The capability of a system or resources to produce a quantity output in a particular time period. Business rules align Return process policies with business strategy. The ability the supply chain has to return products in a valid and accurate way.4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. . determines if the item can be accepted and communicates their decision to the customer.

2 Schedule Excess Return Receipt Ship-to Data to SR3. 289 June 2006 . from a service provider. and using the past pattern to predict future returns. such as the return history on a similar product. Data about the destination of a retun delivery. for the return of excess product A judgmental forecasting technique based upon the a return history that is analogous to a present situation. . . Excess Product Return Authorization Response to SR3. after communicating with the customer. and Aggregate Return Requirements The process of a customer obtaining authorization. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products Permission to accept an excess product return for the designated return center.3 Request Excess Return Authorization Historical Return Rates to P5.4 Schedule Excess Product Shipment © Copyright 2006 Supply-Chain Council.1 Assess. Manage Integrated Supply Chain Inventory Information to EP. . Inc.Outputs: . .4 Manage Integrated Supply Chain Inventory Return Product Authorization to DR3.

upon receipt. Return Product Authorization from DR3.3 Receive Excess Product A list of operations and procedures for scheduling the return of product. Outputs: . The average time associated with scheduling the receipt of the return of excess product Best Practices: . . Metrics (see Appendix A for metrics attributes): . This assessment will lead to the development of a return disposition decision and a return schedule with terms and conditions that will tell the Customer how and when to ship the product. . The scheduling activity would also inform the Return Center’s Receiving department when to expect the shipment and where to send the product.3 Request Excess Return Authorization Return Schedule Instructions to DR3. Cost to Schedule Excess Product Receipt Schedule Excess Return Receipt Cycle Time The sum of the costs associated with scheduling excess product receipt. A list of operations and procedures for scheduling the return of product. Inc. © Copyright 2006 Supply-Chain Council.1 Authorize Excess Product Return Permission to accept an excess product return for the designated return center. after communicating with the customer.DR3. for disposition. Establish Designated Processes for Scheduling and Receiving Excess Inventory None Identified Inputs: . Return Schedule Instructions to SR3. 290 June 2006 .2 Schedule Excess Return Receipt The process where the designated return center evaluates an authorized excess material return to determine packaging and handling requirements.

.DR3. .8 Manage Return Regulatory Requirements Return Schedule Instructions from DR3. . Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt. packaging. Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Customer Sends Receiving Advanced Shipment Notification Prior to Shipment Develop Local Receiving Process Close to Repair Electronically Track Shipment from Customer to Service Provider Pre-Certify Supplier Capability to Send Return Products Correctly to Minimize the Need for Receipt Verification Receivers on the Dock Communicate Directly with the Buyer to Efficiently Resolve Any Discrepancies . 291 June 2006 . . including: damage. . policies and agreements for the transportation activities around return process.5 Return Excess Product A collection of related receipt data records organized in a specific manner. Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. . Guidelines. © Copyright 2006 Supply-Chain Council.RFID Electronically link Return authorization. Outputs: . . Policies. Metrics (see Appendix A for metrics attributes): . .Bar code interface for data collection devices . Return schedule and shipping documents. Administrate any discrepancies that arise. . quantity. trade officials. & Agreements from ER. . None Identified .3 Manage Return Data Collection Receipt Data from ER.). Inputs: . A list of operations and procedures for scheduling the return of product.6 Manage Return Transportation Returned Excess Product from SR3. etc. . including: damage. Receipt Data from ER. Return requirements dictated by process standards set by external entities (i.Product serial number used as identifier . Minimize time spent in product movement. .4 Manage Return Inventory Return Regulatory Requirements from ER. Inc.Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver.3 Receive Excess Product The process where the designated return center receives and verifies the returned excess product and associated documentation against the return authorization and other documentation and prepares the item for transfer.Generate bar coded receiving documents . quantity. government. packaging. etc.Push inspection to SOURCE . etc. Notification of a discrepancy relating to a receipt.e.2 Schedule Excess Return Receipt Return Transportation Guidelines. A collection of related receipt data records organized in a specific manner. The average time associated with receiving excess product returns from the customer Best Practices: . Cost to Receive Excess Product Receive Excess Product Cycle Time The sum of the costs associated with receiving excess returns. .

The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Inc. quantity.4 Manage Return Inventory Return Inventory Transfer Data to P5.2 Identify. 292 June 2006 . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. and Aggregate Return Resources Returned Excess Product to DR3. etc. © Copyright 2006 Supply-Chain Council. Receipt Discrepancy Notification to Enable Return Return Inventory Transfer Data to ER. Assess. .. including: damage. .4 Transfer Excess Product Notification of a discrepancy relating to a receipt. packaging. . Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale.

4 Manage Return Inventory Returned Excess Product from DR3. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. . . . Best Practices: .3 Schedule Product Deliveries Return Inventory Transfer Data to P5. Inc.1 Schedule Product Deliveries Return Inventory Transfer Data to S3. Excess Products to S2. Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment. © Copyright 2006 Supply-Chain Council. or Deliver) on Return Authorization Receiving Equipment and Packaging Materials to Transfer Product Are Planned for In Advance and Readily Available When Needed Return Process Electronically Tracks Transfer from Station to Station Review Transfer Cycle Time Trends and Determine If Equipment Capacity is Properly Balanced with Projected Usage Utilize electronic links Include packaging materials in inventory management system and treat as any other inventory to minimize potential of stock-out. .2 Identify. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. An aggregate material requirements plan used to schedule material deliveries to meet production plan. . Make. Return Inventory for Transfer from ER.4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination. .DR3. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. 293 June 2006 . if needed.2 Receive Product Return Inventory Transfer Data to S2. . .1 Schedule Product Deliveries Material in excess of the current requirements. and Aggregate Return Resources Return Inventory Transfer Data to S1. . . Material in excess of the current requirements. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale.3 Receive Excess Product Sourcing Plans from P2. Inputs: . Outputs: . Excess Products Scheduling Identifies Next Destination (Source.4 Transfer Excess Product The process where the designated return center transfers the excess product to the appropriate process to implement the disposition decision. . can be funded. Assess.2 Receive Product Excess Products to S1. Cost to Transfer Excess Product Transfer Excess Product Cycle Time The sum of the costs associated transferring excess product for disposition The average time associated transfer until product is moved to the next process. Metrics (see Appendix A for metrics attributes): .

Inc.. 294 June 2006 . © Copyright 2006 Supply-Chain Council. Return Inventory Transfer Data to ER.4 Manage Return Inventory The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.

ER. warehouses. ER. determining resource availability and conducting gap analysis and resolution. Locations include retail and wholesale customer and supplier sites. ER. Includes Customs requirements and Import / Export Controls. Includes defining and implementing a Return transportation strategy throughout the supply chain. information systems and equipment in receiving docks that are utilized in support of Return. or manage information or relationships on which planning and execution processes rely.) when planning for the Return of Assets. (2) Enable a service provider to confirm a part is authorized to be returned. and enforcing decision support criteria for Return Planning that are translated into rules for conducting business. (See ER1) ER. etc. ownership. 295 June 2006 . © Copyright 2006 Supply-Chain Council.e. maintaining and dispositioning capital assets such as fork lift trucks. integrating and maintaining the accuracy of return execution information necessary to plan the recovery of supply chain resources. ER. The process includes lease-buy and outsourcing decisions. both inter and intra company. lead times) and managing transportation performance. distribution centers. government.1 Manage Business Rules for Return Processes The process of establishing. repair depots and military bases. (3) Identify the waiting period to confirm a return item has been shipped and received before following up (4) Develop and maintain customer and channel performance standards of return processes such as service levels. Examples of business rules include those that (1) Enable customers to identify when scheduled and unscheduled conditions occur that require a return authorization request.(5) Communicate to customers the allowable amount of elapsed time from purchase and condition in which excess material must be received in order for it to be accepted as a return (6) Negotiate any restocking charge stipulations. ER. cleansing. maintaining. trade officials.6 Manage Return Transportation The process of providing the least cost transportation of a returned product from a customer location to the appropriate service provider location within specified time frames. ER. How unserviceable material flow throughout the network is governed by the specific supply chain’s business rules. Inc.7 Manage Return Network Configuration The process where customer and service provider locations involved in the flow of returns are defined and maintained throughout the supply chain. maintain.5 Manage Return Capital Assets The process of acquiring. Management activities would include defining asset requirements.8 Manage Return Regulatory The process of identifying and complying with regulatory documentation Requirements and process standards set by external entities (i. goals.2 Manage Performance of Return The process of measuring actual Return Process performance against Processes internal and/or external standards to develop and implement a course of action to achieve targeted performance levels. manufacturing facilities. These rules align Return process policies with business strategy.3 Manage Return Data Collection The process of collecting. maintaining transportation-related information (rates. and stocking locations. The Category ER includes eight Level 3 Elements: ER. Can include interim transportation activities conducted within more than one service provider locations.ER Enable RETURN Enable Processes prepare. and objectives. product mix. given service requirements by supply chain stakeholders/trading partners.4 Manage Return Inventory The process of establishing a return process inventory strategy and planning the recovery process inventory limits or levels (unserviceable carcasses ready for teardown/evaluation and those carcasses already evaluated and ready for repair) including replenishment models.

These rules align Return process policies with business strategy. (3) Identify the waiting period to confirm a return item has been shipped and received before following up (4) Develop and maintain customer and channel performance standards of return processes such as service levels. Rules and policies align the Return process with the organization’s business strategy. and objectives. Examples of business rules include those that (1) Enable customers to identify when scheduled and unscheduled conditions occur that require a return authorization request.ER. goals. given service requirements by supply chain stakeholders/trading partners. Business rules align Return process policies with business strategy. or established procedures to manage and execute all activities in the process. Outputs: Business Rules for Return Processes to DR3. Rules for conducting business. i.(5) Communicate to customers the allowable amount of elapsed time from purchase and condition in which excess material must be received in order for it to be accepted as a return (6) Negotiate any restocking charge stipulations. Inc.4 Manage Return Inventory © Copyright 2006 Supply-Chain Council. 296 June 2006 . Maintenance Evaluate the Benefits of Out-Sourcing the Enables customer to focus on core competencies. goals and objectives. developing and maintaining customer and channel performance standards of an return processes such as service levels. Business rules align Return process policies with business strategy. developing and maintaining customer and channel performance standards of return processes such as service levels. goals.1 Authorize Excess Product Return Rules for conducting business.e. Standard Inventory Policy to Determine None Identified Excess Utilize Real-World Cases in Employee None Identified Training Inputs: Process Procedures from P5. given service requirements by supply chain stakeholders/trading partners. i.1 Manage Business Rules for Return Processes The process of establishing.4 Establish and Communicate Return Plans Rules and Policies for conducting business.e. Metrics (see Appendix A for metrics attributes): Cost to Manage Business Rules for Return The sum of the Cost to Manage Business Rules for Return Processes Processes Manage Business Rules for Return The average time associated with managing rules for returns Processes Cycle Time Best Practices: Electronic Reminders of Possible Scheduled Pull signals.e. Return Rules and Policies from P5. and enforcing decision support criteria for Return Planning that are translated into rules for conducting business. (2) Enable a service provider to confirm a part is authorized to be returned. and objectives. given service requirements by supply chain stakeholders/trading partners. goals. and objectives. Business Rules for Return Processes to ER. given service requirements by supply chain stakeholders/trading partners. i.4 Establish and A planned series of actions or operations that advances returns from one Communicate Return Plans stage to another. Excess Material Return Process Publish Return Policy Easy access to return business rules. developing and maintaining customer and channel performance standards of an return processes such as service levels. maintaining.

developing and maintaining customer and channel performance standards of an return processes such as service levels. Business rules align Return process policies with business strategy.1 Identify MRO Product Condition Business Rules for Return Processes to Rules for conducting business. developing and maintaining customer and channel performance standards of an return processes such as service levels.2 Rules for conducting business. given service requirements by supply chain stakeholders/trading partners. Business rules align Return process policies with business strategy. Rules for conducting business. given service requirements by supply chain stakeholders/trading partners. Inc.1 Identify Excess Product Condition Rules for conducting business. Business Rules for Return Processes to SR3. goals. Business rules align Return process policies with business strategy. Assess. Business Rules for Return Processes to DR2. developing and maintaining customer and channel performance standards of an return processes such as service levels. developing and maintaining customer and channel performance standards of an return processes such as Assess. and objectives. goals. given service requirements by supply chain Requirements stakeholders/trading partners. Business rules align Return process policies with business strategy. i. and objectives. given service requirements by supply chain stakeholders/trading partners. and objectives. given service requirements by supply chain stakeholders/trading partners. and objectives. goals. i. Business Rules for Return Processes to DR1. Business rules align Return process policies with business strategy.1 Authorize Defective Product Return Rules for conducting business. developing and maintaining customer ER. goals.e.e. goals. given service requirements by supply chain stakeholders/trading partners. goals. goals. Business rules align Return process policies with business strategy. i. goals. i. i. Business rules align Return process policies with business strategy. developing and maintaining customer and channel performance standards of an return processes such as service levels. Business Rules for Return Processes to SR2.1 Authorize MRO Product Return Rules for conducting business.e. © Copyright 2006 Supply-Chain Council. and objectives.7 Manage Return Network Configuration and channel performance standards of an return processes such as service levels.e. and objectives. developing and maintaining customer and channel performance standards of an return processes such as service levels. i. and objectives. Business rules align Return process policies with business strategy.1 Identify Defective Product Condition Business Rules for Return Processes to P5. and objectives. Business rules align Return process policies with business strategy.8 Manage Return Regulatory Requirements Business Rules for Return Processes to SR1. Business Rules for Return Processes to ER. developing and maintaining customer and channel performance standards of an return processes such as service levels. Rules for conducting business. 297 June 2006 .e.e. i. Business rules align Return process policies with business strategy. i. and objectives. developing and maintaining customer Identify.e.1 Rules for conducting business. given service requirements by supply chain stakeholders/trading partners. given service requirements by supply chain stakeholders/trading partners. given service requirements by supply chain stakeholders/trading partners. Business Rules for Return Processes to P5. goals. and Aggregate Return and channel performance standards of an return processes such as Resources service levels. given service requirements by supply chain stakeholders/trading partners.e. Rules for conducting business. and Aggregate Return service levels. i.Business Rules for Return Processes to ER.e.e. goals. and objectives. i.5 Manage Return Capital Assets Rules for conducting business. developing and maintaining customer and channel performance standards of an return processes such as service levels.

and Aggregate Return Resources Return Performance to ER. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes.6 Manage Return Performance measurement information for the Return Process (the actual Transportation value of measured for the criterion). delivery reliability. with the Customer Continuous Improvement is Planned through Avenue to receive customer comments. Receipt Data from ER.4 Establish and A planned series of actions or operations that advances returns from one Communicate Return Plans stage to another.3 Manage Return Data Collection Supply-Chain Performance Metrics to EP. or established procedures to manage and execute all activities in the process. A collection of related receipt data records organized in a specific manner. Return Product History to ER. Each occurrence consumes time: Metrics (see Appendix A for metrics attributes): Cost to Manage Performance of Return The sum of the costs to Manage Performance of Return Processes.2 Identify. cost.2 Manage Performance of Supply Chain The return history of product including failure rates.5 Manage Return Performance measurement information for the Return Process (the actual Capital Assets value of measured for the criterion). e. failure causes. etc. 298 June 2006 . Assess. Data relative to the return process utilized to compare the company’s actual results to selected values identified as reference. Processes Manage Performance of Return Processes The average time associated with managing the performance of supply Cycle Time chain activities Best Practices: Business Rules Are Clearly Communicated Convenient availability to business rules and return criteria. and asset management.ER. Process Reviews and Customer Feedback Inputs: MRO Product Return Capabilities from ER.2 Manage Performance of Return Processes The process of measuring actual Return Process performance against internal and/or external standards to develop and implement a course of action to achieve targeted performance levels. © Copyright 2006 Supply-Chain Council. Outputs: See “Product Return Capabilities“ MRO Product Return Capabilities to P5. Inc.3 Manage Return Data Collection Receipt Data from ER. Return Performance to ER.4 Manage Return Inventory Return Benchmark Data from Source: Company A collection of related receipt data records organized in a specific manner. flexibility and responsiveness.g.5 See “Product Return Capabilities“ Manage Return Capital Assets Process Procedures from P5.

A collection of related receipt data records organized in a specific manner. Assess.3 Manage Return Data Collection The process of collecting.Use trend analysis to influence inventory level decisions. .3 Receive Defective Product Receipt Data to ER. Inc. © Copyright 2006 Supply-Chain Council. List of requirements of the data system that insure cleansed data is compatible and usable. failure causes. etc.ER. A collection of related receipt data records organized in a specific manner. The return history of product including failure rates.Web-based alerts to identify update occurred and when pre-determined thresholds are exceeded. Data Accessibility across the Enterprise for Web based access to various levels of enterprise data Visibility by Discrete Business Units Inputs: Data Cleansing Procedure from Source: Company Data System Requirements from Source: Company Return Product History from ER. 299 June 2006 . cleansing. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Data Collection The sum of the costs to manage the capital assets associated with returns data collection. integrating and maintaining the accuracy of return execution information necessary to plan the recovery of supply chain resources.3 Receive Excess Product Information required in the process of integrating and maintaining the accuracy of return execution. Manage Return Data Collection Cycle Time The average time associated with managing return data collection Best Practices: Automated Update of Customer Excess Material Return Transaction History . or the data system requirements to fully automate the return process. A collection of related receipt data records organized in a specific manner.3 Receive MRO Product Receipt Data to DR3.2 Manage Performance of Return Processes Receipt Data to DR2.2 Identify. and Aggregate Return Resources Receipt Data to DR1. A collection of related receipt data records organized in a specific manner. Outputs: Data About Return Capabilities to P5.2 Manage Performance of Return Processes The procedure that outlines the cleansing of return data to insure its validity and accuracy during the return process.

goals. Business rules align Return process policies with business strategy. product mix. and objectives. The average time associated with managing return inventory Best Practices: Periodic Review of Metrics and Strategy with Real time view of data.2 Disposition Defective Product Return Inventory Availability from SR3.e. Inventory relative to return process available for use. This sample is then extrapolated across the inventory population. with extrapolation the net and gross percentage of error is determined. etc. Asset Inputs: Business Rules for Return Processes from ER. Unique Identifier Tag for Each Repairable Asset management software using bar code. which provides an indicative measure of entire inventory population. Statistical Test Count The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically counting and reconciling a statistical sample of the entire inventory population.4 The process of receipt and verification of the returned item against the Transfer Excess Product return authorization and other documentation and prepares the item for transfer. RFI tag.4 The process of receipt and verification of the returned item against the Transfer Defective Product return authorization and other documentation and prepares the item for transfer. Return Inventory Transfer Data from DR3.ER. © Copyright 2006 Supply-Chain Council. ownership. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Inventory Manage Return Inventory Cycle Time The sum of the costs to manage the capital assets associated with return inventory. Furthermore. Inc. developing and maintaining customer and channel performance standards of an return processes such as service levels. 300 June 2006 .4 The process of receipt and verification of the returned item against the Transfer MRO Product return authorization and other documentation and prepares the item for transfer. i.3 The process of receipt and verification of the returned item against the Receive MRO Product return authorization and other documentation and prepares the item for transfer.2 Disposition Excess Product Return Inventory Availability from SR2. Return Inventory Availability from SR1. Comparisons to Industry Benchmarks Real Time Data on Current Status Dynamic calculation of safety stock based on actual sales. Inventory relative to return process available for use. Return Inventory Transfer Data from DR2. and stocking locations.2 Disposition MRO Product Return Inventory Transfer Data from DR3. given service requirements by supply chain stakeholders/trading partners. both inter and intra company. Inventory relative to return process available for use.3 Receive Excess Product Return Inventory Transfer Data from DR2.4 Manage Return Inventory The process of establishing a return process inventory strategy and planning the recovery process inventory limits or levels (unserviceable carcasses ready for teardown/evaluation and those carcasses already evaluated and ready for repair) including replenishment models. Return Inventory Transfer Data from DR1. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.1 Manage Business Rules for Return Processes Rules for conducting business.

Inventory relative to return process available for use.4 Schedule MRO Shipment Return Inventory for Transfer to DR2.5 Return MRO Product Return Inventory Availability to SR1.2 Disposition MRO Product Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.2 Disposition Excess Product Return Product Location from SR1.3 Receive MRO Product Receipt Data to ER.3 Request Defective Return Authorization Return Inventory Availability to SR2. A collection of related receipt data records organized in a specific manner. Inventory relative to return process available for transfer to other destination. Inc. Inventory relative to return process available for use.3 Receive Defective Product Receipt Data to DR2. Inventory relative to return process available for use. A collection of related receipt data records organized in a specific manner.5 Return Excess Product Return Inventory Availability to SR1.3 Request Excess Return Authorization Return Inventory Availability to SR3. Return Plans from P5. A collection of related receipt data records organized in a specific manner. © Copyright 2006 Supply-Chain Council. and Aggregate Return Resources A collection of related receipt data records organized in a specific manner.3 The process of receipt and verification of the returned item against the Receive Defective Product return authorization and other documentation and prepares the item for transfer. Inventory relative to return process available for use. Inventory relative to return process available for transfer to other destination. Inventory relative to return process available for use. The goals and approach to the management of return inventories. Inventory relative to return process available for use.4 Schedule Defective Product Shipment Return Inventory Availability to SR3. 301 June 2006 .3 Request MRO Return Authorization Return Inventory Availability to SR3.4 Transfer Defective Product Return Inventory Targets to P5.2 Disposition Defective Product Returned Product Location from SR2. Inventory relative to return process available for use. Inventory relative to return process available for use.Return Inventory Transfer Data from DR1. Inventory relative to return process available for transfer to other destination.4 Establish and Communicate Return Plans Return Product Location from SR3.3 Receive Excess Product Return Inventory Availability to SR2.4 Schedule Excess Product Shipment Return Inventory Availability to SR1.4 Transfer MRO Product Return Inventory for Transfer to DR3. Assess.2 Identify.2 Manage Performance of Return Processes Receipt Data to DR3.4 Transfer Excess Product Return Inventory for Transfer to DR1.5 Return Defective Product Return Inventory Availability to SR2. The physical location where the returned product inventory is held prior to disposition The physical location where the returned product inventory is held prior to disposition The storage location of those items being returned. Inventory relative to return process available for use. Outputs: Receipt Data to DR1.

i. goals.e. and objectives. Return Performance from ER.1 Manage Business Rules for Return Processes Rules for conducting business. determining resource availability and conducting gap analysis and resolution. developing and maintaining customer and channel performance standards of an return processes such as service levels. Inputs: Business Rules for Return Processes from ER. and Aggregate Return Resources See “Product Return Capabilities“ See “Product Return Capabilities“ © Copyright 2006 Supply-Chain Council. maintaining and dispositioning capital assets such as fork lift trucks.Advanced shipping notices .2 Manage Performance of Return Processes Return Plans from P5.ER. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Performance measurement information for the Return Process (the actual value of measured for the criterion). information systems and equipment in receiving docks that are utilized in support of Return.4 Establish and Communicate Return Plans Outputs: MRO Product Return Capabilities to ER. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Capital Assets Manage Return Capital Assets Cycle Time The sum of the costs to manage the capital assets associated with returns. The process includes lease-buy and outsourcing decisions. Inc. 302 June 2006 .Real time shipping tracking Use 4PL to manage and move.2 Manage Performance of Return Processes MRO Product Return Capabilities to P5. given service requirements by supply chain stakeholders/trading partners. Business rules align Return process policies with business strategy. The average time associated with managing return capital assets Best Practices: Automated Data Entry Automated Disposition Instructions for Returns Based on Data Interchange with Strategic Providers Integrated Transportation Visibility Outsource If Not a Core Competency Scanning with RFID/Bar-codes systems Advanced planning and scheduling capability coupled with decision support logic. Management activities would include defining asset requirements.5 Manage Return Capital Assets The process of acquiring.2 Identify. . Assess.

Can include interim transportation activities conducted within more than one service provider locations. Includes defining and implementing a Return transportation strategy throughout the supply chain. Possible to Leverage Transportation Maximization of TMS use. Product. Ground Parcel. Product.Coordinate with Other Shipments Develop Proactive Transit Damage None Identified Programs Electronic Manifest and Electronic Billing Transportation Management System (TMS) Maintenance Management Integrated Order Management. Cost. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Transportation The sum of the costs associated with managing return transportation. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. Warehouse Transportation Management System (TMS) Maintenance Management Management. GL Charging Internet Pooling (Electronic Brokerage of Rating & Routing Shipments) Involve Your Other Supply-Chain Partners If Utilization of transportation management system (TMS) to manage returns. etc. (via internet) Transportation Management System (TMS) Maintenance Management Segregate In-Bound Carcass Return Cost None Identified from Other Transportation Costs Utilize Internet-Based Freight Bidding Built None Identified Around Shared Shipping Volume Projections Utilize Invoice-less Freight Payment None Identified Transportation Management System (TMS) Maintenance Management View for Analysis for All Orders and Shipments the Following Data: Logistics. GL Charging © Copyright 2006 Supply-Chain Council. lead times) and managing transportation performance.ER. Manage Return Transportation Cycle Time The average time associated with managing return transportation Best Practices: Appointment Scheduling for Pickup and Transportation Management System (TMS) Maintenance Management Delivery of Customer Shipments Automated Documentation for International Transportation Management System (TMS) Maintenance Management Shipments Backhaul Trading Exchange Pooling Capture and Maintain Mode Specific Data Transportation Management System (TMS) Maintenance Management Consolidate Shipments Through Cross None Identified Docking . Limit the Number of Carriers. 303 June 2006 .6 Manage Return Transportation The process of providing the least cost transportation of a returned product from a customer location to the appropriate service provider location within specified time frames. Improving Service and Lowering Cost Manage Information Across 100% of Transportation Management System (TMS) Maintenance Management Shipments Measurement of Carrier Performance for Transportation Management System (TMS) Maintenance Management On-time Delivery and Completeness Transportation Management System (TMS) Maintenance Management Real-Time Optimized Shipment Method Selection (Air Parcel. LTL.) Based on Customer Service Requirements Real-Time Shipment Tracking. Treat Them as Utilization of transportation management system (TMS) to manage returns. maintaining transportation-related information (rates. both intra and inter-company within the supply with Each One Geared Toward Continually chain. Cost. both intra and inter-company within the supply throughout the Chain chain. Inc. Partners and Build a Strong Relationship Maximization of TMS use.

policies and agreements for the transportation activities around return process. © Copyright 2006 Supply-Chain Council.4 Establish and Communicate Return Plans Performance measurement information for the Return Process (the actual value of measured for the criterion). 304 June 2006 . Policies.2 Manage Performance of Return Processes Return Plans from P5. Assess. Policies.3 Receive MRO Product return process. Inc. & Guidelines. Agreements to DR1. Policies.2 Identify.Inputs: Return Performance from ER. Agreements to DR3. Policies. & Guidelines. Outputs: Return Transportation Guidelines. & Guidelines. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Agreements to P5.3 Receive Defective Product Return Transportation Guidelines. policies and agreements for the transportation activities around return process. policies and agreements for the transportation activities around Agreements to DR2. policies and agreements for the transportation activities around return process.3 Receive Excess Product Return Transportation Guidelines. and Aggregate Return Resources Return Transportation Guidelines. & Guidelines.

ER. Business rules align Return process policies with business strategy. manufacturing facilities. repair depots and military bases. and Aggregate Return Resources The business rules that govern the flow of unserviceable material through the network. Inc.7 Manage Return Network Configuration The process where customer and service provider locations involved in the flow of returns are defined and maintained throughout the supply chain. and objectives. Assess. goals. i.2 Identify. given service requirements by supply chain stakeholders/trading partners. the network configuration. (See ER1) Metrics (see Appendix A for metrics attributes): Cost to Manage Return Network Configuration Manage Return Network Configuration Cycle Time The sum of the costs to manage the capital assets associated with configuring the return network. 305 June 2006 . Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements.1 Manage Business Rules for Return Processes Rules for conducting business.e. How unserviceable material flow throughout the network is governed by the specific supply chain’s business rules. Return Plans from P5.8 Manage Return Regulatory Requirements Return Process Workflow Definition and Policies to P5. developing and maintaining customer and channel performance standards of an return processes such as service levels. Locations include retail and wholesale customer and supplier sites. distribution centers.4 Establish and Communicate Return Plans Outputs: Return Network Configuration to ER. i. Definition and maintenance of the information flow about the Returns supply chain network for a group of similar or complimentary items through out their life cycle © Copyright 2006 Supply-Chain Council. warehouses.e. The average time associated with managing the return network configuration Best Practices: Service Provider Utilizes Web-Based Communicate to Identify New and Discontinued Repair Sites to Customers Utilize Web-Based Collaboration between Asset Manager and Repair Sites Regarding Capacity and Scheduling Utilize Web-Based Collaboration between Customer and Service Provider on In-Bound Return Forecasts and Asset Tracking Utilize Web-Based Collaboration to Identify Potential New Repair Sites Prior to Their Selection Continuously updated authorized repair sites Total return asset visibility throughout the network Shared return forecasts Shared knowledge of resource availability and bottlenecks Inputs: Business Rules for Return Processes from ER.

e. Process Procedures from P5. given service requirements by supply chain stakeholders/trading partners. trade officials. Return Network Configuration from ER. etc.4 Establish and A planned series of actions or operations that advances returns from one Communicate Return Plans stage to another. State or Local Regulation. 306 June 2006 . labeling and shipping regulatory requirements are given specific attention. © Copyright 2006 Supply-Chain Council. i.1 Identify Excess Product Condition The process of identifying and complying with regulatory documentation and process standards set by external entities (i. government. trade officials. trade officials.e. goals. Inputs: Business Rules for Return Processes from ER. trade officials.1 Identify MRO Product Condition Manage Regulatory Return Policy to SR1. Business rules align Return process policies with business strategy. etc.1 Manage Business Rules for Return Processes Rules for conducting business.e. The average time associated with compliance and regulatory requirements for return products Best Practices: Clarify in Advance Hazardous Material Packaging.8 Manage Return Regulatory Requirements The process of identifying and complying with regulatory documentation and process standards set by external entities (i. government.e. Formal Authorization from the Service Provider per Federal. etc. The process of identifying and complying with regulatory documentation and process standards set by external entities (i.) when planning for the Return and Recovery of Assets. Includes Customs requirements and Import / Export Controls. and objectives. None Identified None Identified Hazardous material regulations are given specific attention.) when planning for the Return and Recovery of Assets. i. the network configuration.) when planning for the Return and Recovery of Assets.e. The process of identifying and complying with regulatory documentation and process standards set by external entities (i. developing and maintaining customer and channel performance standards of return processes such as service levels. government. Prior to Returning Compare Local Customs Requirements to Your Process Procedures to Ensure All Requirements Are Accounted for Before Shipping Confirm All Documentation and Inspection Requirements Before Shipping Note and Communicate Shelf Life Requirements Carefully Before Shipping Overseas packaging. Labeling and Shipping Requirements Clarify in Advance If the Product to be Returned Requires Specific. government. etc.ER.e. Participants at all customer and service provider locations involved clearly understand all regulatory requirements at each step in the return process .) when planning for the Return of Assets.7 Manage Return Network Configuration The business rules that govern the flow of unserviceable material through the network. Outputs: Manage Regulatory Return Policy to SR2. or established procedures to manage and execute all activities in the process. Inc. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Regulatory Requirements and Compliance Manage Return Regulatory Requirements and Compliance Cycle Time The sum of the costs associated with managing compliance to return regulatory requirements.1 Identify Defective Product Condition Manage Regulatory Return Policy to SR3.

Return Regulatory Requirements to DR3.1 Identify MRO Product Condition Return requirements dictated by process standards set by external entities (i. Return requirements dictated by process standards set by external entities (i. government. etc. etc.). 307 June 2006 . trade officials. either expressed or implied. etc. trade officials. Inc. repair or credit because the product received did not meet a commitment. All data relevant to a warranty claim for a customer for replacement. repair or credit because the product received did not meet a commitment.).e.e.).3 Receive MRO Product Warranty Data to SR2. trade officials.1 Assess. etc. concerning a certain fact regarding the product Warranty Data to SR1. trade officials. concerning a certain fact regarding the product All data relevant to a warranty claim for a customer for replacement.e.). and Aggregate Return Resources Return Regulatory Requirements to DR2. Return requirements dictated by process standards set by external entities (i.).3 Receive Excess Product Return Regulatory Requirements to DR1. government.e.3 Receive Defective Product Return Regulatory Requirements to P5. government. etc. government. government. either expressed or implied.e.1 Identify Defective Product Condition © Copyright 2006 Supply-Chain Council.2 Identify. Assess. trade officials. and Aggregate Return Requirements Return Regulatory Requirements to P5. Return requirements dictated by process standards set by external entities (i. Return requirements dictated by process standards set by external entities (i.

