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.

© Copyright 2006 Supply-Chain Council, Inc.

1

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

2

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

3

June 2006

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).

© Copyright 2006 Supply-Chain Council, Inc.

4

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

5

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

6

June 2006

Inc.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. First time users of the Model should be aware that the metrics in the Model are hierarchical – just as the process elements are hierarchical. Figure 5 – Definitions for SCOR Performance Attributes and which Level 1 metrics are associated with each attribute. to the correct place. The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage.0. Lower level calculations (Level 2 metrics) are generally associated with a narrower subset of processes. in the correct quantity. in the correct condition and packaging. an organization may wish to examine the correlation between the request date and commit date. For example. 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. to the correct customer. even lower level metrics (diagnostics) are used to diagnose variations in performance against plan. standard Performance Attribute definitions were provided. Associated with the Performance Attributes are the Level 1 Metrics. SOURCE. In Version 4. with the correct documentation. DELIVER. © Copyright 2006 Supply-Chain Council.0. Level 1 Metrics are created from lower level calculations. 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. Delivery Performance is calculated as the total number of products delivered on time and in full based on a commit date. Level 1 Metrics do not necessarily relate to a SCOR Level 1 process (PLAN. The effectiveness of an organization in managing assets to support demand satisfaction. 7 June 2006 . at the correct time. RETURN). (Level 1 Metrics are primary. The speed at which a supply chain provides products to the customer. For example. In Version 5. This includes the management of all assets: fixed and working capital. Additionally. high level measures that may cross multiple SCOR processes. 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. While these Performance Attributes are critical in implementing the Model. MAKE. formal definitions were not previously included in the Model.

0 similarly saw the addition of a Cycle Time metric for every process. Changed definitions in Version 8.SCOR Version 8.0 Changes No Process Changes In Version 8. but do not “roll up” to Level 1 Metrics. SCOR 7. 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. spanning the supply chain.1.0 Metrics that were categorized as lower level or no longer relevant have been archived. 2. Best Practices no longer contain the “Feature” column. Inc. 8 June 2006 .0. The definition and other detailed information regarding this metric are included in the Metrics Appendix A in this publication. now not maintained by the Council. The team surveyed SCC members on Best Practices that they want to see included in the future and this work is ongoing. 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. This column has been replaced by a definition where it has been identified. Level 2 processes now only include Level 1 metrics and a Cost metric has been added for every single process in the model. Metrics There is an additional Level 1 metric – Return on Working Capital – in the Assets Attribute category. Version 7.0 have been significantly streamlined. as this was a “hangover” from when the Model used to list affiliated software features.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. Integration with scheduling and inventory management new: Available-to-Promise (ATP). It is also listed in the appropriate processes under “Metrics. Best Practices The Best Practices Appendix has also been reworked to make it a more clean and consistent reference. An archived list of SCOR metrics is available upon request. This allows the easy “roll up” of cost and cycle time metrics to the Level 1 metrics. Metrics that are considered to be “diagnostic” are not included in the Appendix A Metrics Hierarchy. or 3 Processes. See Glossary © Copyright 2006 Supply-Chain Council. These measures are important measures.” The Metrics in SCOR 8. Changes to some of the definitions throughout the Model have been updated and some process affiliations are changed. there are no changes to the Level 1. (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.

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

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

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

prioritizing. and prioritizing. The levels of aggregation can be at any element associated with a supply chain asset. all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. representing a projected appropriation of supply-chain resources to meet supply-chain requirements. and Return. Corporate forecast. monthly. P1. and Aggregate Supply Chain Requirements The process of identifying. Daily. SKU.6 months. 1-5 years. horizon and interval. The establishment and communication of courses of action over the appropriate time-defined (long-term.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.4 Establish Supply Chain Plans Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding .e. warehousing. outsource plans or some other action that will optimize service. i. Inc. assets. flexibility. Assess. as a whole with Chain Resources constituent parts. P1. weekly) planning horizon and interval. Annual. The Category P1 includes four Level 3 Elements: P1. For services. Monthly. and aggregating. The average actual cycle time consistently achieved to fulfill customer orders. and Aggregate Supply The process of identifying. SKU by Location. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level. and Quarterly. Cost to Plan Supply Chain Order Fulfillment Cycle Time Plan Cycle Time Return on Supply Chain Fixed Assets © Copyright 2006 Supply-Chain Council. time horizon. Source. horizon and interval.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.e. P1. Daily. i. 1. costs. Divisional forecast. Prioritize. Deliver. Monthly. packaging. Product Line forecast. annual. The sales forecasting time interval generally coincides with how often the plan is updated.2 Identify.e. 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. Make.1 Identify. pricing. Weekly. (or other supply chain inconsistencies) in an iterative and collaborative environment. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed i. and time interval. Weekly. The sales forecast is comprised of the following concepts: sales forecasting level. 12 June 2006 . all sources of demand for the integrated supply chain of a product or service at the appropriate level. This includes the fixed assets used in Plan.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. 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. The sum of the costs associated with planning supply chain activities. aggregating. The process of developing a time-phased course of action that commits supply-chain resources to meet supply-chain requirements.

Including Sales. 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. Receipt. and financial) into one integrated set of plans. It is performed at least once a month and is reviewed by management at an aggregate (product family) level..cpfr. accounts payable. Executed properly. Best Practices: All Functions and Organizations Understand Their Impact on Supply/Demand Balancing.org/intro. using a set of process and technology models. and new-product plans at both the detail and aggregate levels and tie to the business plan. Trade-Off between Service Level and Inventory Investment) © Copyright 2006 Supply-Chain Council.) 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. Customer. The process must reconcile all supply... 13 June 2006 . manufacturing. Materials Management. Manufacturing. through Production to Supplier Request Supply chain planning optimization system Tools Support Balanced Decision Making (e. development. Forecasting and Replenishment is a concept that allows collaborative processes across the supply chain. Marketing. It is the definitive statement of the company’s plans for the near to intermediate term. Components include accounts receivable.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. 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. Product Management. sourcing. Forecasting. inventory. supply chain revenue.g. 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. (From www. demand. Suppliers. Inc. Replenishment (CPFR) None identified Supply chain modeling and visualization system Event-driven supply chain re-planning Collaborative Planning.html) Enterprise resource planning system Customer relationship management On-Line Visibility of All Supply-Chain Demand Requirements and Resources. (From APICS online dictionary. marketing. the sales and operation planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement. 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. The process brings together all the plans for the business (sales.. 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.

and the inventory is restocked to predefined levels. © Copyright 2006 Supply-Chain Council. 14 June 2006 . Inc. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. 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. The on-site inventory is counted.Vendor Managed Inventory VMI is a concept for planning and control of inventory.

Etc. 1.Sum of Variance/Sum of Actuals to determine percentage error. Prioritize. Forecast accuracy is calculated for products and/or families for markets/distribution channels. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level. and time interval. The sales forecast is comprised of the following concepts: sales forecasting level. Divisional forecast. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. EDI. and prioritizing. prioritizing. OAGI. 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. in unit measurement. all sources of demand for the integrated supply chain of a product or service at the appropriate level. © Copyright 2006 Supply-Chain Council. Common calculation is Forecast Sum . B2B Integration and Application Server Systems Joint Service Agreements (JSA) Collaborative Planning Systems Push-Based Forecasts Are Replaced with Standards Based (RosettaNet. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed i.1 Identify. SKU. 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. and Aggregate Supply Chain Requirements The process of identifying. spanning the supply chain. and Aggregate Supply Chain Requirements The sum of the costs associated with identifying. Weekly.3 Reserve Inventory & Determine Delivery Date Order Backlog from D1.6 months. Prioritize. The average time associated with the identifying. eBXML. i. 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. time horizon. horizon and interval.11 Load Vehicle & Generate Shipping Documentation The part of the supply chain requirements related to the customer’s needs. SKU by Location. Internet Trading Exchanges.e. Corporate forecast. Annual. The sales forecasting time interval generally coincides with how often the plan is updated.P1. Daily. Product Line forecast. Daily. 1-5 years.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems. Monthly. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. and aggregating supply chain requirements Forecast Accuracy Identify. 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. Metrics (see Appendix A for metrics attributes): Cost to Identify.e.e. Inc. 15 June 2006 . and Quarterly. assessing and aggregating supply chain requirements. i. aggregating. Prioritize. Monthly. Weekly.

Revised Business Assumptions from EP. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by from EP. Deliver.11 Load Vehicle & Transactions related to sending the product to the customer.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. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. These are reviewed periodically with actual results to verify the linkage of actual cause and Assets effect. Requirements © Copyright 2006 Supply-Chain Council. they represent balanced Supply and Demand.Planning Data from EP.3 Reserve Inventory & Transactions related to sending the product to the customer. Determine Delivery Date Outputs: Supply Chain Requirements to P1.5 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.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. supporting Make. horizon and interval. Revised Business Assumptions from EP. Generate Shipping Documentation Shipments from D1. 16 June 2006 .9 Align Supply Chain Unit Plan with Product Family supporting the Market/Channel Plans. Shipments from D1.3 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. Corresponding Financial Plan Projections. Source. Inc. These are reviewed periodically with actual results to verify the linkage of actual cause and Plan effect.

and operating supplies). and contract considerations. field samples. Etc.5 Manage Integrated Supply Chain Capital Assets Outsource Plan from EP. and customer service (finished goods and spare parts) Make/Buy Decision from EP. Assess. Outsource Plan from EP.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems. 17 June 2006 . performance expectations. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. Assess. all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level. Inc. assessing and aggregating supply chain resources. Production Plan includes production capability. inventory consists of a list of goods and materials held available in stock. Total gross value of inventory at standard cost before reserves for excess and obsolescence. specifications for products and services. assessing. supporting activities (maintenance.3 Manage PLAN Data Collection Production Plans from P3. and Aggregate Supply Chain Resources Cycle Time Inventory Days of Supply The sum of the costs associated with identifying. field FG. Inventory from Source: Customer In business management. horizon and interval. prioritizing. 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. and Aggregate Supply Chain Resources Identify. Also. repair. EDI. plant FG. and aggregating. 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 The process of identifying. future liabilities should not be included Best Practices: Digital Links (XML Based. and contract considerations.2 Identify. specifications for products and services. The average time associated with the identifying. Metrics (see Appendix A for metrics attributes): Cost to Identify. performance expectations. those stocks or items used to support production (raw materials and work-in-process items). A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. and aggregating supply chain resource availability Five point annual average of the sum of all gross inventories (raw materials & WIP. Internet Trading Exchanges.4 Establish Production Plans © Copyright 2006 Supply-Chain Council.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.P1. other) ÷ (COGS ÷ 365). Only includes inventory on company books. Assess. 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. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels.6 Manage Integrated Supply Chain Transportation Planning Data from EP. 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. Inputs: Delivery Plans from P4. 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.

PLAN Regulatory Requirements and government.Regulatory Requirements from EP.8 Manage Requirements dictated by process standards set by external entities (i. Compliance Revised Capital Plan from EP.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. Sourcing Plans from P2. Outputs: Supply Chain Resources to P1.3 Balance As a whole with constituent parts. etc. © Copyright 2006 Supply-Chain Council.e. 18 June 2006 . trade officials. Inc. 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.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.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. horizon and interval. Revised Capital Plan from EP.).

warehousing. The process of developing a time-phased course of action that commits supply-chain resources to meet supply-chain requirements.2 Identify. Inc. and Aggregate Supply Chain Requirements Inventory Strategy from EP. Finished and Purchased Finished Goods) including replenishment models. Prioritize. Outputs: Workflow to P1. Planning Decision Policies from EP. horizon and interval. 19 June 2006 . Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the Plan from EP. flexibility.P1.3 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. plant FG. The total supply chain inventory strategy. For services. Sources of demand for the integrated supply chain of a product or service at the appropriate level. Work In Process. Demand Planning.4 Manage Integrated Supply Chain Inventory As a whole with constituent parts. all sources of supply that are required to add value in the supply chain of a product or service at the appropriate level. product mix. horizon and interval. 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. business rules and transaction data. Business Intelligence (BI) Inputs: Supply Chain Resources from P1.1 Any company policies that affect how a planning process is defined. Manage Business Rules for PLAN Processes approved. field samples. ownership. Assess.2 Manage Performance of steps that will be taken to reach those goals and objectives from the Supply Chain current performance levels. outsource plans or some other action that will optimize service. pricing. (or other supply chain inconsistencies) in an iterative and collaborative environment. costs. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. 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. Total gross value of inventory at standard cost before reserves for excess and obsolescence. and performed. packaging. Only includes inventory on company books. assets. Algorithms use the business rules and metrics as the drivers for the planning engine. and stocking locations. field FG. 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. Contains the plan for total inventory limits or levels (including Raw Material.1 Identify. both inter and intra company. future liabilities should not be included Best Practices: A data warehouse / data mart is the source of all planning (master) data. and Aggregate Supply Chain Resources Supply Chain Requirements from P1. Demand Flow Software that provides multiple data models including the business rules Leadership and metrics for the entire supply chain planning process.4 Establish Supply Chain Plans © Copyright 2006 Supply-Chain Council. Analytical tools enable the ongoing maintenance and improvement of the business rules based on actual data. other) ÷ (COGS ÷ 365). The sum of the costs associated with balance of supply chain resources with supply chain 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.) Among Real-time exchange of supply chain information between supply chain Supply Chain Members members collaborative planning systems. 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. Prioritize. monthly. Courses of action over specified time periods that represent a projected appropriation of total supply-chain resources to meet total supply-chain demand requirements. Inc. annual. 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. 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.1 Identify.4 Establish Supply Chain Plans The establishment and communication of courses of action over the appropriate time-defined (long-term. and Aggregate Product Requirements © Copyright 2006 Supply-Chain Council.3 Balance Supply Chain Resources with Supply Chain Requirements Outputs: Supply Chain Plans to P5.P1. plant FG. Etc. Internet Trading Exchanges. Total gross value of inventory at standard cost before reserves for excess and obsolescence. and Aggregate Return Requirements Supply Chain Plans to P4. weekly) planning horizon and interval.1 Identify.1 Assess. Prioritize. 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. Supply Chain Plans to P2. 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. 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. Only includes inventory on company books. field samples. 20 June 2006 . EDI. 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. other) ÷ (COGS ÷ 365). representing a projected appropriation of supply-chain resources to meet supply-chain requirements.

Prioritize. 21 June 2006 . © Copyright 2006 Supply-Chain Council.1 Identify. 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. Inc.Supply Chain Plans to P3.

Inc. The process of identifying. The process of developing a time-phased course of action that commits resources to meet requirements. all sources of demand for a product or service in the supply chain. inventory. Deliver. Etc. Make. and Aggregate Product Requirements P2.4 Establish Sourcing Plans The process of identifying. 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. 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. Return on Working Capital Best Practices: All Key Participants in the Supply Chain.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. For services. supply chain revenue. and considering. Prioritize. evaluating. EDI. 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. etc) or Internet procurement networks to customer service linkage Inter-company resource planning with EDI/Internet communication None identified © Copyright 2006 Supply-Chain Council.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. Capacity Availability. 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 average actual cycle time consistently achieved to fulfill customer orders. Assess.2 Identify.1 Identify. The establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet sourcing plan requirements. 22 June 2006 . and considering. all material and other resources used to add value in the supply chain for a product or services. This includes the fixed assets used in Plan. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . accounts payable. Source.3 Balance Product Resources with Product Requirements P2. 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. Components include accounts receivable. The Category P2 includes four Level 3 Elements: P2. prioritizing. The levels of aggregation can be at any element associated with a supply chain asset. as a whole with constituent parts. as a whole with constituent parts. cost of goods sold and supply chain management costs. Including Strategic Partners.) 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.

7 Manage Planning A record of specific information for each product. Planning Data from EP. manufactured part. 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. prioritizing. and considering. © Copyright 2006 Supply-Chain Council. Excess.P2. relevant tolerances. Commit Reserved inventory and/or planned capacity and delivery date for a Resources & Launch Program specific order.7 Manage Product routings represent the way products are made and are integrated Planning Configuration with the Bill of Materials. Order Signal from D2.3 Enter Order.3 Reserve Resources Reserved inventory and/or planned capacity and delivery date for a & Determine Delivery Date specific order. work center identification. Key elements of proper Routings include proper sequence of operations.Sum of Variance/Sum of Actuals to determine percentage error. lot size and setups. prioritizing. Identify. which defines the Configuration system parameters with which to effectively plan and execute using ERP (MRP. Prioritize. subassembly. and Aggregate Product Requirements The process of identifying. Prioritize. Forecast accuracy is calculated for products and/or families for markets/distribution channels. as a whole with constituent parts. 23 June 2006 . *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. 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. Product Routings from EP. all sources of demand for a product or service in the supply chain.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. whether purchased or not.1 Identify. assessing and aggregating deliver requirements. and Aggregate Product Requirements Cycle Time The average time associated with the identifying. The equivalent concepts for services are the workflow processes and rules. and Aggregate Product Requirements Forecast Accuracy The sum of the costs associated with identifying. Delivery Plans from P4. Usable. assembly. in unit measurement. and aggregating product requirements Best Practices: Capacity and Supply Constraints Are Balanced Against Demand during the Planning Cycle Categorize 100% of Total Inventory (Active. Metrics (see Appendix A for metrics attributes): Cost to Identify. run times. Common calculation is Forecast Sum . Inc. Order Signal from D3. etc) systems.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. Item Master from EP.

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

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

Outputs: Product Sources to P2. © Copyright 2006 Supply-Chain Council.3 Balance Product Resources with Product Requirements As a whole with constituent parts. Inc. 26 June 2006 . 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 The process of developing a time-phased course of action that commits resources to meet requirements. Best Practices: Suppliers Share Responsibility for Balancing None identified Supply and Demand through Joint Service Agreements Inputs: Product Sources from P2.1 Any company policies that affect how a planning process is defined. 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. As a whole with constituent parts. and performed. Product Requirements from P2. all sources of demand for a product or Prioritize. Manage Business Rules for PLAN Processes approved.1 Identify. all material and other resources used to And Aggregate Product Resources add value in the supply chain for a product or services. Assess.4 Establish Sourcing Plans © Copyright 2006 Supply-Chain Council. Requirements Planning Decision Policies from EP. Inc. Outputs: Workflow to P2.P2. As a whole with constituent parts. and Aggregate Product service in the supply chain.2 Identify. 27 June 2006 . The sum of the costs associated with balance of product resources with product requirements.

4 Transfer Defective Product Sourcing Plans to P4. The average time associated with establishing and communicating source plans Best Practices: Blanket Purchase Orders Cover Period None identified Requirements Digital Linkage (EDI. Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan.1 Identify Sources of Supply Sourcing Plans to P5. and Aggregate Return Resources Sourcing Plans to S3.4 Manage Product Inventory Sourcing Plans to D2. and Aggregate Delivery Resources and Capabilities Sourcing Plans to D1. Assess. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Etc. 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 P2.4 Transfer MRO Product Sourcing Plans to DR3. and Aggregate Return Requirements Sourcing Plans to DR2. An aggregate material requirements plan used to schedule material deliveries to meet production plan. 28 June 2006 . 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. Inc. Assess.1 Assess.P2. Assess.3 Enter Order. 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. An aggregate material requirements plan used to schedule material deliveries to meet production plan. XML. An aggregate material requirements plan used to schedule material deliveries to meet production plan.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.3 Balance Product Resources with Product Requirements Outputs: Sourcing Plans to DR1. Commit Resources & Launch Program An aggregate material requirements plan used to schedule material deliveries to meet production plan.1 Schedule Product Deliveries Sourcing Plans to D3.2 Identify.1 Schedule Product Deliveries Sourcing Plans to P1. An aggregate material requirements plan used to schedule material deliveries to meet production plan. and Aggregate Production Resources Sourcing Plans to S3.2 Identify.3 Reserve Inventory & Determine Delivery Date Sourcing Plans to ES.3 Reserve Resources & Determine Delivery Date Sourcing Plans to ES.3 Schedule Product Deliveries Sourcing Plans to P5.2 Identify. An aggregate material requirements plan used to schedule material deliveries to meet production plan.2 Identify.4 Transfer Excess Product Sourcing Plans to S2. 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. 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.3 Maintain Source Data Sourcing Plans to S1. and Aggregate Supply Chain Resources Sourcing Plans to P3. © Copyright 2006 Supply-Chain Council. An aggregate material requirements plan used to schedule material deliveries to meet production plan.