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12 Ship Product © Copyright 2006 Supply-Chain Council. The series of tasks including placing/loading product onto modes of transportation and generating the documentation necessary to meet internal. The series of activities including retrieving orders to pick. Optionally accept payment. packing / kitting the products. barcodes etc. Specific carriers are selected by lowest cost per route and shipments are rated and tendered. verifying. typically including order management.11 Load Vehicle & Generate Shipping Documentation D1. fax. paste labels. 354 June 2006 . putting away and recording location that a company performs at its own warehouses.. packing / kitting the products. Payment is received from the customer within the payment terms of the invoice.7 Select Carriers & Rate Shipments D1. Inc.5 Build Loads D1.14 Install Product DEFINITION Processes that provide finished goods and services to meet planned or actual demand. The activities such as sorting / combining the products. D1. the process of preparing.12 Ship Product D1. picking the product. Receive orders from the customer and enter them into a company's order processing system. ande delivering the products to the shipping area for loading. lane and location. assembled or configured from standard parts or subassemblies. The activities such as receiving product. assembly or configuration will begins only after the receipt and validation of a firm customer order. Orders can be received through phone. determining inventory availability. Transportation modes are selected and efficient loads are built. building the pick wave. customer.1 Process Inquiry & Quote D2. The process of delivering product that is maintained in a finished goods state prior to the receipt of a firm customer order. testing and installing the product at the customer site. recording product receipt.13 Receive & Verify Product by Customer D1. barcodes etc. The process of shipping the product to the customer site. The process of delivering product that is manufactured. The process of receiving the shipment by the customer site (either at customer site or at shipping area in case of self-collection) and verifying that the order was shipped complete and that the product meets delivery terms. determining put-away location.6 Route Shipments D1.4 Consolidate Orders D1.3 Reserve Inventory & Determine Delivery Date D1. The series of tasks including placing/loading product onto modes of transportation and generating the documentation necessary to meet internal. transportation management.15 Invoice D1.9 Pick Product D2 Deliver Make-to-Order Product D2.1 Process Inquiry & Quote D1.10 Pack Product D1.. paste labels. Receive and respond to general customer inquiries and requests for quotes. Manufacture. Receive and respond to general customer inquiries and requests for quotes. customer.8 Receive Product from Source or Make D1.11 Load Product & Generate Shipping Documentation D2. recording the pick and delivering product to shipping in response to an order. A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received. Inventory and/or planned capacity (both on hand and scheduled) is identified and reserved for specific orders and a delivery date is committed and scheduled. The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. and delivering the products to the shipping area for loading. or electronic media. May include quality inspection. carrier and government needs. The process of shipping the product to the customer site. The activities such as sorting / combining the products.2 Receive. "Technically" examine orders to ensure an orderable configuration and provide accurate price.10 Pack Product D2. When necessary.GLOSSARY PROCESS TERMS PROCESS TERM NAME D Deliver D1 Deliver Stocked Product D1. Enter & Validate Order D1. Loads are consolidated and routed by mode. and distribution management. carrier and government needs. Check the customer's credit. The product is fully functional upon completion.

The process of delivering a product that is designed. establishing price). testing and installing the product at the customer site.6 Route Shipments D2. Optionally accept payment. ande delivering the products to the shipping area for loading. The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. approving the planned resources (e. building the pick wave. Inc.g. Payment is received from the customer within the payment terms of the invoice. putting away and recording location that a company performs at its own warehouses. Loads are consolidated and routed by mode. engineering. recording product receipt. testing and installing the product at the customer site. developing costs estimates. Enter and Validate Order D2. May include quality inspection.13 Receive & Verify Product by Customer D3. Optionally accept payment.12 Ship Product D3.PROCESS TERM NAME D2. generating the documentation necessary to meet internal. The process of receiving a request for proposal or request for quote.. customer.5 Build Loads D2. The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule.. Transportation loads are selected and efficient loads are built. The process of shipping the product to the customer site The process of receiving the shipment (either at customer site or at shipping area in case of self-collection) and verifying that the order was shipped complete and that the product meets delivery terms.4 Schedule Installation D3. "Technically" examine order to ensure an orderable configuration and provide accurate price. verifying inventory availability. Configure. Inventory and/or planned capacity is identified and reserved for specific orders. packing / kitting the products. A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received.2 Receive. . evaluating the request (estimating the schedule. A signal is sent to the financial organization that the order has been shipped and that the billing process should begin and payment be received or be closed out if payment has already been received.15 Invoice D2.3 Enter Order.4 Consolidate Orders D2. Commit Resources & Launch Program D3.9 Pick Product D3 Deliver Engineer-to-Order Product D3. paste labels. the process of preparing.5 Build Loads © Copyright 2006 Supply-Chain Council. product performance) and finalizing the contract. or through electronic media. barcodes etc. manufacturing.3 Reserve Resources & Determine Delivery Date D2. Receive orders from the customer and enter them into a company's order processing system. Configure your product to the customer's specific needs.10 Pack Product D3. Specific carriers are selected by lowest cost per route and shipments are rated and tendered. picking the product. the process of preparing.14 Install Product DEFINITION The process of receiving the shipment at the customer (either at customer site or at shipping area in case of self-collection) site and verifying that the order was shipped complete and that the product meets delivery terms. Design will begin only after the receipt and validation of a firm customer order. The activities such as sorting / combining the products. fax. When necessary. price. Check the customer's credit. manufactured. and a delivery date is committed and scheduled.7 Select Carriers & Rate Shipments D2.15 Invoice D3. When necessary. based on standard available parts or options.2 Negotiate & Receive Contract D3. etc.g. 355 June 2006 D3. Payment is received from the customer within the payment terms of the invoice. The series of tasks including placing product onto vehicles. Orders can be received through phone. schedule.11 Load Product & Generate Ship Documents D3. The process of entering/finalizing the customers order. Transportation modes are selected and efficient loads are built.) and officially launching the program. carrier and government needs. verifying.13 Receive & Verify Product by Customer D2. and responding to the potential customer. The activities such as receiving product.14 Install Product D2. The product is fully functional upon completion. lane and location. The product is fully functional upon completion.1 Obtain and Respond to RFP/RFQ D3.8 Receive Product from Source or Make D2. The process of negotiating order details with customer (e. and assembled from a bill of materials that includes one or more custom parts. determining put-away location. recording the pick and delivering product to packing area in response to an order. The series of activities including retrieving orders to pick.

Inc. determining put-away location. including authorizing return replacement or credit. verifying. 356 June 2006 . picking the product.3 Pick Product from Backroom D4. Merchandising at a store level is the stocking and restocking of products in designated storage locations to generate sales in a retail store. Accepting the request would include negotiating the conditions of the return with the customer. The activities such as receiving product. The process where the last known holder or designated return center receives a defective product return authorization request from a customer.8 Receive Product from Source or Make D3.3 Receive Defective Product DEFINITION The process of consolidating and routing shipments by mode. stock placement. The processes of the last known holder or designated return center authorizing and scheduling the defective product return and the physical receipt of the item by the last known holder or known return center and their transfer of the item for final disposition determination. method of payment. storage and movement through to checkout. The product is fully functional upon completion.1 Authorize Defective Product Return DR1. May include quality inspection. The processes and tasks associated with product checkout including scanning. putting away and recording location that a company performs at its own stores. The process of retrieving restocking orders to pick. lane. Processes associated with receiving returned products for any reason. determining put-away location. upon receipt. © Copyright 2006 Supply-Chain Council. The process where the last known holder or designated return center receives and verifies the returned defective product against the return authorization and other documentation and prepares the item for transfer. The process of preparing and installing the product at the customer site.7 Deliver and/or Install DR Deliver Return DR1 Deliver Return Defective Product DR1. Typical set of tasks associated with product selection.5 Fill Shopping Cart D4. Specific carriers are selected by lowest cost per route and shipments are rated and tendered. and delivering the product to point of stock For restocks.6 Route Shipments D3. merchandise. the tasks associated with identifying the item location. recording the pick and delivering product to packing area in response to an order. These processes extend into post-delivery customer support.4 Stock Shelf D4.PROCESS TERM NAME D3. Rejecting the request would include providing a reason for the rejection to the customer.6 Checkout D4.9 Pick Product D4 Deliver Retail Product D4. recording product receipt. picking item and quantity from a designated backroom warehouse location. service agreement. The activities such as receiving product. A retail store is a physical location that sells products (and services) direct to the consumer using a point of sale process (manual or automated) to collect payment. order confirmation. determines if the item can be accepted and communicates decision to the customer. The series of activities including retrieving orders to pick. credit application and approval. Deliver Retail Products are the processes used to acquire. For promotional items and stock repositioning the tasks associated with shelf and point of sale preparation. and sell finished goods at a retail store. determining inventory availability. May include quality inspection. The process where the last known holder or designated return center evaluates the defective product handling requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the product. for disposition. and/or invoice or receipt. verifying inventory availability. building a pick wave.1 Generate Stocking Schedule D4.2 Receive Product at Store D4. putting away and recording location that a company performs at its own warehouses. and location. The process of scheduling resources to support item-stocking requirements. stocking the shelf according to merchandise plans.7 Select Carriers and Rate Shipments D3. recording the resulting inventory transaction. The scheduling activity would also inform Receiving when to expect the shipment and where to send the product. recording product receipt. verifying. and end of sale activities. building the pick wave. The process includes communication between the customer and last known holder or known return center and the generation of associated documentation.2 Schedule Defective Return Receipt DR1. and recording the appropriate inventory transaction.

upon receipt. method of delivery. The process where the designated return center transfers the excess product to the appropriate process to implement the disposition decision. The scheduling activity would also inform Receiving when to expect the shipment and where to send the part.1 Authorize MRO Product Return DR2. customer experience.2 Schedule Excess Return Receipt DR3. Accepting the request would include negotiating the conditions of the return with the customer. Inc. maintain. determines if the item can be accepted for MRO and communicates their decision to the customer. The process where the service provider receives and verifies the returned MRO item against the return authorization and other documentation and prepares the item for transfer (includes verify). The scheduling activity would also inform the Return Center's Receiving department when to expect the shipment and where to send the product.3 Receive MRO Product DR2. The process includes communication between the customer and service provider and the generation of associated documentation. Accepting the request would include negotiating the conditions of the return with the customer. The process where a service provider receives an MRO product return authorization request from a customer.4 Transfer Defective Product DR2 Deliver Return MRO Product DR2. (Include distribution channel rules) The process of defining the requirement and monitoring the performance of the delivery of product to a customer. etc. The process where the designated return center evaluates an authorized excess material return to determine packaging and handling requirements.1 Manage Deliver Business Rules ED. When physical delivery is out-sourced the performance is passed on to source for contract administration.PROCESS TERM NAME DR1.1 Authorize Excess Product Return DR3. the physical receipt of the item by the designated return center and transfer of the item for final disposition The process includes communication between the customer and designated return center and the generation of associated documentation. Enable Processes prepare. credit. Rejecting the request would include providing a reason for the rejection to the customer. based on quantity. for disposition.3 Receive Excess Product DR3.2 Assess Delivery Performance DEFINITION The process where the last known holder or designated return center transfers the defective product to the appropriate process to implement the disposition decision. The processes of the service provider authorizing and scheduling the MRO return product and the physical receipt of the item by the service provider and their transfer of the item for final disposition determination. The process where the service provider evaluates the MRO service requirements including negotiated conditions and develops a schedule that tells the Customer when to ship the part.4 Transfer MRO Product DR3 Deliver Return Excess Product DR3. The process where the designated return center receives and verifies the returned excess product and associated documentation against the return authorization and other documentation and prepares the item for transfer.4 Transfer Excess Product ED Enable Deliver ED. upon receipt. © Copyright 2006 Supply-Chain Council. including authorizing credit or cash discount. The processes of the designated return center authorizing and scheduling the excess product return. The process where the designated return center receives an excess product return authorization request from a customer. 357 June 2006 . Administrate any discrepancies that arise. including authorizing return replacement or credit. for induction or storage. determines if the item can be accepted and communicates their decision to the customer. Rejecting the request would include providing a reason for the rejection to the customer. The process where the service provider transfers the MRO product to the appropriate process to implement the disposition decision. This assessment will lead to the development of a return disposition decision and a return schedule with terms and conditions that will tell the Customer how and when to ship the product. or manage information or relationships on which planning and execution processes rely. The process of defining and maintaining rules which affect the acceptance of an order.2 Schedule MRO Return Receipt DR2.

g. tooling. replenishment models. This process allows the development and implementation of a course of action to achieve targeted performance. Acquisition. which constrain the ordering and delivering of product.3 Manage MAKE Information EM. Determine material handling (inventory) pick pack & ship methods (inventory). vehicle. The process of transporting In-Process Product (WIP). processes. rates/tariffs and backhaul opportunity (Characterization include information necessary to support maintenance of internal Outbound Transportation equipment CAPITAL ASSETS) and 2) the management of transporters. regulations. and equipment. warehouse data. This includes management of the activities associated with in transit handling and movement of In-Process Product (WIP). alterations. history. stocking locations. order and process data. The process of identifying and maintaining a network of intra-company production units that deliver specific semi-finished materials or product sets to the final production site. status. equipment requirements. and other information specifying the method of production for a particular product. and communicating information to support MAKE planning and execution processes.8 Manage Import/Export Requirements EM Enable Make EM. etc. establish letters of credit terms and conditions. product mix and stocking locations for In-Process Product (WIP). government) A plan for the development and establishment of courses of action over specified time periods to appropriate delivery resources to meet projected delivery requirements. transportation data. This process element includes repairs.4 Manage Finished Goods Inventories ED. The information to be managed includes production. and communicating information to support deliver planning and execution processes. Production details include part/item master. Inc.2 Manage Production Performance EM. and delivery requirements. Determine customs requirements. and transportation capital assets. maintaining. The process of managing. Management of the activities associated with handling/storage/movement of materials used to support production. The plan contains necessary business requirements for information and relationships to effectively and efficiently PLAN the Supply Chain.7 Manage Product Life Cycle ED. warehouse. © Copyright 2006 Supply-Chain Council. The process of developing and maintaining performance standards and analysis methods to compare actual production performance against the established standards. The process of establishing and maintaining finished goods. Enable Processes prepare.4 Manage In-Process Products (WIP) EM. etc. 358 June 2006 .8 Manage Regulatory Compliance EP Enable PLAN DEFINITION The process of collecting. and objectives. and deliver data. goals. The ongoing management of the activities associated with ensuring equipment and facilities are kept in proper order. product mix. replenishment models. The information to be managed includes: order data .6 Manage Transportation EM. containerization. calibration and other miscellaneous items to maintain production capabilities of the manufacturing fixed asset base.1 Manage Production Rules EM. and disposition of order management. maintaining. or manage information or relationships on which planning and execution processes rely. and enforcing rules for managing production details in line with business strategy. collecting. maintaining. ownership.6 Manage Transportation ED.). The process of recording and maintaining regulations and rates.3 Manage Deliver Information ED.7 Manage Production Network EM. The process of defining and maintaining the distribution channel/ network for a specific product line (no capital asset or transportation management). inventory limits or levels. route.5 Manage Deliver Capital Assets ED. The process of identifying and complying with regulatory documentation and process standards set by external entities (e. The process of establishing. terminals. The process of 1) defining and maintaining the information which characterizes product. ownership.(customer preference.5 Manage Equipment and Facilities EM. maintain. bills of materials/formulas. maintenance. routings.PROCESS TERM NAME ED. The process of establishing and maintaining limits or levels. The process of specifying maintaining and dispositioning MAKE's capital assets to operate the supply chain production processes.

and bill of materials. Performance targets established for the execution of supply chain processes are reflected in the process elements for PLAN. The process of defining an integrated supply chain transportation strategy and maintaining the information which characterizes total supply chain transportation requirements. including the evaluation of market need.4 Manage Integrated Supply Chain Inventory EP. source. product mix. introduction and production). etc. The process of measuring actual integrated Supply Chain performance against internal and/or external standards to develop and implement a course of action to achieve targeted performance levels.1 Manage Business Rules for Return Processes DEFINITION The process of establishing. given service requirements by supply chain stakeholders/trading partners. ownership. The process of establishing. delivery reliability. These rules align Return process policies with business strategy.e. cycle time. Finished and Purchased Finished Goods) including replenishment models.PROCESS TERM NAME EP. developing and maintaining customer and channel performance standards of an entire supply chain such as service levels. ABC classification. given the inputs from the strategic and business plans. maintain. and stocking locations. and delivery plans. event planning (promotions. and enforcing decision support criteria for Supply Chain Planning which translate to rules for conducting business.e. product discontinuation. and enforcing decision support criteria for Return Planning that are translated into rules for conducting business. maintaining. integrating and maintaining the accuracy of supply chain execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels.5 Manage Integrated Supply Chain Capital Assets EP.7 Manage Planning Configuration EP. routings.3 Manage PLAN Data Collection EP. responsiveness. both inter and intra company. The process of identifying and complying with regulatory documentation and process standards set by external entities (i.e. Business rules align PLAN process policies with business strategy.9 Align Supply Chain Unit Plan with Financial Plan ER Enable Return ER. and aftermarket support. product realization (development.(5) Communicate to customers the allowable amount of elapsed time from purchase and condition in which excess material must be received in order for it to be accepted as a return (6) Negotiate any restocking charge stipulations. Examples of business rules include those that (1) Enable customers to identify when scheduled and unscheduled conditions occur that require a return authorization request. goals.e. rationalization. cost. i.).8 Manage PLAN Regulatory Requirements and Compliance EP. © Copyright 2006 Supply-Chain Council. and the management of transporters both inter and intra company.) when planning for the integrated supply chain network. This includes revision of not only aggregate forecast and projections related to supply chain. i. but also business assumptions. and objectives. The process of defining and maintaining the information about a unique supply chain network for a group of similar or complimentary products through their full life cycle. The process of revising the long-term supply chain capacity and resource plans.1 Manage Business Rules for PLAN Processes EP. (3) Identify the waiting period to confirm a return item has been shipped and received before following up (4) Develop and maintain customer and channel performance standards of return processes such as service levels. 359 June 2006 .2 Manage Performance of Supply Chain EP. and assets. internal versus contract manufacturing or internal versus 3rd Party Logistics) and then acquiring. given service requirements by supply chain stakeholders/trading partners. Enable Processes prepare. This element also includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. and objectives. make. maintaining. maintaining and dispositioning an organization's capital assets to operate the integrated supply chain. (2) Enable a service provider to confirm a part is authorized to be returned. trade officials.6 Manage Integrated Supply Chain Transportation EP. goals. Work In Process. Inc. The process of defining capacity strategy (i. The process of establishing total supply chain inventory strategy and planning the total inventory limits or levels (including Raw Material. or manage information or relationships on which planning and execution processes rely. The process of collecting. etc. government.

Locations include retail and wholesale customer and supplier sites. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. and stocking locations. etc. For Services. defining hierarchy and managing configuration control of supplier information and source data that are required to make sourcing and related planning and manufacturing decisions. ownership. Can include interim transportation activities conducted within more than one service provider locations. The process includes lease-buy and outsourcing decisions. repair depots and military bases. lead times) and managing transportation performance. (See ER1) The process of identifying and complying with regulatory documentation and process standards set by external entities (i. Source data to be maintained includes supplier profile data. warehouses. maintain. Inc.2 Assess Supplier Performance ES. maintaining and enforcing decision support criteria. distribution centers.4 Manage Return Inventory ER. or manage information or relationships on which planning and execution processes rely. The process of collecting. sorting. Sourcing business rules include: supplier selection and negotiation processes. The process of defining requirements and establishing. cleansing.3 Manage Return Data Collection ER. Management activities would include defining asset requirements.4 Manage Product Inventory DEFINITION The process of measuring actual Return Process performance against internal and/or external standards to develop and implement a course of action to achieve targeted performance levels. cycle counting. financials. integrating and maintaining the accuracy of return execution information necessary to plan the recovery of supply chain resources.7 Manage Return Network Configuration ER.6 Manage Return Transportation ER.2 Manage Performance of Return Processes ER. The process of acquiring. in alignment with business strategy. The business strategy defines the criteria for sourcing business rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities.8 Manage Return Regulatory Requirements ES Enable Source ES. The process of measuring actual supplier performance against internal and/or external standards. Includes Customs requirements and Import / Export Controls. goals and objectives.) when planning for the Return of Assets. The process of establishing and maintaining physical inventories and inventory information. Includes defining and implementing a Return transportation strategy throughout the supply chain. How unserviceable material flow throughout the network is governed by the specific supply chain's business rules. Enable Processes prepare. trade officials. maintaining transportation-related information (rates. quality and delivery performance. spend analysis at various levels of the enterprise. © Copyright 2006 Supply-Chain Council.5 Manage Return Capital Assets ER. providing feedback to achieve and maintain the performance required to meet the customers' business and/or competitive needs. This includes warehouse management. The process of providing the least cost transportation of a returned product from a customer location to the appropriate service provider location within specified time frames.e. this may include tracking the number of service providers and the financial resources committed at any given point in time.3 Maintain Source Data ES. manufacturing facilities.PROCESS TERM NAME ER. The process of establishing a return process inventory strategy and planning the recovery process inventory limits or levels (unserviceable carcasses ready for teardown/evaluation and those carcasses already evaluated and ready for repair) including replenishment models. from major business units to material part number. The process where customer and service provider locations involved in the flow of returns are defined and maintained throughout the supply chain. government. maintaining and dispositioning capital assets such as fork lift trucks.1 Manage Sourcing Business Rules ES. information systems and equipment in receiving docks that are utilized in support of Return. physical inventories and inventory reconciliation. 360 June 2006 . The process of collecting. product mix. both inter and intra company. determining resource availability and conducting gap analysis and resolution.

Also. This includes establishment of a new supplier or maintaining an existing supplier and all the tasks and activities associated with identifying and qualifying the supplier and finalizing on the sourcing terms and conditions. maintaining and dispositioning an organization's <capital assets> located at a supplier's facility and/or outside source. laboratory tests for potency or purity. subassemblies.7 Manage Supplier Network ES. and signoff by the quality organization. Products that are made to order may remain in the holding location to await shipment per the associated customer order. The movement of packaged products into a temporary holding location to await movement to a finished goods location.g. The process of identifying and complying with import/export regulatory documentation and process standards set by external entities (e. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. any standards for setup and run. 361 June 2006 © Copyright 2006 Supply-Chain Council. which includes certifying new suppliers and maintaining the current status of existing suppliers. raw materials. a supplier) to a specific point of use location. depending on the factory layout.6 Release Product to Deliver DEFINITION The process of acquiring. The process of defining and maintaining the information that characterizes inbound logistics management of all supplier deliveries. The selection and physical movement of sourced/in-process product (e. the scheduling of the operations to be performed in accordance with these plans.1 Schedule Production Activities M1. Examples include assembly of batch records for regulatory agencies. testing. Scheduling includes sequencing. The process of manufacturing in a make to stock environment adds value to products through mixing.5 Stage Product M1. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value.. creating certificate of analysis. the management of a supplier certification process. including both physical and electronic goods and services. separating. .3 Produce and Test M1. products. stockroom. fabricated components. Activities associated with post-production documentation. tracking deliveries and import. resolving issues.5 Manage Capital Assets ES. the management of a supplier certification process. Processes that transform product to a finished state to meet planned or actual demand. Given plans for the production of specific parts. and are generally produced in accordance with a sales forecast. In general. machining.. Also. The management of existing purchase orders or supplier contracts. The process of defining and maintaining a unique network of suppliers to deliver a specific product set.PROCESS TERM NAME ES. a location on the production floor.2 Issue Material M1. Within certain industries. and. required ingredients or intermediate formulations) from a stocking location (e." are completed prior to receipt of a customer order. This includes managing volume/step pricing. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements.6 Manage Incoming Product ES. The movement to finished goods is part of the Deliver process. enforcing terms and conditions and maintaining an accurate status for existing purchase orders or contracts. or formulations in specified quantities and planned availability of required sourced products. Make to stock products are intended to be shipped from finished goods or "off the shelf. Inc. The series of activities that containerize completed products for storage or sale to end-users.4 Package M1. forming. packaging may include cleaning or sterilization. Issuing product includes the corresponding system transaction.g..g.8 Manage Import/Export Requirements ES. government). The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). which are used to operate the supply chain. which includes certifying new suppliers and maintaining the current status of existing suppliers.9 Manage Supplier Agreements M Make M1 Make-to-Stock M1. or certification required prior to delivery of finished product to customer. This includes carrier selection and management. and chemical processes.

fabricated components. such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order. or formulations in specified quantities and planned availability of required sourced products. stockroom. depending on the factory layout. The process of manufacturing distinct items. Engineering activities required after acceptance of order. products. or certification required prior to delivery of finished product to customer. and signoff by the quality organization. machining.6 Release Finished Product to Deliver M3 Engineer-to-Order M3.. Scheduling includes sequencing. A make to order environment is one in which products are completed after receipt of a customer order and are built or configured only in response to a customer order. Engineer to Order includes custom products that are designed. Activities associated with post-production documentation. Scheduling includes sequencing.4 Package M2.. etc. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. In general. Within certain industries. In general. the last step in the completion of any preliminary engineering work done as part of the quotation process. raw materials.2 Issue Sourced/In-Process Product M2. or formulations in specified quantities and planned availability of required sourced products.1 Schedule Production Activities M2. The selection and physical movement of sourced/in-process product (e. any standards for setup and run. © Copyright 2006 Supply-Chain Council. While Make to Order includes standard products built only in response to a customer order or products configured in response to a customer order. the scheduling of the operations to be performed in accordance with these plans.g. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. any standards for setup and run. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. separating. May include generation and delivery of final drawings.2 Schedule Production Activities DEFINITION The process of manufacturing in a make to order environment adds value to products through mixing. The movement to finished goods is part of the Deliver process. required ingredients or intermediate formulations) from a stocking location (e. Given plans for the production of specific parts. a location on the production floor. Given plans for the production of specific parts.PROCESS TERM NAME M2 Make-to-Order M2. Inc. but before product can be produced. The series of activities that containerize completed products for storage or sale to end-users. packaging may include cleaning or sterilization. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). Examples include assembly of batch records for regulatory agencies. Products that are made to order may remain in the holding location to await shipment per the associated customer order. and. and chemical processes. forming.g. The movement of packaged products into a temporary holding location to await movement to a finished goods location. specifications. and. Issuing product includes the corresponding system transaction. laboratory tests for potency or purity. developed.5 Stage Finished Product M2.1 Finalize Production Engineering M3. part programs. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. 362 June 2006 . subassemblies. a supplier) to a specific point of use location. creating certificate of analysis.3 Produce and Test M2. testing. and manufactured in response to a specific customer request. formulas. products. depending on the factory layout. the scheduling of the operations to be performed in accordance with these plans. In general.

6 months. (or other supply chain inconsistencies) in an iterative and collaborative environment. Corporate forecast.g. The process of identifying.4 Produce and Test M3. as a whole with constituent parts. testing. Within certain industries. laboratory tests for potency or purity. and aggregating. Product Line forecast. Activities associated with post-production documentation. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level. and Quarterly. Weekly. The process of identifying. raw materials. and signoff by the quality organization.PROCESS TERM NAME M3. Processes that balance aggregate demand and supply to develop a course of action which best meets sourcing. The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). stockroom.g. packaging may include cleaning or sterilization.3 Issue Sourced/In-Process Product M3. The sales forecast is comprised of the following concepts: sales forecasting level. outsource plans or some other action that will optimize service. or certification required prior to delivery of finished product to customer. Issuing product includes the corresponding system transaction. The process of developing a time-phased course of action that commits supplychain resources to meet supply-chain requirements. i. And Aggregate Supply Chain Resources P1.e. 1-5 years. horizon and interval.e. Daily. Annual. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed i. Prioritize.e. horizon and interval. pricing. SKU.5 Package M3. assets. warehousing. a supplier) to a specific point of use location.7 Release Product to Deliver P Plan P1 Plan Supply Chain DEFINITION The selection and physical movement of sourced/in-process product (e. Divisional forecast. horizon and interval. 1. and aggregating. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. The movement to finished goods is part of the Deliver process. P1. Monthly. and time interval. The development and establishment of courses of action over specified time periods that represent a projected appropriation of supply chain resources to meet supply chain requirements for the longest time fence constraints of supply resources. fabricated components.6 Stage Finished Product M3. The series of activities that containerize completed products for storage or sale to end-users.1 Identify. all sources of demand for the integrated supply chain of a product or service at the appropriate level. a location on the production floor. Weekly.2 Identify. as a whole with constituent parts. flexibility. subassemblies. Assess. aggregating. Assess. SKU by Location. packaging. and prioritizing. time horizon. i. prioritizing. prioritizing. Daily. Monthly. Products that are made to order may remain in the holding location to await shipment per the associated customer order. costs. Inc. and Aggregate Supply Chain Resources P1. Examples include assembly of batch records for regulatory agencies. The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing. required ingredients or intermediate formulations) from a stocking location (e.. 363 June 2006 . all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. production and delivery requirements.2 Identify.3 Balance Supply Chain Resources with Supply Chain Requirements © Copyright 2006 Supply-Chain Council. The process of identifying. The movement of packaged products into a temporary holding location to await movement to a finished goods location. The sales forecasting time interval generally coincides with how often the plan is updated. creating certificate of analysis.. The series of activities performed upon sourced/in-process product to convert it from the raw or semi-finished state to a state of completion and greater value. and Aggregate Supply Chain Requirements P1.

prioritizing. Prioritize. and considering. The process of identifying. and considering. The process of identifying. The process of identifying.1 Assess. execute. and considering. The process of identifying. and Aggregate Production Requirements P3. evaluating. and Aggregate Return Requirements P5. The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet sourcing plan requirements.3 Balance Delivery Resources and Capabilities with Delivery Requirements P4. The process of identifying. and Aggregate Production Resources P3. all sources of demand in the creation of a product or service. as a whole with constituent parts. The development and establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements.4 Establish Supply Chain Plans P2 Plan Source P2. and considering.3 Balance Production Resources with Production Requirements P3. prioritizing. as a whole with constituent parts.3 Balance Return Resources with Return Requirements © Copyright 2006 Supply-Chain Council. and Aggregate Product Requirements P2. 364 June 2006 P5 Plan Return P5. as a whole with constituent parts. or constrain the processes for the return of a product.1 Identify. evaluating. all material and other resources used to add value in the supply chain for a product or services.PROCESS TERM NAME P1.4 Establish Delivery Plans DEFINITION The establishment and communication of courses of action over the appropriate time-defined (long-term. Assess. Assess. And Aggregate Product Resources P2. all sources of demand in the delivery of a product or service. Prioritize. and considering. The process of identifying.2 Identify. and Aggregate Delivery Requirements P4. A strategic or tactical process to establish and adjust courses of action or tasks over specified time periods that represent a projected appropriation of return resources and assets to meet anticipated as well as unanticipated return requirements.4 Establish Production Plans P4 Plan Deliver P4. Inc. representing a projected appropriation of supply-chain resources to meet supply-chain requirements. The process of developing courses of action that make feasible the commitment the appropriate return resources and or assets to satisfy return requirements. as a whole with constituent parts. and considering. The scope includes unplanned returns of sold merchandise as well as planned returns of "rotable" products that are refurbished for reissue to customers.2 Identify. as a whole with constituent parts. The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet production and operating plan requirements. and consideration for all resources that add value to.2 Identify. annual. monthly. . and Aggregate Return Resources P5. and considering as a whole with constituent parts. and Aggregate Delivery Resources and Capabilities P4. The process of identifying. Assess. evaluating. all sources of demand for the return of a product. all things that add value in the delivery of a product or service. The development and establishment of courses of action over specified time periods that represent a projected appropriation of material resources to meet supply chain requirements. The establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements. Prioritize. all sources of demand for a product or service in the supply chain. evaluating. prioritizing.1 Identify. evaluating. The development and establishment of courses of action over specified time periods that represent a projected appropriation of production resources to meet production requirements.3 Balance Product Resources with Product Requirements P2. weekly) planning horizon and interval. The process of identifying. The process of developing a time-phased course of action that commits creation and operation resources to meet creation and operation requirements. all things that add value in the creation of a product or performance of a service.1 Identify.2 Identify. as a whole with constituent parts. The process of developing a time-phased course of action that commits resources to meet requirements. Assess.4 Establish Sourcing Plans P3 Plan Make P3. The process of developing a time-phased course of action that commits delivery resources to meet delivery requirements.

Scheduling and managing the execution of the individual deliveries of product against an existing contract or purchase order. Scheduling and managing the execution of the individual deliveries of product against the contract. The requirements for product releases are determined based on the detailed sourcing plan or other types of product pull signals. subassemblies. The process and actions required determining product conformance to requirements and criteria.4 Establish and Communicate Return Plans R1 Return Defective Product R2 Return MRO Product R3 Return Excess Product S Source S1 Source Stocked Product S1. The process of authorizing payments and paying suppliers for product or services. This process includes invoice collection. receipt and transfer of raw material items. The procurement. This process includes invoice collection. The transfer of accepted product to the appropriate stocking location within the supply chain.5 Authorize Supplier Payment S2 Source Make-to-Order Product S2. This includes all aspects of managing the contract schedule including prototypes and qualifications.4 Receive Product S3. This includes all aspects of managing the contract schedule including prototypes. staging. invoice matching and the issuance of checks.3 Schedule Product Deliveries S3.3 Verify Product S2.2 Receive Product S1.5 Authorize Supplier Payment S3 Source Engineer-to-Order Product S3. The identification and qualification of potential suppliers capable of designing and delivering product that will meet all of the required product specifications. The procurement and delivery of product that is built to a specific design or configured based on the requirements of a particular customer order.3 Verify Product S1.1 Schedule Product Deliveries S1.1 Identify Sources of Supply S3. The identification of the final supplier(s) based on the evaluation of RFQs. For service this is the transfer or application of service to the final customer or end user. Scheduling and managing the execution of the individual deliveries of product against the contract.4 Transfer Product S2. transferring.2 Receive Product S2.4 Transfer Product S1. The negotiation. supplier qualifications and the generation of a contract defining the costs and terms and conditions of product availability. Processes that procure goods and services to meet planned or actual demand. invoice matching and the issuance of checks. The requirements for product deliveries are determined based on the detailed sourcing plan. The return of excess inventory and/or serviceable or obsolete products as defined by the terms and conditions of a customer/supplier contract. The process of authorizing payments and paying suppliers for product or services. . procurement and delivery of engineer-to-order assemblies or specialized product or services that are designed and built based on the requirements or specifications of a particular customer order or contract. 365 June 2006 © Copyright 2006 Supply-Chain Council. and stocking product and or application of service. transferring and stocking product. The process and actions required determining product conformance to requirements and criteria. This includes all of the activities associated with repackaging. The return and disposition of defective products as defined by the warranty claims. The process and associated activities of receiving product to contract requirements. This includes all of the activities associated with repackaging. The process and actions required determining product conformance to requirements and criteria. product and or services. product recall. Inc. The process and associated activities of receiving product to contract requirements.5 Verify Product DEFINITION The establishment and communication of courses of action over specified time periods that represent a projected appropriation of required return resources and or assets to meet return process requirements.PROCESS TERM NAME P5. The process and associated activities of receiving product to contract requirements.1 Schedule Product Deliveries S2. delivery. non-conforming product and/or other similar policies including appropriate replacement.2 Select Final Supplier(s) and Negotiate S3. qualifications or service deployment. The return of MRO products as defined by the planned and unplanned Capital Maintenance Plan. The transfer of accepted product to the appropriate stocking location within the supply chain. staging. The requirements for product deliveries are determined based on the detailed sourcing plan.

initiated by the customer. of returning material deemed defective by to the last known holder or designated return center. and physically returning of the excess product. The process. Activities include selecting the carrier and rates. (2) send the product back into service without requiring a return authorization request. The process where the customer develops the schedule for a carrier to pick-up for delivery of the defective product. business rules and product operating conditions inspection as criteria to identify and confirm that material is excess to requirements defective. and who the appropriate service provider would be to service the item. The process of the customer determining whether to service the item. business rules and product operating conditions as criteria to identify and confirm that an item requires maintenance. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center.6 Transfer Product S3. Activities include selecting the carrier and rates. Inc. generating return documentation. and physically returning or disposing of the product.7 Authorize Supplier Payment SR Source Return SR1 Source Return Defective Product SR1. for the return of an MRO product. packaging. The process of authorizing payments and paying suppliers for product or services. preparing the item for transfer. from a service provider. handling. generating return documentation. invoice matching and the issuance of checks.3 Request MRO Return Authorization SR2. preparing scheduling documentation and managing overall scheduling administration. repair. The process of the customer determining whether to return the defective item and the appropriate source contact for a return authorization. The process where the customer develops the schedule for a carrier to pick-up and deliver the MRO product. and overhaul items to a service provider.4 Schedule MRO Shipment DEFINITION The transfer of accepted product to the appropriate stocking location within the supply chain. what service is required. transportation and import / export requirements to facilitate the efficient return of the defective product. These processes extend into post-delivery customer support. for the return of defective product.3 Request Defective Return Authorization SR1. The process where the customer utilizes pre-determined MRO policies. repair. transferring. 366 June 2006 . of returning maintenance. handling. communicating with the service provider. © Copyright 2006 Supply-Chain Council. The process of a customer requesting and obtaining authorization. This process includes invoice collection. This includes all of the activities associated with repackaging. Process includes: customer identification that an action is required and determining what that action should be.1 Identify Defective Product Condition SR1. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Processes associated with returning products for any reason. The process of a customer requesting and obtaining authorization. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. packaging. initiated by the customer. from last known holder or designated return center. staging. Additionally.PROCESS TERM NAME S3.2 Disposition Defective Product SR1. and stocking product. the customer and service provider would discuss enabling conditions such as return replacement or credit. or (3) discard the item. overhaul or disposal. preparing the item for transfer. preparing scheduling documentation and managing overall scheduling administration. and handles the defective product in preparation for shipping in accord with pre-determined conditions. The process. Process includes: customer identification that an action is required and determining what that action should be. The process where the customer packages.4 Schedule Defective Product Shipment SR1. communicating with the last known holder.2 Disposition MRO Product SR2. In addition to discussing the MRO issue. Outputs include a decision to: (1) send a return authorization request to a service provider.1 Identify MRO Product Condition SR2. the customer and last known holder or designated return center would discuss enabling conditions such as return replacement or credit.5 Return Defective Product SR2 Source Return MRO Product SR2. The process where the customer utilizes planned policies. Includes operating failures and planned maintenance requirements.

generating return documentation. The process where the customer utilizes planned policies. the customer and designated return center would negotiate enabling conditions such as return credit or cash discount.3 Request Excess Return Authorization SR3. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the last known holder or designated return center. for the return of excess product. requesting authorization from the designated return center.2 Disposition Excess Product SR3. The process where the customer develops the schedule for a carrier to pick-up the excess product. The product is then provided by the customer to the carrier who physically transports the product and its associated documentation to the service provider.5 Return Excess Product DEFINITION The process where the customer packages. handling. of returning material deemed in excess of current requirements to the designated return center. © Copyright 2006 Supply-Chain Council. Activities include selecting the carrier and rates. 367 June 2006 . The process.5 Return MRO Product SR3 Source Return Excess Product SR3. transportation and import / export requirements to facilitate the efficient return of the excess product. packaging. The process of the customer determining whether to return the excess material and identification of a designated return center a return authorization. preparing scheduling documentation and managing overall scheduling administration. determining what that action should be. Process includes: customer identification that an action is required.PROCESS TERM NAME SR2. The process where the customer packages. from the designated return center.4 Schedule Excess Product Shipment SR3. Additionally. and physically returning the excess product. and handles the excess product in preparation for shipping in accord with pre-determined conditions. preparing the item for transfer. Inc.1 Identify Excess Product Condition SR3. business rules and product inspection as criteria to identify and confirm that material is in excess of the current requirements. The process of a customer requesting and obtaining authorization. and handles the MRO product in preparation for shipping in accord with pre-determined conditions. initiated by the customer.

S2. address.1. D3. S2.3 © Copyright 2006 Supply-Chain Council.2. Inc. D1. telephone number) Wrong Product Information (e..4. name.12. June 2006 .2.g. S2. S2. S3. The number of orders / lines that are received on-time to the demand requirements divided by the total orders / lines for the demand requirements in the measurement period The number of orders / lines that are received on-time with correct shipping documents divided by the total orders / lines processed in the measurement period Percentage of orders which all of the items are received by customer in the quantities committed The number of orders that are received by the customer in the quantities committed divided by the total orders [Total number of orders delivered in full] / [Total number of orders delivered] x 100% The number of product orders / lines that are transferred on-time to demand requirements divided by the total orders / lines transferred in the measurement period The number of transactions processed without error divided by the total transactions processed in the measurement period.15 Invoice D1. or finished goods that are there when needed. Correct destination.4 Stock Shelf DR3 Deliver Return Excess Product SR3 Source Return Excess Product D2. product description) Wrong Price (e.6 R1 Return Defective Product R2 Return MRO Product S1.14 Install Product D1. S3. S3. S2. S3.3.13.14 Install Product D3.METRICS METRIC % In-Stock % of Excess Product Returns Delivered Complete to the Designated Return Center % of Faultless Invoices DEFINITION Percentage of materials. Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. S3.1.5 S1.4 % Orders/ Lines Received with Correct Shipping Documents % of Orders Delivered In Full S1.15 Invoice % Orders/ Lines Processed Complete S1. D1. S3.12.1.3. D2.1.g. M2.13. D3.15 Invoice D2.3.2.4. D1.. D3.4.2. components.13.12..2. % Return to sales at any level of merchandise hierarchy The number of schedules that are changed within the suppliers lead-time divided by the total number of schedules generated within the measurement period 368 PROCESS D4. D2. D2. S2.2. S3.1.4 M1. ED % Product Transferred On-Time to Demand Requirement % Product Transferred without Transaction Errors % Return % Schedules Changed within Supplier's Lead Time S1.3.6 S1. part number. discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date The number of orders / lines that are processed complete divided by the total orders / lines processed within the measurement period The number of orders / lines that are received defect free divided by the total orders / lines processed in the measurement period.g.4. S2.4 % Orders/ Lines Received Defect Free % Orders/ Lines Received On-Time To Demand Requirement S1. with the correct part and documentation The number of invoices processed without issues and or errors divided by the total number of invoices. M3. according to the schedule.3.

3 Balance Return Resources with Return Requirements P1. The average time associated with authorizing payment to suppliers.2 Assess Delivery Performance ES. The average time associated with assessing the performance of supplier processes.5 Build Loads D3.3 Balance Supply Chain Resources with Supply Chain Requirements D1. M2.3 S1.METRIC Actual Asset Life Maintenance Cost as % of Replacement Value Align Supply Chain Unit Plan with Financial Plan Cycle Time Assess Delivery Performance Cycle Time Assess Supplier Performance Cycle Time Asset Turns Authorize Defective Product Return Cycle Time Authorize Excess Product Return Cycle Time Authorize MRO Product Return Cycle Time Authorize Supplier Payment Cycle Time DEFINITION Measure of total lifecycle maintenance cost of an asset compared to its replacement cost. The average time associated with authorizing the return of MRO product.3. S2. S3. M1. Total gross product revenue ÷ Total net assets The average time associated with authorizing the return of defective product. S3.3 S1.4. The average time associated with balancing supply chain resources and supply chain requirements.1. # of days each schedule change impacts the delivery date divided by the total # of changes.3.1.3 P4.1.5 EP. The average time associated with authorizing the return of excess product. The average time associated with balancing deliver resources and deliver requirements. This ratio is based maintenance cost to-date so that that replacement or upgrade cost can be evaluated as the asset ages on an on-going basis.1 Authorize Excess Product Return DR2. The average time associated with aligning the supply chain unit plan with the financial plan The average time associated with assessing the performance of deliver processes.4.5 Build Loads Average Days per Engineering Change Average Days per Schedule Change Average Release Cycle of Changes Balance Delivery Resources with Delivery Requirements Cycle Time Balance Product Resources with Product Requirements Cycle Time Balance Production Resources with Product Creation Requirements Cycle Time Balance Return Resources with Return Requirements Cycle Time Balance Supply Chain Resources with Supply Chain Requirements Cycle Time Build Loads Cycle Time # of days each engineering change impacts the delivery date divided by the total # of changes.1.5 Authorize Supplier Payment S1.1. M3.5 DR1. The average time associated with balancing production resources with production creation requirements.1 Authorize Defective Product Return DR3.2 Assess Supplier Performance M1. 369 June 2006 . The average time associated with building shipment loads. © Copyright 2006 Supply-Chain Council.3 Balance Product Resources with Product Requirements P3.3 Balance Delivery Resources and Capabilities with Delivery Requirements P2. PROCESS EM.5 Authorize Supplier Payment S1.1. The average time associated with balancing product resources and product requirements.3 Balance Production Resources with Production Requirements P5.1 Authorize MRO Product Return S3. The average time associated with balancing return resources and return requirements.9 Align Supply Chain Unit Plan with Financial Plan ED.5 Build Loads D2. Cycle time for implementing change notices divided by total number of changes. M3.7 Authorize Supplier Payment S2.4. Inc. S3. S2. M2. S2.

.4. M1. or overhauled.1 Authorize MRO Product Return S3. The sum of the costs associated with authorizing the return of product to be maintained. D1. M1. direct labor availability and key components/materials availability. M1. S1. [Inventory Days of Supply + Days Sales Outstanding – Days Payable Outstanding] The time it takes for an investment made to flow back into a company after it has been spent for raw materials.9 Align Supply Chain Unit Plan with Financial Plan ED.1 Authorize Defective Product Return DR3.4. The sum of the costs associated with assessing supplier performance. P3. This cost includes direct costs (labor.6 Checkout D1. materials) and indirect costs (overhead). PROCESS M1. S3.3 Balance Delivery Resources and Capabilities with Delivery Requirements P2. The sum of the costs associated with balance of return resources with return requirements. M2. The sum of the costs associated with authorizing the return of excess product.1. D4 Checkout Cycle Time Consolidate Orders Cycle Time Cost of Compliance Including Administrative Costs Cost of Goods Sold D4. this represents the time from the point where a company pays for the resources consumed in the performance of a service to the time that the company received payment from the customer for those services.1 Authorize Excess Product Return DR2.4 Consolidate Orders EM. The sum of the costs associated with authorizing the return of defective product. The average time required for customer order consolidation.METRIC Capacity Utilization Cash-To-Cash Cycle Time DEFINITION A measure of how intensively a resource is being used to produce a good or service.2 Assess Supplier Performance DR1. M3. M2. M3. P2.5 P1.2 Assess Delivery Performance ES. Total MAKE cost to comply with regulatory requirements.3 Balance Production Resources with Production Requirements P5. The average time required for customer checkout.4. P4. The cost associated with buying raw materials and producing finished goods. The sum of the costs associated with aligning supply chain performance plans with financial plans.4 Consolidate Orders D2.5 Authorize Supplier Payment S1. D3. M3. The sum of the costs associated with assessing delivery performance.8 M2 Make-to-Order M1 Make-to-Stock M3 Engineer-to-Order EP. repaired.3.5 Authorize Supplier Payment P4. For services. D2. M2. 370 © Copyright 2006 Supply-Chain Council.2. M2.3 Balance Return Resources with Return Requirements June 2006 Cost to Align Supply Chain Unit Plan with Financial Plan Cost to Assess Delivery Performance Cost to Assess Supplier Performance Cost to Authorize Defective Product Return Cost to Authorize Excess Product Return Cost to Authorize MRO Product Return Cost to Authorize Supplier Payment Cost to Balance Delivery Resources with Delivery Requirements Cost to Balance Product Resources with Product Requirements Cost to Balance Production Resources with Product Creation Requirements Cost to Balance Return Resources with Return Requirements The sum of the costs associated with balance of delivery resources with delivery requirements.1. S2.3 Balance Product Resources with Product Requirements P3. The sum of the costs associated with balance of product resources with product requirements.3.7 Authorize Supplier Payment S2. Inc. Some factors that should be considered are internal manufacturing capacity. The sum of the costs associated with balance of production resources with product creation requirements. M3. constraining processes. The sum of the costs associated with authorizing supplier payment.

2 Identify.5 Fill Shopping Cart M3. The sum of the costs associated with building transportation loads. and Aggregate Return Resources P1. assessing and aggregating supply chain resources.2 Identify. The sum of the costs associated with consolidating customer orders. Assess. assessing and aggregating return resources. And Aggregate Product Resources P3.4 Establish and Communicate Return Plans P1.1 Identify Sources of Supply P2. The sum of the costs associated with identifying. Assess. The sum of the costs associated with finalizing production engineering.5 Build Loads D3. Assess.5 Build Loads D4. committing resources & launching a program. and Aggregate Return Resources Cost to Identify. Assess. Assess. Assess. Assess. and Aggregate Production Resources The sum of the costs associated with deliver and/or install The sum of the costs associated with entering the order. The sum of the costs associated with establishing and communicating source plans. © Copyright 2006 Supply-Chain Council.3 Balance Supply Chain Resources with Supply Chain Requirements D1. Commit Resources & Launch Program Cost to Establish and Communicate Return Plans Cost to Establish and Communicate Supply Chain Plans Cost to Establish Delivery Plans Cost to Establish Production Plans Cost to Establish Sourcing Plans Cost to Fill Shopping Cart Cost to Finalize Production Engineering Cost to Generate Stocking Schedule Cost to Identify Sources of Supply Cost to Identify.4 Establish Delivery Plans P3. and Aggregate Product Resources Cost to Identify. The sum of the costs associated with generating a stocking schedule. The sum of the costs associated with establishing and communicating deliver plans. and Aggregate Supply Chain Resources The sum of the costs associated with identifying. The sum of the costs associated with establishing and communicating return plans.1 Finalize Production Engineering D4. Commit Resources & Launch Program P5. Assess.METRIC Cost to Balance Supply Chain Resources with Supply Chain Requirements Cost to Build Loads Cost to Checkout Cost to Consolidate Orders Cost to Deliver DEFINITION The sum of the costs associated with balance of supply chain resources with supply chain requirements. Assess. and Aggregate Production Resources P4.4 Establish Production Plans P2.4 Establish Sourcing Plans D4. and Aggregate Delivery Resources and Capabilities P5. and Aggregate Supply Chain Resources Cost to Deliver and/or Install Cost to Enter Order. The sum of the costs associated with identifying sources of supply.6 Checkout D1. Inc.3 Enter Order.5 Build Loads D2. 371 June 2006 .2 Identify. assessing and aggregating product resources.4 Consolidate Orders D2. Cost to Identify.2 Identify. The sum of the costs associated with identifying.4 Establish Supply Chain Plans P4. The sum of the costs associated with establishing and communicating production plans. The sum of the costs associated with product checkout.1 Generate Stocking Schedule S3.7 Deliver and/or Install D3. assessing and aggregating production resources. The sum of the costs associated with filling a shopping cart. The sum of the costs associated with identifying.4 Consolidate Orders D1 Deliver Stocked Product D2 Deliver Make-to-Order Product D3 Deliver Engineer-to-Order Product D4.2 Identify. The sum of the costs associated with deliver PROCESS P1. The sum of the costs associated with establishing and communicating supply chain plans.

14 Install Product D1. and Aggregate Product Requirements Cost to Identify.4 Manage Finished Goods Inventories ED. assessing and aggregating return requirements. M2. The sum of the costs associated with managing in-process products (WIP).1 Identify.8 Manage Import/Export Requirements ES. The sum of the . and Aggregate Supply Chain Requirements Cost to Install Product Cost to Invoice Cost to Issue Material Cost to Issue Sourced/In-Process Product Cost to Load Product & Generate Shipping Documentation DEFINITION The sum of the costs associated with identifying. The sum of the costs associated with issuing sourced or in-process material.3 Manage Deliver Information ED.METRIC Cost to Identify.15 Invoice D3. and Aggregate Delivery Requirements P2. The sum of the costs associated with identifying. © Copyright 2006 Supply-Chain Council.6 Manage Incoming Product EM.1 Assess.Costs to Manage Business Rules for PLAN Processes The sum of the Cost to Manage Business Rules for Return Processes The sum of the Costs to Manage Deliver Business Rules The sum of the Costs to Manage Deliver Capital Assets The sum of the Cost to Manage Deliver Information The sum of the Costs to Manage Finished Good Inventory The sum of the costs associated with the management of import/export requirements The sum of the costs associated with managing incoming product.1 Identify.3 Maintain Source Data M1. Prioritize. Prioritize. The sum of the costs associated with invoicing.8 Manage Import/Export Requirements ES. Inc. Prioritize. assessing and aggregating supply chain requirements. PROCESS P4. assessing and aggregating deliver requirements.1 Identify. and Aggregate Production Requirements P5.2 Issue Sourced/InProcess Product D1.3 Issue Sourced/InProcess Product M2.11 Load Product & Generate Ship Documents ES. and Aggregate Return Requirements Cost to Identify.11 Load Vehicle & Generate Shipping Documentation D2. Prioritize. Prioritize. Prioritize. and Aggregate Production Requirements Cost to Identify. Prioritize.11 Load Product & Generate Shipping Documentation D3. The sum of the costs associated with issuing material.14 Install Product D3. The sum of the costs associated with managing integrated supply chain assets. assessing and aggregating production requirements The sum of the costs associated with identifying. and Aggregate Product Requirements P3. The sum of the costs associated with loading product & generating shipping documentation.1 Identify.1 Manage Business Rules for PLAN Processes ER. The sum of the costs associated with identifying.2 Issue Material M3.5 Manage Deliver Capital Assets ED.4 Manage In-Process Products (WIP) EP.15 Invoice M1. M3 EP. The sum of the costs associated with product installation. and Aggregate Return Requirements P1.1 Manage Deliver Business Rules ED. assessing and aggregating deliver requirements The sum of the costs associated with identifying.1 Manage Business Rules for Return Processes ED. Prioritize.5 Manage Integrated Supply Chain Capital Assets Cost to Maintain Source Data Cost to Make Cost to Manage Business Rules for PLAN Processes Cost to Manage Business Rules for Return Processes Cost to Manage Deliver Business Rules Cost to Manage Deliver Capital Assets Cost to Manage Deliver Information Cost to Manage Finished Goods Inventories Cost to Manage Import/Export Requirements Cost to Manage Incoming Product Cost to Manage In-Process Products (WIP) Cost to Manage Integrated Supply Chain Capital Assets The sum of the costs associated with maintaining supplier data. The sum of the costs associated with make. and Aggregate Supply Chain Requirements D1.14 Install Product D2. Prioritize. and Aggregate Delivery Requirements Cost to Identify. 372 June 2006 .

8 Manage PLAN Regulatory Requirements and Compliance EP.6 Manage Return Transportation ES. The sum of the costs associated with assessing supplier performance.2 Manage Performance of Supply Chain EP.7 Manage Production Network EM.4 Manage Return Inventory ER. The sum of the costs associated with managing Finished Good Transportation PROCESS EP.1 Manage Sourcing Business Rules ES.5 Manage Return Capital Assets ER. The sum of the costs associated with managing supplier agreements.7 Manage Return Network Configuration ER. Inc. The sum of the costs associated with managing the supplier network. The sum of the costs associated with managing compliance to return regulatory requirements. The sum of the Cost to Manage Planning Configuration The sum of the Cost to Manage Product Inventory The sum of the Cost to Manage Product Life Cycle The sum of the costs to manage the production network The sum of the costs to manage production performance. The sum of the costs to manage the capital assets associated with returns.7 Manage Supplier Network ED. The sum of the costs to manage production rules.7 Manage Planning Configuration ES.8 Manage Return Regulatory Requirements ER.6 Manage Integrated Supply Chain Transportation EM.9 Manage Supplier Agreements ES. The sum of the costs to manage the capital assets associated with returns data collection. The sum of the costs to Manage PLAN Data Collection.4 Manage Integrated Supply Chain Inventory EP.METRIC Cost to Manage Integrated Supply Chain Inventory Cost to Manage Integrated Supply Chain Transportation Cost to Manage MAKE Equipment and Facilities Cost to Manage MAKE Information Cost to Manage MAKE Regulatory Compliance Cost to Manage Performance of Return Processes Cost to Manage Performance of Supply Chain Cost to Manage PLAN Data Collection Cost to Manage Plan Regulatory Requirements and Compliance Cost to Manage Planning Configuration Cost to Manage Product Inventory Cost to Manage Product Life Cycle Cost to Manage Production Network Cost to Manage Production Performance Cost to Manage Production Rules Cost to Manage Return Capital Assets Cost to Manage Return Data Collection Cost to Manage Return Inventory Cost to Manage Return Network Configuration Cost to Manage Return Regulatory Requirements and Compliance Cost to Manage Return Transportation Cost to Manage Source Capital Assets Cost to Manage Sourcing Business Rules Cost to Manage Supplier Agreements Cost to Manage Supplier Network Cost to Manage Transportation DEFINITION The sum of the costs associated with managing the integrated supply chain inventory. The sum of the costs associated with managing Make equipment and facilities. The sum of the costs to manage the capital assets associated with return inventory.2 Manage Production Performance EM. The sum of the costs to manage the capital assets associated with configuring the return network. The sum of the Costs to Manage Source Capital Assets The sum of the costs associated with Source business rules. The sum of the Cost to Manage MAKE Information The sum of the Cost to Manage MAKE Regulatory Compliance The sum of the costs to Manage Performance of Return Processes. The sum of the costs associated with managing integrated supply chain transportation. 373 June 2006 . The sum of the costs to Manage Plan Regulatory Requirements and Compliance.3 Manage PLAN Data Collection EP.5 Manage Equipment and Facilities EM.4 Manage Product Inventory ED. The sum of the costs associated with managing return transportation.3 Manage Return Data Collection ER.1 Manage Production Rules ER.5 Manage Capital Assets ES.2 Manage Performance of Return Processes EP.8 Manage Regulatory Compliance ER.6 Manage Transportation © Copyright 2006 Supply-Chain Council.3 Manage MAKE Information EM.7 Manage Product Life Cycle EM.

© Copyright 2006 Supply-Chain Council.1 Process Inquiry & Quote M3.13 Receive & Verify Product by Customer DR1.2 Negotiate & Receive Contract D3. The sum of the costs associated with picking product.3 Receive Defective Product DR3.9 Pick Product D3.13 Receive & Verify Product by Customer D2.4 Package M1. The sum of the costs associated with transferring product from source or make activities. The sum of the costs associated with receiving excess returns. The sum of the costs associated with receipt and verification at customer site. The sum of the costs associated with production and test. Configure.9 Pick Product D4. The sum of the costs associated with receiving product at the store. The sum of the costs associated with planning the returning of product.3 Pick Product from Backroom P4 P3 P5 P2 Plan Source P1 Plan Supply Chain D1.4 Receive Product S2. The sum of the costs associated with processing inquiry and quotes.6 Manage Transportation D3.METRIC Cost to Manage Transportation (WIP) Cost to Negotiate & Receive Contract Cost to Obtain & Respond to Request for Quote (RFQ) / Request for Proposal (RFP) Cost to Pack Product Cost to Package Cost to Pick Product Cost to Pick Product from Backroom Cost to Plan Deliver Cost to Plan Make Cost to Plan Return Cost to Plan Source Cost to Plan Supply Chain Cost to Process Inquiry & Quote Cost to Produce and Test Cost to Receive & Verify Product by Customer DEFINITION The sum of the costs associated with managing WIP Transportation The sum of the costs associated with negotiating and receiving contracts The sum of the costs associated with obtaining and responding to Request for Quote (RFQ) / Request for Proposal (RFP).3 Produce and Test D1.1 Obtain and Respond to RFP/RFQ D1.2 Receive. The sum of the costs associated with planning source activities. The sum of the costs associated with product packaging.4 Package D1.13 Receive & Verify Product by Customer D3. 374 .2 Receive Product D4.3 Produce and Test M1. The sum of the costs associated with picking product from backroom.10 Pack Product D3. entering and validating a customer order. The sum of the costs associated with receiving product.1 Process Inquiry & Quote D2.2 Receive Product at Store D2. The sum of the costs associated with planning the making of product.2 Receive Product S1. Enter & Validate Order The sum of the costs associated with receiving.9 Pick Product D2.4 Produce and Test M2. Inc.2 Receive. Cost to Receive.3 Receive Excess Product DR2. The sum of the costs associated with planning the delivery of product. The sum of the costs associated with receiving MRO product returns. Enter and Validate Order June 2006 Cost to Receive Defective Product Cost to Receive Excess Product Cost to Receive MRO Product Cost to Receive Product Cost to Receive Product at Store Cost to Receive Product from Source or Make The sum of the costs associated with receiving defective product returns.8 Receive Product from Source or Make D1. The sum of the costs associated with product packaging.8 Receive Product from Source or Make D1.10 Pack Product D2.8 Receive Product from Source or Make D3. The sum of the costs associated with planning supply chain activities. Enter & Validate Order D2.5 Package M2. PROCESS EM.10 Pack Product M3.3 Receive MRO Product S3.

Cost to Reserve Resources & Determine Delivery Date Cost to Route Shipments Cost to Schedule Excess Product Receipt Cost to Schedule Installation Cost to Schedule MRO Product Receipt Cost to Schedule Product Deliveries The sum of the costs associated with reserving resources and determining a delivery date.7 Release Product to Deliver M2. The sum of the costs associated with scheduling MRO product receipt.7 Select Carriers and Rate Shipments S3.3 Reserve Resources & Determine Delivery Date D3. Inc.7 Select Carriers & Rate Shipments D1.2 Select Final Supplier(s) and Negotiate D1. PROCESS M3.1 Schedule Product Deliveries M1. © Copyright 2006 Supply-Chain Council.6 Stage Finished Product M2.6 Route Shipments D1.3 Reserve Inventory & Determine Delivery Date D2. The sum of the costs associated with scheduling product deliveries.1 Schedule Production Activities M2. The sum of the costs associated with stocking shelves.1 Schedule Product Deliveries S1.1 Schedule Production Activities M3.6 Route Shipments D2.2 Schedule MRO Return Receipt S3. The sum of the costs associated with Source.2 Schedule Excess Return Receipt D3.6 Release Product to Deliver D1.12 Ship Product S1 Source Stocked Product S2 Source Make-to-Order Product S3 Source Engineer-to-Order Product SR3 Source Return Excess Product SR2 Source Return MRO Product SR1 Source Return Defective Product M3.5 Stage Product D4. The sum of the costs associated with routing shipments.5 Stage Finished Product M1. Cost to Source Return The sum of the costs associated with Source Return Cost to Stage Finished Product Cost to Stock Shelf The sum of the costs associated with staging finished goods.2 Schedule Production Activities D2.6 Route Shipments DR3.12 Ship Product D3.METRIC Cost to Release Finished Product to Deliver DEFINITION The sum of the costs associated with releasing finished goods to deliver processes.12 Ship Product D2. The sum of the costs associated with scheduling product installation.7 Select Carriers & Rate Shipments D3.3 Schedule Product Deliveries S2. The sum of the costs associated with shipping products.4 Schedule Installation DR2. Cost to Select Carriers & Rate Shipments The sum of the costs associated with selecting carriers and rating shipments. Cost to Select Final Supplier(s) and Negotiate Cost to Ship Product Cost to Source The sum of the costs associated with selecting final suppliers and negotiating supplier agreements. 375 June 2006 .6 Release Finished Product to Deliver M1. The sum of the costs associated with scheduling excess product receipt.4 Stock Shelf Cost to Schedule Production Activities The sum of the costs associated with scheduling production activities.