Make. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. all things that add value in the creation of a product or performance of a service. and Aggregate Production Resources P3. Inc. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding .3 Balance Production Resources with Production Requirements P3. prioritizing. and Aggregate Production Requirements P3. inventory. and Return. Components include accounts receivable. Assess. 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. For services. evaluating.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. and considering. 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. as a whole with constituent parts. The process of developing a time-phased course of action that commits creation and operation resources to meet creation and operation 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 considering as a whole with constituent parts. all sources of demand in the creation of a product or service.4 Establish Production Plans The process of identifying. Source. accounts payable. Deliver. 29 June 2006 . Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The average actual cycle time consistently achieved to fulfill customer orders. The levels of aggregation can be at any element associated with a supply chain asset.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. supply chain revenue. 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. Prioritize.2 Identify. The process of identifying.1 Identify. cost of goods sold and supply chain management costs. The Category P3 includes four Level 3 Elements: P3.

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

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

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

Production Plans to D2. Production Plans to P2. 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. 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. Prioritize. 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.2 Identify. Production Plan includes production capability.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. 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. 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. 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. Production Plans to EM. Inputs: Workflow from P3. 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 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.2 Schedule Production Activities Production Plan includes production capability.1 Identify. and Aggregate Delivery Resources and Capabilities © Copyright 2006 Supply-Chain Council. Production Plans to D3. Assess.P3. Production Plan includes production capability. Inc. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. OAGI) to automatically query production capacity and ATP and schedule unplanned orders. Production Plan includes production capability. Commit Resources & Launch Program Production Plans to P4. Production Plan includes production capability. eBXML. 33 June 2006 .3 Reserve Resources & Determine Delivery Date Production Plan includes production capability.1 Manage Production Rules Production Plans to M3.

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

and Aggregate Delivery Resources and Capabilities P4. and considering. The establishment of courses of action over specified time periods that represent a projected appropriation of delivery resources to meet delivery requirements.3 Balance Delivery Resources and Capabilities with Delivery Requirements P4. 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. Agreement on Levels of Flexibility) © Copyright 2006 Supply-Chain Council. supply chain revenue. The Category P4 includes four Level 3 Elements: P4. For services. The levels of aggregation can be at any element associated with a supply chain asset.2 Identify. 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. 35 June 2006 . Prioritize. 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 the fixed assets used in Plan. evaluating. Components include accounts receivable. Make. Assess. The process of identifying.1 Identify. Visibility to Supply Resources. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . and Aggregate Delivery Requirements P4. cost of goods sold and supply chain management costs. prioritizing. all things that add value in the delivery of a product or service. Deliver. The average actual cycle time consistently achieved to fulfill customer orders. The sum of the costs associated with the Deliver processes. inventory. 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. EDI. accounts payable.4 Establish Delivery Plans The process of identifying. and considering. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. as a whole with constituent parts. all sources of demand in the delivery of a product or service. and Return. Inc. Source. as a whole with constituent parts.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.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 developing a time-phased course of action that commits delivery resources to meet delivery requirements. Return on Working Capital Total Deliver Costs Best Practices: Distinct and Consistent Linkages Exist to Bi-directional Digital Links (XML.

© Copyright 2006 Supply-Chain Council.) Provide Accurate Visibility customer inventory systems into Actual Demand via Customer Forecasts. The loss may be caused by scrap. 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. prioritizing. Prioritize. Etc. damaged or outdated goods are removed. 36 June 2006 . OAGI) to Scheduled Only When There is No automatically query production capacity and ATP and schedule unplanned Detrimental Impact on Overall Product orders. Delivery Plan Vendor Managed Inventory VMI is a concept for planning and control of inventory. and considering. Production Plans. theft. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates.1 Identify. and Aggregate Delivery Requirements Cycle Time The average time associated with the identifying. etc. Lowers Safety Stock Requirements. EDI.P4. Common calculation is Forecast Sum . assessing and aggregating deliver requirements Forecast accuracy is calculated for products and/or families for markets/distribution channels. Identifies stock-outs from shrinkage or item misplacement. 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. Prioritize. Prioritize. prioritizing. and the inventory is restocked to predefined levels. Identify. all sources of demand in the delivery of a product or service. Inc. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. 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). as a whole with constituent parts. Metrics (see Appendix A for metrics attributes): Cost to Identify. and aggregating delivery requirements Best Practices: Customer Relationship and Digital Linkages Tightly integrated supply chain or demand planning with point of sale and (XML. eBXML. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Product Plans. 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. and Aggregate Delivery Requirements Forecast Accuracy The sum of the costs associated with identifying. deterioration. in process. evaporation. Inputs: Actual Shrink from Source: Company Reductions of actual quantities of items in stock.Sum of Variance/Sum of Actuals to determine percentage error. in unit measurement. and Aggregate Delivery Requirements The process of identifying. or in transit. The on-site inventory is counted.

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

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

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

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

1 Identify. Delivery Resources and Capabilities Delivery Requirements from P4. 41 June 2006 . and Aggregate Delivery a product or service. Assess. Inc. As a whole with constituent parts. and performed.4 Establish Delivery Plans © Copyright 2006 Supply-Chain Council.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. and Aggregate a product. Outputs: Workflow to P4. Requirements Planning Decision Policies from EP. The sum of the costs associated with balance of delivery resources with delivery requirements. Manage Business Rules for PLAN Processes approved.2 Identify.P4.1 Any company policies that affect how a planning process is defined. 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. 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. all sources of demand in the delivery of Prioritize. all things that add value in the delivery of P4.

P4.5 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. Considering Total Business Impacts (Revenue.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. 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. Joint None identified Service Agreements) Are Addressed CrossFunctionally. According to Defined Business Rules None identified To Address Conditions which Cannot be Adequately Satisfied During the Current Planning Period. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Etc.1 Assess.3 Enter Order. Cost. Prioritize. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements.1 Identify. Quality. 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. Customer Service. Delivery Plans to D1. Delivery Plans to M2. 42 June 2006 . Assess. 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.3 Balance Delivery Resources and Capabilities with Delivery Requirements Outputs: Delivery Plans to P1. Delivery Plans to P5.1 Identify. Aggregate Return Requirements Delivery Plans to P3. Delivery Plans to P5. © Copyright 2006 Supply-Chain Council.g. Prioritize.2 Identify. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Aggregate Return Resources Delivery Plans to M3.5 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. Inc.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.) 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.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.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. Each Functional Area Develops Prioritized Recommendations for the Subsequent Planning Period Inputs: Workflow from P4. For services. and A plan for a course of action over specified time periods that involves a projected appropriation of supply resources to meet delivery requirements. Aggregate Production Requirements Delivery Plans to P2. The average time associated with establishing and communicating deliver plans The percentage of ship-from-stock orders shipped within 24 hours of order receipt. 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.2 Identify. Delivery Plans to M1. Aggregate Product Requirements Delivery Plans to D3. Delivery Plans to D2.

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

The process of identifying. The average actual cycle time consistently achieved to fulfill customer orders. reverse drop shippers. and Aggregate Return Resources The process of identifying. all sources of demand for the return of a product. P5.3 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. and Aggregate Return Requirements P5.) Demand Planning Systems to forecast returns.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. predict yield rates for reusable products or components.2 Identify.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. Assess. and consideration for all resources that add value to. execute. and considering. The Category P5 includes four Level 3 Elements: P5. 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. etc. evaluating. P5. as a whole with constituent parts. 44 June 2006 . The scope includes unplanned returns of sold merchandise as well as planned returns of “rotable” products that are refurbished for reissue to customers. or constrain the processes for the return of a product.1 Assess. determine demand in a resale market. and project a revenue stream. evaluating. Inc. Best Practices: Planning and Forecasting Outsourced Return process Use Demand Planning Collaborative planning and forecasting with RETURN outsourcing partners (3PL. © Copyright 2006 Supply-Chain Council.

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

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

1 Manage Business Rules for Return Processes A plan that includes an estimate of future costs and revenues related to expected activities. and contract considerations. Assess.e. assessing and aggregating return resources. and stocking locations. and objectives. 47 June 2006 .P5. Contains the plan for total inventory limits or levels (including Raw Material. Planning Data from EP. i.5 See “Product Return Capabilities“ Manage Return Capital Assets Outsource Plan from EP. evaluating. and consideration for all resources that add value to. Inc.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. Make/Buy Decision from EP.3 Manage Return Data Collection Delivery Plans from P4.5 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.9 Align Supply Chain Unit Plan with Financial Plan Business Rules for Return Processes from ER. © Copyright 2006 Supply-Chain Council. Metrics (see Appendix A for metrics attributes): Cost to Identify. specifications for products and services. Rules for conducting business. Assess. product mix. Information required in the process of integrating and maintaining the accuracy of return execution. ownership. 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. Work In Process. Business rules align Return process policies with business strategy. and Aggregate Return Resources Cycle Time The sum of the costs associated with identifying. goals. Finished and Purchased Finished Goods) including replenishment models. The total supply chain inventory strategy. The budget serves as pattern for and a control over future operations.2 See “Product Return Capabilities“ Manage Performance of Return Processes MRO Product Return Capabilities from ER.4 Establish Delivery Plans Inventory Strategy from EP. both inter and intra company. assessing.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. The average time associated with the identifying. or constrain the processes for the return of a product. Inputs: Budget Constraints from EP. execute. Assess. developing and maintaining customer and channel performance standards of an return processes such as service levels.2 Identify. and Aggregate Return Resources The process of identifying. performance expectations. given service requirements by supply chain stakeholders/trading partners. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. MRO Product Return Capabilities from ER. and Aggregate Return Resources Identify. Data About Return Capabilities from ER.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.

Return Inventory Transfer Data from DR2. Projected Internal and External Capacity An estimate of the amount of product or service a particular part of the from EP.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.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.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. Return Transportation Guidelines. trade officials. Outputs: Return Resources to P5.Production Plans from P3. etc. Agreements from ER. Policies.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. Return Process Capabilities from EP. government. & Guidelines. Return Inventory Transfer Data from DR1.3 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. or constrain the processes for the return of a product.8 Manage Requirements dictated by process standards set by external entities (i. 48 June 2006 .3 Balance Return Resources with Return Requirements All resources that add value to. PLAN Regulatory Requirements and Compliance Return Inventory Targets from ER.8 Return requirements dictated by process standards set by external entities Manage Return Regulatory Requirements (i. Return Inventory Return Inventory Transfer Data from DR2. © Copyright 2006 Supply-Chain Council. execute.e. Return Inventory Transfer Data from DR3. government.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan.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.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.). trade officials. Production Plan includes production capability. policies and agreements for the transportation activities around return process. etc. Return Inventory Transfer Data from DR3.2 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. Return Inventory Transfer Data from DR1. Inc.).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.e.4 Manage The goals and approach to the management of return inventories.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. Sourcing Plans from P2.6 Manage Return Transportation Revised Capital Plan from EP. Regulatory Requirements from EP.

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

All resources that add value to. and Aggregate Return Resources Return Requirements from P5.1 Any company policies that affect how a planning process is defined. The sum of the costs associated with balance of return resources with return requirements. Manage Business Rules for PLAN Processes approved.2 Identify. 50 June 2006 .1 Assess.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. 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. Returns routing. restocking priorities and costs.4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. Outputs: Workflow to P5. execute.2 Manage Performance of that will be taken to reach those goals and objectives from the current Supply Chain performance levels. all sources of demand for the return of a product. Assess. Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the steps Plan from EP. Best Practices: Advance Planning Engines Applied to Advanced math model “solvers“ that optimize / minimize constraints. Inc. and performed. and As a whole with constituent parts. or constrain the processes for the return of a product. 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. Inputs: Return Resources from P5.P5. Aggregate Return Requirements Planning Decision Policies from EP.

1 Authorize Defective Product Return A planned series of actions or operations that advances returns from one stage to another. or established procedures to manage and execute all activities in the process. and Aggregate Delivery Resources and Capabilities Process Procedures to ER.e.3 Balance Return Resources with Return Requirements Outputs: Deliver Return Requirements to P4. mix. (i. and. Inc. timing) A planned series of actions or operations that advances returns from one stage to another. (i. or established procedures to manage and execute all activities in the process. routings. quantity. outsourcing and flexible partnership agreements.P5. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. Prioritize. The ability the supply chain has to return products in a valid and accurate way.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. etc. mix. 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. Dynamic Reconfiguration of Return Process to Meet Demand Intranet and Extranet communications tools The ability to reset and reconfigure the RETURN process capacity.1 Manage Business Rules for Return Processes Product Return Capabilities to DR1. Also requires integration with the CRM system for real time redirection of customer returns based upon cost and capacity. Inputs: Workflow from P5.e. and Aggregate Delivery Requirements Deliver Return Requirements to P4. timing) A determination or projection of the requirements the supply chain must meet in the handling and execution of returns.8 Manage Return A planned series of actions or operations that advances returns from one Regulatory Requirements stage to another. 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. quantity. Assess.1 Identify. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. Product Return Capabilities to DR2. The capability of a system or resources to produce a quantity output in a particular time period.1 Authorize MRO Product Return © Copyright 2006 Supply-Chain Council. 51 June 2006 . The ability the supply chain has to return products in a valid and accurate way. the Internet. Process Procedures to ER. Process Procedures to ER. or established procedures to manage and execute all activities in the process. and. The capability of a system or resources to produce a quantity output in a particular time period.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. by transmitting new requirements and directives using mathematical models.2 Identify.

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

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

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

project management principles.g. and assets. Sound Project Management Process and None identified Methodology Inputs: Continuous Improvement Process from Source: Company Supply-Chain Performance Metrics from ED. cost. responsiveness. cost.g. e. and asset management.g. Performance targets established for the execution of supply chain processes are reflected in the process elements for PLAN. cost. cycle time. flexibility and responsiveness. flexibility and responsiveness. and asset management.e. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. e. cost. and asset management. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. Outputs: Return Process Capabilities to P5. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. 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. e. Inc. Metrics (see Appendix A for metrics attributes): Cost to Manage Performance of Supply The sum of the costs associated with assessing supplier performance. and reporting tools that support strategic and business plans. process development methodologies/approaches.3 Balance Supply Chain Resources with Supply Chain Requirements Supply Chain Performance Improvement Plan to P5. The capability of a system or resources to produce a quantity output in a Assess. delivery reliability.2 Manage Performance of Return Processes Supply-Chain Performance Metrics from EM. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes.2 Manage Production Performance A process that identifies opportunities for performance improvement and facilitates their realization through the use of metrics. 55 June 2006 . flexibility and responsiveness.4 Manage Product Inventory Supply-Chain Performance Metrics from ER. i. 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. flexibility and responsiveness. © Copyright 2006 Supply-Chain Council. and asset management. delivery reliability. e.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.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. delivery reliability. cost. delivery reliability. delivery reliability.2 Assess Delivery Performance Supply-Chain Performance Metrics from ES.2 Identify.

1 Identify. Planning Data to P5. Planning Data to P1. 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 P4. 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. 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. 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.1 Assess.1 Identify. Inc. Assess. 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. All required planning and execution data is integrated and shared in between all functional areas within an organization. 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. 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. A data warehouse/data mart is the source of all planning (master) data. Planning Data to P3.1 Identify. 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.2 Identify. Prioritize. Assess. Prioritize. The average time associated with collecting plan data Best Practices: Integrated Demand and Supply Planning Demand Planning. Supply Planning and especially the Supply Plan Execution Are no longer disconnected. Assess. © Copyright 2006 Supply-Chain Council.3 Manage PLAN Data Collection The process of collecting.2 Identify. Analyzing tools enable the ongoing maintenance and improvement of the business rules based on actual data. 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.1 Identify. business rules and transaction data. 56 June 2006 . and Aggregate Delivery Resources and Capabilities Planning Data to P5.EP. Prioritize.2 Identify. Assess. Planning Data to P1. Planning Data to P2. Algorithms use the business rules as the driver for the planning engine. 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. Planning Data to P2. Prioritize.2 Identify. 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. 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. 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.

© Copyright 2006 Supply-Chain Council. 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.Planning Data to P3. Assess. 57 June 2006 .2 Identify. Inc.

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.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.EP. product mix. 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.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. A capacity constraint is often a bottleneck. Work In Process. Common calculation is Forecast Sum .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. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Key elements of proper Routings include proper sequence of operations.1 Authorize MRO Product Return Planning Decision Policies from Source: Any company policies that affect how a planning process is defined.Supply Chain modeling capabilities. in unit measurement. Company approved. Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials. The equivalent concepts for services are the workflow processes and rules. i. both inter and intra company. Inc.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. and performed. Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based Information from DR3. and stocking locations. ownership. Finished and Purchased Finished Goods) including replenishment models. work center identification. lot size and setups. 58 June 2006 . run times. relevant tolerances.1 Manage Production Rules Inventory Capacity to EM. Advanced Planning Systems.e. Forecast accuracy is calculated for products and/or families for markets/distribution channels. Outputs: Inventory Capacity to EM.Sum of Variance/Sum of Actuals to determine percentage error. 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.

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

relevant tolerances. Outputs: Make/Buy Decision to P5. 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. Inc. 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. The equivalent concepts for services are the workflow processes and rules. internal versus contract manufacturing or internal versus 3rd Party Logistics) and then acquiring. Assess. Common calculation is Forecast Sum . Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials. Key elements of proper Routings include proper sequence of operations. Forecast accuracy is calculated for products and/or families for markets/distribution channels. in unit measurement. and performed. 60 June 2006 . 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.Sum of Variance/Sum of Actuals to determine percentage error.e. Planning Decision Policies from Source: Any company policies that affect how a planning process is Company defined. work center identification. maintaining and dispositioning an organization’s capital assets to operate the integrated supply chain. 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. Make/Buy Decision to P1. Advanced Planning Systems. i. lot size and setups. approved. 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.EP.2 Identify. Assess. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates.2 Identify.5 Manage Integrated Supply Chain Capital Assets The process of defining capacity strategy (i. run times. A capacity constraint is often a bottleneck. © Copyright 2006 Supply-Chain Council.e.

worker effort. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. Assess. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan. and equipment.1 Identify. and contract considerations. product mix.2 Identify.2 Identify.Outsource Plan to P1. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. sustainable output rate which can be achieved with the current product specifications. An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. and Aggregate Supply Chain Requirements Revised Capital Plan to P5. worker effort. plant. and Aggregate Return Resources Revised Capital Plan to P1. and Aggregate Supply Chain Resources © Copyright 2006 Supply-Chain Council. 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. plant. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan.2 Identify. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. and Aggregate Return Requirements Revised Business Assumptions to P1.2 Manage The highest.1 Assess. product mix. Inc. sustainable output rate which can be achieved Production Performance with the current product specifications. and equipment. Assess. Prioritize. specifications for products and services. 61 June 2006 . performance expectations. 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. An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. Production Capacity to EM. Revised Business Assumptions to P5.1 Manage Production Rules Projected Internal and External Capacity The highest. Assess. Production Capacity to EM.

2 Identify. Assess. Common calculation is Forecast Sum . Forecast accuracy is calculated for products and/or families for markets/distribution channels. and performed. relevant tolerances. © Copyright 2006 Supply-Chain Council. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. A capacity constraint is often a bottleneck. in unit measurement. 62 June 2006 .Sum of Variance/Sum of Actuals to determine percentage error.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. Outputs: Outsource Plan to P1.EP. lot size and setups. specifications for products and services. performance expectations. work center identification. and the management of transporters both inter and intra company. run times. 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. Inc. and contract considerations. 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. Product Routings from Source: Company Product routings represent the way products are made and are integrated with the Bill of Materials. The equivalent concepts for services are the workflow processes and rules. Planning Decision Policies from Source: Any company policies that affect how a planning process is Company defined. 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. approved. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. Key elements of proper Routings include proper sequence of operations.