Days’ outstanding in accounts payable) The “5 point rolling average” calculation uses a combination of both historical and forward-looking data.7 Deliver and/or Install D3 Deliver Engineer-to-Order Product D2.3 Verify Product S1. D3. The amount of sales outstanding expressed in days.15 Days of Supply (See Inventory Days of Supply) Days Payable Outstanding [Sum of the 4 previous quarters + projection for next quarter) / 5] The length of time from purchasing materials. Days purchases in accounts payable.4 Transfer Product S2.4 Transfer Excess Product DR2.5 Verify Product EM.8 Manage Import/Export Requirements ED.4 Transfer MRO Product S3. This means that the rolling average value has to be calculated based on the average over the four previous quarters and the projection for the current or next quarter. 376 June 2006 . labor and/or conversion resources until cash payments must be made expressed in days.4 Transfer Defective Product DR3.15 Invoice. D3. The [5 point rolling average of gross accounts payable (AP)] / [total gross annual material purchases / 365]. D2.15 Invoice D1 Deliver Stocked Product D2 Deliver Make-to-Order Product D4 Deliver Retail Product © Copyright 2006 Supply-Chain Council. D2.15.6 Transfer Product S2. The average time required to deliver and install product. Ratio of Cost for Managing Production Performance to Manufacturing Controllable Cost.2 ES.15. The average time associated with clearing an order through customs PROCESS DR1. Inc. The average time associated with Deliver Processes Days Sales Outstanding D1.15 Invoice.3 Verify Product S3.4 Transfer Product S1. 5 point annual average of gross accounts receivable ÷ (total gross annual sales ÷ 365) The length of time from when a sale is made until cash for it is received from customers.METRIC Cost to Transfer Defective Product Cost to Transfer Excess Product Cost to Transfer MRO Product Cost to Transfer Product Cost to Verify Product Costs Associated with Managing Production Performance as a % Manufacturing Controllable Cost Customs Clearance Cycle Time DEFINITION The sum of the costs associated transferring defective product for disposition The sum of the costs associated transferring excess product for disposition The sum of the costs associated transferring MRO product for disposition The sum of the costs associated with transferring product to Make or Deliver processes The sum of the costs associated with raw material verification.8 Manage Import/Export Requirements D1.15 Deliver and/or Install Cycle Time Deliver Cycle Time D4. (Other names: Average payment period for materials.

15. D2. this metric is the proportion for services that are filled so that the service is completed within 24 hours The average time associated with "filling the shopping cart" The average time associated with the finalization of production engineering D2 Deliver Make-to-Order Product D1 Deliver Stocked Product D3 Deliver Engineer-to-Order Product D4 Deliver Retail Product M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order D3. P4. For services. D1.3 Enter Order. D3.11. D1.13 D1. D2.4 Establish Supply Chain Plans P4. D3. D2.15. ED.11. D1. invoices. bills of lading. D3. D3. etc.2 Downside Deliver Adaptability Downside Make Adaptability Enter Order.15.4 Establish Sourcing Plans P1.4 Establish Production Plans P2.4 Establish Delivery Plans P3.3.4 Establish and Communicate Return Plans P1. Commit Resources & Launch Program Cycle Time Establish and Communicate Return Plans Cycle Time Establish and Communicate Supply Chain Plans Cycle Time Establish Delivery Plans Cycle Time Establish Production Plans Cycle Time Establish Sourcing Plans Cycle Time Fill Rate Fill Shopping Cart Cycle Time Finalize Production Engineering Cycle Time The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties.13.12. PROCESS DR1 Deliver Return Defective Product DR Deliver Return DR2 Deliver Return MRO Product D1.5 Fill Shopping Cart M3.3. D3. The average time associated with entering an order.11. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% The reduction in delivered quantities sustainable at 30 days prior to delivery with no inventory or cost penalties.4. Commit Resources & Launch Program P5.12.3. committing resources and program launch The average time associated with establishing and communicating return plans The average time associated with establishing and communicating supply chain plans The average time associated with establishing and communicating deliver plans The average time associated with establishing and communicating production plans The average time associated with establishing and communicating source plans The percentage of ship-from-stock orders shipped within 24 hours of order receipt. Inc.9 D4.12.METRIC Deliver Return Cycle Time DEFINITION The average time associated with returns. M1. D2.3. Delivery Performance to Customer Commit Date Documentation Accuracy The percentage of orders that are fulfilled on the customer's original commit date Percentage of orders with on time and accurate documentation supporting the order. including packing slips.3.1 Finalize Production Engineering © Copyright 2006 Supply-Chain Council.3. D1. 377 June 2006 . D1.13. D2.

prioritizing. and aggregating return requirements The average time associated with the identifying. P4. Assess. Assess.4. Example: If 2 items a day are sold and 20 items are held in inventory.4. Days’ sales in inventory). Prioritize. Prioritize. D2. and Aggregate Return Resources Cycle Time Identify. Prioritize. and Aggregate Supply Chain Requirements Cycle Time Install Product Cycle Time Inventory Days of Supply D4.1.1 Generate Stocking Schedule S3. EP. P4.2 Identify. this represents 10 days’ (20/2) sales in inventory. assessing. and Aggregate Return Resources P1. D1. Assess.14 Install Product D2.1 Identify. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). The [5 point rolling average of gross value of inventory at standard cost] / [annual cost of goods sold (COGS) / 365]. (Other names: Days cost-of-sales in inventory. The average time associated with the generating a stocking schedule The average time associated with the identification of sources of supply The average time associated with the identifying.8.2 Identify. and aggregating supply chain requirements The average time associated with product installation The amount of inventory (stock) expressed in days of sales. assessing. Inc.2 Identify. and Aggregate Production Resources P5.14. ES. and Aggregate Delivery Requirements Cycle Time Identify.3. EM. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Assess.4.1 Assess. and aggregating production resource availability The average time associated with the identifying. and aggregating supply chain resource availability The average time associated with the identifying.11. and Aggregate Supply Chain Requirements D1. and aggregating product resource availability The average time associated with the identifying. D3. 378 PROCESS EP.1 Identify. and aggregating return resource availability The average time associated with the identifying. prioritizing. And Aggregate Product Resources P3.2 Generate Stocking Schedule Cycle Time Identify Sources of Supply Cycle Time Identify. and Aggregate Product Requirements Cycle Time Identify. Assess. and Aggregate Production Requirements Cycle Time Identify. S1.1. D3.1 Identify.2 Identify. Prioritize.14. and Aggregate Supply Chain Resources P4. and aggregating delivery requirements The average time associated with the identifying. EP. P3. and Aggregate Production Resources Cycle Time Identify. D1. P1. Assess. and Aggregate Return Requirements Cycle Time Identify. Prioritize. and Aggregate Delivery Resources Cycle Time Identify.1 Identify Sources of Supply P4.4. and aggregating product requirements The average time associated with the identifying.11. D2.6.1.3. June 2006 . D2.4 Inventory Days of Supply (Finished Goods) D1. and Aggregate Product Requirements P3. ED. EP. Prioritize.8. D3. and Aggregate Supply Chain Resources Cycle Time Identify. and Aggregate Return Requirements P1.3.1. assessing. and aggregating production requirements The average time associated with the identifying. Common calculation (Sum Actuals .8.14 Install Product P1. D2. in unit measurement.3. Assess.5.2 Identify.14 Install Product D3. Prioritize. and Aggregate Production Requirements P5.1 Identify. P1. Assess. and Aggregate Delivery Requirements P2. and aggregating delivery resource availability The average time associated with the identifying. S2. P4.6.4.2. Prioritize. P1. assessing. assessing.4. D1. P1. Assess. and Aggregate Delivery Resources and Capabilities P2.11. and Aggregate Product Resources Cycle Time Identify. Assess.METRIC Forecast Accuracy DEFINITION Forecast accuracy is calculated for products and/or families for markets/distribution channels.14 © Copyright 2006 Supply-Chain Council.7. prioritizing. P2. Prioritize. prioritizing. prioritizing.Sum of Variance) / Sum Actuals to determine percentage error. D3. S3.

5 Manage Equipment and Facilities EM. M1.3 Issue Sourced/InProcess Product D1.5.5. M3.15 Invoice M1.6 Manage Integrated Supply Chain Transportation EM. M2.5 Manage Capital Assets ED.4 Manage In-Process Products (WIP) EP.3 Maintain Source Data M1 Make-to-Stock M3 Engineer-to-Order M2 Make-to-Order EP.5 Manage Deliver Capital Assets ED. M2. The average time associated with the generation and issuance of an invoice The average time associated with the issuance of material to production The average time associated with the issuance of material to production The average time associated with product loading and the generation of shipping documentation PROCESS S2 Source Make-to-Order Product S1 Source Stocked Product S3 Source Engineer-to-Order Product P3.3 Manage Deliver Information ED. Inventory Days of Supply (WIP) Invoice Cycle Time Issue Material Cycle Time Issue Sourced/In-Process Product Cycle Time Load Product & Generate Shipping Documentation Cycle Time Total value of Work in Process ÷ (COGS ÷ 365).1.11 Load Product & Generate Shipping Documentation D3.11 Load Vehicle & Generate Shipping Documentation D2.15 Invoice D3.1 Manage Business Rules for PLAN Processes ER. M3.2 Issue Material M2.2.8 Manage Import/Export Requirements ES.1 Manage Deliver Business Rules ED.4.8 Manage Import/Export Requirements ES.2 Issue Sourced/InProcess Product M3.6 Manage Incoming Product EM. The average time associated with maintaining source data The average time associated with Make Processes The average time associated with managing plan business rules The average time associated with managing rules for returns The average time associated with managing capital assets The average time associated with managing deliver business rules The average time associated with managing deliver capital assets The average time associated with managing deliver information The average time associated with managing finished good inventory The average time associated with managing import/export requirements The average time associated with managing inbound raw material The average time associated with managing WIP inventory The average time associated with managing integrated supply chain capital assets The average time associated with managing integrated supply chain inventory The average time associated with managing integrated supply chain transportation The average time associated with managing production equipment and facilities The average time associated with managing production information 379 .11 Load Product & Generate Ship Documents ES.3 Manage MAKE Information June 2006 Maintain Source Data Cycle Time Make Cycle Time Manage Business Rules for PLAN Processes Cycle Time Manage Business Rules for Return Processes Cycle Time Manage Capital Assets Cycle Time Manage Deliver Business Rules Cycle Time Manage Deliver Capital Assets Cycle Time Manage Deliver Information Cycle Time Manage Finished Goods Inventories Cycle Time Manage Import/Export Requirements Cycle Time Manage Incoming Product Cycle Time Manage In-Process Products (WIP) Cycle Time Manage Integrated Supply Chain Capital Assets Cycle Time Manage Integrated Supply Chain Inventory Cycle Time Manage Integrated Supply Chain Transportation Cycle Time Manage MAKE Equipment and Facilities Cycle Time Manage MAKE Information Cycle Time © Copyright 2006 Supply-Chain Council.4 Manage Integrated Supply Chain Inventory EP.4 Manage Finished Goods Inventories ED.3.5 Manage Integrated Supply Chain Capital Assets EP.METRIC Inventory Days of Supply (Raw Material) DEFINITION Value of raw materials ÷ (COGS ÷ 365). P3.1 Manage Business Rules for Return Processes ES.1.6 D1. M1. Inc.

7 Manage Planning Configuration ES.9 Manage Supplier Agreements ES.3 Manage PLAN Data Collection EP.7 Manage Product Life Cycle EM.5 Manage Return Capital Assets ER.2 Manage Production Performance EM.2 © Copyright 2006 Supply-Chain Council. PROCESS EM.METRIC Manage MAKE Regulatory Compliance Cycle Time Manage Performance of Return Processes Cycle Time Manage Performance of Supply Chain Cycle Time Manage PLAN Data Collection Cycle Time Manage Plan Regulatory Requirements and Compliance Cycle Time Manage Planning Configuration Cycle Time Manage Product Inventory Cycle Time Manage Product Life Cycle Time Manage Production Network Cycle Time Manage Production Performance Cycle Time Manage Production Rules Cycle Time Manage Return Capital Assets Cycle Time Manage Return Data Collection Cycle Time Manage Return Inventory Cycle Time Manage Return Network Configuration Cycle Time Manage Return Regulatory Requirements and Compliance Cycle Time Manage Return Transportation Cycle Time Manage Sourcing Business Rules Cycle Time Manage Supplier Agreements Cycle Time Manage Supplier Network Cycle Time Manage Transportation (WIP) Cycle Time Manage Transportation Cycle Time Negotiate & Receive Contract Cycle Time Obtain & Respond to Request for Quote (RFQ) / Request for Proposal (RFP) Cycle Time Order Entry and Maintenance Costs DEFINITION The average time associated with managing compliance to the make regulatory environment The average time associated with managing the performance of supply chain activities The average time associated with managing the performance of return activities The average time associated with collecting plan data The average time associated with managing the planning of regulatory requirements and compliance The average time associated with managing the planning of the supply chain configuration The average time associated with managing raw material inventory The average time associated with managing the product life cycle The average time associated with managing the production network The average time associated with managing production performance The average time associated with managing production rules The average time associated with managing return capital assets The average time associated with managing return data collection The average time associated with managing return inventory The average time associated with managing the return network configuration The average time associated with compliance and regulatory requirements for return products The average time associated with managing return transportation The average time associated with managing source business rules The average time associated with managing supplier agreements The average time associated with managing the supplier network The average time associated with managing (WIP) transportation The average time associated with managing transportation The average time associated with negotiating and receiving a contract The average time associated with obtaining and responding to RFQs/RFPs Includes costs for maintaining the customer database.1 Manage Sourcing Business Rules ES. accepting new orders and adding them to the order system as well as later order modifications.8 Manage Return Regulatory Requirements ER.2 Negotiate & Receive Contract D3.8 Manage PLAN Regulatory Requirements and Compliance EP. D2.7 Manage Supplier Network EM.6 Manage Transportation D3.6 Manage Transportation ED.2 Manage Performance of Supply Chain EP.2. credit check.8 Manage Regulatory Compliance ER.1 Manage Production Rules ER.7 Manage Return Network Configuration ER.3 Manage Return Data Collection ER. 380 June 2006 .2 Manage Performance of Return Processes EP.7 Manage Production Network EM.1 Obtain and Respond to RFP/RFQ D1.4 Manage Return Inventory ER. Inc.6 Manage Return Transportation ES.4 Manage Product Inventory ED.

METRIC Order Fulfillment Costs

Order Fulfillment Cycle Time

DEFINITION Includes costs for processing the order, allocating inventory, ordering from the internal or external supplier, scheduling the shipment, reporting order status and initiating shipment. The average actual cycle time consistently achieved to fulfill customer orders. Any lead time during the order fulfillment process where no activity takes place, which is imposed by customer requirements. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’, which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization. This kind of idle time should not be deducted from Order Fulfillment Cycle Time. The aggregation of the following cost elements (contained in this glossary): The average time associated with packing a product for shipment. Percentage of orders delivered in an undamaged state that meet specification, have the correct configuration, are faultlessly installed (as applicable), and accepted by the customer [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. Components include all items and quantities on-time using the customer's definition of on-time, and documentation - packing slips, bills of lading, invoices, etc. The average time associated with product pick The average time associated with product pick from backroom The average time associated with Plan Processes The average time associated with planning source activities The average time associated with processing inquiries and quotes The average time associated with production and test

PROCESS D1.3, D2.3, D3.3, D3.4

Order Fulfillment Dwell Time

P1, P2, P3, P4, S1, S2, S3, M1, M2, M3, D1, D2, D3, D4, SR1, DR1, SR2, DR2, SR3, DR3 D1.2, D1.3, D2.2, D2.3, D3.3

Order Management Costs Pack Product Cycle Times Perfect Condition

D3 Deliver Engineer-to-Order Product D1 Deliver Stocked Product D1.10 Pack Product D2.10 Pack Product D3.10 Pack Product D1.13, D1.14, D2.13, D2.14, D3.13, D3.14, ED.2

Perfect Order Fulfillment

S2, M2 D3 Deliver Engineer-to-Order Product D2 Deliver Make-to-Order Product D1 Deliver Stocked Product D1.9 Pick Product D2.9 Pick Product D3.9 Pick Product D4.3 Pick Product from Backroom P1 Plan Supply Chain P2 Plan Source D1.1 Process Inquiry & Quote D2.1 Process Inquiry & Quote M1.3 Produce and Test M3.4 Produce and Test M2.3 Produce and Test

Pick Product Cycle Time Pick Product from Backroom Cycle Time Plan Cycle Time Plan Source Cycle Time Process Inquiry & Quote Cycle Time Produce and Test Cycle Time

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METRIC Product Acquisition Costs

Receive & Verify Product by Customer Cycle Time

DEFINITION Product acquisition costs include costs incurred for the production of product: sum of product management and planning, supplier quality engineering, inbound freight and duties, receiving and product storage, incoming inspection, product process engineering and tooling costs. The average time associated with receiving and verifying an order at the customer site

PROCESS S3 Source Engineer-to-Order Product S2 Source Make-to-Order Product S1 Source Stocked Product D1.13 Receive & Verify Product by Customer D2.13 Receive & Verify Product by Customer D3.13 Receive & Verify Product by Customer DR1.3 Receive Defective Product DR3.3 Receive Excess Product DR2.3 Receive MRO Product D4.2 Receive Product at Store D1.8 Receive Product from Source or Make D2.8 Receive Product from Source or Make D3.8 Receive Product from Source or Make D2.2 Receive, Configure, Enter and Validate Order D1.2 Receive, Enter & Validate Order S3.4 Receive Product S2.2 Receive Product S1.2 Receive Product M2.6 Release Finished Product to Deliver M1.6 Release Product to Deliver M3.7 Release Product to Deliver D1.3 Reserve Inventory & Determine Delivery Date P1, P2, P3, P4, S1, S2, S3, M1, M2, M3, D1, D2, D3, D4, SR1, DR1, SR2, DR2, SR3, DR3 P1, P2, P3, P4, S1, S2, S3, M1, M2, M3, D1, D2, D3, D4, SR1, DR1, SR2, DR2, SR3, DR3

Receive Defective Product Cycle Time Receive Excess Product Cycle Time Receive MRO Product Cycle Time Receive Product at Store Cycle Time Receive Product from Source or Make Cycle Time

The average time associated with receiving defective product returns from the customer The average time associated with receiving excess product returns from the customer The average time associated with receiving MRO product returns from the customer The average time associated with receiving product at the customer store The average time associated with receiving a transfer of product to deliver processes from source or make

Receive, Configure, Enter & Validate Order Cycle Time Receive, Enter & Validate Order Cycle Time Receiving Product Cycle Time Release Finished Product to Deliver Cycle Time

The average time associated with receiving and verifying an order at the customer site The average time associated with receiving and verifying an order at the customer site Total elapsed time from time product is received to time it is passed to next process The average time associated with releasing finished product to deliver

Reserve Inventory & Determine Delivery Date Cycle Time Return on Supply Chain Fixed Assets

Return on Working Capital

Route Shipments Cycle Time

The average time associated with reserving inventory and determining a delivery date Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. This includes the fixed assets used in Plan, Source, Make, Deliver, and Return. Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s working capital position verses the revenue generated from a supply chain. Components include accounts receivable, accounts payable, inventory, supply chain revenue, cost of goods sold and supply chain management costs. The average time associated with routing shipments

D3.6 Route Shipments D2.6 Route Shipments D1.6 Route Shipments
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METRIC Schedule Achievement

Schedule Defective Return Receipt Cycle Time Schedule Excess Return Receipt Cycle Time Schedule Installation Cycle Time Schedule MRO Return Receipt Cycle Time Schedule Product Deliveries Cycle Time

DEFINITION The percentage of time that a plant achieves its production schedule. This calculation is based on the number of scheduled end-items or total volume for a specific period. Note: over-shipments do not make up for under-shipments. The average time associated with scheduling the receipt of the return of defective product The average time associated with scheduling the receipt of the return of excess product The average time associated with scheduling the installation of product The average time associated with scheduling the receipt of the return of MRO product The average time associated with scheduling the shipment of the return of MRO product

PROCESS M1.1 Schedule Production Activities M2.1 Schedule Production Activities M3.2 Schedule Production Activities DR1.2 Schedule Defective Return Receipt DR3.2 Schedule Excess Return Receipt D3.4 Schedule Installation DR2.2 Schedule MRO Return Receipt S3.3 Schedule Product Deliveries S2.1 Schedule Product Deliveries S1.1 Schedule Product Deliveries M1.1 Schedule Production Activities M2.1 Schedule Production Activities M3.2 Schedule Production Activities D1.7 Select Carriers & Rate Shipments D2.7 Select Carriers & Rate Shipments D3.7 Select Carriers and Rate Shipments S3.2 Select Final Supplier(s) and Negotiate D1.12 Ship Product D2.12 Ship Product D3.12 Ship Product S1 Source Stocked Product S2 Source Make-to-Order Product S3 Source Engineer-to-Order Product M1.5 Stage Product M2.5 Stage Finished Product M3.6 Stage Finished Product D4.4 Stock Shelf P4 Plan Deliver SR3 Source Return Excess Product SR2 Source Return MRO Product DR1.4 Transfer Defective Product
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Schedule Production Activities Cycle Time

The average time associated with scheduling production activities

Select Carriers & Rate Shipments Cycle Time

The average time associated with selecting carriers and rating shipments

Select Final Supplier(s) and Negotiate Cycle Time Ship Product Cycle Time Source Cycle Time

The average time associated with scheduling the shipment of the return of MRO product The average time associated with shipping product The average time associated with Source Processes

Stage Finished Product Cycle Time Stock Shelf Cycle Time Total Deliver Costs Total Excess Material Return Costs Total Source Return Costs Transfer Defective Product Cycle Time
© Copyright 2006 Supply-Chain Council, Inc.

The average time associated with staging finished product The average time associate with stocking shelves The sum of the costs associated with the Deliver processes. The sum of the costs associated with the receipt of returned excess products from the customer The sum of the costs associated with the return of raw materials to the supplier. The average time associated transfer until product is moved to the next process.
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METRIC Transfer Excess Product Cycle Time Transfer MRO Product Cycle Time Transfer Product Cycle Time Upside Deliver Adaptability

DEFINITION The average time associated transfer until product is moved to the next process. The average time associated transfer until product is moved to the next process. The average time associated transfer until product is moved to the next process. The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the assumption of no other constraints. The maximum sustainable percentage increase in returns of finished goods from customers that can be achieved in 30 days. The number of days required to achieve an unplanned sustainable 20% increase in the return of finished goods from customers. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. The number of days required to achieve an unplanned sustainable 20% increase in production with the assumption of no raw material constraints. Inventory Awaiting Return

PROCESS DR3.4 Transfer Excess Product DR2.4 Transfer MRO Product S1.4 Transfer Product S3.6 Transfer Product S2.4 Transfer Product D1 Deliver Stocked Product D2 Deliver Make-to-Order Product D3 Deliver Engineer-to-Order Product D4 Deliver Retail Product D1 Deliver Stocked Product D2 Deliver Make-to-Order Product D3 Deliver Engineer-to-Order Product D4 Deliver Retail Product DR Deliver Return DR2 Deliver Return MRO Product DR3 Deliver Return Excess Product DR Deliver Return DR2 Deliver Return MRO Product DR3 Deliver Return Excess Product M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order SR1.2 Disposition Defective Product SR2.2 Disposition MRO Product SR1.3 Request Defective Return Authorization SR3.2 Disposition Excess Product SR3.3 Request Excess Return Authorization SR2.2 Disposition MRO Product SR2.3 Request MRO Return Authorization

Upside Deliver Flexibility

Upside Deliver Return Adaptability

Upside Deliver Return Flexibility

Upside Make Adaptability

Upside Make Flexibility

Value of Defective Inventory in Disposition Stage/ Total Inventory Value Value of Defective Product Inventory in Request Return Authorization Stage/ Total Defective Product Inventory Value Value of Excess Inventory in Disposition Stage/ Total Inventory Value Value of Excess Product Inventory in Request Return Authorization Stage/ Total Excess Product Inventory Value Value of Unserviceable MRO Inventory In Disposition Stage/ Total MRO Inventory Value Value of Unserviceable MRO Inventory in Request Return Authorization Stage/ Total MRO Inventory Value

Inventory awaiting return authorization.

Inventory Awaiting Return Inventory Awaiting Return Authorization Inventory awaiting disposition Inventory awaiting return authorization

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METRIC Verify Product Cycle Time Warranty and Returns

DEFINITION The average time associated with verifying raw material product Number of returns within the warranty period. Warranty is a commitment, either expressed or implied that a certain fact regarding the subject matter of a contract is presently true or will be true. Warranty costs include materials, labor and problem diagnosis for product defects. The ratio of usable output from a process to its input.

PROCESS S3.5 Verify Product S2.3 Verify Product S1.3 Verify Product M1.3, M1.4

Warranty Costs Yield

Yield Variability

The condition that occurs when the output of a process is not consistently repeatable either in quantity, quality, or combination of these.

M1, M1.3, M1.4, M2, M2.3, M2.4, M3, M3.4, M3.5 M2 Make-to-Order M2.3 Produce and Test M1.3 Produce and Test M3.4 Produce and Test M1 Make-to-Stock M3 Engineer-to-Order M1.3 Produce and Test M3.4 Produce and Test M2.3 Produce and Test

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BEST PRACTICES
BEST PRACTICE ABC Classification Ability to Track Component/SubComponent Manufacturing Country of Origin Accurate and Approved Process Plans, Routings, Specifications and Procedures Accurate and Approved Process Plans/Specifications Accurate and Approved Work Instructions/Process Plans Accurate and Low Cost Batch Records for Regulatory Compliance DEFINITION None identified Component/lot tracking (lot trace-ability) PROCESS EP.7 Manage Planning Configuration ED.8 Manage Import/Export Requirements ES.8 Manage Import/Export Requirements M1.4 Package M2.4 Package M1.3 Produce and Test M2.3 Produce and Test M2 Make-to-Order M1 Make-to-Stock M2.6 Release Product to Deliver M3.7 Release Product to Deliver M1.6 Release Product to Deliver M2.6 Release Finished Product to Deliver M2 Make-to-Order M1 Make-to-Stock M2.3 Produce and Test M1.3 Produce and Test M1.4 Package M2.4 Package M1.1 Schedule Production Activities M2.1 Schedule Production Activities M3.2 Schedule Production Activities P5.3 Balance Return Resources with Return Requirements S1.1 Schedule Product Deliveries S2.1 Schedule Product Deliveries S3.3 Schedule Product Deliveries SR2.5 Return MRO Product SR1.5 Return Defective Product SR3.5 Return Excess Product

Electronic document management Electronic document management Electronic document management that maintains current Standard Operating Procedures (SOP) Electronic batch records

Accurate and Low Cost Batch/Configuration Records for Warranty and Regulatory Tracking

Electronic batch recording/configuration

Additional Capacity for Overflow Demand

Outsource manufacturing and work force augmentation providers connected to production schedules via the internet.

Advance Planning Engines Applied to Returns Advanced Ship Notices Allow for Tight Synchronization between Source and Make Processes

Advanced math model "solvers" that optimize / minimize constraints, routing, restocking priorities and costs. Blanket order support with scheduling interfaces to external supplier systems

Advanced Shipping Notice

Integrated data sharing with repair facility.

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BEST PRACTICE Advanced Shipping Notices & UCC128 Container Labeling

DEFINITION Bar coding; EDI; integrated transportation/warehouse management

Alignment of Strategic and Business Plans with Long-Term Capacity and Resource Planning All Functions and Organizations Understand Their Impact on Supply/Demand Balancing, Including Sales, Marketing, Product Management, Manufacturing, Customer, Suppliers, Materials Management, and Product Development All Key Participants in the Supply Chain, Including Strategic Partners, Have Full Visibility of the Demand/Supply Plan Alliance and Leverage Agreements Allow Source Suppliers Full Visibility into the Current Return Situations and the Forecasted Return Activity Appointment Scheduling for Pickup and Delivery of Customer Shipments

None identified

None identified

PROCESS D2.10 Receive & Verify Product at Customer Site D1.11 Receive & Verify Product at Customer Site D3.9 Receive & Verify Product at Customer Site D2.11 Load Product & Generate Shipping Documentation D2.13 Receive & Verify Product by Customer D1.11 Load Vehicle & Generate Shipping Documentation D1.13 Receive & Verify Product by Customer D3.13 Receive & Verify Product by Customer D3.11 Load Product & Generate Ship Documents EP.5 Manage Integrated Supply Chain Capital Assets EP.6 Manage Integrated Supply Chain Transportation P1 Plan Supply Chain

Supply Chain Event Management Systems

P2 Plan Source

None identified Shared supply chain forecasting and event management functionality with Source suppliers Transportation Management System (TMS) Maintenance Management

S1 Source Stocked Product P5.2 Identify, Assess, and Aggregate Return Resources ES.6 Manage Incoming Product ED.6 Manage Transportation ER.6 Manage Return Transportation SR3.4 Schedule Excess Product Shipment ED.8 Manage Import/Export Requirements ES.8 Manage Import/Export Requirements EM.1 Manage Production Rules M3.4 Produce and Test M2.3 Produce and Test M1.3 Produce and Test

Arrange for Shipping Insurance in Case Of In-Transit Loss or Damage Assessing Export/Import Requirements during Time of Product Development/Manufacture Attribute-Based Process Planning Authorize Each Operation to Assess the Quality of the Previous Operations

Preventative management Multi-country Export/Import documentation compliance Computer aided process planning / recipe management None identified

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BEST PRACTICE Automated Configuration Management

DEFINITION Configuration

Automated Conformance Monitoring And Control Automated Conversion of Engineering Drawings into Product Specifications Automated Data Entry

Internal automatic notification of conformance, including holding of product until requirements are met None identified Scanning with RFID/Bar-codes systems

PROCESS M3.1 Finalize Engineering D2.2 Receive, Configure, Enter and Validate Order M3.1 Finalize Production Engineering EM.8 Manage Regulatory Compliance M3.1 Finalize Engineering M3.1 Finalize Production Engineering ED.5 Manage Deliver Capital Assets ER.5 Manage Return Capital Assets D4.3 Pick Product from Backroom ER.5 Manage Return Capital Assets ES.6 Manage Incoming Product ED.6 Manage Transportation ER.6 Manage Return Transportation EM.1 Manage Production Rules SR3.1 Identify Excess Product Condition EM.1 Manage Production Rules M2.6 Release Product to Deliver M3.7 Release Product to Deliver M1.6 Release Product to Deliver M2.6 Release Finished Product to Deliver D4.2 Receive Product at Store D4.1 Generate Stocking Schedule SR3.2 Disposition Excess Product D4.3 Pick Product from Backroom S2 Source Make-to-Order Product

Automated Directed Picking Automated Disposition Instructions for Returns Based on Data Interchange with Strategic Providers Automated Documentation for International Shipments

A pick list displayed on a handheld device that directs picks and relieves inventory from backroom locations Advanced planning and scheduling capability coupled with decision support logic. Transportation Management System (TMS) Maintenance Management

Automated Engineering Specifications Automated Inventory Visibility and Planning System to Highlight Inventory in Excess of Requirements Automated Links To Existing CAD & CAM Information Automated Notification of Laboratory Regarding Sample Availability

Automated Intelligence (Heuristic) - based engineering specifications system Automated inventory planning package linked to real time demand data and inventory business rules. Electronic hypertext or links to existing database of detail/parts/setup sketches/drawings Interface between production system and LIMS

Automated Pick List

System generated pick-lists based on picking / batching rules. None identified

Automated Registry of Inventory Return Locations by Item to Speed Identification of Proper Return Location Automated Replenishment of Back Stock Based on Minimum Stocking Levels Automated Statistical Process Control (SPC)

None identified None identified

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BEST PRACTICE Automated Update of Customer Excess Material Return Transaction History

DEFINITION - Use trend analysis to influence inventory level decisions. - Web-based alerts to identify update occurred and when pre-determined thresholds are exceeded. None identified RFID, smart cart or customer self-service charges goods to card upon store departure. Parametric driven (Group Technology based) manufacturing design system Software specific to industry regulations and standards (e.g. may be software to produce MSDS documents, or FDA requirements, etc.) Bar Coding & Radio Frequency Communications

PROCESS ER.3 Manage Return Data Collection

Automated Update of Supplier Performance Information Automatic Customer Payment Automatic Generation / Configuration Of Tooling / Set-Up Instructions Automatic Generation And Submission Of Conformance Documents Automatic Identification

ES.3 Maintain Source Data D4.6 Checkout EM.1 Manage Production Rules EM.8 Manage Regulatory Compliance D2.8 Receive Product from Source or Make D3.8 Receive Product from Source or Make D1.8 Receive Product at Warehouse D1.8 Receive Product from Source or Make M3.5 Package M2.4 Package M1.4 Package EM.1 Manage Production Rules D2.2 Receive, Configure, Enter and Validate Order D1.2 Receive, Enter & Validate Order EM.1 Manage Production Rules D1.3 Reserve Inventory & Determine Delivery Date D2.3 Reserve Resources & Determine Delivery Date D1.3 Reserve Inventory & Determine Delivery Date D2.3 Reserve Resources & Determine Delivery Date M1.2 Issue Product M1.2 Issue Material M2.2 Issue Sourced/InProcess Product M3.3 Issue Sourced/InProcess Product ES.6 Manage Incoming Product ED.6 Manage Transportation ER.6 Manage Return Transportation

Automatic Label and Seal Verification Automatic Link to Recipe Management, PLC Program, CNC Program Systems, Etc., to Deliver New Manufacturing Documentation Automatic Multi-level Credit Checking: Dollar Limits; Days Sales Outstanding; Margin Testing Automatic Notification When to Begin and When to Complete Automatic Reservation of Inventory and Dynamic Sourcing of Product for Single Shipment to Customer Available-to-Promise (ATP)

Automatic interface to inspection systems Seamless application interface to manufacturing planning documentation and CAM systems Integrated Order/Financial Management

Workflow/Groupware Integrated order management system that treats each order line as a separate order with integration to inventory source and status; Real-time inventory management Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a customer order. Flexible back flush logic

Back Flush Material at Order Completion

Backhaul Trading Exchange

Pooling

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BEST PRACTICE Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy

DEFINITION - Bar code interface for data collection devices - Generate bar coded receiving documents - Product serial number used as identifier - RFID

Blanket Purchase Orders Cover Period Requirements Build Load in Stop Sequence

None identified Integrated inbound/outbound transportation planning (i.e. 1st truck destination loaded last, etc.). None identified

Build Subassemblies to Forecast at Highest Generic Level in Bill of Material; Maintain Flexibility While Minimizing Cycle Time and Inventory Position Build Subassemblies/Products to Forecast at Highest Generic Level to Minimize Make Cycle Time Business Intelligence (BI)

PROCESS S3.4 Receive Product S3.5 Verify Product S2.3 Verify Product DR1.3 Receive Defective Product S2.2 Receive Product S1.2 Receive Product S1.3 Verify Product DR2.3 Receive MRO Product DR3.3 Receive Excess Product P2.4 Establish Sourcing Plans D3.5 Build Loads D1.5 Plan & Build Loads D2.5 Plan & Build Loads D1.5 Build Loads D2.5 Build Loads M3.2 Schedule Production Activities

None identified A data warehouse / data mart is the source of all planning (master) data, business rules and transaction data. Analytical tools enable the ongoing maintenance and improvement of the business rules based on actual data. Convenient availability to business rules and return criteria. Supply chain modeling and visualization system Supply Chain modeling capabilities, i.e. Advanced Planning Systems. None identified None identified None identified None identified

M2 Make-to-Order P1.3 Balance Supply Chain Resources with Supply Chain Requirements

Business Rules Are Clearly Communicated with the Customer Capability to Run "Simulated" FullStream Supply/Demand Balancing for "What-If" Scenarios Capability to Run Multiple "Simulated" Full-Stream Supply/Demand Balancing Against Long-Term Capacity Plans and Scenarios Capability Transfer to Customer Capability Transfer to Organization Capacity and Supply Constraints Are Balanced Against Demand during the Planning Cycle Capacity and Supply Constraints Identified During MPS Schedule Process Are Balanced Against Demand during the Planning Cycle Capture and Maintain Mode Specific Data

ER.2 Manage Performance of Return Processes P1 Plan Supply Chain EP.6 Manage Integrated Supply Chain Transportation EP.5 Manage Integrated Supply Chain Capital Assets EP.4 Manage Integrated Supply Chain Inventory S2.4 Transfer Product S1.4 Transfer Product S3.6 Transfer Product P2.1 Identify, Prioritize, and Aggregate Product Requirements P2.2 Identify, Assess, And Aggregate Product Resources ES.6 Manage Incoming Product ED.6 Manage Transportation ER.6 Manage Return Transportation

Transportation Management System (TMS) Maintenance Management

© Copyright 2006 Supply-Chain Council, Inc.