Outsource Plan to P5. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. Inc. and Aggregate Supply Chain assumptions affecting a business plan. 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. performance expectations. Assess. Projected Internal and External Capacity to An estimate of the amount of product or service a particular P5.2 Identify. and contract considerations.1 Manage Production Rules The capability of a transportation system to perform it’s function. Transportation Capacity to EM.2 Identify. 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. 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.2 Identify. specifications for products and services. A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and Assess. 63 June 2006 . Assess. © Copyright 2006 Supply-Chain Council. Revised Capital Plan to P1.2 Manage The capability of a transportation system to perform it’s Production Performance function.

whether purchased or not. 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. which defines the system parameters with which to effectively plan and execute using ERP (MRP. 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. Bill of Materials to P2. Common calculation is Forecast Sum . and real time point of consumption reporting. event planning (promotions. subassembly.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. and Aggregate A record of specific information for each product. Inc. Collaborative Planning. rationalization. This element also includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. Item Master to P4. Aggregate Production Requirements etc) systems. 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. Item Master to P5. Prioritize. in unit measurement. 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. manufactured part. Vendor Managed Inventory.1 Assess. Prioritize.1 Identify.). assembly. © Copyright 2006 Supply-Chain Council. and A record of specific information for each product. and A record of specific information for each product.EP. and A record of specific information for each product. Item Master to P3. and bill of materials. Prioritize. including the evaluation of market need. which defines the system Aggregate Product Requirements parameters with which to effectively plan and execute using ERP (MRP.1 Identify. Item Master to P2. product realization (development. etc) systems. Prioritize. routings. subassembly. assembly. Aggregate Delivery Requirements etc) systems. manufactured part. and after-market support. Forecasting. which defines the system parameters with which to effectively plan and execute using ERP (MRP. introduction and production). *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates. which defines the system Return Requirements parameters with which to effectively plan and execute using ERP (MRP. ABC classification. Prioritize. 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. product discontinuation.1 Identify. 64 June 2006 .Sum of Variance/Sum of Actuals to determine percentage error.1 Identify.1 Identify. etc. whether purchased or not. etc) systems.

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

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

and Aggregate Return Family supporting the Market/Channel Plans. Corresponding Projections. Revised Business Assumptions to P5. projected balance sheet. they represent balanced Supply and Demand. Deliver. Strategic Plan from Source: Company Outputs: Budget Constraints to P5. make. 67 June 2006 . and increase its earnings performance.1 An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. This process develops objectives usually accompanied by budgets. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Prioritize.9 Align Supply Chain Unit Plan with Financial Plan The process of revising the long-term supply chain capacity and resource plans. Inc. Revised Business Assumptions to P1. Improve its market and competitive position. Requirements supporting Make.1 Identify. cost and profit. © Copyright 2006 Supply-Chain Council. and Aggregate Supply for the Revised Aggregate Forecast and Projections. Corresponding Projections. This includes revision of not only aggregate forecast and projections related to supply chain. Supply Chain Requirements supporting Make. These are reviewed Chain Requirements periodically with actual results to verify the linkage of actual cause and effect. and Aggregate Return periodically with actual results to verify the linkage of actual cause and Requirements effect. These are reviewed Assess. 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. Deliver. Source.EP. high-level plan that describes how a company intends to conduct business. A longer range. Prioritize. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product to P1. activity. they represent balanced Supply and Demand. A plan that includes an estimate of future costs and revenues related to and Aggregate Return Resources expected activities. source. 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. Best Practices: Re-Planning Process Exists in Multi-Levels Business to business Internet capability to share common data.2 Identify.1 Assess. Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product to P5. Assess. given the inputs from the strategic and business plans. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. and a cash flow statement. but also business assumptions. and delivery plans. Source.1 An update to the expected cause and effect statements that are the base Identify. and Aggregate Family supporting the Market/Channel Plans. The budget serves as pattern for and a control over future operations.

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.

© Copyright 2006 Supply-Chain Council, Inc.

68

June 2006

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
© Copyright 2006 Supply-Chain Council, Inc.

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.
69 June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

70

June 2006

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:

© Copyright 2006 Supply-Chain Council, Inc.

71

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

72

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

73

June 2006

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
© Copyright 2006 Supply-Chain Council, Inc. 74 June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

75

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

76

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

77

June 2006

856 & 862 transactions Inputs: Logistics Selection from ES. Cycle time for implementing change notices divided by total number of changes. # of days each schedule change impacts the delivery date divided by the total # of changes. © Copyright 2006 Supply-Chain Council.2 Schedule Production Activities Production Schedule from M2.2 Issue Sourced/In-Process Product Replenishment Signal from D2. 850. Any signal that indicates when to produce or transport Items in a pull replenishment system.S2. 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. qualifications or service deployment. 78 June 2006 .1 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. The sum of the costs associated with scheduling product deliveries.3 Reserve Resources & Determine Delivery Date Replenishment Signal from M3. 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. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item.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. The requirements for product deliveries are determined based on the detailed sourcing plan. 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. This includes all aspects of managing the contract schedule including prototypes.6 Manage Incoming Product Production Schedule from M3.1 Schedule Production Activities Replenishment Signal from M2.1 Schedule Production Activities Production Schedule from M1. Any signal that indicates when to produce or transport Items in a pull replenishment system.

79 June 2006 . or the signal that sends the estimated need of parts or services to the supplier.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.2 Identify. Agreements Scheduled Receipts to S2. Scheduled Receipts to M1. purchasing. Product On Order to P2.1 Schedule Product due to arrive.1 Schedule Product due to arrive. Assess. Supplier Performance engineering.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. And Aggregate Product Resources Product On Order to ES.Replenishment Signal from M1. Return Inventory Transfer Data from DR2.4 Establish Sourcing An aggregate material requirements plan used to schedule material Plans deliveries to meet production plan. Source Execution Data from M2. Inc. Outputs: Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull replenishment system. Supplier Performance from ES. Sourcing Plans from P2. Product on order with a selected source.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. Production Activities Scheduled Receipts to M3. Production Activities © Copyright 2006 Supply-Chain Council.2 Issue Material Any signal that indicates when to produce or transport Items in a pull replenishment system.2 Schedule Product due to arrive.2 Receive Product Product due to arrive. based on an agreed set of measurements.2 Assess The results of measuring the actual supplier performance on cost.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. Production Activities Scheduled Receipts to M2. Return Inventory Transfer Data from DR3. and so on. quality. Return Inventory Transfer Data from DR1.

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 .Product serial number used as identifier .Generate bar coded receiving documents . Outputs: Receipt Verification to ES. information or services.4 Transfer Excess Product MRO Products from DR2. 80 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. Repair and Overhaul spare parts used to support of operations and maintenance. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. payment terms. Repair and Overhaul spare parts used to support of operations and maintenance. Material in excess of the current requirements.1 Schedule Product Deliveries Maintenance. inbound raw materials and outbound finished goods) specifying service levels.4 Transfer MRO Product Product from Source: Supplier Scheduled Receipts from S2.Bar code interface for data collection devices .2 Receive Product The process and associated activities of receiving product to contract requirements.4 Transfer Defective Product Excess Products from DR3. 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 . damaged or outdated goods are removed.S2. The on-site inventory is counted.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. Inputs: Defective Products from DR1.RFID Carrier agreements are agreements between a company and its domestic and global carriers (for both. Inc. Product due to arrive. and the inventory is restocked to predefined levels. and other conditions. 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. © Copyright 2006 Supply-Chain Council. Maintenance. The end object of a transformation process that includes physical objects.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria.

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

Product serial number used as identifier .Bar code interface for data collection devices .Generate bar coded receiving documents . The sum of the costs associated with raw material verification.2 Assess Supplier Acknowledgement that the product received conforms to specified Performance requirements and criteria. Receipt Verification to ES.4 Transfer 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.3 Verify Product The process and actions required determining product conformance to requirements and criteria. The average time associated with verifying raw material product Best Practices: Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy . 82 June 2006 . Outputs: Receipt Verification to S2.S2.2 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria. Receipt Verification to ES.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. Inc. 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. © Copyright 2006 Supply-Chain Council.

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. Only includes inventory on company books. Any signal that indicates when to produce or transport Items in a pull replenishment system. 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. 83 June 2006 . This includes all of the activities associated with repackaging. 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. 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.3 Reserve Inventory & Determine Delivery Date Replenishment Signal from M3. 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. © Copyright 2006 Supply-Chain Council.3 Issue Sourced/In-Process Product Replenishment Signal from M1. staging. other) ÷ (COGS ÷ 365).4 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain.6 Manage Transportation Any signal that indicates when to produce or transport Items in a pull replenishment system. plant FG.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.2 Issue Sourced/In-Process Product Replenishment Signal from D1.2 Issue Material WIP Inventory Location from EM. and stocking product and or application of service.S2. Any signal that indicates when to produce or transport Items in a pull replenishment system. Replenishment Signal from M2. Inc. Location of inventory that is specified as “work in progress“. field FG. field samples. Receipt Verification from S2. Total gross value of inventory at standard cost before reserves for excess and obsolescence.

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

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

6 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain. The average actual cycle time consistently achieved to fulfill customer orders. Source. accounts payable. S3. Product acquisition costs include costs incurred for the production of product: sum of product management and planning. invoice matching and the issuance of checks. This includes all of the activities associated with repackaging. receiving and product storage. The levels of aggregation can be at any element associated with a supply chain asset. S3. S3. This includes all aspects of managing the contract schedule including prototypes and qualifications.5 Verify Product The process and actions required determining product conformance to requirements and criteria. Inc. 86 June 2006 .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.3 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. inbound freight and duties. The Category S3 includes seven Level 3 Elements: S3. S3. Value of raw materials ÷ (COGS ÷ 365). and stocking product. 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. transferring. The requirements for product deliveries are determined based on the detailed sourcing plan.7 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services. supplier qualifications and the generation of a contract defining the costs and terms and conditions of product availability. S3. supply chain revenue. Deliver. supplier quality engineering. inventory. 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. and Return. This process includes invoice collection.4 Receive Product The process and associated activities of receiving product to contract requirements. 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. Components include accounts receivable. staging. incoming inspection. Make. This includes the fixed assets used in Plan. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. cost of goods sold and supply chain management costs.2 Select Final Supplier(s) and Negotiate The identification of the final supplier(s) based on the evaluation of RFQs. S3. product process engineering and tooling costs.S3 Source Engineer-to-Order Product The negotiation. 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.

This data can be organizational.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. Inc. . Current Inventory Source Data from ES. Data or information about the supplier. A clear. financial. Sourcing Plans from P2. Structured supplier data is needed to set up and implement ERP or similar systems. Metrics (see Appendix A for metrics attributes): . Workflow to S3. Business Rules for Source Processes from ES. None identified Inputs: . An aggregate material requirements plan used to schedule material deliveries to meet production plan. The average time associated with the identification of sources of supply Best Practices: . complete and accurate statement or drawing of the technical requirements of a material. . information. . . © Copyright 2006 Supply-Chain Council. item or service.3 Maintain Source Data .1 Manage Sourcing Business Rules Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities. product. . Cost to Identify Sources of Supply Identify Sources of Supply Cycle Time The sum of the costs associated with identifying sources of supply.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. 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 of the procedure to determine if the requirements are met. None identified None identified None identified .S3.4 Establish Sourcing Plans Supplier Data from ES. . ETO Spec or Design from Source: Company . Sourcing business rules include: supplier selection and negotiation processes. Concurrent Engineering is Used to Tightly Link Sourcing into the Product Development Process Make/Buy Decision Process (Outsourcing vs. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. 87 June 2006 . 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 .7 Manage Supplier Network Outputs: .

. . Sourcing business rules include: supplier selection and negotiation processes. specifications. Metrics (see Appendix A for metrics attributes): . formulas.7 Manage Supplier Network A proposal that may contain final drawings.. part programs. supplier qualifications and the generation of a contract defining the costs and terms and conditions of product availability. .1 Manage Sourcing Business Rules business within the enterprise and other legal entities. etc. . 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 . product. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. Current Inventory Source Data from ES. ETO Proposal from Source: Supplier Supplier Data from ES.2 Select Final Supplier(s) and Negotiate The identification of the final supplier(s) based on the evaluation of RFQs. Workflow from S3.3 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. information. . Inc. 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. . © Copyright 2006 Supply-Chain Council. 88 June 2006 . Structured supplier data is needed to set up and implement ERP or similar systems. This data can be organizational. .S3.1 Identify Sources of Supply Business Rules for Source Processes from Rules that are translated into guidelines and policies for conducting ES. that describe requirements of a product Data or information about the supplier. financial. The average time associated with scheduling the shipment of the return of MRO product Best Practices: . None identified Internet web sites for financial evaluation None identified None identified Inputs: . . ERP .

. such as purchase order or supplier contract. 89 June 2006 . Inc.9 Manage Supplier Agreements Supplier Agreement to EM.Outputs: . 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. such as purchase order or supplier contract. Supplier Agreement to ES. . © Copyright 2006 Supply-Chain Council. 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. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise.6 Manage Transportation Supplier Agreement to S3. or the signal that sends the estimated need of parts or services to the supplier.3 Schedule Product Deliveries .

.3 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of product against the contract. The average time associated with scheduling the shipment of the return of MRO product Best Practices: . The requirements for product deliveries are determined based on the detailed sourcing plan. . The sum of the costs associated with scheduling product deliveries. 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.3 Enter Order. . . . 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. 850. This includes all aspects of managing the contract schedule including prototypes and qualifications.S3. 856 & 862 transactions Inputs: . # of days each schedule change impacts the delivery date divided by the total # of changes. . . Any signal that indicates when to produce or transport Items in a pull replenishment system.2 Schedule Production Activities Replenishment Signal from M1. .1 Schedule Production Activities Production Schedule from M1.3 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. . Inc. 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 Production Activities Production Schedule from M3. Commit Resources & Launch Program Return Inventory Transfer Data from DR3.4 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. % 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.6 Manage Incoming Product Production Schedule from M2. Metrics (see Appendix A for metrics attributes): . . 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. .2 Issue Sourced/In-Process Product Replenishment Signal from M3. . . .

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

1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria. 92 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. % 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.2 Assess Supplier Performance Receipt Verification to ES. .RFID Carrier agreements are agreements between a company and its domestic and global carriers (for both. Acknowledgement that the product received conforms to specified requirements and criteria.Product serial number used as identifier . . Product due to arrive. Total elapsed time from time product is received to time it is passed to next process Best Practices: . .Generate bar coded receiving documents . 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: . .S3. . Bar Coding is Used to Minimize Handling Time and Maximize Data Accuracy Carrier Agreement .Bar code interface for data collection devices . Receipt Verification to ES.3 Schedule Product Deliveries The end object of a transformation process that includes physical objects. . and other conditions. . . Inc. 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.8 Manage Import/Export Requirements Receipt Verification to ES. . . information or services. payment terms. inbound raw materials and outbound finished goods) specifying service levels. Acknowledgement that the product received conforms to specified requirements and criteria. Product from Source: Supplier Scheduled Receipts from S3. . and the inventory is restocked to predefined levels. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. Metrics (see Appendix A for metrics attributes): . © Copyright 2006 Supply-Chain Council. The on-site inventory is counted. damaged or outdated goods are removed. Outputs: . .4 Receive Product The process and associated activities of receiving product to contract requirements.

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

Inputs: .S3. Metrics (see Appendix A for metrics attributes): . © Copyright 2006 Supply-Chain Council. 94 June 2006 . 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 . % 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.Generate bar coded receiving documents . The average time associated with verifying raw material product Best Practices: .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 to S3. .1 Manage Sourcing Business Rules Acknowledgement that the product received conforms to specified requirements and criteria.Bar code interface for data collection devices . Inc. . . Outputs: .6 Transfer Product Receipt Verification to ES.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. Receipt Verification from S3. . Acknowledgement that the product received conforms to specified requirements and criteria.Product serial number used as identifier .5 Verify Product The process and actions required determining product conformance to requirements and criteria.2 Assess Supplier Performance Receipt Verification to ES. The sum of the costs associated with raw material verification. .

4 Manage Product Inventory Receipt Verification from S3. and stocking product.3 Reserve Inventory & Determine Delivery Date Replenishment Signal from M1. Any signal that indicates when to produce or transport Items in a pull replenishment system. Transfer Product Cycle Time Best Practices: . 95 June 2006 . This includes all of the activities associated with repackaging.6 Transfer Product The transfer of accepted product to the appropriate stocking location within the supply chain. . Any signal that indicates when to produce or transport Items in a pull replenishment system. other) ÷ (COGS ÷ 365). . . Location of inventory that is specified as “work in progress“. . Only includes inventory on company books. . . future liabilities should not be included The average time associated transfer until product is moved to the next process.2 Issue Material WIP Inventory Location from EM.3 Issue Sourced/In-Process Product Replenishment Signal from M2. field FG. . 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. Finished Goods Inventory Location from ED. field samples. Total gross value of inventory at standard cost before reserves for excess and obsolescence. plant FG. . Metrics (see Appendix A for metrics attributes): .5 Verify Product Replenishment Signal from M3. Outputs: © Copyright 2006 Supply-Chain Council. staging. . . .2 Issue Sourced/In-Process Product Replenishment Signal from D1. Inc.4 Manage Finished Goods Inventories Product Inventory Location from ES. transferring. % 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. Any signal that indicates when to produce or transport Items in a pull replenishment system. 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. . Acknowledgement that the product received conforms to specified requirements and criteria. 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: .S3.6 Manage Transportation The physical storage location where Finished Product inventory is held in stock prior to use or shipment.

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

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

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

Inc. This data can be organizational .5 Verify Product Receipt Verification from S2. 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.ES. product. maintaining and enforcing decision support criteria. part type. 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. Acknowledgement that the product received conforms to specified requirements and criteria. supplier performance data & spend data stratified by commodity.2 Receive Product Receipt Verification from S1. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. Acknowledgement that the product received conforms to specified requirements and criteria. Metrics (see Appendix A for metrics attributes): . process type Inputs: .3 Verify Product Receipt Verification from S1. supplier. 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. Acknowledgement that the product received conforms to specified requirements and criteria. Data or information about the supplier. Fab & Hold Agreements.7 Manage Supplier Network Acknowledgement that the product received conforms to specified requirements and criteria. goals and objectives. . information . . Sourcing business rules include: supplier selection and negotiation processes. Cost to Manage Sourcing Business Rules Manage Sourcing Business Rules Cycle Time The sum of the costs associated with Source business rules.4 Receive Product Supplier Data from ES.2 Receive Product Receipt Verification from S3. . The average time associated with managing source business rules Best Practices: . © Copyright 2006 Supply-Chain Council. business unit/site. Just-In-Time Agreements. Web based access to preferred and recommended suppliers. . in alignment with business strategy.3 Verify Product Receipt Verification from S2. . financial. . Optimized Supplier Count. . . Acknowledgement that the product received conforms to specified requirements and criteria. .1 Manage Sourcing Business Rules The process of defining requirements and establishing. 99 June 2006 . . Structured supplier data is needed to set up and implement ERP or similar systems. . Receipt Verification from S3. . Acknowledgement that the product received conforms to specified requirements and criteria.