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4 Schedule MRO Shipment SR1.5 Manage Capital Assets Change in the Demand Signal Instantaneously "Reconfigures" the Production and Supply Plans Changeover Reduction / Continuous Improvement Program Event-driven supply chain re-planning Changeover process flow element identification.6 Route Shipments D2. and other conditions.5 Manage Equipment and Facilities ES. Prioritize. carrier selection. inbound raw materials and outbound finished goods) specifying service levels.8 Manage Return Regulatory Requirements ER. Overseas packaging.6 Route Shipments & Select Carriers D3.2 Receive Product ES. Clarify in Advance Hazardous Material Packaging.4 Receive Product S2. and measurement tool. instructional directions to conduct changeover.2 Receive Product D1. State or Local Regulation.8 Manage Return Regulatory Requirements 391 June 2006 . Labeling and Shipping Requirements Clarify in Advance If the Product to be Returned Requires Specific. and rating Carrier/Route Optimization Based on Continuous Movement and Consolidation/Pooling Categorize 100% of Total Inventory (Active.11 Load Product & Generate Shipping Documentation D3. Carrier Selection Based on Performance Criteria at Least Cost Scheduling. Software to identify operational constraints to the MAKE processes to assist in directing resources toward bottleneck functional areas.6 Route Shipments P2.6 Route Shipments D1. and Aggregate Product Requirements M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock M3.BEST PRACTICE Carrier Agreement DEFINITION Carrier agreements are agreements between a company and its domestic and global carriers (for both. Excess.2 Schedule Production Activities P1 Plan Supply Chain EM. Obsolete) for Appropriate Action Route scheduling. Formal Authorization from the Service Provider per Federal. ER.9 Manage Supplier Agreements ES. Usable.7 Manage Supplier Network S1. which can be used to prioritize and track results of improvement efforts. labeling and shipping regulatory requirements are given specific attention.4 Schedule Excess Product Shipment D3. carrier selection. payment terms.11 Load Vehicle & Generate Shipping Documentation SR2. and rating None identified Cellular and Demand Pull Manufacturing Cellular Manufacturing Support for cellular and demand pull manufacturing execution Manufacturing is broken into work cells PROCESS D2. Assess.11 Load Product & Generate Ship Documents S3. Participants at all customer and service provider locations involved clearly understand all regulatory requirements at each step in the return process .4 Schedule Defective Product Shipment SR3. And Aggregate Product Resources P2. Prior to Returning © Copyright 2006 Supply-Chain Council.2 Identify.1 Identify.2 Assess Supplier Performance ES. Inc.

Forecasting and Replenishment is a concept that allows collaborative processes across the supply chain. 392 June 2006 .BEST PRACTICE Clarify Point of Contact and Return Location Collaboration among Operations Strategy Team DEFINITION Electronic rules for business relationships and transactions. Forecasting.3 Manage Deliver Information S3. and Aggregate Supply Chain Requirements Collaborative Planning.8 Manage Return Regulatory Requirements © Copyright 2006 Supply-Chain Council.html) Interactive. Capacity planning systems with accurate production capability data.1 Manage Sourcing Business Rules D1. Problems.8 Manage Return Regulatory Requirements Comparative Analysis of Supplier Performance is Used in Sourcing Decisions Compare Local Customs Requirements to Your Process Procedures to Ensure All Requirements Are Accounted for Before Shipping Complete Lot History Software application with data analysis capability None Identified Inventory by lot of sourced/in-process or discrete order /usage reporting by lot or discrete order None identified None identified Comprehensive History of Customer Interactions Including Order History.2 Issue Sourced/InProcess Product ED.2 Issue Product M1..3 Request Defective Return Authorization SR3. Replenishment (CPFR) Collaborative Planning/Scheduling Collaborative Review and Agreement of Business Rules Prior to Contract Execution Combine Consolidation Needs with Other Products/Divisions/Companies Communicate with Customer before the Return to Establish What Types of Returns Are Acceptable Supply Chain Capacity Planning Systems Collaborative Planning. using a set of process and technology models.2 Assess Supplier Performance ER. Supply Chain Advanced Planning Systems Supply Chain Integration Systems Integration between supply chain advanced planning and ERP execution systems PROCESS SR1.4 Establish Supply Chain Plans P1.cpfr. Claims. Inc. In Sourcing) Confirm All Documentation and Inspection Requirements Before Shipping M1.7 Manage Production Network ES. Etc.1 Authorize Excess Product Return DR1.1 Identify.3 Request Excess Return Authorization P1.2 Issue Material M2.1 Authorize MRO Product Return ES. Web based access to current spend data available from enterprise to part level None identified None identified P1 Plan Supply Chain EM..1 Authorize Defective Product Return DR2.1 Identify Sources of Supply None Identified ER.org/intro. on-line planning/scheduling systems.. Concurrent Engineering is Used to Tightly Link Sourcing into the Product Development Process Make/Buy Decision Process (Outsourcing vs.4 Consolidate Orders DR3. (From www. Prioritize.

cause and effect analysis.5 Plan & Build Loads D1.5 Plan & Build Loads and Shipments D2.3 Schedule Product Deliveries D2. Consolidate Shipments Through Cross Docking . Traffic Lane.4 Schedule Defective Product Shipment SR3.6 Manage Return Transportation D3. Enter and Validate Order D1.4 Schedule Excess Product Shipment EM. configuration and customer service applications Consignment inventory management Integrated load planning and building with warehouse management None Identified Transportation modeling and rate analysis Consolidation of Inbound and Outbound Requirements Integrated inbound/outbound transportation planning Consolidation of Return Carriers Outbound logistics software to assist with route. and Delivery Plans) Consignment Agreements Are Used to Reduce Assets and Cycle Time While Increasing the Availability of Critical Items Consolidate Orders by Customer. Prioritize.6 Route Shipments D1. Source. Telemetry to Automatically Communicate Replenishment of Chemicals Historical trending. planning.4 Consolidate Orders ER. Configure. Especially Those Who Are New to the Process Confirm Changes in Condition Code Policies Are Promptly Communicated to All Employees and Supply-Chain Partners. Inc.2 Assess Supplier Performance ER.5 Build Loads D2. Vendor Managed Inventory.2 Disposition Defective Product SR1.Coordinate with Other Shipments Consolidation of Carriers DEFINITION None identified PROCESS SR1. 393 June 2006 .2 Receive. Carrier.3 Manage MAKE Information ES.4 Consolidate Orders D1.2 Disposition Defective Product P3.1 Identify. Integrated demand/deployment planning to customer location driven by POS. Inventory.6 Route Shipments D2.6 Route Shipments D1.4 Schedule MRO Shipment SR1. Etc. Continuous Improvement Continuous Improvement and Development is Driven and Measured through the Performance Review Process Continuous Improvement is Planned through Process Reviews and Customer Feedback Continuous Replenishment Programs.6 Route Shipments & Select Carriers D3. Consideration of Supplier's Material Availability in Company's Supply Resources (Including Supplier's Production Plans & Capability.2 Manage Performance of Return Processes D2.BEST PRACTICE Confirm Asset Return Condition Codes Are Clearly Understood by All Employees.1 Schedule Product Deliveries S3.5 Build Loads SR2. and Key Performance Indicators Scheduling reviews of processes for possible improvements None identified Avenue to receive customer comments.1 Schedule Product Deliveries S2. Customer movement data © Copyright 2006 Supply-Chain Council. Enter & Validate Order None identified Digital linkage to supplier quoting.5 Plan & Build Loads D3. and Aggregate Production Requirements S1.2 Receive.5 Build Loads D3.

2 Assess Supplier Performance ES.2 Schedule Production Activities M2.12 Ship Product D3. In a traditional DC.8 Receive Product from Source or Make D2. 394 June 2006 . the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes.6 Route Shipments & Select Carriers D2.2 Assess Delivery Performance D4.5 Build Loads D1.8 Receive Product from Source or Make D1. Inc.2 Access Delivery Performance ED.BEST PRACTICE Cost Accounting System to Determine the Best Return Process to Follow from a Cost of Business Perspective Cost Reduction and or Cost Avoidance Are Opportunities Are Identified.1 Schedule Production Activities M3. Implemented and Measured on a Periodic Basis Create and Maintain Multiple Suppliers and Multiple Supplier Sites to Record Information about Individuals and Companies from Whom You Want to Purchase Catalogue Goods and Services Cross Training/Certification DEFINITION ABC costing system None identified PROCESS P5.8 Receive Product from Source or Make D3. Cross docking actively links the receiving and shipping processes.11 Load Vehicle & Generate Shipping Documentation D1. In a DC.7 Manage Supplier Network None Identified HR/certification support Cross-Docking Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. both cross docking (no storage) and traditional (with storage) operations might take place.6 Route Shipments D1.3 Balance Return Resources with Return Requirements ES.3 Manage Deliver Information ED.5 Plan & Build Loads D1.12 Ship Product D2.6 Checkout Customer Profile Drive Recognition Upon Checkout None identified © Copyright 2006 Supply-Chain Council.5 Build Loads D2.5 Plan & Build Loads D2.11 Load Product & Generate Ship Documents D3.6 Route Shipments ED. CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems CRP/VMI Integrated Load Building.6 Route Shipments D3.1 Schedule Production Activities D1.5 Build Loads D3. Routing & Scheduling with Advanced Ship Notice (ASN) Internet-enabled package/shipment tracking WEB based Shared systems Customer Access to Online Tracking of Order Status and Shipping Information Customer Initiated Package Tracking M1.12 Ship Product D2.11 Load Product & Generate Shipping Documentation D3.

2 Receive Product S1. Electronically link Return authorization. or Deliver) on Return Authorization Defined Stocking Levels and Criteria Deliveries Are Balanced Throughout Each Working Day and Throughout the Week Software that provides customer input and keeps the customer informed about the planning of the production and delivery process by managing all contacts and communication with the customer thorough all channels including internet and traditional sales and customer service channels. and Aggregate Delivery Requirements Customer Sends Receiving Advanced Shipment Notification Prior to Shipment Customer Service Data Validation Including Geo-Coding Data Accessibility across the Enterprise for Visibility by Discrete Business Units Defective Products Scheduling Identifies Next Destination (Source.2 Receive Product S2.2 Schedule Production Activities © Copyright 2006 Supply-Chain Council.3 Balance Supply Chain Resources with Supply Chain Requirements None identified Web based access to various levels of enterprise data Utilize electronic links DR3. Prioritize.5 Verify Product S3. Return schedule and shipping documents.3 Receive MRO Product ED.) Provide Accurate Visibility into Actual Demand via Customer Forecasts.3 Balance Delivery Resources and Capabilities with Delivery Requirements Repetitive scheduling and sequencing M2. Demand Flow Leadership Demand Priorities Reflecting Strategic Customer Relationships as Business Policies Are Automatically Followed in Allocating Resources. and Inventory Positions Customer Relationship Management (CRM) DEFINITION Tightly integrated supply chain or demand planning with point of sale and customer inventory systems PROCESS P4. Product Plans. Make.3 Manage Return Data Collection DR1. Etc.3 Maintain Source Data ER. Algorithms use the business rules and metrics as the drivers for the planning engine.1 Schedule Production Activities M3.3 Pick Product from Backroom S3. Production Plans.3 Balance Supply Chain Resources with Supply Chain Requirements None identified None identified Delivery Schedules Are Collaboratively Developed with Customers Demand Planning.1 Identify.3 Verify Product S1. Software that provides multiple data models including the business rules and metrics for the entire supply chain planning process. collaborative data-sharing environment. 395 June 2006 . P1.3 Manage Deliver Information ES. Inc. Rules-based distribution planning system Trading partner agreements P4. First-In-FirstOut (FIFO) is Utilized as the Default Scheduling Priority Demand Pull Mechanisms Web-based access to plant scheduling status. . EDI.4 Transfer Defective Product D4.4 Receive Product S2.3 Verify Product M2 Make-to-Order M3 Engineer-to-Order P1.3 Receive Defective Product DR2.3 Receive Excess Product DR1.BEST PRACTICE Customer Relationship and Digital Linkages (XML.

And Aggregate Supply Chain Resources P1. Auto-Tendering for direct ship utilizing EDI/XML protocols.4 Establish Sourcing Plans P1. XML. Electronic documentation submission via EDI and/or internet. 396 June 2006 .2 Identify.6 Stage Finished Product M1.) is Used to Provide Real-Time Demand Information and Handle Routine Transactions Digital Links (XML Based.1 Schedule Production Activities M1.4 Produce and Test SR1.8 Manage Import/Export Requirements M3. Prioritize.2 Issue Sourced/InProcess Product M3. Direct Transfer of Documents to Recipient and Forwarder Direct Transfer of Documents to Recipient and Forwarder © Copyright 2006 Supply-Chain Council.8 Manage Import/Export Requirements Develop Proactive Transit Damage Programs Digital Linkage (EDI.6 Stage Product M2.3 Receive Defective Product DR2.8 Manage Import/Export Requirements ES. EDI.1 Identify. Internet Trading Exchanges.6 Manage Return Transportation P2.BEST PRACTICE Demand-Pull Manufacturing. Minimize time spent in product movement.1 Schedule Production Activities M3 Engineer-to-Order M1 Make-to-Stock M2. Share production status with customers and transportation providers via web-based tools. etc. Etc.2 Issue Material M2.8 Manage Import/Export Requirements ES. Including Active Reduction of Manufacturing Systems Time and WIP Through the Use of Demand-Pull Mechanisms and Visual Controls Demand-Pull Mechanisms.1 Manage Production Rules M3.5 Stage Product M2.3 Receive MRO Product ER. envelop sizes.2 Identify.2 Issue Product M1.5 Stage Product M3.3 Request Defective Return Authorization SR3. vessel or batch sizes) Machine productivity and downtime monitoring Clarification as to who will pay in-bound and out-bound freight cost. Assess.5 Stage Finished Product ED.3 Issue Sourced/InProcess Product EM. B2B Integration and Application Server Systems Direct Connection to Customs Clearance Direct Ship from Factory to Customer/Channel Electronic documentation submission via EDI and/or internet. and Aggregate Supply Chain Requirements P1.3 Request Excess Return Authorization DR3. and Aggregate Supply Chain Resources ED.3 Receive Excess Product DR1. Assess. Intermediate Products. PROCESS M1. or Subassembly Area Design For Production Design/Upgrade Production Equipment to Maximize Flexibility and Avoid Line Stoppages Develop and Clarify Mutually Understood Cycle Times to Process Return Authorizations Develop Local Receiving Process Close to Repair DEFINITION Support of demand-pull mechanisms (Kanban. Kanban Replenishment Signals from Stockroom. tank.) based on rate schedules and user-defined minimum/maximum trigger points None identified Table of manufacturing capacities or design envelops (capacities. Inc. Etc.4 Establish Supply Chain Plans P1. replenishment signals.) Among Supply Chain Members None Identified None identified Real-time exchange of supply chain information between supply chain members collaborative planning systems.

Integration with Procurement Systems & Electronic Commerce with Vendors Drive Deliveries Directly to Stock or Point-Of-Use in Manufacturing to Reduce Costs and Cycle Time Pay on receipt Specify delivery location and time (to the minute) Specify delivery sequence Specify return disposition location and time. cost.3 Reserve Resources & Determine Delivery Date D2. System data field to specify where the part / product shipping container should be removed.8 Manage Import/Export Requirements ES. EDI.9 Pick Product © Copyright 2006 Supply-Chain Council.8 Receive Product from Source or Make S2.1 Schedule Production Activities M3.2 Disposition Defective Product SR3. Reuse of intermediate WIP containers for finished goods.9 Pick Product D2.4 Manage In-Process Products (WIP) Dynamic Deployment Based on Constraint Based Planning and Optimal Scheduling Dynamic Location Assignment Including Lot Control.8 Manage Import/Export Requirements D2. etc) or Internet procurement networks to customer service linkage Multi-plant supply/demand planning and execution PROCESS P2 Plan Source P4 Plan Deliver P3 Plan Make Control who can create.8 Receive Product from Source or Make D1.O. 397 June 2006 .8 Pick Staged Product D3.2 Schedule Production Activities EM.6 Transfer Product Drive Returns Directly to Return Stock Point of Disposition to Reduce Cost and Cycle Time Drum-Buffer-Rope Scheduling Technique (DBR.4 Transfer Product S3.8 Receive Product at Warehouse D1. and resource optimization Real time inventory control.9 Pick Product D3. Download P.1 Manage Production Rules ED. EM.4 Transfer Product S1. Inc. Quality Assurance D2. Best practice is to remove the dunnage as soon as possible unless part / product damage will result. Zoned Picking. revise and access information Electronic documentation submission via EDI and/or internet. stock locator.8 Receive Product from Source or Make D3. and rules based picking logic Dunnage Control SR1.8 Receive Product from Source or Make D2. & Advanced Ship Notices for Automated Receiving and Put Away DEFINITION Bi-directional Digital Links (XML. Advanced planning and scheduling logic with constraint.7 Pick Staged Product D1.1 Schedule Production Activities M2.2 Disposition Excess Product M1. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput.BEST PRACTICE Distinct and Consistent Linkages Exist to Ensure Disruptions and Opportunities in Material Resources Are Quickly and Accurately Communicated and Acted Upon Distinct and Consistent Linkages Exist to Ensure that Disruptions and Opportunities in Production Are Quickly and Accurately Communicated and Responses Made Document Control Documents Generated Automatically During Shipment Preparation.

7 Manage Supplier Network S3. Quick Response Electronic Catalogues/Malls Electronic Commerce (Customer Visibility of Stock Availability. recipes/formulas.8 Pick Staged Product D1.1 Identify Sources of Supply EM.11 Load Product & Generate Shipping Documentation D3..1 Manage Production Rules D2.9 Pick Product D2.8 Receive Product at Warehouse D1. Enter and Validate Order D1. 398 June 2006 . Confirmation.2 Manage Performance of Supply Chain D1 Deliver Stocked Product D1 Deliver Stocked Product D2. and Time EDI Links between Manufacturing and Distributor to Achieve Visibility of Complete Finished Goods Inventory and Expected Shipments EDI Links Integrate Supplier Resource Information (Inventory.8 Receive Product from Source or Make P5. ABC Frequency of Access Dynamic Return Restocking Management Dynamic Simulation of Picking Requirements Optimized for Labor. and rules based put away logic Dynamic prioritization of restocking plans in order to rapidly re-sell products that are in demand thus reducing new inventory demand.9 Pick Product D1. Cost.9 Pick Product D3. instructions. Scheduling None identified EDI applications and integrated order management EP. stock locator. Credit Approval). On-Line Stock Check and Reservation of Inventory Electronic Data Interchange Can Be Used To Send Rfqs and Technical Information to and from Potential Suppliers to Determine Supplier Capability to Fulfill Requirements So that They May Be Added to Supplier Network Electronic Data Interchange is Used to Send Technical Information to and from Potential Suppliers Electronic Documentation and Imaging Electronic Generation and Download of Shipping Documents DEFINITION Real time inventory control.3 Reserve Inventory & Determine Delivery Date P2 Plan Source None identified Inter-company resource planning with EDI/Internet communication None identified Demand Planning. specifications. to all users None identified S3.2 Select Final Supplier(s) and Negotiate Electronic Data Interchange None identified Graphical display of drawings. Quality Assurance. Deployment.11 Load Product & Generate Ship Documents D1.BEST PRACTICE Dynamic Location Assignment Including Lot Control.3 Balance Return Resources with Return Requirements D3. Rules based picking logic and simulation PROCESS D3. Inc.2 Receive. Capacity Availability.2 Receive.8 Receive Product from Source or Make D1. diagrams. Configure. Use of Hand-Held Terminals for Direct Order Entry.11 Load Vehicle & Generate Shipping Documentation © Copyright 2006 Supply-Chain Council. Etc. Enter & Validate Order ES.7 Pick Staged Product D2.) with Own Resources Efficient and Effective Benchmarking Process Leveraging Cross Industry Metrics and Definitions Efficient Consumer Response (ECR). Zoned Put Away. etc.

Shipments.BEST PRACTICE Electronic Manifest and Electronic Billing DEFINITION Transportation Management System (TMS) Maintenance Management Electronic Matching Between POS Data and Store Inventory (Shelves and Back Room) Electronic Material Move Transactions Integrated Software Systems Automated process control and/or barcode data collection Electronic Reminders of Possible Scheduled Maintenance Electronic Sourcing and Negotiation Pull signals.12 Invoice & Receive Payment D3. SR1. Cheaper to Administer) Enable Customer-Service Representatives to Complete the Bill Of Lading for the Customer Including Carrier Routing.1 Manage Business Rules for Return Processes ES.3 Issue Sourced/InProcess Product M2. and Aggregate Delivery Requirements Clarification of policy if authorizations are not processed within the expected cycle time.6 Stage Product M2. Enter & Validate Order None identified © Copyright 2006 Supply-Chain Council.9 Manage Supplier Agreements D3. Prioritize.3 Receive Excess Product DR1.3 Request Defective Return Authorization SR3.6 Manage Transportation ER.2 Receive. Weight.2 Issue Product M3.13. and Current Inventory Positions None identified PROCESS ES. Scheduled Material Receipts. Inc.6 Stage Finished Product M2. Customer Credit History. Enter and Validate Order D1. Lowers Safety Stock Requirements. Description and Class to Minimize Guesswork & Wrong Estimates Enable Real-Time Visibility into Backlog.6 Manage Return Transportation P4.15 Invoice D1. Prioritize.6 Manage Incoming Product ED.2 Issue Material M3.1 Manage Sourcing Business Rules ES.1 Identify.1 Identify.15 Invoice DR3.5 Stage Finished Product M3.3 Receive Defective Product DR2. Configure. Invoice & Receive Payment D2. and Aggregate Delivery Requirements M1. Order Status.11 Invoice & Receive Payment D1.15 Invoice D2. Business Rules for electronic sourcing process and hierarchy None identified Electronic Transfer of Shipment Information to Finance Electronically Track Shipment from Customer to Service Provider None Identified Eliminate "Special Deals" Sales to Reduce Returns and Improve Forecast Accuracy (Reduces Uncertainty.5 Stage Product M1. 399 June 2006 .5 Stage Product ER.2 Issue Sourced/InProcess Product M1.3 Receive MRO Product P4.2 Receive.3 Request Excess Return Authorization D2.

1 Manage Sourcing Business Rules ES.7 Manage Supplier Network ER.1 Identify. Part / WIP location by date received for those parts that must be stocked or staged in a holding area B2B Integration and Application Server Systems Intranet and Extranet communications tools EM. Make.11 Load Product & Generate Shipping Documentation D3.5 Manage Equipment and Facilities First In . IT © Copyright 2006 Supply-Chain Council.7 Manage Supplier Network ES.7 Deliver and/or Install P4. quality. Prioritize. asbuilt documentation None identified Pilot by Wal-Mart.9 Manage Supplier Agreements SR1.1 Manage Production Rules D4.First Out Forecasts Are Replaced with Actual Customer Replenishment Signals and Orders Where Possible Full Internal (And External If Source Suppliers Share in the Return Process Responsibilities) Visibility to Return Plans Full Visibility of Credit History by Shipping Personnel System software to list checklist items.4 Manage In-Process Products (WIP) P4.5 Manage Capital Assets ED.5 Manage Deliver Capital Assets EM.4 Establish and Communicate Return Plans D2.BEST PRACTICE Enterprise Level Policies/Rules with Local Execution DEFINITION Web based access to enterprise level business rules Enterprise Level Spend Analysis None identified Establish Designated Processes for Scheduling and Receiving Excess Inventory Establishment of Criteria to Rank Suppliers Evaluate Supplier Network for Duplicates Evaluate the Benefits of Out-Sourcing the Excess Material Return Process Excess Products Scheduling Identifies Next Destination (Source.2 Schedule Excess Return Receipt ES.9 Manage Supplier Agreements DR3.1 Manage Business Rules for Return Processes DR3. and Aggregate Delivery Requirements June 2006 None identified Genealogy Tracking Goals / Performance Plans Ideal Stock Position Based on Days/Weeks of Supply Where-used listing of as-planned vs. Inc. and Aggregate Delivery Requirements P5. Utilize electronic links PROCESS ES.1 Manage Sourcing Business Rules ES.11 Load Vehicle & Generate Shipping Documentation EM.11 Load Product & Generate Ship Documents D1.5 Manage Equipment and Facilities ES. Prioritize.4 Transfer Excess Product EM.1 Identify Excess Product Condition ES. price performance as well as any other criteria such as terms and conditions Supplier Merge Programs for duplicates Enables customer to focus on core competencies.1 Identify Defective Product Condition SR3. report results of audit & forward actions to be taken Automated Item Cubing and Weighting systems Software to capture actual performance history / costs of operations with capability of predicting "best cost action plans" relating to maintaining equipment and facilities. 400 . or Deliver) on Return Authorization Facility & Equipment Environmental / Safety Audit System Facility Master Plan Factory Floor Electronic Decision Making Information System None Identified Utilize supplier delivery.1 Identify.

Customer Master Record None identified Transportation Management System (TMS) Maintenance Management ED. All required planning and execution data is integrated and shared in between all functional areas within an organization. Algorithms use the business rules as the driver for the planning engine. genealogy Both customer and Service Provider departments are alerted at the same time and viewing the same information.3 Manage PLAN Data Collection Integrated Demand and Supply Planning . Warehouse Management.7 Manage Planning Configuration Supplier managed inventories with scheduling interfaces to external supplier systems to replenish None Identified None Identified Tracking. Supply Chain performance dashboard capability.Demand Planning.2 Schedule MRO Return Receipt EP.BEST PRACTICE Identification of Suppliers Who Will Participate in Consignment Inventory Programs Identification of Suppliers Who Will Participate in Kanban Programs Identification of Suppliers Who Will Participate in Procurement Split (Two or More Suppliers Sharing Purchase Requirements) Programs Identification of Suppliers Who Will Participate in Vendor Managed Inventory (VMI) Programs Implement Employee Involvement Programs Incorporates leading practices such as Efficient Consumer Response. Integrated Edit at Order Entry Time Integrated Facility Management Integrated Order Management.1 Manage Business Rules for PLAN Processes D2.11 Load Vehicle & Generate Shipping Documentation D3. GL Charging Integrated Transportation Visibility Memory based planning systems provide one single data model and data mart (including the business rules) for the entire supply chain planning and execution process.2 Schedule Defective Return Receipt DR2. Vendor Managed Inventory.Advanced shipping notices .5 Manage Return Capital Assets .11 Load Product & Generate Ship Documents EP.4 Produce and Test EP.7 Manage Supplier Network ES.11 Load Product & Generate Shipping Documentation D1.7 Manage Supplier Network ES.1 Manage Deliver Business Rules ED. Interface to supplier's shipping system to financials EM.6 Manage Transportation ER.6 Manage Incoming Product ED.Real time shipping tracking © Copyright 2006 Supply-Chain Council. Product. Inc. Supply Planning and especially the Supply Plan Execution Are no longer disconnected. 401 June 2006 .7 Manage Supplier Network ES. and Replenishment. Forecasting.7 Manage Supplier Network M2 Make-to-Order M1 Make-to-Stock M3.6 Manage Return Transportation ER. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics.4 Manage In-Process Products (WIP) DR1.7 Manage Product Life Cycle ES. and real time point of consumption reporting. Cost. In-Process Product (WIP) Handling Rules Integrate Return Planning with Maintenance and Inventory Planning to Optimize the System Integrated Business and SupplyChain Planning Processes Where Cross-Functional Input is Leveraged to Set Business Rules Integrated Credit Checking DEFINITION Consignment Inventory Management Electronic Kanban Support None identified PROCESS ES. Collaborative Planning.