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

inbound raw materials and outbound finished goods) specifying service levels.4 Receive Product Acknowledgement that the product received conforms to specified requirements and criteria. Web based relational database / management application None identified . . Metrics (see Appendix A for metrics attributes): . Analyzed and Reported to Suppliers Online and Real-Time through Extranet Applications Suppliers Are Evaluated. . Supplier Performance Data is Collected. Acknowledgement that the product received conforms to specified requirements and criteria. . Selected and Qualified with Criteria Matched to Business Requirements and Competitive Needs Inputs: . . . 101 June 2006 . . . Acknowledgement that the product received conforms to specified requirements and criteria.2 Receive Product Receipt Verification from S1. payment terms. . .ES. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs.2 Receive Product Receipt Verification from S3. Receipt Verification from S1.5 Verify Product Receipt Verification from S2. and other conditions. © Copyright 2006 Supply-Chain Council. Acknowledgement that the product received conforms to specified requirements and criteria. 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. Assess Supplier Performance Cycle Time Cost to Assess Supplier Performance The average time associated with assessing the performance of supplier processes. . Inc. Carrier Agreement Carrier agreements are agreements between a company and its domestic and global carriers (for both. 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.2 Assess Supplier Performance The process of measuring actual supplier performance against internal and/or external standards. Best Practices: . 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. Acknowledgement that the product received conforms to specified requirements and criteria. The sum of the costs associated with assessing supplier performance. Analyzed and Used in Performance Reporting Supplier Performance Assessment System . .3 Verify Product Receipt Verification from S3.

. Or. Supplier Performance to S3. . quality. Outputs: . based on an agreed set of measurements. and so on. purchasing. The results of measuring the actual supplier performance on cost. logistic quality) and to delivery specification (in time. 102 June 2006 ..g. Structured supplier data is needed to set up and implement ERP or similar systems. Receipt Verification from S2. purchasing.“ The results of measuring the actual supplier performance on cost. engineering. and so on.1 Schedule Product Deliveries . purchasing.7 Manage Supplier Network Supplier Performance to S1. based on an agreed set of measurements. and so on. based on an agreed set of measurements. financial.7 Manage Supplier Network Acknowledgement that the product received conforms to specified requirements and criteria. based on an agreed set of measurements. Quality and Delivery Performance to ES. correct packaging etc). The results of measuring the actual supplier performance on cost. engineering. Sometimes these two metrics are connected in one. .1 Schedule Product Deliveries Supplier Performance to S2. information . . Data or information about the supplier. product. The results of measuring the actual supplier performance on cost. product quality. Inc. purchasing. quality. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. engineering. quality. quality. engineering. This data can be organizational . © Copyright 2006 Supply-Chain Council.3 Verify Product Supplier Data from ES. and so on.3 Maintain Source Data “The process of measuring actual supplier performance against internal and/or external standards. the extent to which the supplier delivers according to quality specification (e.3 Schedule Product Deliveries Supplier Performance to 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.7 Manage Supplier Network Outputs: . Sometimes these two metrics are connected in one. .1 Identify Sources of Supply . Data or information about the supplier.4 Establish Sourcing Plans Supplier Data from ES. spend analysis at various levels of the enterprise.7 Manage Product Life Cycle © Copyright 2006 Supply-Chain Council. . from major business units to material part number. Inc. 103 June 2006 . Current Inventory Source Data to ES. product quality. financials. The average time associated with maintaining source data Best Practices: . 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: . . Sourcing Plans from P2.2 Select Final Supplier(s) and Negotiate .ES.g. correct packaging etc). Or. Cost to Maintain Source Data Maintain Source Data Cycle Time The sum of the costs associated with maintaining supplier data. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. information .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.“ An aggregate material requirements plan used to schedule material deliveries to meet production plan. 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. product. Source data to be maintained includes supplier profile data. 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 data can be organizational . . financial.3 Maintain Source Data The process of collecting. Current Inventory Source Data to S3. Structured supplier data is needed to set up and implement ERP or similar systems. logistic quality) and to delivery specification (in time. sorting. the extent to which the supplier delivers according to quality specification (e. Current Inventory Source Data to S3. . Metrics (see Appendix A for metrics attributes): .2 Assess Supplier Performance “The process of measuring actual supplier performance against internal and/or external standards. 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. quality and delivery performance. . Current Inventory Source Data to ED. . Quality and Delivery Performance from ES.

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

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

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

Cost. Ground Parcel.6 Manage Incoming Product The process of defining and maintaining the information that characterizes inbound logistics management of all supplier deliveries. .8 Manage Import/Export Requirements Import/Export Requirements from ES. . etc. . . Acknowledgement that the product received conforms to specified requirements and criteria.) Based on Customer Service Requirements Real-Time Shipment Tracking.2 Receive Product Receipt Verification from S3. but provides transportation for hire for one or a limited number of shippers under a specific contract. Contract Carrier Rates from ES.8 Manage Import/Export Requirements Receipt Verification from S2. Metrics (see Appendix A for metrics attributes): .2 Receive Product Receipt Verification from S1. The average time associated with managing inbound raw material Best Practices: . . . Cost to Manage Incoming Product Manage Incoming Product Cycle Time The sum of the costs associated with managing incoming product. 107 June 2006 . LTL. This includes carrier selection and management.4 Receive Product The rates charged by a carrier that does not serve the general public. Product. Acknowledgement that the product received conforms to specified requirements and criteria. Inputs: . . 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. tracking deliveries and import. . . . 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 . Requirements established by a government or trading areas (i.ES. 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. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. Inc. including both physical and electronic goods and services. . Outputs: © Copyright 2006 Supply-Chain Council. (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 . . NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries.e EU. Acknowledgement that the product received conforms to specified requirements and criteria. . Warehouse Management.

..1 Schedule Product Deliveries Logistics Selection to S3.3 Schedule Product Deliveries Logistics Selection to S1. Inc. 108 June 2006 . Logistics Selection to S2.1 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. .

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. business-to-business trading network. and other conditions. quality. inbound raw materials and outbound finished goods) specifying service levels. 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. 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. Inc. 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. buyer-driven auctions. 109 June 2006 . the management of a supplier certification process. 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 are an open procurement network. which includes certifying new suppliers and maintaining the current status of existing suppliers. payment terms. Exchanges will also support more traditional catalog-based sales. accessible to any buyer and focused on new Internet-enabled purchasing models like spot buys or reverse.7 Manage Supplier Network The process of defining and maintaining a unique network of suppliers to deliver a specific product set.ES. 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. Also.

Current Inventory Source Data from ES.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. financial. EDI. This data can be organizational . This data can be organizational . This data can be organizational . information .9 Manage Supplier Agreements Supplier Performance from ES. based on an agreed set of measurements. financial. This data can be organizational . financial.9 Manage Supplier Agreements Supplier Data to S3.3 Maintain Source Data Supplier Agreement from ES. purchasing. such as purchase order or supplier contract.3 Maintain Source Data Data or information about the supplier.2 Assess Supplier Performance Outputs: Supplier Data to ES. This data can be organizational .1 Identify Sources of Supply Data or information about the supplier. information . product. Supplier Data to ES. product. and so on. 110 June 2006 . engineering. Business rules align Return process policies with business strategy.2 Select Final Supplier(s) and Negotiate Data or information about the supplier. Structured supplier data is needed to set up and implement ERP or similar systems. This data can be organizational . developing and maintaining customer and channel performance standards of an return processes such as service levels. Structured supplier data is needed to set up and implement ERP or similar systems. Inc. and objectives. product. financial. i.e. information . Supplier Data to ES. information . information . information . product. financial. given service requirements by supply chain stakeholders/trading partners. Data or information about the supplier. Data or information about the supplier.1 Manage Sourcing Business Rules Supplier Data to S3. 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 Supplier Data to ES. product. Structured supplier data is needed to set up and implement ERP or similar systems. 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. goals. The results of measuring the actual supplier performance on cost. financial. An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. Structured supplier data is needed to set up and implement ERP or similar systems. Data or information about the supplier. product. quality. Structured supplier data is needed to set up and implement ERP or similar systems. Structured supplier data is needed to set up and implement ERP or similar systems. © Copyright 2006 Supply-Chain Council.1 Manage Sourcing Business Rules Rules for conducting business.

. . Requirements established by a government or trading areas (i.6 Manage Transportation Import/Export Requirements to ES. Inputs: . Contract Carrier Rates to ES.9 Manage Supplier Agreements The rates charged by a carrier that does not serve the general public. Component/lot tracking (lot trace-ability) Multi-country Export/Import documentation compliance Electronic documentation submission via EDI and/or internet.8 Manage Import/Export Requirements The process of identifying and complying with import/export regulatory documentation and process standards set by external entities (e. . but provides transportation for hire for one or a limited number of shippers under a specific contract.e EU. Inc. 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. but provides transportation for hire for one or a limited number of shippers under a specific contract.ES. Metrics (see Appendix A for metrics attributes): . Capital Assets from ES. Acknowledgement that the product received conforms to specified requirements and criteria. Requirements established by a government or trading areas (i. . . Electronic documentation submission via EDI and/or internet. NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. Outputs: . . NAFTA etc) 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. © Copyright 2006 Supply-Chain Council.6 Manage Incoming Product Contract Carrier Rates to ED. . Electronic documentation submission via EDI and/or internet. Acknowledgement that the product received conforms to specified requirements and criteria.5 Manage Capital Assets Parts and Services Consumed from EM.g. government). . .5 Manage Equipment and Facilities Receipt Verification from S3.e EU. The rates charged by a carrier that does not serve the general public. .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.5 Manage Capital Assets Import/Export Requirements to ES. .4 Receive Product Receipt Verification from S2. .. 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: . .2 Receive Product Receipt Verification from S1. 111 June 2006 .

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

An agreement between supplier and purchaser to perform or not to perform specific acts or services or to deliver merchandise. enforcing terms and conditions and maintaining an accurate status for existing purchase orders or contracts. supplier. Web based access to preferred and recommended suppliers. Product on order with a selected source. .9 Manage Supplier Agreements The management of existing purchase orders or supplier contracts. Inc. Product on order with a selected source. and other conditions.5 Authorize Supplier Payment Payment Terms to S3. Outputs: . . © Copyright 2006 Supply-Chain Council. Optimized Supplier Count.7 Manage Supplier Network Requirements established by a government or trading areas (i. part type. . The average time associated with managing supplier agreements Best Practices: . . . invoice matching and the issuance of checks. Payment Terms to S2. inbound raw materials and outbound finished goods) specifying service levels.ES. Metrics (see Appendix A for metrics attributes): . Data or information about the supplier.2 Select Final Supplier(s) and Negotiate Supplier Data from ES. which includes certifying new suppliers and maintaining the current status of existing suppliers. This process includes invoice collection. . Electronic Sourcing and Negotiation Enterprise Level Policies/Rules with Local Execution Enterprise Level Spend Analysis Long Term Supplier Agreements/Partnerships Optimized Supply-Chain Processes. such as purchase order or supplier contract. . The process of authorizing payments and paying suppliers for product or services. Structured supplier data is needed to set up and implement ERP or similar systems. financial. Just-In-Time Agreements. information . . This includes managing volume/step pricing. Supplier and Part Rationalization Inputs: . Also. . 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.8 Manage Import/Export Requirements Product On Order from S2. .e EU. payment terms. Carrier Agreement Carrier agreements are agreements between a company and its domestic and global carriers (for both. product.1 Schedule Product Deliveries Product On Order from S3. This data can be organizational . Fab & Hold Agreements.1 Schedule Product Deliveries Supplier Agreement from S3.3 Schedule Product Deliveries Product On Order from S1. resolving issues.7 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or services. 113 June 2006 . business unit/site. This process includes invoice collection. supplier performance data & spend data stratified by commodity. the management of a supplier certification process. Import/Export Requirements from ES. invoice matching and the issuance of checks. . Product on order with a selected source. process type . NAFTA etc) which must be met before allowing the shipping or delivery of a product across national boundaries. Cost to Manage Supplier Agreements Manage Supplier Agreements Cycle Time The sum of the costs associated with managing supplier agreements.

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

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

Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. accounts payable. Inc. Source. report writing. The ratio of usable output from a process to its input. Components include accounts receivable. The levels of aggregation can be at any element associated with a supply chain asset. Six Sigma.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. 116 June 2006 . Make. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. Production Level Loading Capacity planning Provide Continuous Formal Training to Examples would be TQM. Scheduling) and Information systems that are easily accessible. 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. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. compensations systems. and Return. supply chain revenue. 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. Allow customer access to production status and inventories using internet technologies and web site features. or non-value adding activities within your manufacturing organization None identified None identified Support for modular skills inventory with links to training databases.) based on rate schedules and user-defined minimum/maximum trigger points Use a team based systematic approach to identifying and eliminating wasteful. inventory. Posted Performance Results Data warehouse. This includes the fixed assets used in Plan. Build Subassemblies to Forecast at the Highest Generic Level in the Bill of Material/Recipe/Formula Organize to Enhance Flexibility: Few Job Classifications. real time database and Executive Benchmarks (ie Capacity. Deliver. Use of web-based Readily Available to Employees technologies for dissemination of information. replenishment signals. 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 production with the assumption of no raw material constraints. etc. Employees © Copyright 2006 Supply-Chain Council. cost of goods sold and supply chain management costs. to the last possible supply chain location. Self-Directed Work Force. such as assembly or packaging. Flat Management Structure. Performance Results that Are Compared to 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. Electronic dispatch and data collection. 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. report writing. and operator instructions Electronic dispatch and data collection with external interface to internet.

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.Vendor Managed Inventory VMI is a concept for planning and control of inventory. The on-site inventory is counted. and the inventory is restocked to predefined levels. Inc. 117 June 2006 . © Copyright 2006 Supply-Chain Council. damaged or outdated goods are removed.

HR/certification support Support of demand-pull mechanisms (Kanban. . . and. Order entry.M1. 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. Cost to Schedule Production Activities Schedule Achievement . Inc.) based on rate schedules and user-defined minimum/maximum trigger points (DBR. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. 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. the scheduling of the operations to be performed in accordance with these plans.1 Schedule Production Activities Given plans for the production of specific parts. 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. Scheduling includes sequencing. In general. or formulations in specified quantities and planned availability of required sourced products. Inventory Levels. products. 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. . any standards for setup and run. 118 June 2006 . . Note: overshipments do not make up for under-shipments. constraining processes. . also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. 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. etc. Some factors that should be considered are internal manufacturing capacity. Raw Materials. Additional Capacity for Overflow Demand Cross Training/Certification Demand-Pull Manufacturing. Interface between maintenance management system and scheduling system Detailed production scheduling model and simulation capabilities Scheduling utilizing optimization techniques. The average time associated with scheduling production activities . The sum of the costs associated with scheduling production activities. direct labor availability and key components/materials availability. . . The percentage of time that a plant achieves its production schedule. Metrics (see Appendix A for metrics attributes): . intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. . . . replenishment signals. Detailed production model that synchronizes PLAN and MAKE activities in real time. . This calculation is based on the number of scheduled end-items or total volume for a specific period. depending on the factory layout. engineering. Schedule Production Activities Cycle Time Best Practices: . Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet.

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

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

© Copyright 2006 Supply-Chain Council.2 Issue Material The selection and physical movement of sourced/in-process product (e. Inventory Availability from S1. . Inventory Availability from S2. Items. The rules for handling WIP items in the production and repair process. a location on the production floor. Intermediate Products. . Issuing product includes the corresponding system transaction. Move Information and Methods from EM. 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). Production Schedule from M1.6 Manage Transportation . Cost to Issue Material Issue Material Cycle Time The sum of the costs associated with issuing material. raw materials. supporting activities (maintenance. 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). Metrics (see Appendix A for metrics attributes): .6 Transfer Product . Kanban Replenishment Signals from Stockroom.4 Manage In-Process Products (WIP) WIP Location Rules from EM. in inventory. . fabricated components. and customer service (finished goods and spare parts). . Inc.1 Schedule Production Activities WIP Handling Rules. repairs and operating supplies). or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials. . stockroom. a supplier) to a specific point of use location. . repairs and operating supplies). The average time associated with the issuance of material to production Best Practices: . . repairs and operating supplies). supporting activities (maintenance. These rules include the movement and accounting for inprocess items between work locations. supporting activities (maintenance.g.g. Back Flush Material at Order Completion Complete Lot History Demand-Pull Mechanisms. 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. EDI link to supplier’s sales order and inventory systems Inputs: . Inventory Availability from S3. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. required ingredients or intermediate formulations) from a stocking location (e...M1. subassemblies. and movement inventory. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations.4 Transfer Product . 121 June 2006 .4 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). . The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s).

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

. The ratio of usable output from a process to its input. . Electronic data collection of completion. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. 123 June 2006 . and labor data Electronic work instructions © Copyright 2006 Supply-Chain Council. For services. The condition that occurs when the output of a process is not consistently repeatable either in quantity.M1. quality. . . 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. 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. Electronic collection of defect data and on-line SPC. Move. . . direct labor availability and key components/materials availability. . Six Sigma. 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. The sum of the costs associated with production and test. 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. . 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. or combination of these. Cost to Produce and Test Fill Rate . labor and equipment data and dissemination of information on factory floor Electronic dispatch of operations Examples would be TQM. . either expressed or implied. Including Queue. labor and problem diagnosis for product defects. . . Warranty is a commitment. scrap. Metrics (see Appendix A for metrics attributes): . Some factors that should be considered are internal manufacturing capacity. Produce and Test Cycle Time Warranty and Returns . . . . . . Warranty Costs Yield Yield Variability Best Practices: . lot tractability. . quality. that a certain fact regarding the subject matter of a contract is presently true or will be true. Inc. constraining processes. scrap. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. . . Warranty costs include materials. . Electronic collection of quality data and on-line SPC.

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

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

scrap. . . 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. direct labor availability and key components/materials availability. . or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion. . Accurate and Approved Process Plans.3 Produce and Test Outputs: . Warranty Costs Best Practices: .1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. . Number of returns within the warranty period. that a certain fact regarding the subject matter of a contract is presently true or will be true. lot tractability. either expressed or implied. . Metrics (see Appendix A for metrics attributes): . packaging may include cleaning or sterilization. . quality. .M1. Within certain industries. Warranty is a commitment. . Some factors that should be considered are internal manufacturing capacity. . 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.4 Package The series of activities that containerize completed products for storage or sale to end-users. Warranty costs include materials. . and labor data Electronic Work Instructions Inputs: . . 126 June 2006 . Routings. changeover. Workflow from M1. labor and problem diagnosis for product defects. . Inc. Workflow to M1. constraining processes. The sum of the costs associated with product packaging. Cost to Package Package Cycle Time Warranty and Returns . © Copyright 2006 Supply-Chain Council.5 Stage Product Information Feedback to M1. .

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

8 Receive Product from Source or Make Information Feedback to M1. 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. 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: . . The flow of information back into the control system so that actual performance can be compared with planned performance. Examples include assembly of batch records for regulatory agencies. . The authorization to ship a finished product that has been ordered.6 Release Product to Deliver Activities associated with post-production documentation. . 128 June 2006 . . Inc.1 Schedule Production Activities The authorization to ship a finished product that has been ordered. laboratory tests for potency or purity.5 Stage Product Outputs: .M1. testing. © Copyright 2006 Supply-Chain Council.2 Receive Product at Store Finished Product Release to D1. Workflow from M1. and signoff by the quality organization. or certification required prior to delivery of finished product to customer. The average time associated with releasing finished product to deliver Best Practices: . Finished Product Release to D4. Metrics (see Appendix A for metrics attributes): .

stockroom.2 Issue Sourced/In-Process Product M2. Issuing product includes the corresponding system transaction. 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. Total value of Work in Process ÷ (COGS ÷ 365).. This cost includes direct costs (labor. The movement to finished goods is part of the Deliver process. 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.1 Schedule Production Activities Given plans for the production of specific parts. a location on the production floor. The sum of the costs associated with make. subassemblies. packaging may include cleaning or sterilization.. M2. products.3 Produce and Test M2.5 Stage Finished Product M2. a supplier) to a specific point of use location. The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties. The movement of packaged products into a temporary holding location to await movement to a finished goods location. Within certain industries. required ingredients or intermediate formulations) from a stocking location (e. The selection and physical movement of sourced/in-process product (e.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. or certification required prior to delivery of finished product to customer. The series of activities that containerize completed products for storage or sale to end-users. The cost associated with buying raw materials and producing finished goods. Activities associated with post-production documentation. Inc. or formulations in specified quantities and planned availability of required sourced products.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 . separating. creating certificate of analysis. Cost of Goods Sold Cost to Make Downside Make Adaptability Inventory Days of Supply (WIP) © Copyright 2006 Supply-Chain Council. 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.g. The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. and. 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. For services. raw materials. and chemical processes. Scheduling includes sequencing. forming. any standards for setup and run. Products that are made to order may remain in the holding location to await shipment per the associated customer order. fabricated components.g. The Category M2 includes six Level 3 Elements: M2. depending on the factory layout. materials) and indirect costs (overhead).M2 Make-to-Order The process of manufacturing in a make to order environment adds value to products through mixing. machining.4 Package M2. testing. and sign-off by the quality organization. the scheduling of the operations to be performed in accordance with these plans. 129 June 2006 . laboratory tests for potency or purity. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. In general.

Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. The percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage. invoices. 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. 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. Make. Components include accounts receivable. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints.packing slips. Six Sigma. 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. Produce Products to Unique Customer Requirements Production Level Loading Provide Continuous Formal Training to Employees © Copyright 2006 Supply-Chain Council. accounts payable. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Components include all items and quantities on-time using the customer’s definition of on-time. Self-Directed Work Force. bills of lading. The ratio of usable output from a process to its input. 130 June 2006 . 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. etc. Source. collaborative data-sharing environment. Data warehouse. None identified Support for modular skills inventory with links to training databases. supply chain revenue. Inc. Flat Management Structure. cost of goods sold and supply chain management costs. This includes the fixed assets used in Plan. The levels of aggregation can be at any element associated with a supply chain asset. inventory.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. The number of days required to achieve an unplanned sustainable 20% increase in production with the assumption of no raw material constraints. report writing. compensations systems. such as assembly or packaging. and documentation . and Return. to the last possible supply chain location. Order entry specifications linked to manufacturing order Capacity planning Examples would be TQM. and operator instructions Electronic dispatch and data collection with external interface to internet.

depending on the factory layout. 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.1 Schedule Production Activities Given plans for the production of specific parts. The percentage of time that a plant achieves its production schedule. . © Copyright 2006 Supply-Chain Council.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. . .. . and. Scheduling includes sequencing. orders) and the planned capacity (capacity available) of these resources over a span of time. Inc. 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. In general. . Additional Capacity for Overflow Demand Cross Training/Certification Demand Pull Mechanisms Demand-Pull Manufacturing. . Order entry. . any standards for setup and run. Cost to Schedule Production Activities Schedule Achievement . Required production resources included in routing/process instructions Schedule undated by on line reporting and status systems and resequence activities . replenishment signals. the scheduling of the operations to be performed in accordance with these plans. 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.) based on rate schedules and user-defined minimum/maximum trigger points (DBR. constraining processes. Detailed production model that synchronizes PLAN and MAKE activities in real time. 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. . The average time associated with scheduling production activities . Inventory Levels. Some factors that should be considered are internal manufacturing capacity. .M2. products. Note: overshipments do not make up for under-shipments. etc. Equipment and Facilities Schedules and Plans from EM. . intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. or formulations in specified quantities and planned availability of required sourced products. Inputs: . also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. 131 June 2006 . Schedule Production Activities Cycle Time Best Practices: . direct labor availability and key components/materials availability. engineering. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. The sum of the costs associated with scheduling production activities. Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet.e. HR/certification support Repetitive scheduling and sequencing Support of demand-pull mechanisms (Kanban.

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

2 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e. Inventory Availability from S1. Issuing product includes the corresponding system transaction. © Copyright 2006 Supply-Chain Council. .M2. subassemblies. Kanban Replenishment Signals from Stockroom. and movement inventory. Those stocks or items on hand used to support production (raw materials and work in process items). a supplier) to a specific point of use location. and customer service (finished goods and spare parts). or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials. . These rules include the movement and accounting for inprocess items between work locations. raw materials. Metrics (see Appendix A for metrics attributes): . a location on the production floor. . Inc. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations. and customer service (finished goods and spare parts). 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.4 Manage In-Process Products (WIP) WIP Location Rules from EM.1 Schedule Production Activities WIP Handling Rules.6 Manage Transportation . A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. supporting activities (maintenance.4 Transfer Product . EDI link to supplier’s sales order and inventory systems Inputs: . . repairs and operating supplies). Inventory Availability from S3. stockroom. .. supporting activities (maintenance.. .4 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 Complete Lot History Demand-Pull Mechanisms. Production Schedule from M2. 133 June 2006 . . required ingredients or intermediate formulations) from a stocking location (e. and customer service (finished goods and spare parts). repairs and operating supplies).g. Inventory Availability from S2. The average time associated with the issuance of material to production Best Practices: . Items. repairs and operating supplies). . 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. Those stocks or items on hand used to support production (raw materials and work in process items).6 Transfer Product . in inventory. fabricated components. Intermediate Products. supporting activities (maintenance. The rules for handling WIP items in the production and repair process.g. 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.

1 Schedule Product Deliveries Replenishment Signal to S3.6 Transfer Product Replenishment Signal to S3. repairs and operating supplies).4 Transfer Product Replenishment Signal to S1. and Aggregate Production Resources Product Location Information to EM. Any signal that indicates when to produce or transport Items in a pull replenishment system. Assess. Information Feedback to M2.2 Identify.9 Pick Product The flow of information back into the control system so that actual performance can be compared with planned performance. Inc. 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. . . © Copyright 2006 Supply-Chain Council. .Outputs: . . . . 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. Those stocks or items on hand used to support production (raw materials and work in process items). Any signal that indicates when to produce or transport Items in a pull replenishment system. Inventory Availability to P3.1 Schedule Product Deliveries Replenishment Signal to S2. repairs and operating supplies).1 Schedule Production Activities Inventory Availability to D2.6 Manage Transportation Production Schedule to M2. . .1 Schedule Product Deliveries . 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. .3 Schedule Product Deliveries Replenishment Signal to S2. Attributes of the product’s storage location. Any signal that indicates when to produce or transport Items in a pull replenishment system.3 Produce and Test Replenishment Signal to S1. supporting activities (maintenance.4 Transfer Product Source Execution Data to S2. . Any signal that indicates when to produce or transport Items in a pull replenishment system. 134 June 2006 . 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).

. 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.1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. . Including Queue. . . Automatic download of production equipment with batch recipes/part programs Use principals of Lean Manufacturing. . . . 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.4 Package Information Feedback to M2. 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. . Metrics (see Appendix A for metrics attributes): . scrap. . . The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. . lot tractability. . quality.M2. . Electronic collection of defect data and on-line SPC. Inc. . and labor data Electronic work instructions Outputs: . Electronic data collection of completion. . . Move. The condition that occurs when the output of a process is not consistently repeatable either in quantity. . The sum of the costs associated with production and test. Cost to Produce and Test Produce and Test Cycle Time Warranty Costs Yield Yield Variability Best Practices: . Workflow to M2. direct labor availability and key components/materials availability. . quality. The ratio of usable output from a process to its input. or combination of these. labor and problem diagnosis for product defects. Some factors that should be considered are internal manufacturing capacity. . © Copyright 2006 Supply-Chain Council. The average time associated with production and test Warranty costs include materials.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. constraining processes. 135 June 2006 .

scrap. . Some factors that should be considered are internal manufacturing capacity. quality.4 Package The series of activities that containerize completed products for storage or sale to end-users. . . .3 Produce and Test Outputs: . 136 June 2006 . . Accurate and Approved Process Plans. .5 Stage Finished Product Information Feedback to M2. Cost to Package Package Cycle Time Warranty Costs Best Practices: . changeover.1 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. constraining processes. . The sum of the costs associated with product packaging. Workflow from M2. . © Copyright 2006 Supply-Chain Council. . or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion. . lot tractability. Within certain industries. 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. and labor data Electronic Work Instructions Inputs: . packaging may include cleaning or sterilization. . . Workflow to M2. Warranty costs include materials.M2. labor and problem diagnosis for product defects. . direct labor availability and key components/materials availability. Routings. Metrics (see Appendix A for metrics attributes): . . 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.

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

. . Examples include assembly of batch records for regulatory agencies. Workflow from M2. laboratory tests for potency or purity. © Copyright 2006 Supply-Chain Council.9 Pick Product Information Feedback to M2.1 Schedule Production Activities The authorization to ship a finished product that has been ordered. 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: .6 Release Finished Product to Deliver Activities associated with post-production documentation. Metrics (see Appendix A for metrics attributes): . . creating certificate of analysis. . The average time associated with releasing finished product to deliver Best Practices: .M2. Inc. testing. The flow of information back into the control system so that actual performance can be compared with planned performance. 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. and signoff by the quality organization.5 Stage Finished Product Outputs: . 138 June 2006 . Finished Product Release to D2. or certification required prior to delivery of finished product to customer.

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

etc. 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. 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. compensations systems. Support of demand-pull mechanisms (Kanban. Deliver.) based on rate schedules and user-defined minimum/maximum trigger points Support for modular skills inventory with links to training databases. Make. collaborative data-sharing environment. cost of goods sold and supply chain management costs. and Return. Flat Management Structure. supply chain revenue. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Source. and operator instructions Electronic dispatch and data collection with external interface to internet. The average time associated with Make Processes The average actual cycle time consistently achieved to fulfill customer orders. 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. Data warehouse. The levels of aggregation can be at any element associated with a supply chain asset. inventory. This includes the fixed assets used in Plan. Inc. Best Practices: Cellular Manufacturing Delivery Schedules Are Collaboratively Developed with Customers Demand-Pull Manufacturing. report writing.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. © Copyright 2006 Supply-Chain Council. This cost includes direct costs (labor. 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 ratio of usable output from a process to its input. accounts payable. Total value of Work in Process ÷ (COGS ÷ 365). The sum of the costs associated with make. replenishment signals. materials) and indirect costs (overhead). The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties. Components include accounts receivable. The maximum sustainable percentage increase in production that can be achieved in 30 days with the assumption of no raw material constraints. real time data base and EI systems On-line design tools facilitated by internet connections. 140 June 2006 .

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

. depending on the factory layout. The average time associated with scheduling production activities . the scheduling of the operations to be performed in accordance with these plans. Metrics (see Appendix A for metrics attributes): . . The sum of the costs associated with scheduling production activities. .M3. Other Jobs and Resource Availability) On Line Outsource manufacturing and work force augmentation providers connected to production schedules via the internet. Schedule Production Activities Cycle Time Best Practices: . . The percentage of time that a plant achieves its production schedule. 142 June 2006 . . . In general. . Interface between maintenance management system and scheduling system Algorithms that manage set up times/costs. Additional Capacity for Overflow Demand Build Subassemblies to Forecast at Highest Generic Level in Bill of Material. 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. direct labor availability and key components/materials availability. 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. constraining processes. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. Note: overshipments do not make up for under-shipments. None identified . Inc. 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. and. intermediate production activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. This calculation is based on the number of scheduled end-items or total volume for a specific period. . and ideal job sequences (eg. cleaning times. . or formulations in specified quantities and planned availability of required sourced products. Capacity Utilization A measure of how intensively a resource is being used to produce a good or service. None identified . .2 Schedule Production Activities Given plans for the production of specific parts. Manufacturing is broken into work cells HR/certification support Repetitive scheduling and sequencing Machine productivity and downtime monitoring (DBR. Scheduling includes sequencing. Inventory Levels. color sequencing light to dark) Scheduling utilizing optimization techniques. Cost to Schedule Production Activities Schedule Achievement . Some factors that should be considered are internal manufacturing capacity. any standards for setup and run. products.

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

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

. Inc. repairs and operating supplies).6 Transfer Product Those stocks or items on hand used to support production (raw materials and work in process items). supporting activities (maintenance. . Back Flush Material at Order Completion Demand-Pull Mechanisms. The average time associated with the issuance of material to production Best Practices: . Those stocks or items on hand used to support production (raw materials and work in process items). subassemblies. in inventory. repairs and operating supplies). . 145 June 2006 . and customer service (finished goods and spare parts).2 Schedule Production Activities WIP Handling Rules. The process and rules for establishing and maintaining in-process item inventory ownership and stocking locations.4 Manage In-Process Products (WIP) WIP Location Rules from EM. . and movement inventory.g.3 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e.4 Transfer Product .M3. Those stocks or items on hand used to support production (raw materials and work in process items).g.6 Manage Transportation . repairs and operating supplies). stockroom. and customer service (finished goods and spare parts). required ingredients or intermediate formulations) from a stocking location (e. a supplier) to a specific point of use location. These rules include the movement and accounting for inprocess items between work locations. Activity Usage Type: Metrics (see Appendix A for metrics attributes): . © Copyright 2006 Supply-Chain Council. 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. a location on the production floor. Move Information and Methods from EM. . 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 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. Items. Intermediate Products. supporting activities (maintenance. raw materials. . Inventory Availability from S3. Kanban Replenishment Signals from Stockroom. Production Schedule from M3.4 Transfer Product . Inventory Availability from S1. Issuing product includes the corresponding system transaction. fabricated components. . EDI link to supplier’s sales order and inventory systems None identified Inputs: .. 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. supporting activities (maintenance. . . The Bill of Materials/routing information or recipe/production instructions will determine the products to be issued to support the production operation(s). or Subassembly Area Electronic Material Move Transactions Strategic Safety Stock of Selected Materials. The rules for handling WIP items in the production and repair process.

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

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

. The sum of the costs associated with production and test. Six Sigma. and labor data Electronic work instructions Inputs: .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. . Electronic collection of defect data and on-line SPC. The average time associated with production and test Warranty costs include materials. Move. . Electronic data collection of completion. .3 Issue Sourced/In-Process Product Outputs: .5 Package Information Feedback to M3. Some factors that should be considered are internal manufacturing capacity. Workflow from M3. The ratio of usable output from a process to its input.2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. . .M3. Cost to Produce and Test Produce and Test Cycle Time Warranty Costs Yield Yield Variability Best Practices: . Including Queue. . 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. Workflow to M3. . Inc. . constraining processes. lot tractability. . Use principals of Lean Manufacturing. © 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. scrap. direct labor availability and key components/materials availability. . Electronic collection of qualityt data and on-line SPC. . or combination of these. quality. Metrics (see Appendix A for metrics attributes): . 148 June 2006 . . labor and problem diagnosis for product defects. quality. . . The processes associated with the validation of product performance to ensure conformance to defined specifications and requirements. . The condition that occurs when the output of a process is not consistently repeatable either in quantity. . . 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. .

Cost to Package Package Cycle Time Warranty Costs Best Practices: . Metrics (see Appendix A for metrics attributes): . 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. 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. constraining processes. direct labor availability and key components/materials availability.4 Produce and Test Outputs: . . packaging may include cleaning or sterilization. .5 Package The series of activities that containerize completed products for storage or sale to end-users. or layout None identified Electronic dispatch of operations None identified Electronic data collection of completion.M3. lot tractability. Workflow from M3. labor and problem diagnosis for product defects. . changeover.6 Stage Finished Product Information Feedback to M3. Some factors that should be considered are internal manufacturing capacity. . Inc. . quality. . . . Within certain industries. and labor data Electronic Work Instructions Inputs: . . 149 June 2006 . . © Copyright 2006 Supply-Chain Council. .2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. The sum of the costs associated with product packaging. Workflow to M3. Warranty costs include materials. scrap. .

Products that are made to order may remain in the holding location to await shipment per the associated customer order. .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.2 Schedule Production Activities The flow of information back into the control system so that actual performance can be compared with planned performance. The movement to finished goods is part of the Deliver process. .5 Package Delivery Plans from P4. 150 June 2006 .M3. Inc.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.7 Release Product to Deliver Information Feedback to M3. Production Plan includes production capability. Cost to Stage Finished Product Stage Finished Product Cycle Time The sum of the costs associated with staging finished goods. Automated process control and/or barcode data collection Inputs: . Outputs: . © Copyright 2006 Supply-Chain Council. . 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. . Workflow from M3. Auto-Tendering for direct ship utilizing EDI/XML protocols. Workflow to M3.6 Stage Finished Product The movement of packaged products into a temporary holding location to await movement to a finished goods location. Metrics (see Appendix A for metrics attributes): . .

Metrics (see Appendix A for metrics attributes): . Workflow from M3.6 Stage Finished Product Outputs: . .M3. The flow of information back into the control system so that actual performance can be compared with planned performance. .2 Schedule Production Activities The authorization to ship a finished product that has been ordered. creating certificate of analysis. or certification required prior to delivery of finished product to customer. © Copyright 2006 Supply-Chain Council. testing. and signoff by the quality organization. Examples include assembly of batch records for regulatory agencies. . Inc. 151 June 2006 . 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. laboratory tests for potency or purity. Finished Product Release to D3.7 Release Product to Deliver Activities associated with post-production documentation.9 Pick Product Information Feedback to M3. . 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: .

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

. Etc. and objectives.EM. 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. goals. vessel or batch sizes) Document Control Control who can create. diagrams. 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.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 . projected balance sheet. worker effort. Inc. equipment requirements. and enforcing rules for managing production details in line with business strategy. envelop sizes. 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.. PLC Seamless application interface to manufacturing planning documentation Program. specifications. cost and profit. plant. to all users Genealogy Tracking Where-used listing of as-planned vs. instructions. tooling. 153 June 2006 . revise and access information Electronic Documentation and Imaging Graphical display of drawings. maintaining. and equipment. 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. Corporate Objectives and Strategies from Source: Company Inventory Capacity from EP. CNC Program Systems. sustainable output rate which can be achieved with the current product specifications.based) manufacturing design Tooling / Set-Up Instructions system Automatic Link to Recipe Management. recipes/formulas. Production details include part/item master. The average time associated with managing production rules Best Practices: Computer aided process planning / recipe management Automated Intelligence (Heuristic) . and other information specifying the method of production for a particular product.1 Manage Production Rules The process of establishing. activity. Corporate objectives are the goals and mission of an organization.5 Manage Integrated Supply Chain Capital Assets © Copyright 2006 Supply-Chain Council. tank. bills of materials/formulas. The highest.4 Manage Integrated Supply Chain Inventory Product Design from Source: Company Production Capacity from EP. and a cash flow statement. processes. etc. This process develops objectives usually accompanied by budgets. routings. product mix.

Production Plan includes production capability. Production Rules to Make Production Rules to Source Production Rules to Plan © Copyright 2006 Supply-Chain Council. 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. 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.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. 154 June 2006 . Transportation Capacity from EP. 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.Production Plans from P3.

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 a cash flow statement. and track progress against schedule and standards. as defined by the company. This process allows the development and implementation of a course of action to achieve targeted performance. sustainable output rate which can be achieved with the current product specifications. 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).4 Manage Integrated Supply Chain Inventory Product Design/Quality from Source: Company Production Capacity from EP. product mix. a percentage of parts produced without a need for adjustment or repair. Transportation Capacity from EP. and cost. The production policy indicates standard rules on how the production quality should be secured. plant.EM.5 Manage Integrated Supply Chain Capital Assets Production Plans from P3. Integrated Supply Chain Transportation Outputs: Production Quality and Policies to EM. 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. worker effort. activity. cost and profit. For example. Inc.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 highest. aesthetics.6 Manage The capability of a trasportation system to perform it’s function. Corporate Objectives and Strategies from Source: Company Inventory Capacity from EP. as well as its actual performance.4 Establish Production Plans Production Plan includes production capability. 155 June 2006 . industry standards. 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. projected balance sheet. Corporate objectives are the goals and mission of an organization. customer/supplier alignment agreements.5 Manage Equipment and Facilities The operational techniques and planned and systematic activities used to fulfill requirements for quality in the production process. This process develops objectives usually accompanied by budgets. Internal/external benchmarking. and equipment. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. Production Rules to Deliver © Copyright 2006 Supply-Chain Council. or the quality of the production. 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.

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.2 Manage Performance of Supply Chain © Copyright 2006 Supply-Chain Council. delivery reliability. 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 asset management. cost. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes.g. Production Rules to Make Production Rules to Plan Supply-Chain Performance Metrics to EP. Inc. 156 June 2006 . flexibility and responsiveness.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.

Process. 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. 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. and dissemination of information for planning. files. processing..EM. 157 June 2006 . business rules and outputs for a new system. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. Smart Cards. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. © Copyright 2006 Supply-Chain Council. Information Needs Analysis from Source: Make Information Needs Analysis from Source: Source Information Needs Analysis from Source: Deliver Specifying the inputs. Information Needed to Create and Maintain Interrelated computer hardware and software along with people and IT from Source: Company processes designed for the collection. so that the data yields an understanding not available from any single data element. and control.3 Manage MAKE Information The process of managing. Radio Frequency Identification. 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. Magnetic Stripe. Data arranged or presented from a set of logically related tasks or activities performed to achieve a defined business outcome. Machine Interface. to enable data collection On-Demand Access to Available to Promise None identified (ATP). decision making. etc. Inc. so that the data yields an understanding not available from any single data element. but without expressing computer alternatives and technical details. business rules and outputs for a new system. processing. Specifying the inputs. so that the data yields an understanding not available from any single data element. Specifying the inputs. and communicating information to support MAKE planning and execution processes. but without expressing computer alternatives and technical details. Production Schedules and Inventory Status by Internal Operations and Customers Utilize Enterprise Information Systems Enter. cause and effect analysis. maintaining. files. The information to be managed includes production. order and process data. files. collecting. processing. This could include using PLC. but without expressing computer alternatives and technical details. bar code. Radio Frequency Communication. processing. business rules and outputs for a new system. so that the data yields an understanding not available from any single data element.

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

© Copyright 2006 Supply-Chain Council. units of production. with extrapolation the net and gross percentage of error is determined. No discarded material. This sample is then extrapolated across the inventory population. Reuse of intermediate WIP containers for finished goods. product mix and stocking locations for In-Process Product (WIP). 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 Manage In-Process Products (WIP) The process of establishing and maintaining limits or levels. Incoming Product Information from Source: Source Production Orders Planned & Actual Reports A statement of the output of a production facility for a specified period. The on-site inventory is counted. Management of the activities associated with handling/storage/movement of materials used to support production. Inc. and the inventory is restocked to predefined levels. Capacity requirements are usually expressed in terms of hours of work or.EM. which provides an indicative measure of entire inventory population. ownership. plant FG. Only includes inventory on company books. replenishment models. genealogy WIP Storage Management System Efficient Space Utilization Implementing Pull Systems Move high frequency used inventory close to point of use. Recyclable or no containers where appropriate.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. 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. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory. VMI is a concept for planning and control of inventory. 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. Data concerning product on order and due to be delivered to location agreed in the order. Best practice is to remove the dunnage as soon as possible unless part / product damage will result. For example. other) ÷ (COGS ÷ 365). 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. Total gross value of inventory at standard cost before reserves for excess and obsolescence. Part / WIP location by date received for those parts that must be stocked or staged in a holding area Tracking. First In . field FG. from Source: Plan comparing planned to actual production. damaged or outdated goods are removed. Furthermore. 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). when units consume similar resources at the same rate. field samples. No packing and unpacking time required. 159 June 2006 .

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

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

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

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

comparing planned to actual production.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. A statement of the output of a production facility for a specified period. Inc. when units consume similar resources at the same rate.e. Methods from Source: Plan These rules include the movement and accounting for in-process items between work locations. WIP Handling Rules. in inventory. Equipment and Facilities Replacement and Disposition Plans from EM. and the modernization of plant facilities Attributes of the product’s storage location. Move Information and The rules for handling WIP items in the production and repair process. such as purchase order or supplier contract.g.2 Issue Material Product Location Information from M3. Attributes of the product’s storage location. and movement inventory. © 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. which kind of packaging. 164 June 2006 . AGVs and ASRS) and process improvement (i. units of production. This software then needs to provide a report based on the cubic feet of material times distance moved by part number.“ or an estimate of the customer delivery requirements of a product or service. The policy is sometimes stated as “our quoted delivery time. This includes management of the activities associated with in transit handling and movement of In-Process Product (WIP).e. in inventory. Supplier Agreement from S3. Actions relating to the planning.5 Manage Equipment and Facilities Product Location Information from M2. e.EM. 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. Move Information and The rules for handling WIP items in the production and repair process.2 Issue Sourced/In-Process Product Product Location Information from M1.3 Issue Sourced/In-Process Product Product Location Information from Source: Deliver Production Orders Planned & Actual Reports from Source: Company Projected Delivery Requirements from EM. reduction of handling steps. and movement inventory. shorter move paths) Short Move Paths Software that allows for input of the distance that particular parts/WIP need to be moved. Capacity requirements are usually expressed in terms of hours of work or. should the parts be shipped one by one or in bulks etc. 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. financing and disposition of capital outlays for such purposes as the purchase of new equipment. the introduction of new product lines.7 The company’s goal for the time to ship the product after the receipt of a Manage Production Network customer’s order. Attributes of the product’s storage location.6 Manage Transportation The process of transporting In-Process Product (WIP).

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

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. should the parts be shipped one by one or in bulks etc.g. Feedback on the production schedule allowing for corrective action to a production problem. © Copyright 2006 Supply-Chain Council. 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.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. e. which kind of packaging. should the parts be shipped one by one or in bulks etc. on-line planning/scheduling systems. The company’s goal for the time to ship the product after the receipt of a customer’s order. The policy is sometimes stated as “our quoted delivery time. 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.“ or an estimate of the customer delivery requirements of a product or service. The company’s goal for the time to ship the product after the receipt of a customer’s order. 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. Capacity planning systems with accurate production capability data. Includes: the amount of direct materials. which kind of packaging. Schedule visibility.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. e. 166 June 2006 .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.EM.g. Inc. 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. e. which kind of packaging. and allocated overhead. The organic capability of an organization to produce output per time period. The policy is sometimes stated as “our quoted delivery time. The organic capability of an organization to produce output per time period. The policy is sometimes stated as “our quoted delivery time.“ or an estimate of the customer delivery requirements of a product or service. Projected Delivery Requirements to EM. direct labor.

Plan government. 167 June 2006 .EM. etc.) External Regulatory Information from Source: Documentation and process standards set by external entities (i. Claims are marketing information provided as to performance. External Regulatory Information from Source: Documentation and process standards set by external entities (i. 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. trade officials.e. 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. or FDA requirements. etc. trade officials.) 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. Electronic Document Management System features. Make government.) Electronic subscription and publication of conformance documentation. Inputs: Corporate Objectives and Strategies from Corporate objectives are the goals and mission of an organization. may be software to produce MSDS documents.g. Source government.g. Source: Company Equipment and Facilities Characteristics from Equipment and facility traits and specifications required to meet external Source: Company entities requirements. including holding of product until requirements are met Software specific to industry regulations and standards (e. etc.) External Regulatory Information from Source: Documentation and process standards set by external entities (i. etc.8 Manage Regulatory Compliance The process of identifying and complying with regulatory documentation and process standards set by external entities (e. 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. Inc.e.e. etc. Courses of action and processes that are established to meet the requirements placed on production by external entities.

putting away and recording location that a company performs at its own warehouses. Inc.2 Receive. The Category D1 includes fifteen Level 3 Elements: D1. the process of preparing. Payment is received from the customer within the payment terms of the invoice. Optionally accept payment. Check the customer’s credit. fax.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. packing / kitting the products. verifying. D1.. D1. The product is fully functional upon completion. barcodes etc. D1.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.10 Pack Product The activities such as sorting / combining the products. D1. customer. 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. For services. © Copyright 2006 Supply-Chain Council. D1. carrier and government needs. D1.9 Pick Product The series of activities including retrieving orders to pick. building the pick wave. recording product receipt. or electronic media. determining inventory availability.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. D1.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation.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. picking the product. D1.7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are rated and tendered. recording the pick and delivering product to shipping in response to an order. D1.14 Install Product When necessary. 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. D1.6 Route Shipments Loads are consolidated and routed by mode. “Technically“ examine orders to ensure an orderable configuration and provide accurate price.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.12 Ship Product The process of shipping the product to the customer site. testing and installing the product at the customer site. 168 June 2006 .8 Receive Product from Source or Make The activities such as receiving product.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.5 Build Loads Transportation modes are selected and efficient loads are built. and delivering the products to the shipping area for loading. Enter & Validate Order Receive orders from the customer and enter them into a company’s order processing system. Orders can be received through phone. determining put-away location. D1. May include quality inspection. Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . lane and location. D1. paste labels. D1.

Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Make. 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 quantities delivered that can be achieved in 30 days with the assumption of unconstrained finished good availability. bills of lading. Components include all items and quantities on-time using the customer’s definition of on-time. Deliver. Deployment. accounts payable. EDI © Copyright 2006 Supply-Chain Council. Best Practices: Efficient Consumer Response (ECR). 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. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). such as assembly or packaging. This includes the fixed assets used in Plan. and documentation . Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes.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. The average actual cycle time consistently achieved to fulfill customer orders. Quick Response Electronic Catalogues/Malls Internet Ordering Postponement Demand Planning. 169 June 2006 . and Return.packing slips. 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. supply chain revenue. 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. cost of goods sold and supply chain management costs. etc. Inc. VMI. inventory. Source. to the last possible supply chain location. The levels of aggregation can be at any element associated with a supply chain asset. None identified Rapid Replenishment. Components include accounts receivable. invoices.

a bid. and description of goods or services offered by a supplier to a prospective purchaser. 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. availability. 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. it is usually considered an offer to sell. and description of goods or services offered by a supplier to a prospective purchaser. it is usually considered an offer to sell. Outputs: Customer Quote to D1. and requests for quotes. © Copyright 2006 Supply-Chain Council. without Reserving None identified Inventory. and requests for quotes. When given in response to an inquiry. Inc.2 Receive. terms of sale. Enter & Validate Order A statement of price. availability. Best Practices: Quote Capability. 170 June 2006 . A statement of price. cost. When given in response to an inquiry. terms of sale.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes.D1. 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. a bid. cost.

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

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

which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. and customer service (finished goods and spare parts). for None identified Key Customers. repairs and operating supplies). 173 June 2006 .4 Establish Delivery Plans Inventory Availability from M1. Those stocks or items on hand used to support production (raw materials and work in process items). 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. supporting activities (maintenance. 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. repairs and operating supplies). Real-time inventory management Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a customer order.2 Issue Material Inventory Availability from S1. which is imposed by customer requirements. Those stocks or items on hand used to support production (raw materials and work in process items).D1. Inc. supporting activities (maintenance. For services. 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. and customer service (finished goods and spare parts). This kind of idle time should not be deducted from Order Fulfillment Cycle Time. © Copyright 2006 Supply-Chain Council. with FIFO Allocation for All Others Inputs: Delivery Plans from P4.4 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.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. 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. 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.

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

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

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

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

Inc.7 Select Carriers & 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 required or agreed time or rate of delivery of goods or services purchased for a future period. © 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.D1.9 Pick Product The required or agreed time or rate of delivery of goods or services purchased for a future period. Outputs: Scheduled Deliveries to Plan Scheduled Deliveries to D1.6 Route Shipments Routes for shipping by consolidating loads. 178 June 2006 .

Zoned Put Away. & 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. putting away and recording location that a company performs at its own warehouses. verifying. May include quality inspection. and rules based put away logic Control. In a DC. Permission to return to service an item that has been repaired and found to be within specifications and operable. recording product receipt. The items to be merged are cross-docked from inbound receipt to outbound shipping. at a plant or a supplier) as well as make-to-order items.g. In a traditional DC. 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. © Copyright 2006 Supply-Chain Council. stock locator.8 Receive Product from Source or Make The activities such as receiving product.2 Disposition MRO Product Finished Product Release from M1.2 Disposition Defective Product Authorization to Return to Service from SR3. This includes items on stock in the distribution center. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. Inputs: Authorization to Return to Service from SR2. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. Permission to return to service an item that has been repaired and found to be within specifications and operable.D1. Quality Assurance. Merging is usually performed in a shipper’s distribution center (DC) or in a carrier’s terminal.2 Disposition MRO Product Authorization to Return to Service from SR1.6 Release Product to Deliver Permission to return to service an item that has been repaired and found to be within specifications and operable. ABC Frequency of Access Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment.2 Disposition Excess Product Authorization to Scrap from SR3. determining put-away location. Inc. 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.O. Download P. Cross docking actively links the receiving and shipping processes. items on stock elsewhere (e. from which the shipment is sent. The authorization to ship a finished product that has been ordered. items on stock in other distribution centers. 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. 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. 179 June 2006 .2 Disposition Excess Product Authorization to Scrap from SR1.

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

stock locator. building the pick wave. 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.g. at a plant or a supplier) as well as make-to-order items. recording the pick and delivering product to shipping in response to an order.D1. The items to be merged are cross-docked from inbound receipt to outbound shipping. Inputs: Scheduled Deliveries from D1. Zoned Picking. determining inventory availability. Wave picking consolidates orders into “waves“ where multiple orders with similar characteristics are picked at one time. 181 June 2006 . This includes items on stock in the distribution center. Cost. from which the shipment is sent. and customer service (finished goods and spare parts). Outputs: Workflow to D1. geography. repairs and operating supplies). orders are scheduled to be picked when they are received.9 Pick Product The series of activities including retrieving orders to pick. supporting activities (maintenance. 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.7 Select Carriers & Rate Shipments Inventory Availability from D1. Those stocks or items on hand used to support production (raw materials and work in process items). or any other criteria that makes sense for the DC operation.10 Pack Product © Copyright 2006 Supply-Chain Council. In some DC’s. Orders can be consolidated by customer. Merging is usually performed in a shipper’s distribution center (DC) or in a carrier’s terminal.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. items on stock elsewhere (e. picking the product. items on stock in other distribution centers. and Time Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment. For services. Quality Assurance Rules based picking logic and simulation Dynamic Simulation of Picking Requirements Optimized for Labor. 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. and rules based picking logic Control. The percentage of ship-from-stock orders shipped within 24 hours of order receipt. Inc.

182 June 2006 . paste labels.9 Pick Product Outputs: Workflow to D1. barcodes etc.11 Load Vehicle & Generate Shipping Documentation © Copyright 2006 Supply-Chain Council. Inc. The average time associated with packing a product for shipment.D1. Inputs: Workflow from D1.10 Pack Product The activities such as sorting / combining the products. packing / kitting the products. and 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.

and Credit Information to SR1. Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. Shipping. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. In a traditional DC. Inc.) are required. Verify. 183 June 2006 . bills of lading. carrier and government needs.8 Manage Import/Export Requirements Shipping Parameters and Documentation from ED. payment terms. © Copyright 2006 Supply-Chain Council. Shipping parameters. and other conditions. including packing slips. marking. export papers.D1. and loading for shipment. cube and route decide carrier and cost. integrated transportation/warehouse management Carrier agreements are agreements between a company and its domestic and global carriers (for both.g. and products. 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. EDI.5 Return Defective Product Products that have been acknowledged as received by the customer. The function that performs tasks for the outgoing shipment of parts. Cross docking actively links the receiving and shipping processes. invoices. size. inbound raw materials and outbound finished goods) specifying service levels. Outputs: Delivered End Items to Customer Load. 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. Legal documentation of the contents of a shipment (e. components. weighing. In a DC. customer. [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. such as weight.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. bill of lading. both cross docking (no storage) and traditional (with storage) operations might take place. way bill. Also. etc. It includes packaging. etc.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. verify the shipment and customer credit information. 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.

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

185 June 2006 . None identified Shipment Tracking Inputs: Workflow from D1. Inc.D1.11 Load Vehicle & Generate Shipping Documentation Outputs: Workflow to D1. In a traditional DC.13 Receive & Verify Product by Customer © Copyright 2006 Supply-Chain Council. both cross docking (no storage) and traditional (with storage) operations might take place. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes.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% Cost to Ship Product The sum of the costs associated with shipping products. 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. Cross docking actively links the receiving and shipping processes. In a DC.

D1. information or services. 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. 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.12 Ship Product Outputs: Product to D1. EDI. 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.14 Install Product The end object of a transformation process that includes physical objects. Inc. 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. are faultlessly installed (as applicable). © Copyright 2006 Supply-Chain Council. have the correct configuration. 186 June 2006 .

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.15 Invoice The process of preparing. testing and installing the product at the customer site. 187 June 2006 . and between internal functions such as Field Service.14 Install Product When necessary. The standalone product is fully functional upon completion. the process of preparing. Etc. The average time associated with product installation Percentage of orders delivered in an undamaged state that meet specification. are faultlessly installed (as applicable).13 Receive & Verify Product The end object of a transformation process that includes physical objects. The product is fully functional upon completion. Inc.D1. testing and installing the product at the customer site. Outputs: Installed Product to D1. Marketing and Order Management) Inputs: Product from D1. Installation Cycle Time. but there may be requirement for subsequent integration. by Customer information or services. © Copyright 2006 Supply-Chain Council. 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. have the correct configuration. Manufacturing. The sum of the costs associated with product installation. Collaborative planning tools with the Source suppliers (This would be effective between customer and supplier.

. discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date The sum of the costs associated with invoicing. product description) Wrong Price (e.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. © Copyright 2006 Supply-Chain Council. invoices. [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. 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.g. but there may be requirement for subsequent integration. The standalone product is fully functional upon completion. Payment is received from the customer within the payment terms of the invoice.14 Install Product The process of preparing. including packing slips.g. testing and installing the product at the customer site. Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. etc. name. Outputs: Payment to Company Receipt of payment for goods and services per contract or purchase order.D1. bills of lading.. 188 June 2006 . part number. address.g. telephone number) Wrong Product Information (e. Percentage of orders with on time and accurate documentation supporting the order..

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

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

191 June 2006 . Which Can Be Converted into an Order in a Single Step Quote Capability. Metrics (see Appendix A for metrics attributes): . and requests for quotes. without Reserving Inventory. Order Quote (Customer) to Customer A statement of price. None identified Inputs: . Configure.2 Receive. Cost to Process Inquiry & Quote Process Inquiry & Quote Cycle Time The sum of the costs associated with processing inquiry and quotes. The average time associated with processing inquiries and quotes Best Practices: . a bid. . terms of sale. Quote Capability. Which Can be Converted into an Order. Inc. cost. it is usually considered an offer to sell. a bid. Outputs: . When given in response to an inquiry. and description of goods or services offered by a supplier to a prospective purchaser. 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 . it is usually considered an offer to sell.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes. . availability. 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. terms of sale. Enter and Validate Order © Copyright 2006 Supply-Chain Council.D2. . without Reserving Inventory. Customer Inquiry from Source: Customer General customer inquiries for information concerning products.

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

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

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

Reserve Resources & Determine Delivery Date Cycle Time Best Practices: . supporting activities (maintenance. which is imposed by customer requirements. . Those stocks or items on hand used to support production (raw materials and work in process items). Advanced planning and scheduling logic with constraint. Booked Order from D2.4 Establish Delivery Plans Inventory Availability from S2.2 Receive. Delivery Plans from P4. 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. Production Plan includes production capability. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. Inc. or it might be a more complicated series of activities. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment. . Real-time inventory management Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a customer order. and resource optimization Inputs: . and customer service (finished goods and spare parts). cost. Enter and Validate Order The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor.4 Establish Production Plans © Copyright 2006 Supply-Chain Council. Configure. The commitment should be based on the available-to-promise line (ATP) in the master schedule. 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. The average time associated with reserving resources and determining a delivery date . Production Plans from P3.4 Transfer Product . . 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. Cost to Reserve Resources & Determine Delivery Date Delivery Performance to Customer Commit Date Order Fulfillment Dwell 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 reserving resources and determining a delivery date. . 195 June 2006 .D2. This kind of idle time should not be deducted from Order Fulfillment Cycle Time. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organization. . and a delivery date is committed and scheduled. repairs and operating supplies). 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 Inventory and/or planned capacity is identified and reserved for specific orders. Metrics (see Appendix A for metrics attributes): .