BEST PRACTICE Internet Exchanges Internet Ordering Inventory Allocation Exception Process is Clearly Defined and Jointly Owned by Manufacturing and Sales Inventory is Planned at the Part Level.2 Identify. and Aggregate Supply Chain Resources Involve Your Other Supply-Chain Partners If Possible to Leverage Transportation throughout the Chain Item/Shelf Scanning Upon Put-A-Way Items Are Relieved from Inventory When Item is Removed from Shelf JIT Environment Joint Service Agreements (JSA) Utilization of transportation management system (TMS) to manage returns. Assess. RFID. Exchanges are an open procurement network. and Aggregate Supply Chain Requirements S3 Source Engineer-to-Order Product S2 Source Make-to-Order Product S1 Source Stocked Product P1.2 Identify.6 Manage Return Transportation D4.3 Balance Production Resources with Production Requirements P3. And Aggregate Product Resources P2. accessible to any buyer and focused on new Internet-enabled purchasing models like spot buys or reverse. on-line communications between source and demand Collaborative Planning Systems © Copyright 2006 Supply-Chain Council.4 Stock Shelf D4. PROCESS ES.7 Manage Production Network P1.2 Identify. and Aggregate Production Resources P2.3 Reserve Inventory & Determine Delivery Date P2. both intra and inter-company within the supply chain.5 Fill Shopping Cart EM. smart cart or customer self-service reduces system inventory upon item pick. OAGI) to automatically query inventory levels.4 Establish Supply Chain Plans P1. None identified None identified None identified None identified Digital Linkages using XML standards (RosettaNet. Assess. Prioritize. And Aggregate Supply Chain Resources P1. buyer-driven auctions.7 Manage Supplier Network D1 Deliver Stocked Product D1. Maximization of TMS use. businessto-business trading network. 402 June 2006 .2 Identify. Schedule visibility. And Aggregate Product Resources P3. Scan store shelves / bar codes to confirm put-a-way.2 Identify. And Aggregate Product Resources ER. Assess. Assess. eBXML.1 Identify. Inc. Based on Supply and Demand Variability Inventory Performance is Measured at the Dollar and Unit Levels Inventory targets Are Reviewed and Adjusted Frequently DEFINITION Internet Exchanges are a hosted. Assess. Exchanges will also support more traditional catalog-based sales. Assess.2 Identify.

None identified Electronic rules for business relationships and transactions: Vendor-managed Inventory Agreements. Just-In-Time Agreements.9 Manage Supplier Agreements SR1. And Aggregate Supply Chain Resources P1. Assess. Treat Them as Partners and Build a Strong Relationship with Each One Geared Toward Continually Improving Service and Lowering Cost Link Individual Performance to Organizational and Divisional Goals Long Term Supplier Agreements/Partnerships Long-Term Return Agreements / Partnerships Loyalty Card Data Maintain Accurate Lot/Batch History Information Maintain Data and System Integrity by Ensuring Production Data. M2 Make-to-Order M1 Make-to-Stock M3.14 Install Product Joint Service Agreements with Source Suppliers to Share Responsibilities and Costs of Returns Joint Service Agreements with Suppliers Define the Levels of "Flexibility" or Resource Upside Available Within Stated Lead Times and Agreed Upon Conditions Just-In-Time Demand Flow Techniques Labor Scheduling that Matches Product Flow Lead Times Updated Monthly (This would be effective between customer and supplier.2 Identify. or nonvalue adding activities within your manufacturing organization Utilization of transportation management system (TMS) to manage returns. and Schedule Requirements Are 99+% Accurate © Copyright 2006 Supply-Chain Council.14 Install Product D2. Assess. and Aggregate Supply Chain Resources M1 Make-to-Stock ER.2 Receive Product at Store D4.4 Produce and Test M2.3 Produce and Test M2.1 Generate Stocking Schedule P1.2 Identify. DEFINITION Collaborative planning tools with the Source suppliers PROCESS D1.11 Test & Install Product D2. and Aggregate Return Resources P2 Plan Source Demand-pull mechanisms Workforce management solution with flexible rules. None identified Lean Manufacturing Limit the Number of Carriers.5 Fill Shopping Cart M3.4 Produce and Test M1. Etc.6 Manage Return Transportation Use for comparison to previous sales activity/track new consumers. Maximization of TMS use. Electronic data collection of employee actions and sourced/in-process product lot used Detailed production model that synchronizes PLAN and MAKE activities in real time.1 Manage Sourcing Business Rules ES.1 Schedule Production Activities June 2006 403 .4 Produce and Test ES. Manufacturing. Assess.3 Request Defective Return Authorization SR3. None identified M3. Inventory Levels.BEST PRACTICE Joint Service Agreements to Document Acceptable Service Levels in Terms of Installation Costs. Installation Cycle Time. Marketing and Order Management) Collaborative planning tools with the Source suppliers None identified P5.3 Produce and Test M1. both intra and inter-company within the supply chain.2 Identify.1 Schedule Production Activities M2. Use a team based systematic approach to identifying and eliminating wasteful. Inc.3 Produce and Test D4.3 Produce and Test M1.3 Request Excess Return Authorization D4. Fab & Hold Agreements. etc. and between internal functions such as Field Service.

Transportation Management System (TMS) Maintenance Management PROCESS EM. This includes items on stock in the distribution center. None identified Maximize Data Integrity and System Accuracy by Ensuring 99%+ Accuracy of BOM Configuration. quality. Inc. Electronic Document Management System features. The items to be merged are cross-docked from inbound receipt to outbound shipping. Prioritize. scrap.6 Manage Incoming Product ED. etc. and Schedule Requirements Measure Customer Service Measured and Compared with Same Activity Previous Period Measurement of Carrier Performance for On-time Delivery and Completeness Measurement.1 Schedule Product Deliveries S3. Transportation Management System (TMS) Maintenance Management ED. items on stock in other distribution centers. 404 June 2006 .g.6 Manage Return Transportation P2.5 Fill Shopping Cart None identified Electronic data collection of completion. Identifies stock-outs from shrinkage or item misplacement. Prioritize. and Aggregate Product Requirements P4.1 Identify. at a plant or a supplier) as well as make-to-order items.5 Manage Deliver Capital Assets D4.6 Manage Incoming Product ED. Monitoring and Adjustment of Service or Product Installation Measuring Process Metrics and Feedback to Operators Mechanical (Kanban) Pull Signals Are Used to Notify Suppliers of the Need to Deliver Product Advanced Shipping Notices (ASN)Parcel and Container Routing and Rating Compliance Labeling Real time shipment tracking DSS or portal tool that shows previous period performance and comparison for store management (whether it is a year ago.8 Receive Product from Source or Make D1. Inventory Levels. and Aggregate Delivery Requirements M3.3 Schedule Product Deliveries D1.9 Pick Product © Copyright 2006 Supply-Chain Council.3 Produce and Test Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment.BEST PRACTICE Maintaining Repository of Current Regulatory Requirements Manage Information Across 100% of Shipments DEFINITION Electronic subscription and publication of conformance documentation.). from which the shipment is sent. items on stock elsewhere (e. Merging is usually performed in a shipper's distribution center (DC) or in a carrier's terminal. period ago.1 Identify.6 Manage Return Transportation D4. labor and equipment data and dissemination of information on factory floor Electronic Kanban support ES. S1.8 Manage Regulatory Compliance ES.6 Manage Transportation ER.7 Deliver and/or Install M1.6 Manage Transportation ER.2 Schedule Production Activities Master Production Scheduling Reflects Management of Capacity and/or Supply Constraints Matching Shelf Stock to Expectations None identified A software based system that corrects shelf inventory levels based on actual product present (possible RFID solution).1 Schedule Product Deliveries S2.

None identified None identified Off Peak Stocking On Demand Access of Supplier/Source Data On Line Access and Notification of Tooling and Equipment Information On Line Document Management and Automated Supplier Approval Processes Can Reduce the Cycle Time and Costs Associated With Managing Supplier Evaluations and Get Them into the Supplier Network Faster The majority of stocking is completed with minimal impact to or visibility from the customer.BEST PRACTICE Migrate From Build to Stock to Configure to Order. Location specific product labeling. And Aggregate Product Resources D4. 405 June 2006 . or layout WIP Storage Management System Efficient Space Utilization Implementing Pull Systems Move high frequency used inventory close to point of use. Automatic download of production equipment with setup parameters Graphical display of setup.5 Manage Equipment and Facilities M3.2 Identify.1 Manage Production Rules ES.2 Select Final Supplier(s) and Negotiate Hazardous material regulations are given specific attention.4 Package EM. the system should provide the frequency of picks by part number so that high frequency picks can be moved to convenient locations or part pick quantities increased.7 Manage Planning Configuration ER.3 Maintain Source Data EM.4 Package M1. None identified EM. Web based access to current supplier/source data Delivery of tooling and equipment details drawings ERP © Copyright 2006 Supply-Chain Council.8 Manage Return Regulatory Requirements D4.4 Transfer MRO Product ED. Build Subassemblies to Forecast at the Highest Generic Level in the Bill of Material/Recipe/Formula Minimize Capital Assets Required and Maintenance Costs Minimize Operator Induced Errors Minimizing In-Process Product (WIP) Minimum Product Handling DEFINITION None identified PROCESS M1 Make-to-Stock MRO Scheduling Identifies Next Destination (Stores or Repair Station) on Return Authorization Multi-country Export/Import documentation compliance Multiple Locations Throughout Store Outsourcing strategies including the use of Application Service Providers (ASPs).7 Manage Supplier Network S3. Inc. For example. Assess. changeover. webbased maintenance/diagnostic assistance and MRO parts.2 Identify.4 Stock Shelf ES. Assess. and Aggregate Production Resources P2.4 Manage In-Process Products (WIP) DR2.6 Checkout P3.4 Manage In-Process Products (WIP) EM.5 Package M2.8 Manage Import/Export Requirements D4.5 Fill Shopping Cart New Items Introductions Are part of the Sales and Operations Planning Process at the General Management Business Team Level Note and Communicate Shelf Life Requirements Carefully Before Shipping Notification of Existing/Future Event or Promotions Obsolete Inventory is Reviewed at the Part Number Level EP. Utilize electronic links None identified Planned and tracked via a plan-o-gram system.

2 Select Final Supplier(s) and Negotiate EM. Inc. Configure. On-line Customer Service Module CRM (Customer resource Management) software is getting a big push in the E-Commerce/EBusiness areas and generally provides a means to fulfill this requirement None identified Enterprise resource planning system Customer relationship management system None identified No packing and unpacking time required.1 Manage Deliver Business Rules P1 Plan Supply Chain ED.3 Manage MAKE Information ES. and operator instructions Use 4PL to manage and move. Radio Frequency Communication.7 Manage Product Life Cycle EM. Optimized Supplier Count. Enter and Validate Order Support for modular skills inventory with links to training databases. This could include using PLC.2 Select Final Supplier(s) and Negotiate ED.1 Identify Sources of Supply S3.3 Manage MAKE Information EM.4 Manage In-Process Products (WIP) ES. part type. Magnetic Stripe. etc. bar code.1 Manage Sourcing Business Rules ES. Including Formal Orders and Ad Hoc Requests Customers Have One Point of Contact for All Products Organize to Enhance Flexibility: Few Job Classifications. Flat Management Structure. both Currently Available and Committed (Pegged) Operations and Network Analysis Optimize Packing Optimized Supply-Chain Processes.5 Package M1. supplier performance data & spend data stratified by commodity. Recyclable or no containers where appropriate.4 Package M2.7 Manage Supplier Network S3. No discarded material. Smart Cards.BEST PRACTICE On Line RFQ Processes Linked into the Document Management Process Reduces Cycle Time and Product Management Costs On-Demand Access of Production Information DEFINITION None identified On-Demand Access to Available to Promise (ATP). None identified M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock ER. Self-Directed Work Force. process type None identified ED. Production Schedules and Inventory Status by Internal Operations and Customers On-Line Availability to Supplier Financials to Determine Potential Supplier Viability to be Added to Supplier Network Online Real-Time Customer Entry and Edit Data Collection and Display Systems designed for efficient performance of valueadded operations in production. supplier. Cross-Functional Work Teams Outsource If Not a Core Competency Packaging Operation is an Integral Part of the Overall Production Process © Copyright 2006 Supply-Chain Council.. to enable data collection None identified PROCESS S3. Supplier and Part Rationalization Order Entry is Organized by Customer Segment Customers Receive Differentiated Service Based on Volume of Business Customer Team is Empowered to Fully Service Customer Requests.2 Receive. compensations systems.3 Manage Deliver Information Internet web sites for financial evaluation On-Line Rule Base On-Line Visibility of All Supply-Chain Demand Requirements and Resources.9 Manage Supplier Agreements D2. business unit/site.4 Package June 2006 406 .5 Manage Return Capital Assets M3. Machine Interface. Web based access to preferred and recommended suppliers. Radio Frequency Identification.

4 Package M1.3 Produce and Test M1 Make-to-Stock D3.2 Manage Production Performance P5 Plan Return P4. as Needed Pay on Receipt Electronic dispatch and data collection. Capacity.7 Authorize Supplier Payment S1. Etc.3 Produce and Test M2.5 Package M1.1 Identify.1 Obtain and Respond to RFP/RFQ S3. reverse drop shippers.4 Produce and Test M3. Joint Service Agreements) Are Addressed Cross-Functionally.4 Manage Product Inventory ER.4 Package M2. Periodic Review of Standards Planning and Forecasting Outsourced Return process Planogram Flexibility for Seasonal/Promotional changes Plans that Violate Business Rules (e. Cost. 407 June 2006 .5 Authorize Supplier Payment ES. Prioritize. Scheduling) and Readily Available to Employees Periodic Review of Metrics and Strategy with Comparisons to Industry Benchmarks Web based access / availability to business rules and performance criteria Data warehouse. report writing. and Aggregate Delivery Requirements P4.g.4 Establish Delivery Plans None identified Data warehouse. real time data base and EI systems P4. etc. Electronic dispatch of operations Paperless Production Order and Inventory Tracking Partnership with Outside Design Firms to Provide Skills and Capacity.4 Establish Delivery Plans M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock © Copyright 2006 Supply-Chain Council. Use of web-based technologies for dissemination of information. Quality.5 Authorize Supplier Payment S2.) None identified None identified ED.) Plans Which Do Not Violate Business Rules Are Communicated Openly and Cross-Functionally for Execution Posted Performance Results Process for establishing and maintaining review schedules Collaborative planning and forecasting with RETURN outsourcing partners (3PL.BEST PRACTICE Paperless Order Tracking and Customer Visibility of Orders Paperless Production Control DEFINITION Electronic dispatch and data collection with external interface to internet. Real time view of data. report writing. Inc. real time database and Executive Information systems that are easily accessible.4 Manage Return Inventory EM.e. Customer Service. Allow customer access to production status and inventories using internet technologies and web site features. None identified Electronic Invoice Processing PROCESS M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order M3. Considering Total Business Impacts (Revenue.2 Assess Supplier Performance M1 Make-to-Stock Performance Expectations and Business Rules Are Clearly Communicated Prior to the Initiation of Business with the Supplier Performance Results that Are Compared to Benchmarks (i.4 Manage Finished Goods Inventories ES.

4 Produce and Test D4.4 Stock Shelf M1.3 Receive Defective Product DR2. which could highlight suggested actions based upon readings obtained. to the last possible supply chain location.7 Manage Production Network D4.Push inspection to SOURCE . with FIFO Allocation for All Others Proactive Education of Customers to Set Expectations and Encourage Close Working Relationships (Knowledge of Long-Lead Items.3 Receive MRO Product EM. Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. Inc. Capacity planning Real time monitoring of production status and In-Process Product (WIP) Scan store shelves / bar codes to confirm put-a-way. 408 June 2006 .4 Package DR3.5 Package M2. track maintenance completed.1 Manage Production Rules EM.4 Package M3. Scan using handheld and match with ad.Receiving quality criteria connected to ISO 9000 practices Libraries of manufacturing capabilities or design envelopes Database for equipment to contain expected results of analysis. such as assembly or packaging. Six Sigma. Examples would be TQM. for Key Customers.1 Identify Sources of Supply On-line design tools facilitated by internet connections. None identified PROCESS D1 Deliver Stocked Product D2 Deliver Make-to-Order Product M1 Make-to-Stock M2 Make-to-Order S1 Source Stocked Product S2 Source Make-to-Order Product M1.3 Reserve Inventory & Determine Delivery Date P4 Plan Deliver Order entry specifications linked to manufacturing order None identified M2 Make-to-Order S3. Lubrication Composition & Vibration) DEFINITION Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible in a generic state. and have capability of generating desired reports.3 Produce and Test M2 Make-to-Order M1 Make-to-Stock M3. Agreement on Levels of Flexibility) Produce Products to Unique Customer Requirements Product Data Management & Electronic Document Management Are Used to Manage Technical Documents and Requirements for Engineer to Order Product Product Design Collaboration with Customers Production Level Loading Production Reporting/Status Proof of Performance (Promotion Management) Provide Continuous Formal Training to Employees Provide Product or Service Training to Employees or FAQ's Online D1. contain a help-file to be consulted None identified None identified Priority-Based Inventory Reservations.7 Deliver and/or Install None identified © Copyright 2006 Supply-Chain Council.BEST PRACTICE Postponement Postponement and Pre-Kitting Of Accessories into Modular Packages that Allow Flexibility While Maintaining Control Pre-Certify Supplier Capability to Send Return Products Correctly to Minimize the Need for Receipt Verification Pre-Defined Manufacturing Design Rules Predictive Maintenance Monitoring (Heat. M3 Engineer-to-Order M2 Make-to-Order M1 Make-to-Stock EM.3 Receive Excess Product DR1. allow entry of test readings. Visibility to Supply Resources. Noise.5 Manage Equipment and Facilities .

eBXML. and Aggregate Supply Chain Requirements D2.1 Manage Business Rules for Return Processes D4. Prioritize. None identified The ability to reset and reconfigure the RETURN process capacity. OAGI. without Reserving Inventory.3 Manage Deliver Information Publish Return Policy Push Product on Trailer Arrival Easy access to return business rules. ED. Invoice & Receive Payment D3. D2.4 Manage Return Inventory M1.BEST PRACTICE Provide Scheduling Output Back to Material and Labor Planning Systems Provide Single Source of Information on the Customer (Single Group / Owner Responsible for Accuracy / Quality of Customer Data) Provide Visibility to and Quickly Escalate Delinquent Accounts for Resolution DEFINITION Allow dynamic re-synchronization of MAKE activities by tying in real time status information to scheduler Secure E-Commerce Server and integrated Order Management System (OMS) Warehouse Management System (WMS) and Transportation Management System (TMS) Integrated accounts receivables PROCESS M1. etc) B2B integration tools and systems None identified Push-Based Forecasts Are Replaced with Customer Replenishment "PullBased" Signals Quote Capability. Which Can be Converted into an Order. Inc.1 Process Inquiry & Quote D1. the Internet. etc. outsourcing and flexible partnership agreements.15 Invoice ER. picked from back room.2 Identify. Raw Materials. But Does Not Generate Build Signal or Reserve Inventory Capacity Quote Capability. Also requires integration with the CRM system for real time redirection of customer returns based upon cost and capacity.1 Schedule Production Activities © Copyright 2006 Supply-Chain Council. System prioritization of items coming off trucks vs. Assess.1 Schedule Production Activities ED. and Finished Goods Inventory and Test Activities Allow dynamic re-synchronization of MAKE activities by tying in real time status information to scheduler.4 Establish and Communicate Return Plans Real Time Data on Current Status Real Time Feedback from Production. VMI. routings.1 Generate Stocking Schedule D4.4 Manage Product Inventory ER. 409 June 2006 . Dynamic calculation of safety stock based on actual sales.11 Invoice & Receive Payment D2.13.1 Process Inquiry & Quote None identified Use of RETURN tracking and projection systems and flexible partner agreements that allow the rapid addition of RETURN capacity to match unexpected demand.12 Invoice & Receive Payment D1. and Aggregate Return Resources D1 Deliver Stocked Product P5. Which Can Be Converted into an Order in a Single Step Rapid Reconfiguration of Return Capacity Rapid Replenishment.1 Identify. EDI Rapid.2 Receive Product at Store P1. Dynamic Reconfiguration of Return Process to Meet Demand D3.1 Process Inquiry & Quote P5. Standards Based (RosettaNet. without Reserving Inventory.4 Manage Finished Goods Inventories ES.15 Invoice D2.15 Invoice D1. by transmitting new requirements and directives using mathematical models.

3 Produce and Test ES. DR3. Electronic collection of quality data and online SPC.3 Produce and Test M1.3 Produce and Test M2.4 Produce and Test M2. call centers or CRM system. Transportation Management System (TMS) Maintenance Management PROCESS ED.4 Transfer Excess Product DR1.1 Assess.3 Produce and Test P5. LTL. Requires a connection with customers.6 Manage Transportation M3.3 Receive MRO Product DR3.6 Manage Incoming Product ED.3 Produce and Test M1.6 Manage Incoming Product ED. Move.6 Manage Transportation ER.e. Automatic download of production equipment with batch recipes/part programs Reduction of WIP handling through automation (i. Having real time data on return demand and including it in the plan and forecast.3 Receive Excess Product DR1.e.BEST PRACTICE Real Time Package Tracking DEFINITION Tracking and tracing Real Time Performance Measurement Reporting Systems Real Time quality control techniques Real Time Return Anticipation Systems to collect production information online generate reports upon request by operators.6 Manage Return Transportation ES. reduction of handling steps. Include packaging materials in inventory management system and treat as any other inventory to minimize potential of stock-out. and Aggregate Return Requirements Real Time Statistical Control Techniques Real-Time Optimized Shipment Method Selection (Air Parcel. and Set-Up Times Enterprise-wide planning system customer Relationship Systems M3.6 Manage Return Transportation P1 Plan Supply Chain Buyer's name for every receipt is clearly visible on Receiver. shorter move paths) Use principals of Lean Manufacturing.2 Assess Delivery Performance EM. Ground Parcel.3 Receive Defective Product DR2. Electronic collection of defect data and online SPC.) Based on Customer Service Requirements Real-Time Shipment Tracking.6 Manage Transportation ER. AGVs and ASRS) and process improvement (i.3 Produce and Test M1. possibly to the store level with retail returns.4 Produce and Test M1.4 Produce and Test M2. Including Queue. and track progress against schedule and standards.3 Produce and Test EM.4 Transfer MRO Product M2.2 Access Delivery Performance ED.2 Manage Production Performance M3.3 Produce and Test © Copyright 2006 Supply-Chain Council.4 Transfer Defective Product DR2. 410 June 2006 . (via internet) Transportation Management System (TMS) Maintenance Management Re-Balancing of Full-Stream Supply/Demand on a Daily Basis. Including Source-Make-Deliver Resources and Requirements from "Customers' Customer to Suppliers' Supplier" Receivers on the Dock Communicate Directly with the Buyer to Efficiently Resolve Any Discrepancies Receiving Equipment and Packaging Materials to Transfer Product Are Planned for In Advance and Readily Available When Needed Reduce Chances of Operator Error Reduce In-Process Product (WIP) Handling Reduce Non-Value Added Activities. etc. The return demand needs to be included in the production plan as soon as possible because upon repair it may be the next piece of serviceable inventory to satisfy demand. Inc.

Enter & Validate Order ES. And Aggregate Supply Chain Resources DR3. and Aggregate Product Requirements © Copyright 2006 Supply-Chain Council. Customers) Order Entry Capability Removal of Obsolete Capital Assets Removal of Obsolete Stock Re-Planning Process Exists in MultiLevels of the Supply-Chain between Business Enterprises Re-Planning Process Links the Supply Chain Operation with the Business Strategy and the Marketing Strategy Responsiveness and Flexibility Are Emphasized By Developing Expertise in Making Business Processes ReProgrammable. 411 June 2006 .6 Release Product to Deliver P1. quality. Prioritize.6 Release Finished Product to Deliver M1. Re-Configurable and Continuously Changeable Return Process Electronically Tracks Transfer from Station to Station None identified None identified Automated Calculation of ABC Velocity Movement Automated Calculation of ABC Velocity Movement Business to business Internet capability to share common data. can be funded. Periodic review of capital asset plan to determine if additional equipment.2 Receive.4 Package M2.2 Manage Performance of Supply Chain D2. if needed. lot tractability. scrap. Assess.4 Transfer Defective Product DR2.5 Manage Capital Assets ED.5 Package M2.9 Align Supply Chain Unit Plan with Financial Plan EP. Remote (Sales.3 Produce and Test M1.2 Identify.4 Transfer Excess Product DR1.BEST PRACTICE Reduce Non-Value Added Paperwork While Still Measuring Process Metrics DEFINITION Electronic data collection of completion.2 Receive.5 Manage Deliver Capital Assets EP. Prioritize.4 Transfer Defective Product DR2.7 Release Product to Deliver M2.4 Package EP.4 Transfer MRO Product M2. Enter and Validate Order D1. None identified PROCESS M1.4 Produce and Test M3. Inc.4 Transfer MRO Product P4. and labor data Reliable Continuous Improvement Process and Methodology. and Aggregate Delivery Requirements P2. POG software/field force None identified DR3.4 Transfer Excess Product DR1. Configure.6 Release Product to Deliver M3.3 Produce and Test M3.9 Align Supply Chain Unit Plan with Financial Plan P1 Plan Supply Chain Integrated process modeling and software reconfiguration tools Utilize Bar coding Review Batch Records by Exception Electronic batch records linked to process plans/recipes and exceptions flagged Review Product Profitability Review Transfer Cycle Time Trends and Determine If Equipment Capacity is Properly Balanced with Projected Usage RFID and Other Tagging Sales and Operations Agree to Limits of Short Term Flexibility ABC and cost modeling.1 Identify.1 Identify.

The process must reconcile all supply. development. Executed properly.6 Manage Return Transportation Schedule Reflects Current Plant Status (Equipment Availability.1 Schedule Production Activities M3.2 Schedule Production Activities M1. demand.) None identified Interface between maintenance management system and scheduling system PROCESS P1 Plan Supply Chain Scan Displays for Promotion Conformance Scan Displays for Promotion Conformance Schedule Includes Preventative Maintenance Program D4. Other Jobs and Resource Availability) On Line Segregate In-Bound Carcass Return Cost from Other Transportation Costs Schedule undated by on line reporting and status systems and re-sequence activities None Identified © Copyright 2006 Supply-Chain Council. marketing.2 Schedule Production Activities M2.1 Schedule Production Activities M1. and ideal job sequences (e. The process brings together all the plans for the business (sales.BEST PRACTICE Sales and Operations Planning (S&OP) DEFINITION A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain. and financial) into one integrated set of plans. It is the definitive statement of the company's plans for the near to intermediate term. sourcing. and new-product plans at both the detail and aggregate levels and tie to the business plan. 412 June 2006 .1 Schedule Production Activities M2. covering a horizon sufficient to plan for resources and to support the annual business planning process.2 Schedule Production Activities M3.1 Schedule Production Activities ER. the sales and operation planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement.. Inc. It is performed at least once a month and is reviewed by management at an aggregate (product family) level. (From APICS online dictionary. color sequencing light to dark) Scheduling utilizing optimization techniques Required production resources included in routing/process instructions M1.2 Schedule Production Activities M2.1 Schedule Production Activities M3. manufacturing.g.1 Schedule Production Activities M3. cleaning times.4 Stock Shelf Schedule Minimizes Changeover Costs between Products Schedule Optimizes Use of Shared Resources Such as Tooling and Production Equipment Algorithms that manage set up times/costs.

13 Receive & Verify Product by Customer D3.12 Ship Product D2. 413 .7 Select Carriers & Rate Shipments D3.1 Process Inquiry & Quote D1.BEST PRACTICE Select Carriers by Least Cost per Shipment and Rate Using Actual Rates Prior to Release to Billing DEFINITION Rules based carrier selection and actual rate database Service Provider Utilizes Web-Based Communicate to Identify New and Discontinued Repair Sites to Customers Set Up Electronic or Pre-authorized Returns Continuously updated authorized repair sites None identified PROCESS D3. Inc.6 Route Shipments SR2.5 Return Defective Product D2.1 Authorize MRO Product Return D1.5 Return Excess Product SR1. RFID Short Move Paths Single Data Source for Decision Support and Business Rules Single Point of Contact for All Order Inquiries (Including Order Entry) SKU Rationalization Software that allows for input of the distance that particular parts/WIP need to be moved.6 Route Shipments EM.12 Ship Product D3.6 Route Shipments D1.6 Manage Transportation Shipment Tracking None identified Shipment Tracking and Tracing Satellite communications. GPS.7 Manage Planning Configuration June 2006 © Copyright 2006 Supply-Chain Council.7 Select Carriers & Rate Shipments ER.6 Route Shipments & Select Carriers D2. business rules and transaction data.1 Process Inquiry & Quote EP.9 Receive & Verify Product at Customer Site D2. Analyzing tools enable the ongoing maintenance and improvement of the business rules based on actual data.11 Load Vehicle & Generate Shipping Documentation D3. A data warehouse/data mart is the source of all planning (master) data.7 Select Carriers and Rate Shipments D3.1 Authorize Excess Product Return DR1.3 Manage PLAN Data Collection D2. This software then need to provide a report based on the cubic feet of material times distance moved by part number.6 Route Shipments D1.10 Receive & Verify Product at Customer Site D1.6 Route Shipments & Select Carriers D3.13 Receive & Verify Product by Customer D1. None identified None identified EP.1 Authorize Defective Product Return DR2.11 Receive & Verify Product at Customer Site D3.5 Return MRO Product SR3.7 Manage Return Network Configuration DR3.12 Ship Product D2.

4 Establish Delivery Plans D4. 414 June 2006 .1 Manage Production Rules ED.1 Manage Business Rules for Return Processes ED.9 Align Supply Chain Unit Plan with Financial Plan D4. Inc. Furthermore. This minimizes restocking effort.2 Manage Production Performance EM. Analyzed and Used in Performance Reporting Supplier and Material Rationalization See Up and cross selling Software application to automate data collection and reporting Web based access to supplier/source data ES. industry standards.5 Manage Deliver Capital Assets ED.2 Assess Supplier Performance ES.7 Manage Product Life Cycle EM.7 Deliver and/or Install D4.2 Issue Material M2.5 Manage Deliver Capital Assets M1.3 Maintain Source Data © Copyright 2006 Supply-Chain Council.5 Fill Shopping Cart Stocking is Completed in Zones Storage and Configuration Management for Release and Revision Control of Final Documents Storage Location Zoning Strategic Safety Stock of Selected Materials.2 Issue Product M1. and/or substitution Supplier "Cost of Nonconformance" Data is Collected.3 Issue Sourced/InProcess Product EP. with extrapolation the net and gross percentage of error is determined.BEST PRACTICE Sound Project Management Process and Methodology Specific Changes to the Plan Are Agreed to Cross-Functionally. customer/supplier alignment agreements.4 Manage In-Process Products (WIP) ED. or Subassemblies to Decouple Sourced Product Issuance Cycle Time from Supplier Lead Time Strategic Sales and Operations Planning Process in Place and Managed at the Executive Level Substitution Internal/external benchmarking. This sample is then extrapolated across the inventory population. None identified Trained staff or automated systems (Internet) that recommend up-sell. crosssell. According to Defined Business Rules Stage Product or Service Adoption Staging Based on In-store Zones Standard Inventory Policy to Determine Excess Standard Operating Procedures and Methodology Standards and Measurements Aligned to Maximize Supply Chain Performance Statistical Test Count DEFINITION None identified None identified None identified Items are staged for re-stocking based on zones within the store. None Identified None identified PROCESS EP. Items.2 Issue Sourced/InProcess Product M3. visibility of key performance indicators The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically counting and reconciling a statistical sample of the entire inventory population.3 Pick Product from Backroom ER.2 Manage Performance of Supply Chain P4.4 Stock Shelf EM. Each area of the store has its own stocking plan and items are routed specifically to that area.4 Manage Finished Goods Inventories ES. which provides an indicative measure of entire inventory population.4 Manage Product Inventory ER.4 Manage Return Inventory D4. Product data management (PDM) or Electronic Data Management (EDM) feature set Automated or Optimized Slotting (Storage Location) Systems Use of safety stock algorithms to minimize stock levels.

415 June 2006 .3 Verify Product S2.2 Issue Product M1.2 Assess Supplier Performance S3.2 Select Final Supplier(s) and Negotiate S3.3 Verify Product ES.2 Receive Product S2. linkage of Inventory Information “Assess Supplier Performance” is the process of measuring actual supplier performance against internal and/or external standards.5 Manage Equipment and Facilities ES.4 Establish Supply Chain Plans P1.5 Verify Product S1. Planning Re-planning Business Rules Plan Changes © Copyright 2006 Supply-Chain Council.2 Receive Product S2.3 Verify Product S3. and Aggregate Supply Chain Requirements None identified Collaboration among Supply Chain partners extends outwards to customers.1 Identify Sources of Supply EM.5 Verify Product S3.3 Verify Product S1.3 Balance Product Resources with Product Requirements P1.BEST PRACTICE Supplier Certification Programs Are Used to Reduce (Skip Lot) or Eliminate Receiving Inspection DEFINITION Skip lot/sampling inspection logic Supplier Certification Programs Can Reduce the Cycle Time for Certifying Existing Suppliers to Provide New Technologies Supplier Delivers Directly to Point of Use Supplier Delivers Directly to Point of Use .3 Issue Sourced/InProcess Product S3.I.4 Receive Product S1.3 Verify Product S2. Inc.2 Issue Material M2.7 Manage Supplier Network S3. Selected and Qualified with Criteria Matched to Business Requirements and Competitive Needs Suppliers Share Responsibility for Balancing Supply and Demand through Joint Service Agreements Supply Chain Advance Planning System ES.4 Receive Product S1.1 Identify.2 Assess Supplier Performance P2.3 Verify Product ES.2 Issue Sourced/InProcess Product M3. Web based relational database / management application Electronic Tag tracking to Point of Use (POU) destination None identified PROCESS S3.5 Verify Product S2. spanning the supply chain.D.2 Assess Supplier Performance Supplier Performance Data is Collected.2 Receive Product S1.(Dock to Line or End Destination) Supplier Delivery to Production Process at Point of Use None identified Electronic Tag tracking to Point of Use (POU) destination Electronic Tag tracking to Point of Use (POU) destination EDI link to supplier's sales order and inventory systems Supplier Development Programs Are Used to Get Local Suppliers to Invest in Developing New Technologies Supplier Managed Inventory of Parts Supplier Performance Assessment System None identified E.2 Receive Product M1. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. Analyzed and Reported to Suppliers Online and Real-Time through Extranet Applications Supplier Replaces Defective Material at Customer's Facility with Good Product as Required Suppliers Are Evaluated. Prioritize.