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.1 Schedule Product Deliveries © Copyright 2006 Supply-Chain Council. Any signal that indicates when to produce or transport Items in a pull replenishment system. . and Aggregate Product Requirements Replenishment Signal to S2. Reserved inventory and/or planned capacity and delivery date for a specific order.2 Identify. Those stocks or items on hand used to support production (raw materials and work in process items). Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. . Production Schedule from M2. . Customer Order to ED. repairs and operating supplies).1 Identify. 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. Reserved inventory and/or planned capacity and delivery date for a specific order. . and customer service (finished goods and spare parts). 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. It is often referred to as an actual demand to distinguish it from a forecasted demand. Prioritize. Prioritize. 196 June 2006 . Inventory Status to Source . Inventory Status to Deliver . and customer service (finished goods and spare parts). An aggregate material requirements plan used to schedule material deliveries to meet production plan. Outputs: . Determination of the time required from the receipt of the order until the item should be delivered.4 Consolidate Orders . 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. repairs and operating supplies). Prioritize. Inc. 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. and Aggregate Delivery Requirements Order Signal to P3. Inventory Availability/Delivery Date to P4. Assess. Those stocks or items on hand used to support production (raw materials and work in process items).1 Schedule Production Activities Sourcing Plans from P2.2 Assess Delivery Performance Delivery Date to D2.1 Identify. and Aggregate Production Requirements Order Signal to P2.. Inventory Status to Make . Order Backlog to P4. . 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. supporting activities (maintenance. Inventory Status to Plan . 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. supporting activities (maintenance. Determination of the time required from the receipt of the order until the item should be delivered. In the first period.1 Identify.4 Establish Sourcing Plans A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. and Aggregate Delivery Resources and Capabilities . .

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

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

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

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

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

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

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

. payment terms. In a DC. customer. None identified None identified Interface to supplier’s shipping system to financials . . . 204 June 2006 . EDI. and other conditions. inbound raw materials and outbound finished goods) specifying service levels. Advanced Shipping Notices & UCC128 Container Labeling Carrier Agreement Bar coding. Outputs: . .) are required. Legal documentation of the contents of a shipment (e.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.D2. . cube and route decide carrier and cost. size. Inc.g. Cross docking actively links the receiving and shipping processes. Used in many distribution centers (DC) to increase inventory velocity while maintaining shipping efficiency. © Copyright 2006 Supply-Chain Council. bill of lading. Products that have been acknowledged as received by the customer. In a traditional DC.10 Pack Product Shipping Export Parameters and Documentation from ED. Shipping parameters. 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. integrated transportation/warehouse management Carrier agreements are agreements between a company and its domestic and global carriers (for both. invoices. Electronic Generation and Download of Shipping Documents Full Visibility of Credit History by Shipping Personnel Integrated Credit Checking Inputs: . Metrics (see Appendix A for metrics attributes): . export papers. etc.12 Ship Product Advanced Ship Notice to D2. such as weight. way bill. . both cross docking (no storage) and traditional (with storage) operations might take place. [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 .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. carrier and government needs. .13 Receive & Verify Product by Customer Delivered End Items to Customer An EDI notification of shipment of product. the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes. including packing slips.8 Manage Import/Export Requirements Shipping Parameters and Documentation from ED. Workflow from D2. Load Product & Generate Shipping Documentation Cycle Time Best Practices: . Cross-Docking . 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. . Workflow to D2. bills of lading. etc. .

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

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

have the correct configuration. Product to D2. integrated transportation/warehouse management None identified Inputs: . Inc. Workflow from D2.12 Ship Product Advanced Ship Notice from D2. . Receive & Verify Product by Customer Cycle Time Best Practices: . Metrics (see Appendix A for metrics attributes): .D2. © Copyright 2006 Supply-Chain Council. 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.11 Load Product & Generate Shipping Documentation An EDI notification of shipment of product. 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 . . Advanced Shipping Notices & UCC128 Container Labeling Shipment Tracking Bar coding. 207 June 2006 . EDI. . . Outputs: .14 Install Product The end object of a transformation process that includes physical objects. information or services.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. 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. are faultlessly installed (as applicable).

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

Payment is received from the customer within the payment terms of the invoice. . . but there may be requirement for subsequent integration. part number. invoices. product description) Wrong Price (e. % of Faultless Invoices The number of invoices processed without issues and or errors divided by the total number of invoices.g. . testing and installing the product at the customer site. etc. Installed Product from D2. Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. telephone number) Wrong Product Information (e.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. © Copyright 2006 Supply-Chain Council. address. 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: . 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.. Outputs: .g. including packing slips.14 Install Product The process of preparing. [Total number of orders delivered with correct and timely documentation] / [Total number of orders delivered] x 100% . Payment to Company Receipt of payment for goods and services per contract or purchase order. name. The standalone product is fully functional upon completion.. . Customer Invoicing/ Accounting Costs Days Sales Outstanding Deliver Cycle Time Documentation Accuracy Best Practices: . Metrics (see Appendix A for metrics attributes): ..D2. . Inc.g. 209 June 2006 . bills of lading.

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

. bills of lading. .packing slips. Source. 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. For services. 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. accounts payable. Components include all items and quantities on-time using the customer’s definition of on-time. Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . Return on 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. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days). . Components include accounts receivable. 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.Metrics (see Appendix A for metrics attributes): . . Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. Inc. 211 June 2006 . inventory. . Deliver. . Make. Upside Deliver Adaptability Upside Deliver Flexibility © Copyright 2006 Supply-Chain Council. . etc. Return on Working Capital .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. and Return. 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 levels of aggregation can be at any element associated with a supply chain asset. . and documentation . The average actual cycle time consistently achieved to fulfill customer orders. supply chain revenue. This includes the fixed assets used in Plan. invoices.

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

© Copyright 2006 Supply-Chain Council. . Approved Contract to D3. An order from a customer for a particular product or a number of products.7 Manage Product Life Cycle Optional Payment to Company . etc. . . 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: .6 Manage Transportation Location of Customers to ED. A contract may be oral or written. Coupled with cube and route. maybe partial or in full. Optionally accept payment. Weight. schedule. and Freight Class to ED. 213 June 2006 . It is often referred to as an actual demand to distinguish it from a forecasted demand..g. Payment at the time of order.2 Negotiate & Receive Contract The process of negotiating order details with customer (e.1 Obtain and Respond to RFP/RFQ Order Rules from ED. .2 Assess Delivery Performance Customer Order Size. . 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. these criteria determine type of carrier and cost of shipment Customer profile.3 Enter Order. status. distribution centers. Completed Proposal from D3. entering. which includes address and location data. and promising orders from customers. Inc. customer preferences including shipping.D3. Customer Order to ED. and delivery requirements. product performance) and finalizing the contract. credit and purchase histories. price. Outputs: . and interplant operations. Metrics (see Appendix A for metrics attributes): .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.

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

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

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

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.

© Copyright 2006 Supply-Chain Council, Inc.

217

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

218

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

219

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

220

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

221

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

222

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

223

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

224

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

225

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

226

June 2006

14 Install Product Outputs: . [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 .g. . Workflow from D3. including packing slips. Cost to Invoice Documentation Accuracy . Percentage of orders with on time and accurate documentation supporting the order.. . Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e. Product Installed from D3. address. . % of Faultless Invoices The number of invoices processed without issues and or errors divided by the total number of invoices. bills of lading. part number. Metrics (see Appendix A for metrics attributes): .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. name..D3. Invoice Cycle Time Best Practices: . Payment is received from the customer within the payment terms of the invoice. Payment to Company Receipt of payment for goods and services per contract or purchase order.. 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: .g.g. etc. 227 June 2006 . product description) Wrong Price (e.14 Install Product Inputs: . telephone number) Wrong Product Information (e. invoices. © Copyright 2006 Supply-Chain Council. discounts not applied) Wrong Quantity or Wrong Terms or Wrong Date The sum of the costs associated with invoicing. Inc.

The process of retrieving restocking orders to pick. Deliver. order confirmation. The Category D4 includes seven Level 3 Elements: D4. The product is fully functional upon completion. the tasks associated with identifying the item location. and delivering the product to point of stock For restocks. and Return.5 Fill Shopping Cart D4. Inc. determining inventory availability. 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. credit application and approval. Return on Working Capital © Copyright 2006 Supply-Chain Council. D4.7 Deliver and/or Install Metrics (see Appendix A for metrics attributes): Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding . and/or invoice or receipt. 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. 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 end of sale activities. putting away and recording location that a company performs at its own stores. May include quality inspection. stock placement. and sell finished goods at a retail store.6 Checkout D4.2 Receive Product at Store D4. 228 June 2006 .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. verifying. inventory. method of payment. For services. building a pick wave. The activities such as receiving product. The average actual cycle time consistently achieved to fulfill customer orders. Typical set of tasks associated with product selection. recording product receipt. Merchandising at a store level is the stocking and restocking of products in designated storage locations to generate sales in a retail store.3 Pick Product from Backroom The process of scheduling resources to support item-stocking requirements. supply chain revenue. For promotional items and stock repositioning the tasks associated with shelf and point of sale preparation. Make. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. picking item and quantity from a designated backroom warehouse location. 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. storage and movement through to checkout.D4 Deliver Retail Product Deliver Retail Products are the processes used to acquire. The levels of aggregation can be at any element associated with a supply chain asset. Source. cost of goods sold and supply chain management costs. determining put-away location. service agreement. The processes and tasks associated with product checkout including scanning. This includes the fixed assets used in Plan. merchandise. Components include accounts receivable.4 Stock Shelf D4. The process of preparing and installing the product at the customer site. and recording the appropriate inventory transaction. accounts payable. recording the resulting inventory transaction. stocking the shelf according to merchandise plans.1 Generate Stocking Schedule D4.

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. 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.

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

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

.2 Receive Product at Store Those stocks or items on hand used to support production (raw materials and work in process items). 232 June 2006 . and customer service (finished goods and spare parts).2 Receive Product at Store On-Order/Backorder from Source: Company . Assorted by Shelf Order to Company Loaded Retail Cart or Pallet to D4. the fixed quantity that should be ordered each time the available stock (onhand plus on-order) falls to or below the reorder point.3 Pick Product from Backroom The process of retrieving restocking orders to pick. Inc. . and delivering the product to point of stock Metrics (see Appendix A for metrics attributes): . supporting activities (maintenance. which are usually components or raw materials. Inputs: . A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand. recording the resulting inventory transaction. In a fixed-reorder quantity system of inventory control. This minimizes restocking effort. repairs and operating supplies). Workflow from Source: Company Inventory Availability from D4. . The average time associated with product pick from backroom Best Practices: . . © Copyright 2006 Supply-Chain Council.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. 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. . determining inventory availability. Stored products or service parts ready for sale. 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. as distinguished from stores.D4. building a pick wave. Replenishment Quantities from Source: Company Outputs: . An unfilled customer order or commitment. picking item and quantity from a designated backroom warehouse location. Inventory in Stock from Source: Company Item Pick Sheet for Stocking Schedule from D4. .

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

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

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

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: . . Inc. © Copyright 2006 Supply-Chain Council. .6 Checkout Outputs: . . Goals / Performance Plans Measurement. . The product is fully functional upon completion.7 Deliver and/or Install The process of preparing and installing the product at the customer site. Metrics (see Appendix A for metrics attributes): . 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. 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. customer satisfaction. i. Best Practices: .6 Checkout Inputs: . . Checkout Completed from D4. . 236 June 2006 . The installation of product is completed at the customer site. Workflow from D4.e. Indication of quality in workmanship and design. and the product is fully functional. Indication of product and service quality. .D4.

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

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

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

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

2 Receive. Report that portrays a potential customer’s payment history and debt. history.ED. Comprehensive History of Customer Interactions Including Order History. Enter & Validate Order Credit History from D3. .2 Receive. and deliver data. . credit and purchase histories. 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: . including design efforts for make-to-order products Customer profile. Metrics (see Appendix A for metrics attributes): .2 Receive. Etc. Contract Status from D3. The information to be managed includes: order data . . customer preferences including shipping. maintaining. Inc. etc. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment.3 Manage Deliver Information The process of collecting. The commitment should be based on the available-to-promise line (ATP) in the master schedule. . which include address data. status. customer preferences including shipping. indicating the ability to pay in a timely manner in the future. and communicating information to support deliver planning and execution processes. etc. Problems. © Copyright 2006 Supply-Chain Council. Report that portrays a potential customer’s payment history and debt. . Enter and Validate Order Credit History from D1. warehouse data. Customer profile. Customer profile. . credit and purchase histories. Enter & Validate Order . Enter and Validate Order Contract Status from D1. 241 June 2006 . . etc. credit and purchase histories. Configure.). status. and delivery requirements. which include address data. Provide Single Source of Information on the Customer (Single Group / Owner Responsible for Accuracy / Quality of Customer Data) Inputs: . Claims. or it might be a more complicated series of activities. and delivery requirements. 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) .1 Obtain and Respond to RFP/RFQ Contract Status from D2. etc. Booked Order from D2. status.1 Obtain and Respond to RFP/RFQ Credit History from D2. indicating the ability to pay in a timely manner in the future. . Configure.2 Receive. Report that portrays a potential customer’s payment history and debt. customer preferences including shipping.(customer preference. and delivery requirements. Configure. .2 Receive. transportation data. status. and delivery requirements. which include address data. Enter and Validate Order The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. indicating the ability to pay in a timely manner in the future.

. which includes address data. credit and purchase histories. which include address data.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.. customer preferences including shipping. credit and purchase histories.1 Obtain and Respond to RFP/RFQ Purchase History from D2. status. © Copyright 2006 Supply-Chain Council. status. and delivery requirements. Configure. .. which include address data.2 Receive. and delivery requirements. . Customer profile. which includes address data. and customer profile. Enter and Validate Order Shipping Preferences from D3. and delivery requirements. etc.2 Receive. which include address data.2 Receive. etc. 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. . status.. Enter & Validate Order Customer Address Data from D3. Customer Master Database/Up to Date to ED. credit and purchase histories. . credit and purchase histories. customer preferences including shipping. includes customer profiles. which includes address data. etc. . and customer profile. and customer profile. Configure. etc. Configure. etc. status. Customer preferences including shipping. Customer Address Data from D1.. credit and purchase histories. Enter & Validate Order Customer profile. and delivery requirements.1 Obtain and Respond to RFP/RFQ Customer Address Data from D2.2 Receive. Outputs: . customer preferences including shipping.2 Receive. Customer preferences including shipping. Enter & Validate Order Purchase History from D3. and delivery requirements. etc. Enter and Validate Order Purchase History from D1. . Inc. and delivery requirements. Enter and Validate Order Shipping Preferences from D1. credit and purchase histories. status. status.2 Receive. 242 June 2006 . . Customer profile.1 Obtain and Respond to RFP/RFQ Shipping Preferences from D2.

field FG. . replenishment models. inventory limits or levels. entering. and promising orders from customers. Five point annual average of the sum of all gross inventories (raw materials & WIP. 243 June 2006 .3 Manage Deliver Information Existing Inventory Data from D1. includes customer profiles.ED. . or finished products including order quantities and safety stock levels. with extrapolation the net and gross percentage of error is determined. other) ÷ (COGS ÷ 365). Inventory Rules from Source: Plan . . whether raw materials. Manage Finished Goods Inventories Cycle Time Best Practices: . stocking locations. plant FG. and finished goods inventories Communication of courses of action over the appropriate timedefined planning horizon and interval. The rules that determining the desired levels of items. future liabilities should not be included The average time associated with managing finished good inventory . Available data that characterizes and quantifies raw material. Cost to Manage Finished Goods Inventories Finished Goods Inventory Days of Supply Inventory Days of Supply . . % 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). work in process. Order Rules from ED. work in process. distribution centers. ownership.1 Manage Deliver Business Rules © Copyright 2006 Supply-Chain Council. . representing a projected appropriation of supply chain resource to meet supply-chain requirements as they affect the customer. This sample is then extrapolated across the inventory population. 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. product mix. Metrics (see Appendix A for metrics attributes): . Rules for the function that encompasses receiving. Only includes inventory on company books. Inc. field samples. Dynamic calculation of safety stock based on actual sales. .4 Manage Finished Goods Inventories The process of establishing and maintaining finished goods. which provides an indicative measure of entire inventory population. Inputs: .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. Furthermore. . Customer Master Database/Up to Date from ED. 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. and interplant operations.

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

. warehouse. entering. . . and security personnel. Outputs: . . Order Rules from ED. lot sizes. The rules that determining the desired levels of items. distribution centers. Warehouse constraints are those storage items that impact on the supply chain efficiency. or finished products including order quantities and safety stock levels. . . Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. and costs. building maintenance. Approved Item Master from Source: Plan The “master“ record for an item. The rules that determining the desired levels of items. thus defining the bill of material.) and may contain data on inventory status. and equipment. and transportation capital assets. Determine material handling (inventory) pick pack & ship methods (inventory). whether raw materials. Item records are linked by bill of material records (or product structure records). Warehouse Operating Constraints to Plan © Copyright 2006 Supply-Chain Council. 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: .5 Manage Deliver Capital Assets Acquisition. .2 Assess Delivery Performance The process of measuring actual supplier performance against internal and/or external standards. 245 June 2006 . maintenance. The budget serves as a pattern for and a control over future operations. flexibility and responsiveness. it contains identifying and descriptive data and control values (lead times. or finished products including order quantities and safety stock levels. delivery reliability. Inc. work in process. requirements. Metrics (see Appendix A for metrics attributes): . and disposition of order management. Rules for the function that encompasses receiving. Inventory Rules from ED. Delivery Performance to ED.1 Manage Deliver Business Rules Supply-Chain Performance Metrics from ED. 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: . A plan that includes an estimate of future costs and revenues related to expected activities. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs. planned orders. and asset management.2 Assess Delivery Performance . and interplant operations.4 Manage Finished Goods Inventories Inventory Rules from Source: Plan . Typically. work in process.g. . etc. cost. . e. including material handling equipment and personnel. equipment maintenance. and promising orders from customers. Budgets from Source: Plan . whether raw materials.ED.

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

Weight. and Freight Class from D3.8 Manage Import/Export Requirements Customer Order Size. (via internet) View for Analysis for All Orders and Shipments the Following Data: Logistics. regulations. rates/tariffs and backhaul opportunity (Characterization include information necessary to support maintenance of internal Outbound Transportation equipment . . 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: . 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. . Enter & Validate Order Customer Order Size. . Ground. 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 . . . 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. Weight. .2 Negotiate & Receive Contract Customer Order Size.2 Receive. etc. © Copyright 2006 Supply-Chain Council. these criteria determine type of carrier and cost of shipment June 2006 . LTL. Weight. . or freight.) Based on Customer Service Requirements Real-Time Shipment Tracking. .6 Manage Transportation The process of 1) defining and maintaining the information which characterizes product. . Warehouse Management.Carrier Rate Tables from Source: Company Contract Carrier Rates from ES.. . Inputs: .ED. . these criteria determine type of carrier and cost of shipment Coupled with cube and route. Air. . Inc. Metrics (see Appendix A for metrics attributes): .2 Receive... route.CAPITAL ASSETS) and 2) the management of transporters. The rates charged by a carrier that does not serve the general public. 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 . but provides transportation for hire for one or a limited number of shippers under a specific contract. . vehicle. these criteria determine type of carrier and cost of shipment Coupled with cube and route. and Freight Class from D2. Enter 247 Rates charged by common carriers to move goods. containerization. Cost. Cost. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. Product. terminals. Product. Configure. Coupled with cube and route. and Freight Class from D1. Ground Parcel. .