.1 Identify. Prioritize.4 Schedule MRO Shipment SR1. parts listing reference guide and part cost lists. Inc. Rules for deciding appropriate disposition.5 Manage Capital Assets Two-Bin Floor Stock Located at Work Center for "B" And "C" Components Controlled by Operators and Replenished When One Bin is Empty Unique Identifier Tag for Each Repairable Asset Unplanned Orders Are Accepted and Scheduled Only When There is No Detrimental Impact on Overall Product Delivery Plan Up and Cross Selling and/or Substitution None identified SR2.4 Manage Return Inventory P3. parts listings. Prioritize. Each Functional Area Develops Prioritized Recommendations for the Subsequent Planning Period Tools Support Balanced Decision Making (e. crosssell. etc. and Aggregate Product Requirements P4. and/or substitution.5 Manage Equipment and Facilities ES.4 Schedule Defective Product Shipment SR3.BEST PRACTICE Supply Chain is Designed to Have Supply Flexibility Equal to Demand Volatility Supply/Demand Process is Highly Integrated from Customer Data Gathering to Order Receipt. electronic equipment repair history.3 Issue Sourced/InProcess Product ER.4 Establish Production Plans P4.1 Identify. June 2006 . RFI tag.5 Manage Equipment and Facilities P1. Shop floor access to electronic data base of equipment line drawings. None identified EM. Prioritize. Advance Planning and Scheduling System PROCESS P1 Plan Supply Chain P1 Plan Supply Chain EM. part stores inventory & reorder points.4 Establish Delivery Plans None identified Supply chain planning optimization system P1 Plan Supply Chain Transportation Modeling and Rate Analysis Automatically generated TPM repair schedules integrated with MRP systems. automatic store room parts purchases.1 Identify.4 Establish Supply Chain Plans Advance Planning and Scheduling System Supply Chain Event Management Software None identified P1. through Production to Supplier Request Systematic Disposition Of Equipment Systems Support Accurate On-Line Visibility of Full-Stream Demand Requirements and Priorities as Well as Resource Utilization and Availability Systems Support Accurate On-Line Visibility of Full-Stream Demand Requirements and Priorities The Demand Plan is Updated Frequently to Reflect Actual Consumption or Customer Forecast Information To Address Conditions which Cannot be Adequately Satisfied During the Current Planning Period. electrical wiring diagrams. Trade-Off between Service Level and Inventory Investment) Total Preventative Maintenance Program DEFINITION None identified Integrated supply chain planning system with interfaces to all supply/demand data sources through public and private digitally enabled supply networks. and Aggregate Supply Chain Requirements P2.5 Fill Shopping Cart Asset management software using bar code. eBXML. and Aggregate Delivery Requirements D4. OAGI) to automatically query production capacity and ATP and schedule unplanned orders. Trained staff or automated systems (Internet) that recommend up-sell.4 Schedule Excess Product Shipment M3. Digital Linkages using XML standards (RosettaNet. 416 © Copyright 2006 Supply-Chain Council.g.

3 Manage MAKE Information ER.2 Select Final Supplier(s) and Negotiate D1. FAX None identified S3. Process.15 Invoice D1.4 Package M2. predict yield rates for reusable products or components.13. 856 & 862 transactions Utilize Enterprise Information Systems Utilize Internet-Based Freight Bidding Built Around Shared Shipping Volume Projections Enter.15 Invoice D2. None identified None identified None identified PROCESS M3. Invoice & Receive Payment D2. and project a revenue stream.1 Schedule Product Deliveries S2.BEST PRACTICE Up-to-Date Shop Packet/Specification for Each Unique Production Event/Demand Up-to-Date Shop Packet/Specifications Use an Exchange System Where Customer is Issued a Serviceable Item Upon Submitting an Unserviceable Item Use Demand Planning DEFINITION Electronic Work Instructions Electronic work instructions None identified Use Historical Based Return Rate Forecasts Use of CAD/CAE Applications to Simulate Design. and Aggregate Return Requirements D3.1 Authorize Defective Product Return DR2. 850. Cost and Manufacturing Process Use of Cross Functional Teams to Execute the Process of Developing Long-Term Capacity and Resource Plans Use of Platform Teams in the New Product Development Process Use of Speed Racks for Automated Material Handling Utilize Concurrent Engineering with Suppliers to Allow Them to Provide Engineering and Product Performance Test Data to Qualify as Part of Potential Supplier Network Utilize Concurrent Engineering with Suppliers to Allow Them to Provide Engineering and Product Performance Test Data Utilize EDI and EFT for Payment to Speed Closing of Receivables and to Reduce Processing Costs Demand Planning Systems to forecast returns. and Deliver information about the manufacturing process to management using information systems that span the enterprise None Identified © Copyright 2006 Supply-Chain Council. 417 June 2006 .12 Invoice & Receive Payment D3.1 Obtain and Respond to RFP/RFQ EP.5 Manage Integrated Supply Chain Capital Assets EP.15 Invoice S1.9 Pick Product D1.11 Invoice & Receive Payment D3.9 Pick Product ES.1 Assess.3 Produce and Test M3.6 Manage Return Transportation EDI transaction and network services Utilize EDI Transactions to Reduce Cycle Time and Costs EDI interface for 830. EDI.4 Package M2.5 Package M1.7 Manage Supplier Network None identified None identified Internet.7 Manage Planning Configuration D2.3 Schedule Product Deliveries EM.6 Manage Integrated Supply Chain Transportation EP.3 Produce and Test M1. Inc. determine demand in a resale market.1 Schedule Product Deliveries S3.4 Produce and Test DR1.1 Authorize MRO Product Return P5 Plan Return P5.

orders are scheduled to be picked when they are received.6 Manage Transportation ER. or any other criteria that makes sense for the DC operation. Integrated Order Management by Customer by Line Item VMI is a concept for planning and control of inventory.7 Manage Return Network Configuration D2. and Aggregate Delivery Requirements ED.2 Receive Product S1.9 Pick Product Shared knowledge of resource availability and bottlenecks Activity Based Costing. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. GL Charging Wave picking Transportation Management System (TMS) Maintenance Management A practice used in many DC operations to increase labor picking productivity and reduce the labor cost per pick.6 Route Shipments D3.BEST PRACTICE Utilize Invoice-less Freight Payment Utilize Real-World Cases in Employee Training Utilize Web-Based Collaboration between Asset Manager and Repair Sites Regarding Capacity and Scheduling Utilize Web-Based Collaboration between Customer and Service Provider on In-Bound Return Forecasts and Asset Tracking Utilize Web-Based Collaboration to Identify Potential New Repair Sites Prior to Their Selection Value Pricing Based on "Cost to Serve". Orders can be consolidated by customer.4 Manage In-Process Products (WIP) S2. Cost Plus Pricing Vendor Managed Inventory DEFINITION None Identified None Identified Total return asset visibility throughout the network Shared return forecasts PROCESS ER. Product. © Copyright 2006 Supply-Chain Council.2 Receive.7 Manage Return Network Configuration ER. damaged or outdated goods are removed. In some DC’s. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer.5 Build Loads P1 Plan Supply Chain S3. The on-site inventory is counted. Enter and Validate Order D1.6 Manage Return Transportation ER. geography.7 Manage Return Network Configuration ER. Enter & Validate Order D1. and the inventory is restocked to predefined levels. Cost. EDLP.2 Receive. Prioritize.4 Manage Product Inventory M1 Make-to-Stock P4. Inc. Configure.4 Receive Product EM.1 Identify.5 Build Loads D1.6 Route Shipments D2. View for Analysis for All Orders and Shipments the Following Data: Logistics.2 Receive Product ES. 418 June 2006 . Wave picking consolidates orders into “waves” where multiple orders with similar characteristics are picked at one time.6 Manage Return Transportation D1.1 Manage Business Rules for Return Processes ER.

years. etc. A contract may be oral or written. Inc.Carrier Rate Tables Approved Contract Approved Item Master DEFINITION Amount of past sales spanning any specified period of time (weeks. This can be as simple as creating shipping documents for finished goods in a make-tostock environment.. theft... The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. thus defining the bill of material. week. requirements. Rates charged by common carriers to move goods. whether purchased or not. In the first period. The function of physically separating a homogeneous subgroup from a heterogeneous population of items Permission to return to service an item that has been repaired and found to be within specifications and operable. The budget serves as pattern for and a control over future operations. etc. Ground. Typically.) and expressed in any specified increments (per day. including design efforts for make-to-order products A plan that includes an estimate of future costs and revenues related to expected activities. Item records are linked by bill of material records (or product structure records). The commitment should be based on the available-to-promise line (ATP) in the master schedule. lot sizes. deterioration. manufactured part. The budget serves as a pattern for and a control over future operations. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. An EDI notification of shipment of product. and costs. The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. month. months. or in transit. or it might be a more complicated series of activities. etc. or freight. Acceptance of an agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. functions. The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. assembly. year. 419 June 2006 . A plan that includes an estimate of future costs and revenues related to expected activities. planned orders. The loss may be caused by scrap. subassembly.INPUTS AND OUTPUTS INPUT / OUTPUT Actual Sales History Actual Shrink Advanced Ship Notice Air. evaporation. and so on Benchmark measures are often derived from other firms that display "best in class" achievement The Bill of Materials is a structured list of all the materials or parts needed to produce a particular finished product.) and may contain data on inventory status. in process. Assorted by Shelf Order Authorization to Return to Service Authorization to Scrap Available to Promise Date Benchmark Data Bill of Materials Booked Order Budget Constraints Budgets © Copyright 2006 Supply-Chain Council. ATP includes on-hand inventory less customer orders that are due and overdue A set of measurements (or metrics) that is used to establish goals for improvements in processes. products. The "master" record for an item. etc. it contains identifying and descriptive data and control values (lead times.) Reductions of actual quantities of items in stock.

e. A process that identifies opportunities for performance improvement and facilitates their realization through the use of metrics. This process develops objectives usually accompanied by budgets. The rates charged by a carrier that does not serve the general public.e. project management principles. Business Rules for Source Processes Capacity Constraints Capacity Requirements Capital Assets Completed Proposal Configuration Rules Conformance Plan Conformance Rules Consistently High Adoption Rates Consolidated Orders Consolidated Product Continuous Improvement Process Contract Carrier Rates © Copyright 2006 Supply-Chain Council. The resources needed to produce the projected level of work required from a facility over a time horizon. Sourcing business rules include: supplier selection and negotiation processes. Packages and lots that move from suppliers to a carrier terminal and are sorted and then combined with similar shipments from other suppliers for travel to their final destination. customer satisfaction. i. Business rules align Return process policies with business strategy. A capacity constraint is said to exist when the available capacity at a resource may be insufficient to meet the workload necessary to support the desired throughput. and reporting tools that support strategic and business plans. projected balance sheet. but provides transportation for hire for one or a limited number of shippers under a specific contract. Courses of action and processes that are established to meet the requirements placed on production by external entities. and bill of materials. cost and profit. Rules for conducting business. process development methodologies/approaches. i. developing and maintaining customer and channel performance standards of an return processes such as service levels. An affirmative indication or judgment that a product or service has met criteria translated into rules for meeting external regulatory requirements Indication of product and service quality. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. when units consume similar resources at the same rate. Physical objects that are held by an organization for its production potential and that costs more than some threshold value (APICS) A document submitted in response to the a request for proposal from a customer with all the terms and conditions of sale of a product or service The rules for the management of product configuration. A capacity constraint is often a bottleneck.INPUT / OUTPUT Business Plan Business Rules for Return Processes DEFINITION A document resulting from a process of linking the long-range strategy with projections of revenue. 420 June 2006 . given service requirements by supply chain stakeholders/trading partners. rationalization. Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. Capacity requirements are usually expressed in terms of hours of work or. Inc. units of production. The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. and objectives. activity. goals. and a cash flow statement. routings. which includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters.

receipt of a serviceable item from stock. repair of the repairable item. which include address data. shipment of purchased product. these criteria determine type of carrier and cost of shipment Customer profile. Customer manages carrier selection. and allocated overhead. status. These promises maybe made by either the buyer of seller. etc. status.INPUT / OUTPUT Contract Status DEFINITION Customer profile. etc. what purchased. credit and purchase histories. customer preferences including shipping. credit for the cost of the item. credit for the cost of the item. numbers and rings. Report that portrays a potential customer's payment history and debt. and delivery requirements. receipt of a serviceable item from stock. customer preferences. Weight. Customer profile. The cost to produce and item during a given period of time. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer's needs. etc. This database contains all information relative to customers as a group or singly and is updated when ever new information is received about a customer. and requests for quotes. and payment of carrier. It is often referred to as an actual demand to distinguish it from a forecasted demand. includes customer profiles. which includes history. indicating the ability to pay in a timely manner in the future. time frame. customer preferences including shipping. 421 June 2006 . Corporate objectives are the goals and mission of an organization. The options available on the return of a repairable item. credit and purchase histories. and delivery requirements. Measure of customer satisfaction with products and service. status. repair of the repairable item. Coupled with cube and route. direct labor. cost. Customer profile. Contract Terms Contractual Obligations Corporate Objectives and Strategies Cost to Produce Credit Exchange Options Credit History Credit/ Exchange Options Current Inventory Source Data Customer Address Data Carrier Contracts (Customer) Customer Data (preference) Customer Inquiry Customer Loyalty / Recurring Visits Customer Master Database/Up to Date Customer Order Customer Order Size. recurring. Inc. General customer inquiries for information concerning products. and Freight Class Customer Profile/Data © Copyright 2006 Supply-Chain Council. which includes history. availability. An order from a customer for a particular product or a number of products. customer preferences. status. All the provisions and agreements of a contract. frequency of visits. The options available on the return of a repairable item. etc. Input to customer profile. Contracts that customers have with specific freight carriers through which suppliers have to work for the delivery of products. Includes: the amount of direct materials. and delivery requirements. A promise in a contract that binds one to a specific course of action. and delivery requirements. which include address data.

it is usually considered an offer to sell. The part of the supply chain requirements related to the customer's needs. or the data system requirements to fully automate the return process. The customer request for disposition instructions for a defective product from the appropriate source.INPUT / OUTPUT Customer Quote DEFINITION A statement of price. Those stocks or items on hand used to support production (raw materials and work in process items). The procedure that outlines the cleansing of return data to insure its validity and accuracy during the return process.e. Resources needed to meet Item stocking schedule requirement. a bid. The amount of time that normally elapses between the time an order is received and the time the order is shipped. List of requirements of the data system that insure cleansed data is compatible and usable. mix. The approved or disapproved Return Product Authorization (RPA) for excess inventory. Daily Shipment Volume categorized by customer. The customer request for disposition instructions for a defective product from the appropriate source. etc. and customer service (finished goods and spare parts). Determination of the time required from the receipt of the order until the item should be delivered. 422 June 2006 . A determination or projection of the requirements the supply chain must meet in the handling and execution of returns. carrier. Information required in the process of integrating and maintaining the accuracy of return execution. For make-to-order products. Inc. unserviceable products and/or serviceable or obsolete products as defined by the terms and conditions of a customer/supplier contract. (i. source. A requirement for product from a distribution location to a source location. and description of goods or services offered by a supplier to a prospective purchaser. Repair and Overhaul spare parts used to support of operations and maintenance. Maintenance. often as represented by the master schedule available-to-promise. A standard allowance that is assumed on any given order for the movement of items from one operation to the next. repairs and operating supplies). The process of making a delivery commitment. When given in response to an inquiry. this usually involves a check of uncommitted material and availability of capacity. Customer Replenish Signal Customer Requirements Customer Service Requirements Daily Replenishment Requirements Daily Shipment Volume Data About Return Capabilities Data Cleansing Procedure Data System Requirements DC/Vendor Lead Time DC/Vendor Transit Time Defective Product Disposition Request Defective Product Return Authorization Request Defective Product Return Authorization Response Defective Products Deliver Contract Terms Deliver Return Requirements Delivered End Items Delivery Date © Copyright 2006 Supply-Chain Council. supporting activities (maintenance. traffic lane. sales forecasts and actual orders/backorders. terms of sale. quantity. including service requirements. timing) Products that have been acknowledged as received by the customer. including sales forecasts and actual orders and backorders Supply chain requirements related to the customer's needs.

or gauging one or more characteristics of equipment and facilities and comparing it to planned. Claims for the refund of duties as a result of a ruling by the a government agency. calibration. all sources of demand in the delivery of a product or service.Result of a calculation that determines the most cost effective to quantity to order or produce. Request disposition instructions for an excess item from the Supplier.e. complete and accurate statement or drawing of the technical requirements of a material. outputs. A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. formulas. or service. metrics. 423 June 2006 . formulas. alterations. processes. Economic Shipping Quantity Result of a calculation that determines the most cost effective quantity to ship. etc. providing feedback to achieve and maintain the performance required to meet the customers' business and/or competitive needs. As a whole with constituent parts. Inc. The process of documenting of the timing and maintenance of equipment and facilities including required repairs.that describe requirements of a product. specifications. servicing. As a whole with constituent parts.. Final drawings. etc. specifications.that describe requirements of a product A document used to solicit vendor responses when the functional requirements and features are known.INPUT / OUTPUT Delivery Performance DEFINITION The process of measuring actual supplier performance against internal and/or external standards. the introduction of new product lines. A clear. Delivery Plans Delivery Requirements Delivery Resources and Capabilities Duty Drawback Claims Engineering Design Enterprise Distribution Model EOQ/ESQ's Equipment and Facilities Characteristics Equipment and Facilities Maintenance History Equipment and Facilities Monitoring Information Equipment and Facilities Replacement and Disposition Plans Equipment and Facilities Schedules and Plans ETO Proposal ETO Request for Proposal ETO Spec or Design Excess Product Disposition Request © Copyright 2006 Supply-Chain Council. part programs. process. and best business practices. The design process consists of translating a set of functional requirements into an operational product. A proposal that may contain final drawings. and the modernization of plant facilities Time-phased plans of present and future load (capacity required) on all resources (Equipment and Facilities) based on the planned and released supply authorizations (i. Economic Order Quantity . item or service. Equipment and facility traits and specifications required to meet external entities requirements. and of the procedure to determine if the requirements are met. inputs. part programs. financing and disposition of capital outlays for such purposes as the purchase of new equipment. Model of the distribution enterprise including the flows. testing. Actions relating to the planning. examining. orders) and the planned capacity (capacity available) of these resources over a span of time. replacement of parts and other miscellaneous items to maintain production capability of the manufacturing fixed asset base Data gathered by measuring. all things that add value in the delivery of a product.

The authorization to ship a finished product that has been ordered. for the return of excess product Material in excess of the current requirements. Available data that characterizes and quantifies raw material. The flow of information back into the control system so that actual performance can be compared with planned performance. so that the data yields an understanding not available from any single data element. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Documents the implement law and requirements concerning the import and export of items and the manufacture of item. Excess Product Return Authorization Response Excess Products Existing Inventory Data External Regulatory Information Finish Goods Inventory Target Levels Finished Goods Inventory Location Finished Product Release Full Cart (Empty Cart) Full Cart Ready for Checkout Full Shelf Locations Government Constraints Government Regulations High Customer Services Satisfaction Levels Historical Return Rates Import/Export Requirements Incoming Product Information Information Feedback Information from Business Processes © Copyright 2006 Supply-Chain Council. Inc. Requirements established by a government or trading areas (i. Data concerning product on order and due to be delivered to location agreed in the order. cart transitions from full to empty.e EU. In addition to discussing the excess. and using the past pattern to predict future returns. Completion of customer checkout. Determination of the best retail locations for implementation of full shelf equipment. such as the return history on a similar product. packaging.e. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. for the return of excess. government. the customer and service provider would discuss enabling conditions such as return replacement or credit. The process of a customer obtaining authorization. 424 June 2006 . transportation and import / export requirements to facilitate the efficient return of excess to the service provider. delivery of a product or manufacture of an item. Indication of product and service quality.INPUT / OUTPUT Excess Product Return Authorization Request DEFINITION The process of a customer requesting authorization from a service provider. The target inventory is equal to the order point plus a variable order quantity. from a service provider. The physical storage location where Finished Product inventory is held in stock prior to use or shipment. A judgmental forecasting technique based upon the a return history that is analogous to a present situation. Requirements established by a government which must be met before allowing the shipping.) In a min-max inventory system. the equivalent of the maximum. and finished goods inventories Documentation and process standards set by external entities (i. handling. trade officials. Customer selected goods transferred to the point of sale. sale of the selected goods. work in process. etc.

Interrelated computer hardware and software along with people and processes designed for the collection. work in process. The rules that determining the desired levels of items. items. Inc. Communication of courses of action over the appropriate time-defined planning horizon and interval. work in process. Contains the plan for total inventory limits or levels (including Raw Material. or finished products. processing. Demand for inventory maybe dependant or independent. cycle (lot size). but without expressing computer alternatives and technical details. etc Inventory Inventory Availability Inventory Availability/Delivery Date Inventory Capacity Inventory in Stock Inventory Rules Inventory Status Inventory Strategy Item Master Item Pick Sheet for Stocking Schedule Item Stocking Requirements Load Information © Copyright 2006 Supply-Chain Council. The activities and techniques of determining the desired levels of items. Work In Process. repairs and operating supplies). product mix. and control. an service parts. Specifying the inputs. maintaining. ownership. and communicating information and masterdata to support planning and execution processes. supporting activities (maintenance. and operating supplies). and customer service (finished goods and spare parts). or finished products including order quantities and safety stock levels. testing and installing the product at the customer site. The total supply chain inventory strategy. Those stocks or items on hand used to support production (raw materials and work in process items). and dissemination of information for planning. Determination of the time required from the receipt of the order until the item should be delivered. The standalone product is fully functional upon completion. A document that lists the material to be picked to meet the schedule for the planned movement of material from a bulk storage area to an order pick storage area.e. repair. i. files. 425 June 2006 .INPUT / OUTPUT Information Infrastructure Plan Information Needed to Create and Maintain IT Information Needs Analysis Installed Product Integrated Supply Chain Plan Internal Capacity DEFINITION A plan outlining the processes required for managing. fluctuation (safety. and customer service (finished goods and spare parts) Those stocks or items on hand used to support production (raw materials and work in process items). those stocks or items used to support production (raw materials and work-in-process items). etc) systems. A record of specific information for each product. repairs and operating supplies). representing a projected appropriation of supply chain resource and input material to meet supply-chain requirements as they affect the customer. businesss rules and outputs for a new system. as distinguished from stores. Information relative to a load that is built and shipped. supporting activities (maintenance. buffer or reserve). The process of preparing. In business management. Also. both inter and intra company. transportation (pipeline). A periodic report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products that are covered in the stock status report. processing. inventory consists of a list of goods and materials held available in stock. Maximum rate of output for the inventory managment and warehouse process Stored products or service parts ready for sale. weight. and customer service (finished goods and spare parts). but there may be requirment for subseqent integration. and stocking locations. destinations. which defines the system parameters with which to effectively plan and execute using ERP (MRP. Finished and Purchased Finished Goods) including replenishment models. which are usually components or raw materials. whether raw materials. Inventory functions are anticipation. decision making. whether raw materials. hedge. supporting activities (maintenance. customer. The organic capability of an organization to produce output per time period. collecting.

software. which includes address and location data. usually when the buyer meets certain stipulated conditions that reduce the price of the products purchased. etc.) when planning for the Return and Recovery of Assets. Shipping. Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) On-line orders that are missing due to internet. Also. marking. and (usually) quantities held for quality problems. such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order. components. Procedures. Methods. Merchandise Category/Classification Merchandising Plan (SUPPLIER) Methods. and produced in response to a specific customer request. higher average ring. etc. budgets. 426 June 2006 . opportunity and issue analysis. The scheduled activities. customer preferences including shipping. Managing the flow of raw materials and products in a supply chain based on uncertain demand for the finished products The process of identifying and complying with regulatory documentation and process standards set by external entities (i. See “Product Return Capagilities” Maintenance. Request disposition instructions for an MRO item from the Supplier. Repair and Overhaul spare parts used to support of operations and maintenance. based upon paying early. buying in quantity. trade officials. and loading for shipment. backorders. projects. reservations. Customer profile. For example. procedures and processes required to produce distinct items. verify the shipment and customer credit information. or hardware malfunctions. and basic cleanliness. Indication of quality in workmanship and design. and delivery requirements. and pro forma profit and loss statement and management controls. which establishes an allowance or deduction. manufactured good. and Credit Information Loaded Retail Cart or Pallet Location of Customers Logistics Selection Lost or Dropped Shopping Carts Low Rates of Failure Loyalty Customer Profile Changes Make/Buy Decision Manage Integrated Supply Chain Inventory Information Manage Regulatory Return Policy Management Process Reports Manufacturer's Recommended Maintenance Schedules & Specifications Markdown Plans DEFINITION The function that performs tasks for the outgoing shipment of parts. Verify. Customer selected retail finished goods transferred to the point of sale. granted by the seller to the buyer. government. The output of the process used to determine whether a demand will be supplied with internal capacity or purchased through contract manufacturing and/or contracted services externally. It includes packaging. The categorization of goods based upon the range of specifications met during the manufacturing process. More units. etc. Part of the Market Plan. and products. that are recommended by the manufacturer to forestall machine breakdowns. The merchandising plan includes the current market position. merchandising objectives and strategies. Reports which provide management with the process information required to evaluate prescribed activities to ensure that the stated objectives of a project. replacements. or service are achieved. etc. programs.INPUT / OUTPUT Load. including adjustments.e. Inc. The on-hand MRO inventory balance minus allocations. including custom products that are designed. developed. status. Processes MRO Disposition Request MRO Parts Availability MRO Product Return Capabilities MRO Products © Copyright 2006 Supply-Chain Council. credit and purchase histories. weighing. action plans.

Data required to develop and build a Plan-O-Gram display to help minimize setup time by showing specific placement of all items. Receipt of payment for goods and services per contract or purchase order. A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand. the established frequency to change and maintain parts. An unfilled customer order or commitment. Inc. on the display. for the return of an MRO product Requirements for the triggering of material movement to a work center only when that work center is ready to begin the next job. a bid. Reserved inventory and/or planned capacity and delivery date for a specific order. In addition to discussing the MRO issue. and performed. with frequency set per part or machine type. so the order can be finalized and entered into the order system. 427 June 2006 MRO Return Authorization Response On-demand Replenishment Requirements On-Order/Backorder Optional Payment Order Backlog Order Information Order Quote (CUSTOMER) Order Rules Order Signal Outsource Plan Parts and Services Consumed Payment Payment Terms Plan and Build Loads Information Planning Data Planning Decision Policies Plan-o-gram Data Point of Sale Data (Daily) Preventative Maintenance and Calibration Schedule Process Procedures © Copyright 2006 Supply-Chain Council.) A planned series of actions or operations that advances returns from one stage to another. This process includes invoice collection. terms of sale. A plan that describes how a company will utilize third party business partners to provide products and services which the company chooses not to provide with internal capacity. Transportation modes are selected and efficient loads are built. distribution centers. including adjustments. invoice matching and the issuance of checks. maybe partial or in full. specifications for products and services. and basic cleanliness. The relief of inventory and computation of sales data at the time and place of the sales. performance expectations. . and interplant operations. The process of authorizing payments and paying suppliers for product or services. by product number. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. or established procedures to manage and execute all activities in the process. When given in response to an inquiry. The items and services utilized to manufacture a product. The function encompasses receiving and entering all data necessary on orders. (Well cared for equipment and facilities will last longer and cause fewer problems. and contract considerations. it is usually considered an offer to sell. or magnetic media and equipment. Planned and scheduled activities. Also. entering. based on failure consequences. packaging. Payment at the time of order. approved. handling. for the return of an MRO product. A statement of price. and description of goods or services offered by a supplier to a prospective purchaser.INPUT / OUTPUT MRO Return Authorization Request DEFINITION The process of a customer requesting authorization from a service provider. the customer and service provider would discuss enabling conditions such as return replacement or credit. Rules for the function that encompasses receiving. from a service provider. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. generally (may be manual) through the use of bar-coding. replacements. and promising orders from customers. The process of a customer obtaining authorization. Any company policies that affect how a planning process is defined. that forestall machine and facility breakdowns. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received.

428 June 2006 . aesthetics. Claims are marketing information provided as to performance. A statement of the output of a production facility for a specified period. Availability of a product by location that is reserved. The product design is the translation of a set of functional requirements into an operational product that meets both the enterprise and customer expectations. Claims from the users of the product indicate a need to change the product design A product design approach that uses quality measures to capture the extent to which the design meets the needs of the target market (customer attributes). or the number of products ready to be or planned to be shipped to the specific customer or market at the specific time. As a whole with constituent parts. the part number and a text description of the product) and the relationships to other items in the product family and linked / related SKU's. The proportion of individual products that make up the total production or sales volume and plan that authorizes the factory to manufacture a certain quantity of a specific item. comparing planned to actual production. lot size and setups. The ability the supply chain has to return products in a valid and accurate way. product mix. Production Plan includes production capability. all material and other resources used to add value in the supply chain for a product or services. The equivalent concepts for services are the workflow processes and rules. The end object of a transformation process that includes physical objects.g. The target for the total product inventory. sustainable output rate which can be achieved with the current product specifications. raw material. including e. work center identification. The physical storage location where product inventory is held in stock prior to use or shipment. Product routings represent the way products are made and are integrated with the Bill of Materials.INPUT / OUTPUT Procurement Signal (Supplier) Product Product Availability Product Data (linked/related SKU's) Product Design Product Design/Claims Product Design/Quality Product Inventory Location Product Inventory Target Levels Product Location Information Product Mix and Plans Product On Order Product Requirements Product Return Capabilities Product Routings Product Sources Product/Category Lifecycle Production Capacity (JN list calls Capability) Production Orders Planned Production Plans DEFINITION Any signal that indicates when to produce or transport Items in a pull replenishment system. work in progress and finished goods. and cost. The capability of a system or resources to produce a quantity output in a particular time period. or the portfolio of products the company has to cover the targeted customer need and the plans of how to manage that portfolio. Inc. The highest. The product design is the translation of a set of functional requirements into an operational product that meets both the enterprise and customer expectations. run times. Product on order with a selected source. relevant tolerances. as well as its actual performance. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. plant. Key elements of proper Routings include proper sequence of operations. worker effort. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. and. or the signal that sends the estimated need of parts or services to the supplier. etc. scheduled or available for sale. The time from initial research and development to the time at which the sales and support of the product to customers are withdrawn. Attributes of the product's storage location. As a whole with constituent parts. information or services.g. © Copyright 2006 Supply-Chain Council. and equipment. The properties and characteristics of a product (e. all sources of demand for a product or service in the supply chain.

etc. Promotion activities . all things that add value in the creation of a product or performance of a service. Requirements dictated by process standards set by external entities (i. publicity. The production policy indicates standard rules on how the production quality should be secured. Inc.g. product quality. Notification of a discrepancy relating to a receipt. advertising. Sometimes these two metrics are connected in one. the extent to which the supplier delivers according to quality specification (e.). sales promotions. 429 June 2006 © Copyright 2006 Supply-Chain Council. The policy is sometimes stated as "our quoted delivery time. Any signal that indicates when to produce or transport Items in a pull replenishment system. trial or purchase by final customers or others in the marketing channel. Collecting data and organizing. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. the fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point. should the parts be shipped one by one or in bulks etc." or an estimate of the customer delivery requirements of a product or service. correct packaging etc). for shipments. In a fixed-reorder quantity system of inventory control. etc. Acknowledgement that the product received conforms to specified requirements and criteria. advertising. Or. .INPUT / OUTPUT Production Quality and Policies Production Resources Production Rules Production Schedule Production Status Projected Delivery Requirements Projected Internal and External Capacity Promotion Event Calendar Promotion/Event Plans Promotional Plan Purchase History Quality and Delivery Performance Rated Carrier Data Rated Shipments Receipt Data Receipt Discrepancy Notification Receipt Verification Regulatory Requirements Replenishment Quantities Replenishment Signal Reports. etc. Contract rates and tariffs from carriers by commodity. and other tools to persuade customers to purchase the product offering during the year. An estimate of the amount of product or service a particular part of the business (internal capacity) or a third party business partner (external capacity) is capable of producing over a particular period of time when all factors that control the production processes are working optimally. As a whole with constituent parts.g. trade officials. For example.other than advertising. packaging. logistic quality) and to delivery specification (in time. and personal selling that stimulate. including: damage. or the quality of the production. and other tools to persuade customers to purchase the product offering The amount of purchased products for a certain time in history per specific intervals The process of measuring actual supplier performance against internal and/or external standards. The plan for a promotional product offering and how it is communicated to the customer and includes public relations. providing feedback to achieve and maintain the performance required to meet the customers' business and/or competitive needs. sales promotions.e. a percentage of parts produced without a need for adjustment or repair. or an indication of how far in the production process a specific part has progressed The company's goal for the time to ship the product after the receipt of a customer's order. arranging or presenting the data so that they yield an understanding not available from any single data element. lane. Feedback on the production schedule allowing for corrective action to a production problem. and Documents DEFINITION The operational techniques and planned and systematic activities used to fulfill requirements for quality in the production process. as defined by the company. e. Time phased promotion / event tasks where the product offering is communicated to the customer and includes public relations. government. interest. Information. mode. Shipments subject to defined and established rates A collection of related receipt data records organized in a specific manner. The rules directing or regulating the movement of goods through the entire manufacturing and repair cycle (parameters of production) from the requisitioning of raw material to the delivery of the finished products. quantity. which kind of packaging.

The business rules that govern the flow of unserviceable material through the network. etc. The physical location where the returned product inventory is held prior to disposition As a whole with constituent parts. The goals and approach to the management of return inventories. Corresponding Projections. Data concerning the return and disposition of defective products. Product being returned that is in a defective condition. i. excess inventory and/or serviceable or obsolete products. policies and agreements for the transportation activities around return process. trade officials. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Return requirements dictated by process standards set by external entities (i. after communicating with the customer. As a whole with constituent parts. Inc. government. MRO. including failure information. customer.INPUT / OUTPUT Resource Availability Return Benchmark Data Return Inventory Availability Return Inventory for Transfer Return Inventory Targets Return Inventory Transfer Data Return Network Configuration Return Performance Return Plans Return Process Capabilities Return Process Workflow Definition and Policies Return Product Authorization Return Product History Return Product Location Return Production Requirements Return Regulatory Requirements Return Requirements Return Resources Return Rules and Policies Return Schedule Instructions Return Transportation Guidelines. The return history of product including failure rates. developing and maintaining customer and channel performance standards of return processes such as service levels. execute. Product being returned as defined by the terms and conditions of a customer/supplier contract as available inventory and disposition excess not usable for sale. The storage location of those items being returned. repair.e. Inventory relative to return process available for use. all sources of demand in the creation of a product or service. or constrain the processes for the return of a product. etc. or the available resources at a point in time able to generate an output. Rules and policies align the Return process with the organization's business strategy. Source. Rules and Policies for conducting business. Product being returned for maintenance.e. all sources of demand for the return of a product. supporting Make. Courses of action over specified time periods that represent the projected appropriation of required return resources and or assets to meet the return process requirements. Data relative to the return process utilized to compare the company's actual results to selected values identified as reference. given service requirements by supply chain stakeholders/trading partners. The capability of a system or resources to produce a quantity output in a particular time period Definition and maintenance of the information flow about the Returns supply chain network for a group of similar or complimentary items through out their life cycle Permission to accept an excess product return for the designated return center. An update to the aggregate Supply-Chain Forecasts of Demand by Product Family supporting the Market/Channel Plans. the network configuration. failure causes.). All resources that add value to. Policies. they represent balanced Supply and Demand. goals and objectives. A list of operations and procedures for scheduling the return of product. i. Inventory relative to return process available for transfer to other destination. Deliver. & Agreements Returned Defective Product Returned Excess Product Returned MRO Product Returned Product Information Returned Product Location Returns Data Revised Aggregate Forecast and Projections DEFINITION The capability of a system or resource to produce a quantity of output in a particular time period. The properties. 430 June 2006 . The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. excess. Guidelines. or overhaul. etc. Performance measurement information for the Return Process (the actual value of measured for the criterion). © Copyright 2006 Supply-Chain Council.e. obsolete. or MRO product. characteristics and information relating to returns.

. Information used to select modes. Performance targets in service related measures (i.e. Planned or scheduled returning of material deemed defective for some certain time or times The required or agreed time or rate of delivery of goods or services purchased for a future period.A document used to solicit vendor responses when the functional requirements and features are known but no specific product is in mind. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Planned or scheduled returning of material deemed in excess of current requirements for some certain time or times. carriers & rates. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. cost. Planned or scheduled act of installing something for some certain time or times. Shipping parameters. 431 June 2006 © Copyright 2006 Supply-Chain Council. Legal documentation of the contents of a shipment (e. Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. Data which will provide measurement of actual supplier performance against internal and or external standards to provide feedback to achieve and maintain the performance required to meet the customer's needs. Transactions related to sending the product to the customer. Request for Proposal .. Legal documentation of the contents of a shipment (e. and customer profile. Data about the destination of a retun delivery. Listing or routes. transportation lanes.). which includes address data. The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule. Legal documentation of the contents of a shipment (e. export papers. channel. etc. export papers.g. bill of lading. bill of lading. Customers who are satisfied with the product or service delivered by the suppliers. quality..). and delivery requirements. etc.) are required. A set of minimum acceptable values that describe service requirements of a particular industry.g.. The transaction history of the physical shipment of an item to another internal location or to a customer. Service levels are established by balancing requirements against operational strategy. Request for Quote .. credit and purchase histories. etc. way bill. etc. bill of lading. Product due to arrive. Scheduling of direct deliveries of material to a specified location on a plant floor near the operation where it is to be used. . such as weight.. etc. way bill.) compared to the established service requirements. and/or customer segment. delivery performance. cube and route decide carrier and cost. export papers..A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors. etc. etc. Customer preferences including shipping. status.g. All sources of demand in the Source Return of a product or service. available carriers. Routes for shipping by consolidating loads. Inc.INPUT / OUTPUT Revised Business Assumptions Revised Capital Plan RFQ/RFP Routing Guide Satisfied Customer Scheduled Defective Product Return Scheduled Deliveries Scheduled Excess Product Return Scheduled Installation Scheduled MRO Return Scheduled Receipts Scrap Authorization Service Levels Service Requirements Shipment Documents Shipment Routes Shipments Shipping Documents Shipping Export Parameters and Documentation Shipping History Shipping Parameters and Documentation Shipping Preferences (Customer) Shipping Schedules (internal or 3PL) Ship-to Data Source Execution Data Source Return Requirements Sourcing Plans DEFINITION An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. size. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan. lead times. way bill. including the aspects such as time.

. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. Improve its market and competitive position. and asset management. whether raw materials. Product being tranferred to the appropriate stocking location within the supply chain. based on an agreed set of measurements. Note 2 . rules. Sources of demand for the integrated supply chain of a product or service at the appropriate level. fluctuation (safety.g. Data or information about the supplier. History of a lack of materials. horizon and interval. This data can be organizational . and the product is fully functional. cycle (lot size). consistent with previous information and does not violate business policies or rules. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. As a whole with constituent parts. internal. such as purchase order or supplier contract. The determination of inventory quantity by actual count. product. quality.this does not make the order "committed" there may be other tasks to be performed before a commitment can be made. purchase or production. delivery reliability.e. 432 June 2006 © Copyright 2006 Supply-Chain Council. or finished products. and methods of doing business. high-level plan that describes how a company intends to conduct business.this order could be customer. A list of operations and procedures for allocating storage needs for items in inventory. and increase its earnings performance. flexibility and responsiveness. The activities and techniques of determining the desired levels of items. and so on. A plan that describes goals and objectives for a supply chain and the steps that will be taken to reach those goals and objectives from the current performance levels. A timetable for the planned movement of material from a bulk storage area to an order pick storage area. or finished goods that are ordered. work in process. Demand for inventory may be dependant or independent. Requests for returns that are valid. e. Inventory functions are anticipation. purchasing. information . components. all sources of supply that are required to add value in the supply chain of a product or service at the appropriate level. buffer or reserve). The results of measuring the actual supplier performance on cost. engineering. A longer range. Structured supplier data is needed to set up and implement ERP or similar systems. Information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. and service parts. Note 1 . cost. horizon and interval. Inc. hedge. The capability of a system to perform its expected function Charges established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. The installation of product is completed at the customer site. Physical inventories can be taken on a continuous. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. financial. the information that the order contains is accurate.INPUT / OUTPUT Standard Practices/Rules Stocking Requirements Stocking Schedule Stock-out History Store Allocation Instructions Store Shelf Inventory Counts Strategic Plan Successful Installation / Live System Supplier Agreement Supplier Data Supplier Performance Supply Chain Execution Data Supply Chain Performance Improvement Plan Supply Chain Plans Supply Chain Requirements Supply Chain Resources Supply-Chain Performance Metrics Systems Capability Tariffs and Duties (External) Transferred Product Transportation Capacity Valid Returns Request Validated Order DEFINITION Industry established common practices. transportation (pipeline). periodic or annual basis. The capability of a trasportation system to perform it's function. An order that has had the instructions / requirements validated i.

either expressed or implied. Warehouse constraints are those storage items that impact on the supply chain efficiency. The sales or demand history that is analogous to the present situation for similar products. a SKU / Subclass. This can be intermediate storage in a manufacturing facility prior to final packaging or can be a class of materials waiting final transformation to finished products. The plan for a promotional product offering and how it is communicated to the customer and includes public relations. and other tools to persuade customers to purchase the product offering. and movement inventory. These rules include the movement and accounting for in-process items between work locations. Inc. including material handling equipment and personnel. repair or credit because the product received did not meet a commitment. in inventory. building maintenance. Location of inventory that is specified as "work in progress".INPUT / OUTPUT Validated Return Material Authorization Vendor Merchandising / Co-op advertising agreements Vendor/DC inventory availability Warehouse Operating Constraints Warranty Data WIP Handling Rules. © Copyright 2006 Supply-Chain Council. This process includes item stocking and accounting requirements. Vendor/DC inventory available to a customer to supply demands. advertising. and security personnel. sales promotions. equipment maintenance. All data relevant to a warranty claim for a customer for replacement. 433 June 2006 . (Where the customer has access to the supplier's inventory and the supplier has access to the customer's requirements and inventory or vendor managed inventory). The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. concerning a certain fact regarding the product The rules for handling WIP items in the production and repair process. Move Information and Methods WIP Inventory Location WIP Location Rules WIP Move Information and Methods Year-to-Year for Like SKU/Subclass DEFINITION A validated and approved Return Product Authorization (RPA). The process of recording and tracking the movement of WIP items through the production and repair process.

SOURCE.APPENDIX A METRICS Performance Attributes and Associated Level 1 Metrics Performance Attribute Supply Chain Reliability Performance Attribute Definition The performance of the supply chain in delivering: the correct product. Level 1 Metrics do not necessarily relate to a SCOR Level 1 process (PLAN. with the correct documentation. MAKE. Inc. 434 June 2006 . Performance Attributes Level 1 Metrics Perfect Order Fulfillment Order Fulfillment Cycle Time Upside Supply Chain Flexibility Upside Supply Chain Adaptability Downside Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-To-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Customer-Facing Reliability Responsiveness Flexibility Internal-Facing Costs Assets x x x x x x x x x x © Copyright 2006 Supply-Chain Council. RETURN). DELIVER. at the correct time. high level measures that may cross multiple SCOR processes. The speed at which a supply chain provides products to the customer. The effectiveness of an organization in managing assets to support demand satisfaction. The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage. This includes the management of all assets: fixed and working capital. to the correct customer. in the correct quantity. The costs associated with operating the supply chain. to the correct place. in the correct condition and packaging. Level 1 Metric Perfect Order Fulfillment Supply Chain Responsiveness Supply Chain Flexibility Supply Chain Costs Supply Chain Asset Management Order Fulfillment Cycle Time Upside Supply Chain Flexibility Upside Supply Chain Adaptability Downside Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-to-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital Performance Attributes and Level 1 Metrics Level 1 Metrics are primary.

concise. 435 June 2006 . Metric Definition Intended to provide clear. © Copyright 2006 Supply-Chain Council. Hierarchical Metric Structure These diagrams express the hierarchical structure of metrics from different levels by digraph. Inc. Discussion Additional descriptions which are necessary. Qualitative Relationship Description If the relationships between metrics cannot clearly quantitatively expressed by mathematical equations. should roll up to level 1 metrics (dashed link). typically a formula. and also. Calculation Provides an operable method to calculate the metric. * The dashed line boxes represent optional metrics associated with the Level 3 processes. if calculable. A causal link (arrow) from one metric A to another metric B means that metric A could affect metric B. For a level 1 metric. Data Collection Illustrates how to collect data for metric calculation. qualitative description of the relationships is required. it needs to drill down to level 3 metrics.Key to Template for Appendix A Specification: This template was used to develop the hierarchical structure between SCOR level 1. it needs to drill down to level 2 metrics. and 3 metrics. Quantitative Relationship (optional. For a level 2 metric. 2. if calculable) Lists the quantitative relationships between metrics by mathematical equations. benchmarkable. definitions of the metric.

2. D1. These are primarily associated with the original commitment (Customer Order Processing – D1. D2. Hierarchical Metric Structure Level 1 Perfect Order Fulfillment % of Orders Delivered in Full Level 2 Perfect Condition Documentation Accuracy Delivery Performance to Customer Commit Date Qualitative Relationship Description • • • • An order is considered perfect if the products ordered are the products provided and the quantities ordered match the quantities provided (% In Full).Assess Delivery Performance (ED. customer ready. D2. In addition.11. documentation and condition). • It receives a score of 0 if not perfect. D3. the documents necessary for support of the supply chain process should be scored across the set of Deliver process elements.14. Documentation supporting the order line is considered perfect if it is all accurate. specified customer entity and delivery time ordered is met upon receipt (Delivery Performance to Customer Commit Date). For an order line to be perfect. D3. A delivery is considered perfect if the location. D3. D 2. D2. The calculation of line item perfect order line fulfillment is based on the Level 2 components: • Each component receives a score of 1 if it is judged to be perfect. with no damage. 436 June 2006 . The Perfect Order Fulfillment calculation is based on the performance of each Level 2 component of the order line to be calculated (product & quantity.14. etc. D1.2) should be updated from metrics derived. D1. Data Collection Data for the components that are used to drive the calculation of supply chain performance are primarily taken from Deliver and impact Deliver Enable process elements. Components include all items and quantities on-time using the customer’s definition of on-time.14. D2. with the correct configuration.2. Inc.13.15).11. an Order is Perfect if the individual line items making up that order are all perfect.3) and the satisfaction of that commitment (Receipt and Installation (as appropriate) – D1. © Copyright 2006 Supply-Chain Council. The Enable Deliver Process Element . and documentation – packing slips. The product condition is considered perfect if the product is delivered / faultlessly installed (as applicable) on specification. D3. all of the individual components must be perfect. 4) the order line is perfectly fulfilled. bills of lading.Performance Attribute: Supply Chain Reliability Level 1 Metric: Perfect Order Fulfillment Metric Definition The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage.15. and is accepted by the customer (Perfect Condition) Quantitative Relationship (optional. D3.13. if calculable) Calculation [Total Perfect Orders] / [Total Number of Orders] x 100% Note.13. date & time & Customer. invoices. If the sum of the scores equal the number of components (in this case. complete.11.15. and on time (Accurate Documentation).

especially since this attribute measures performance of the supply chain which is. An order is defined as a collection of one or more order lines representing a request to deliver specified quantities of goods or to render specific services. An order line always references a product or service. on specification Orders canceled by the customer are excluded from the metric. using the customer’s definition of on-time delivery • Documentation supporting the order including packing slips. etc. of course. all items on the order line are delivered in the quantities specified • Delivered on time to the initial commitment date. For an order to be considered perfect the following standards must be met: • Delivered complete. The order can further be defined as a request (with a specific identifier as a reference) to deliver specified items or to render specific services with specific prices.Discussion The performance of the supply chain is considered “perfect” if the original commitment made to a customer is met through the supply chain. Although condition may not be as rigorously measured as time or quantity it should be considered as a component if available. where an order line is defined as a line representing a commitment on a sales order. no damage. customer-ready and accepted. Often for date and quantity issues (and occasionally product). bills of lading. and quantities. 437 June 2006 . quality certifications. invoices. It should also be noted that a corresponding evaluation of suppliers’ performances could be determined by extending these standards to each supplier’s ability to source products. This is acknowledged as a standard practice. correct configuration. Order changes initiated by the customer and agreed to by the supplier supersede initial commitments and form a new comparative basis for the metric. © Copyright 2006 Supply-Chain Council. in those situations the standard measured is considered to be met perfectly if the range specified is satisfied. ultimately measured by its customers. a range rather than a strict value is used. dates. is complete and accurate • Faultlessly installed (as applicable).. The term “customer-ready” for the perfect condition standard may imply a subjective component based on the customer’s satisfaction. Commitments are made to a customer at the order line level. Inc.

D2. Several SCOR diagnostic metrics exist that can be used to focus “% In Full” improvement efforts.3). 438 June 2006 . committed quantities refer to a range that is acceptable to the customer rather than a strict value.3 & D3. such as for supplying bulk materials.1) including inventory location accuracy. M3. D3.4). and no extra items are provided • All quantities received by the customer match the order quantities (within mutually agreed tolerances) Quantitative Relationship (optional.12.13.3. such that orders deliberately split by the supplier should still be considered “in full” so long as all metric criteria are met.12.13) Discussion Order quantities are based on item / quantity original commitments agreed to by the customer. This metric has no “timing” element. inventory availability (M1. D2.1.2. D3. D1. In some cases.12. Orders canceled by the customer are excluded from the metric. and the satisfaction of that commitment through the shipment and customer receiving processes (D 1. (ED. Some of these include: • % Orders Scheduled to Requested Quantity • Schedule Achievement • Yield variability • Planned Shipment Fill Rate (not yet defined) • % Stock Outs (not yet defined) • Inventory Cycle Count Accuracy (not yet defined) Orders may not be filled completely to the customer’s original request quantity due to the inability to © Copyright 2006 Supply-Chain Council. if calculable) Calculation [Total number of orders delivered in full] / [Total number of orders delivered] x 100% Data Collection Data for the components that are used to drive the calculation of % In Full are primarily associated with the original order processing step of ‘Reserve inventory and Determine Delivery Date’ (D1.1. Inc. M2. D.Performance Attribute: Supply Chain Reliability Level 2 Metric: % of Orders In Full Metric Definition Percentage of orders which all of the items are received by customer in the quantities committed Hierarchical Metric Structure Level 1 Perfect Order Fulfillment Level 2 % of Orders Delivered in Full Level 3 Delivery Item Accuracy Delivery Quantity Accuracy Qualitative Relationship Description An order is considered delivered “in full” if: • All items ordered are the items actually provided. Order changes initiated by the customer and agreed to by the supplier supersede original commitments and form a new comparative basis for the metric.13.

Inc.schedule to the initial request. 439 June 2006 . © Copyright 2006 Supply-Chain Council. a deviation from the shipment plan may lead to inability to fulfill an order completely. Breakdown may also occur from the inventory availability (including stock outs for MTS and schedule achievement for MTO and ETO) and inventory location accuracy. Lastly.

g. such that partial deliveries can still be considered as meeting the Customer Commit Date so long as all metric criteria are met.12. if calculable) Calculation [Total number of orders delivered on the original commitment date] / [Total number of orders delivered] x 100% Data Collection Data for the components that are used to drive the calculation of Delivery Performance to Customer Commit Date are primarily associated with the original order processing step of ‘Reserve inventory and Determine Delivery date’ (D1. Orders canceled by the customer are excluded from the metric. Inc. The original commitment date can refer to a range. Transportation availability). D3. and the satisfaction of that commitment through the shipment and customer receiving processes (D 1. This metric has no “In Full” element.3 & D3. D3. Measuring the frequency of accepting the customer’s original request date. rather than a strict date and time.g. Some of these include: • % Orders Scheduled to Request • % Orders Shipped on time (not yet defined) • Carrier Performance Reliability (not yet defined) Orders may not be delivered to the Customer Commit Date due to breakdowns in the order fulfillment and shipment process (e. © Copyright 2006 Supply-Chain Council. can be an important measure of customer satisfaction. commit date. Orders may also be delivered late due to carrier delivery performance / issues. Order changes impacting the timing of a delivery that are initiated by the customer and agreed to by the supplier supersede original commitments and form a new comparative basis for the metric. D1.13. vs.13). Discussion Order delivery performance from a timing perspective is based on original commitments agreed to by the customer.12. Several SCOR diagnostic metrics exist that can be used to focus delivery performance improvement efforts. D2.Performance Attribute: Supply Chain Reliability Level 2 Metric: Delivery Performance to Customer Commit Date Metric Definition The percentage of orders that are fulfilled on the customer’s originally scheduled or committed date Hierarchical Metric Structure Level 1 Perfect Order Fulfillment Level 2 Delivery Performance to Customer Commit Date Level 3 Customer Commit Date Achievement Time Customer Receiving Delivery Location Accuracy Qualitative Relationship Description An order is considered delivered to the original Customer commitment date if: • The order is received on time as defined by the customer • The delivery is made to the correct location and Customer entity Quantitative Relationship (optional. D2. D2.3. that is acceptable to the customer (e. advanced shipments).12. The acceptable window for delivering on time should be defined in the customer’ service level agreement.3).13. 440 June 2006 .

installation (as applicable) and satisfaction of the order commitment (D1. claims.Performance Attribute: Supply Chain Reliability Level 2 Metric: Perfect Condition Metric Definition Percentage of orders delivered in an undamaged state that meet specification. D1. have the correct configuration.14. D2.2) should be updated to reflect this metric and its components.13. Inc. if calculable) Calculation [ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100% Data Collection Data for the components that are used to drive the calculation of “Perfect Condition” are primarily associated with the receipt. The Enable Deliver Process Element . D3.13.14.13. are faultlessly installed (as applicable). This data is typically available from a complaints. 441 June 2006 . D2. D3. © Copyright 2006 Supply-Chain Council. or warranty/returns database. and accepted by the customer Hierarchical Metric Structure Level 1 Perfect Order Fulfillment Level 2 Perfect Condition Orders Delivered Damage Free Conformance Warranty & Returns Level 3 Orders Delivered Defect Free Conformance % Orders Received Damage Free % Faultless Installations Qualitative Relationship Description An order is considered to be delivered in perfect condition if all items meet the following criteria: • Undamaged • Meet specification and has correct configuration (as applicable) • Faultlessly installed (as applicable) and accepted by the customer • Not returned for repair or replacement (within the warranty period) Quantitative Relationship (optional.Assess Delivery Performance (ED.14).

calculated at the order level.Discussion This metric. Several SCOR diagnostic metrics exist that can be used to focus Perfect Condition improvement efforts. claims and returns within the warranty period are included and count against this metric. Inc. Justified and non-justified product quality issues. Some of these include: • Cost of Noncompliance • Damage and Shrinkage • Scrap Expense • Warranty Costs • Yield Variability © Copyright 2006 Supply-Chain Council. assesses the quality of products delivered through the supply chain from the customer’s perspective. Improving this metric lowers the supply chain cost associated with claims and returns. 442 June 2006 .

Quantitative Relationship (optional. Government and other supply chain regulatory entities. etc. Inc. Hierarchical Metric Structure Level 1 Perfect Order Fulfillment Level 2 Documentation Accuracy Shipping Documentation Accuracy Payment Documentation Accuracy Level 3 Compliance Documentation Accuracy Other Required Documentation Accuracy Qualitative Relationship Description An order is considered to have accurate documentation when the following are accepted by the customer: • Shipping documentation • Payment documentation • Compliance documentation • Other required documentation All documentation must be complete. bills of lading. invoices.Performance Attribute: Supply Chain Reliability Level 2 Metric: Documentation Accuracy Metric Definition Percentage of orders with accurate documentation supporting the order. if calculable) Calculation [Total number of orders delivered with accurate documentation] / [Total number of orders delivered] x 100% Document supporting the order includes: • Shipping documentation: o Packing slips (Customers) o Bill of lading (Carriers) o Government or Customs documentation / forms • Payment Documentation: o Invoice o Contractual outline agreement • Compliance documentation o Material Safety Data Sheets • Other required documentation o Quality certification © Copyright 2006 Supply-Chain Council. 443 June 2006 . and readily available when and how expected by the customer. correct. including packing slips.

15). increase the customs delay.11.15. Inc.Data Collection Data for the components that are used to drive the calculation of Accurate Documentation are primarily associated with the Deliver processing step of ‘Load Product & Generate Shipping Documentation’ (D1. Government. D3. and other regulatory entities. on-time documentation implies a scheduled ship date and scheduled invoice date. The timeliness and quality of the documentation is measured from the perspective of the customer. D3. 444 June 2006 . The definition encompasses On time and Accurate documentation. and ‘Invoice’ (D1. D2. and delay the customer’s acceptance of the order. Documentation may be late or incomplete due to the inability to prepare / process the correct documentation on time. The data collection step is part of Assess Delivery Performance (ED2) and Manage Deliver Information (ED3) Discussion This metric is calculated at the order level. D2. However. Inaccurate or late invoices may also lead to the inability to fulfill the customer request.11.15. Inaccurate or late shipping documentation may prevent the product to be loaded or shipped. Accurate documentation metrics are similar to what exists for SOURCE process metrics Possible diagnostic metrics that can be used to focus Accurate Documentation improvement efforts include: • % orders documentation (shipping and invoice) processed on time • % faultless invoices © Copyright 2006 Supply-Chain Council.11).

this gross order fulfillment cycle time does not truly reflect the responsiveness of the organisation. The responsiveness of the organisation is determined by the cumulative cycle time for all activities that are required to fulfill the order. according to the following formula: Order Fulfillment Cycle Time = Order Fulfillment Process Time + Order Fulfillment Dwell Time.Performance Attribute: Supply Chain Responsiveness Level 1 Metric: Order Fulfillment Cycle Time Metric Definition The average actual cycle time consistently achieved to fulfill customer orders. one can argue that it may increase the ability of the organisation to meet that order as it allows the organisation to plan ahead and fulfill the order in a more optimal way. if calculable) Order Fulfillment Cycle Time ≈ Source Cycle Time + Make Cycle Time + Deliver Cycle Time Calculation [Sum Actual Cycle Times For All Orders Delivered] / [Total Number Of Orders Delivered] Data Collection Data for the components that are used to drive the calculation of responsiveness are taken from the Source. This kind of idle time should not be deducted © Copyright 2006 Supply-Chain Council. so Order Fulfillment Cycle Time will equal Order Fulfillment Process Time. Hierarchical Metric Structure Level 1 Order Fulfillment Cycle Time Level 2 Source Cycle Time Make Cycle Time Deliver Cycle Time Qualitative Relationship Description Quantitative Relationship (optional. which is imposed by customer requirements’. On the contrary. Therefore the definition of Order Fulfillment Cycle Time consists of a ‘gross’ component and a ‘net’ component named Order Fulfillment Process Time. Inc. this cycle time starts from the order receipt and ends with customer acceptance of the order. Note that dwell time will equal 0 for companies who do not utilize this metric. regardless of whether this represented cycle time for the activities performed by the organisation to fulfill the order (both value-add and non-value-add) or dwell time because the order was placed well in advance by the customer. It represents all the time passed between these two events. 445 June 2006 . Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. the gross order fulfillment cycle time will be seven days. Discussion The order fulfillment cycle time as captured from the moment a customer places the order to the moment the order is fulfilled is considered to be a ‘gross’ cycle time. If the customer places the order 3 months ahead (pre-ordering). If the customer places the order one day in advance. but should exclude any dwell time where no activity takes place. the fact that the customer pre-orders does not reduce the responsiveness of the organisation. the gross fulfillment cycle time will be 96 days. However. Take for example an organisation that needs six days to fulfill a certain customer order. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organisation. Make and Deliver process elements. As such. Order fulfillment dwell time is defined as ‘any lead time during the order fulfillment process where no activity takes place. For each individual order.

Dwell time is mostly associated with the ordering process. as this is the cycle time reflecting most accurately the responsiveness of the organisation. It will also ensure that those organisations in industries where dwell time is a factor can be benchmarked against organisations in industries where dwell time does not play a role. Inc. Note that for those organisations where dwell time does not play a role. but is requested by the customer to wait (for example to follow a certain shipment schedule). consisting of the net component and dwell time. It is also common in the delivery process where the organisation may be in principle ready to ship the product/service. where a customer may place an order in advance to reserve capacity/materials etc. Because the lower level metrics are hierarchical (the cumulative sum of cycle times at level 2 or 3 should be equal to the cycle time at level 1). but also to all lower level metrics. © Copyright 2006 Supply-Chain Council. the cumulative sum of dwell times at level 2 or 3 should total up to the dwell time at level 1. 446 June 2006 .from the gross order fulfillment cycle time. but where the actual steps in the order fulfillment process take place later on. This means that each lower level metric can have a gross component. the dwell time can be taken as zero days which results in the net order fulfillment cycle time to be equal to the gross order fulfillment cycle time For benchmarking purposes it is recommended to use the Order Fulfillment Process Time. The concept of dwell time applies not only to the level 1 metric.

depending on the possible strategies deployed by companies to fulfill orders such as make-to-stock. When make-to-stock or make-to-order strategy is deployed. the dashed optional metrics ‘Identify Sources of Supply Cycle Time’ and ‘Select Supplier and Negotiate Cycle Time’ are not used in the calculation. © Copyright 2006 Supply-Chain Council. 447 June 2006 .Performance Attribute: Supply Chain Responsiveness Level 2 Metric: Source Cycle Time Process Numbers: S1. if calculable) Source Cycle Time ≈ (Identify Sources of Supply Cycle Time + Select Supplier and Negotiate Cycle Time) + Schedule Product Deliveries Cycle Time + Receive Product Cycle Time + Verify Product Cycle Time + Transfer Product Cycle Time + Authorize Supplier Payment Cycle Time Calculation Data Collection Discussion Metrics in Level 3 that are used to drive the calculation of ‘Source Cycle time’ are taken from the Source process elements. Inc. S3 Metric Definition The average time associated with Source Processes. make-to-order or engineer-to-order. Hierarchical Metric Structure Level 1 Order Fulfillment Cycle Time Level 2 Source Cycle Time Identify Sources of Supply Cycle Time Authorize Supplier Payment Cycle Time Select Supplier and Negotiate Cycle Time Transfer Product Cycle Time Level 3 Schedule Product Deliveries Cycle Time Verify Product Cycle Time Receive Product Cycle Time * The dashed line boxes represent optional metrics associated with the Level 3 processes. S2. (The same hereinafter) Qualitative Relationship Description Quantitative Relationship (optional.

In Make Cycle Time. so the “least amount of time” should be applied rather than the total sum. © Copyright 2006 Supply-Chain Council. M2. Hierarchical Metric Structure Level 1 Order Fulfillment Cycle Time Level 2 Make Cycle Time Schedule Production Activities Cycle Time Release Finished Product To Deliver Cycle Time Issue Material/Product Cycle Time Stage Finished Product Cycle Time Level 3 Produce and Test Cycle Time Package Cycle Time Finalize Production Engineering Cycle Time Qualitative Relationship Description Quantitative Relationship (optional. make-to-order or engineer-to-order.g. M3 Metric Definition The average time associated with Make Processes. depending on the possible strategies deployed by companies to fulfill orders such as make-to-stock. 448 June 2006 . And also. the metric ‘Issue Materia