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

Requirements established by a government which must be met before allowing the shipping. credit and purchase histories. Enter & Validate Order Product Mix and Plans from Source: Plan . status. which includes address and location data. Customer profile. processes.8 Manage Import/Export Requirements Location of Customers from D2. Enter and Validate Order Location of Customers from D3. and delivery requirements. status. and best business practices. which includes address and location data. Inc. which includes address and location data. Metrics (see Appendix A for metrics attributes): . Government Constraints from ED. . customer preferences including shipping. © Copyright 2006 Supply-Chain Council. credit and purchase histories. The budget serves as a pattern for and a control over future operations. and delivery requirements. . or the portfolio of products the company has to cover the targeted customer need and the plans of how to manage that portfolio. etc. Budgets from Source: Plan A plan that includes an estimate of future costs and revenues related to expected activities. customer preferences including shipping. . . An update to the expected cause and effect statements that are the base for the Revised Aggregate Forecast and Projections. etc. Revised Business Assumptions from Source: Plan Outputs: . Customer profile.2 Receive. Current Inventory Source Data from ES. credit and purchase histories. . 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: . 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. . Configure. outputs. 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.2 Negotiate & Receive Contract Location of Customers from D1.2 Receive. status.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). 249 June 2006 . These are reviewed periodically with actual results to verify the linkage of actual cause and effect. inputs. and delivery requirements. metrics. . Integrated Facility Management Operations and Network Analysis Standard Operating Procedures and Methodology None identified None identified None identified Inputs: .3 Maintain Source Data . Enterprise Distribution Model to Plan Model of the distribution enterprise including the flows.ED. Customer profile. . delivery of a product or manufacture of an item. customer preferences including shipping.

. .2 Receive Product Receipt Verification from S3.11 Load Vehicle & Generate Shipping Documentation Shipping History from D3. . . 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. Determine customs requirements. Acknowledgement that the product received conforms to specified requirements and criteria. 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. Government Regulations from Source: Government Receipt Verification from S1. Charges established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. which constrain the ordering and delivering of product. . 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: .4 Receive Product Shipping History from D1. The transaction history of the physical shipment of an item to another internal location or to a customer. . . . . . Acknowledgement that the product received conforms to specified requirements and criteria. The transaction history of the physical shipment of an item to another internal location or to a customer. Metrics (see Appendix A for metrics attributes): .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. 250 June 2006 . . etc. Electronic documentation submission via EDI and/or internet.2 Receive Product Receipt Verification from S2.11 Load Product & Generate Ship Documents Shipping History from D2.8 Manage Import/Export Requirements The process of recording and maintaining regulations and rates. . establish letters of credit terms and conditions. . Inc. The transaction history of the physical shipment of an item to another internal location or to a customer. Outputs: © Copyright 2006 Supply-Chain Council. None identified Inputs: . .ED. Acknowledgement that the product received conforms to specified requirements and criteria. Electronic documentation submission via EDI and/or internet.

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

The average actual cycle time consistently achieved to fulfill customer orders. The Category SR1 includes five Level 3 Elements: SR1. cost of goods sold and supply chain management costs.SR1 Source Return Defective Product The process. SR1. preparing the item for transfer. The average time associated with Source Return Processes Return on Working Capital Source Return Cycle Time © Copyright 2006 Supply-Chain Council.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. Process includes: customer identification that an action is required and determining what that action should be.5 Return Defective Product The process where the customer packages. communicating with the last known holder. initiated by the customer. preparing scheduling documentation and managing overall scheduling administration. Additionally. Inc. Source. for the return of defective product.3 Request Defective Return The process of a customer requesting and obtaining authorization. packaging. 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. SR1. 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. transportation and import / export requirements to facilitate the efficient return of the defective product. Components include accounts receivable. SR1. accounts payable. and Return. business rules and product operating conditions inspection as criteria to identify and confirm that material is excess to requirements defective. supply chain revenue.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. 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. and physically returning of the excess product. The levels of aggregation can be at any element associated with a supply chain asset. 252 June 2006 . from Authorization last known holder or designated return center. the customer and last known holder or designated return center would discuss enabling conditions such as return replacement or credit. handling. SR1. Activities include selecting the carrier and rates. 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. Make. Deliver.1 Identify Defective Product Condition The process where the customer utilizes planned policies. and handles the defective product in preparation for shipping in accord with pre-determined conditions. of returning material deemed defective by to the last known holder or designated return center. generating return documentation.

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

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

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

256 June 2006 . .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. Data about the destination of a retun delivery. © Copyright 2006 Supply-Chain Council. . Returned Defective Product to SR1.

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

). Legal documentation of the contents of a shipment (e..). Also. and loading for shipment. export papers. Return Inventory Availability from ER. verify the shipment and customer credit information. . 258 June 2006 . Information from D1. .g. export papers.. . Returned Defective Product to DR1. Satellite communications. bill of lading.4 Schedule Defective Product Shipment Returned Defective Product from SR1. and handles the defective product in preparation for shipping in accord with pre-determined conditions. way bill.4 Manage Return Inventory Inventory relative to return process available for use.SR1. Shipping. Inc.. way bill.. Verify.. GPS. % 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: . It includes packaging. and products.4 Schedule Defective Product Shipment Load. Legal documentation of the contents of a shipment (e.g. . . Metrics (see Appendix A for metrics attributes): .. Outputs: . Legal documentation of the contents of a shipment (e. . marking. etc. . way bill. Generate Shipping Documentation weighing. bill of lading. Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. export papers.. 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. Scheduled Defective Product Return from SR1.11 Load Vehicle & components. . .g. etc. bill of lading. RFID Inputs: .5 Return Defective Product The process where the customer packages. © Copyright 2006 Supply-Chain Council. and Credit The function that performs tasks for the outgoing shipment of parts.).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. ... .

upon receipt. DR1. Rejecting the request would include providing a reason for the rejection to the customer. . The process includes communication between the customer and last known holder or known return center and the generation of associated documentation. accounts payable. Return on Working Capital . The average actual cycle time consistently achieved to fulfill customer orders. Source. . determines if the item can be accepted and communicates decision to the customer. The scheduling activity would also inform Receiving when to expect the shipment and where to send the product. DR1.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. 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. Accepting the request would include negotiating the conditions of the return with the customer. . DR1. The Category DR1 includes four Level 3 Elements: . supply chain revenue.2 Schedule Defective Return Receipt . The levels of aggregation can be at any element associated with a supply chain asset. cost of goods sold and supply chain management costs. including authorizing return replacement or credit. Deliver.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. . Value of Defective Product Inventory in Deliver Return Process/ Total Defective Product Inventory Value © Copyright 2006 Supply-Chain Council. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. The process where the last known holder or designated return center transfers the defective product to the appropriate process to implement the disposition decision.4 Transfer Defective Product Metrics (see Appendix A for metrics attributes): . inventory. and Return. 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. 259 June 2006 . 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. . Cost to Deliver Return Deliver Return Cycle Time Order Fulfillment Cycle Time Return on Supply Chain Fixed Assets The average time associated with returns. This includes the fixed assets used in Plan.3 Receive Defective Product . DR1. Inc. Make.

Accepting the request would include negotiating the conditions of the return with the customer. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. 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. determines if the item can be accepted and communicates decision to the customer. i. goals. The customer request for disposition instructions for a defective product from the appropriate source.4 Manage Integrated Supply Chain Inventory Product Return Capabilities from P5.e. unserviceable products and/or serviceable or obsolete products as defined by the terms and conditions of a customer/supplier contract. The ability the supply chain has to return products in a valid and accurate way. . . and objectives. Return Plans from P5. The customer request for disposition instructions for a defective product from the appropriate source. 260 June 2006 .DR1. Defective Product Disposition Request from SR1. Metrics (see Appendix A for metrics attributes): . 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. Value of Defective Product Inventory in Authorization Stage/ Total Defective Product Inventory Value Best Practices: .3 Request Defective Return Authorization Defective Product Return Authorization Request from SR1. . . Authorize Defective Product Return Cycle Time Cost to Authorize Defective Product Return The average time associated with authorizing the return of defective product.4 Establish and Communicate Return Plans . © Copyright 2006 Supply-Chain Council. Rejecting the request would include providing a reason for the rejection to the customer.3 Request Defective Return Authorization Manage Integrated Supply Chain Inventory Information from EP. . 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: . Inc. given service requirements by supply chain stakeholders/trading partners. and. Business Rules for Return Processes from ER.4 Establish and Communicate Return Plans Outputs: . . Defective Product Return Authorization Response to SR1. including authorizing return replacement or credit.3 Request Defective Return Authorization The approved or disapproved Return Product Authorization (RPA) for excess inventory. . The sum of the costs associated with authorizing the return of defective product. 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.1 Manage Business Rules for Return Processes Rules for conducting business.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. .

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

The scheduling activity would also inform Receiving when to expect the shipment and where to send the product. Metrics (see Appendix A for metrics attributes): . .1 Authorize Defective Product Return Requests for returns that are valid.1 Authorize Defective Product Return Inputs: . . © Copyright 2006 Supply-Chain Council. 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.DR1. 262 June 2006 . It is initiated by event: .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. Outputs: . Inc. for disposition. Fault Found from DR1.3 Request Defective Return Authorization Return Schedule Instructions to DR1. Valid Returns Request from DR1. The average time associated with scheduling the receipt of the return of defective product Best Practices: .3 Receive Defective Product A list of operations and procedures for scheduling the return of product. upon receipt. A list of operations and procedures for scheduling the return of product. Cost to Schedule Defective Product Receipt Schedule Defective Return Receipt Cycle Time The sum of the costs associated with scheduling defective product receipt. Return Schedule Instructions to SR1.

etc. Outputs: . quantity. . Receipt Discrepancy Notification to Enable Return Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt. . The average time associated with receiving defective product returns from the customer Best Practices: . . including: damage.2 Schedule Defective Return Receipt Return Transportation Guidelines. packaging.RFID Electronically link Return authorization. Notification of a discrepancy relating to a receipt. Product being returned that is in a defective condition. Guidelines. . packaging. © Copyright 2006 Supply-Chain Council.Product serial number used as identifier . trade officials.4 Manage Return Inventory Receipt Data from ER.Generate bar coded receiving documents . .). Minimize time spent in product movement. A list of operations and procedures for scheduling the return of product. Return schedule and shipping documents. . quantity. policies and agreements for the transportation activities around return process. Policies. None Identified .6 Manage Return Transportation Returned Defective Product from SR1. . Inputs: .3 Manage Return Data Collection Return Regulatory Requirements from ER. .Bar code interface for data collection devices . Return requirements dictated by process standards set by external entities (i. 263 June 2006 . including: damage. Metrics (see Appendix A for metrics attributes): .8 Manage Return Regulatory Requirements Return Schedule Instructions from DR1. etc.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. . Notification of a discrepancy relating to a receipt. packaging. . government. . . Cost to Receive Defective Product Receive Defective Product Cycle Time The sum of the costs associated with receiving defective product returns. . etc. & Agreements from ER.DR1. quantity. etc.Push inspection to SOURCE . A collection of related receipt data records organized in a specific manner. Receipt Data from ER.5 Return Defective Product A collection of related receipt data records organized in a specific manner. 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 . Inc. including: damage.Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver.e. .

Product being returned that is in a defective condition. and Aggregate Return Resources Returned Defective Product to DR1.2 Identify.4 Manage Return Inventory Return Inventory Transfer Data to P5. Inc. 264 June 2006 . Assess.. 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. . .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. © Copyright 2006 Supply-Chain Council.

Inputs: .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.1 Schedule Product Deliveries Return Inventory Transfer Data to S3. and Aggregate Return Resources Return Inventory Transfer Data to S1. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. . can be funded. Defective Products Scheduling Identifies Next Destination (Source. . 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. Repair and Overhaul spare parts used to support of operations and maintenance.3 Schedule Product Deliveries Return Inventory Transfer Data to ER.4 Manage Return Inventory Returned Defective Product 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. An aggregate material requirements plan used to schedule material deliveries to meet production plan.4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment. Make. Repair and Overhaul spare parts used to support of operations and maintenance.2 Receive Product Defective Products to S2. Outputs: .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. . Product being returned that is in a defective condition.2 Identify. .3 Receive Defective Product Sourcing Plans from P2. . Maintenance. Defective Products to S1. . Return Inventory for Transfer from ER. if needed. 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.4 Manage Return Inventory Return Inventory Transfer Data to S2.2 Receive Product Return Inventory Transfer Data to P5. . Assess. Metrics (see Appendix A for metrics attributes): . . Inc.DR1. 265 June 2006 . © 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.

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

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

what service is required. repair. . .8 Receive Product from Source or Make Authorization to Scrap to D1. . Inc. and who the appropriate service provider would be to service 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: . © Copyright 2006 Supply-Chain Council.SR2. . . (2) send the product back into service without requiring a return authorization request. 268 June 2006 . Authorization to Return to Service to D1. Outputs include a decision to: (1) send a return authorization request to a service provider.4 Manage Return Inventory Permission to return to service an item that has been repaired and found to be within specifications and operable. or overhaul. Outputs: . Product being returned for maintenance. . .4 Manage Return Inventory Returned MRO Product to SR2. Return Plans from P5. Metrics (see Appendix A for metrics attributes): . Product being returned for maintenance.3 Request MRO Return Authorization Returned Product Location to ER. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. or (3) discard the item.4 Establish and Communicate Return Plans Returned MRO Product from SR2. or overhaul. repair.8 Receive Product from Source or Make Return Inventory Availability to ER. .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.2 Disposition MRO Product The process of the customer determining whether to service the item. Inventory relative to return process available for use. The storage location of those items being returned.

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

Build Loads Return Inventory Availability from ER. Workflow from SR2.SR2.3 Request MRO Return Authorization Plan and Build Loads Information from D1.3 Request MRO Return Authorization Credit Exchange Options from SR2. .5 Return MRO Product Product being returned for maintenance. or overhaul. Manage Return Inventory Ship-to Data from DR2. % 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: . Activities include selecting the carrier and rates. .3 Request MRO Return Authorization Returned MRO Product from SR2. © Copyright 2006 Supply-Chain Council. Inc.4 Inventory relative to return process available for use. None identified Inputs: . . . 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. . . . repair.3 Request MRO Return Authorization Ship-to Data from SR2. Planned or scheduled act of installing something for some certain time or times. .1 Authorize MRO Data about the destination of a return delivery. 270 June 2006 . Metrics (see Appendix A for metrics attributes): . Returned MRO Product to SR2. preparing the item for transfer.5 Return MRO Product Scheduled MRO Return to SR2. preparing scheduling documentation and managing overall scheduling administration.5 Transportation modes are selected and efficient loads are built. . carrier selection. Product Return Outputs: .4 Schedule MRO Shipment 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. marking. etc. .g.. Also. bill of lading. or overhaul. way bill. RFID Inputs: . Inc.. Generate Shipping Documentation weighing. and Credit The function that performs tasks for the outgoing shipment of parts. Outputs: . Shipping. . . . and loading for shipment.11 Load Vehicle & components. Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. way bill. .. . and handles the MRO product in preparation for shipping in accord with pre-determined conditions. etc. way bill. verify the shipment and customer credit information. . repair. . export papers.5 Return MRO Product The process where the customer packages. Verify.. GPS. Legal documentation of the contents of a shipment (e. Information from D1.. Return Inventory Availability from ER.).. Metrics (see Appendix A for metrics attributes): .SR2. .g. Legal documentation of the contents of a shipment (e. Satellite communications. Returned MRO Product to DR2.. % 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: . and products. Legal documentation of the contents of a shipment (e. It includes packaging. etc.).4 Schedule MRO Shipment Load.4 Manage Return Inventory Inventory relative to return process available for use. bill of lading. export papers. Returned MRO Product from SR2.. © Copyright 2006 Supply-Chain Council.g. .4 Schedule MRO Shipment Scheduled MRO Return from SR2. export papers.3 Receive MRO Product Shipment Documents to Government Shipment Documents to Carrier Shipment Documents to Customer Product being returned for maintenance. 271 June 2006 .). . bill of lading..

Upside Deliver Return Flexibility The number of days required to achieve an unplanned sustainable 20% increase in the return of finished goods from customers. determines if the item can be accepted for MRO and communicates their decision to the customer. supply chain revenue. The process includes communication between the customer and service provider and the generation of associated documentation. The Category DR2 includes four Level 3 Elements: DR2. 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.2 Schedule MRO Return Receipt DR2. including authorizing return replacement or credit. cost of goods sold and supply chain management costs. 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. Make. for induction or storage. The levels of aggregation can be at any element associated with a supply chain asset. Accepting the request would include negotiating the conditions of the return with the customer. inventory. Upside Deliver Return Adaptability The maximum sustainable percentage increase in returns of finished goods from customers that can be achieved in 30 days. upon receipt. Deliver. with the Correct Part and Documentation Cost to Deliver Return Deliver Return Cycle Time The average time associated with returns. 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 process where the service provider transfers the MRO product to the appropriate process to implement the disposition decision. Inc. The scheduling activity would also inform Receiving when to expect the shipment and where to send the part.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. This includes the fixed assets used in Plan. Source. Order Fulfillment Cycle Time The average actual cycle time consistently achieved to fulfill customer orders. Value of Unserviceable MRO Inventory in Deliver Return Process/ Total MRO Inventory Value © Copyright 2006 Supply-Chain Council. DR2. accounts payable. within Schedule.3 Receive MRO Product DR2. 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.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. Rejecting the request would include providing a reason for the rejection to the customer. Components include accounts receivable. 272 June 2006 . and Return.

Metrics (see Appendix A for metrics attributes): . 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. 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: . repaired. Rejecting the request would include providing a reason for the rejection to the customer. handling. The process of a customer requesting authorization from a service provider. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. the customer and service provider would discuss enabling conditions such as return replacement or credit. for the return of an MRO product. . In addition to discussing the MRO issue. 273 June 2006 . Product Return Capabilities from P5.1 Manage Business Rules for Return Processes Rules for conducting business. Inc. Authorize MRO Product Return Cycle Time Cost to Authorize MRO Product Return The average time associated with authorizing the return of MRO product. including authorizing return replacement or credit.DR2. and objectives. given service requirements by supply chain stakeholders/trading partners. 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 capability of a system or resources to produce a quantity output in a particular time period. developing and maintaining customer and channel performance standards of an return processes such as service levels.3 Request MRO Return Authorization MRO Return Authorization Request from SR2. The ability the supply chain has to return products in a valid and accurate way. Accepting the request would include negotiating the conditions of the return with the customer. goals. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. Return Plans from P5. . . i. Business Rules for Return Processes from ER. The sum of the costs associated with authorizing the return of product to be maintained.4 Establish and Communicate Return Plans .3 Request MRO Return Authorization . Business rules align Return process policies with business strategy. packaging. Best Practices: .4 Manage Integrated Supply Chain Inventory MRO Disposition Request from SR2.1 Authorize MRO Product Return The process where a service provider receives an MRO product return authorization request from a customer. determines if the item can be accepted for MRO and communicates their decision to the customer. and.e. .4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. or overhauled. Manage Integrated Supply Chain Inventory Information from EP. .

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

1 Authorize MRO Product Return Requests for returns that are valid. 275 June 2006 . Return Schedule Instructions to SR2. The scheduling activity would also inform Receiving when to expect the shipment and where to send the part. The average time associated with scheduling the receipt of the return of MRO product Best Practices: . upon receipt.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. 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. Outputs: . A list of operations and procedures for scheduling the return of product.DR2. Inc. Cost to Schedule MRO Product Receipt Schedule MRO Return Receipt Cycle Time The sum of the costs associated with scheduling MRO product receipt.3 Receive MRO Product A list of operations and procedures for scheduling the return of product. Inputs: . for induction or storage.3 Request MRO Return Authorization Return Schedule Instructions to DR2. . . Metrics (see Appendix A for metrics attributes): . Valid Returns Request from DR2. © Copyright 2006 Supply-Chain Council.

including: damage. A list of operations and procedures for scheduling the return of product. . trade officials. . .Product serial number used as identifier . . packaging. quantity. etc.Push inspection to SOURCE . Return schedule and shipping documents. The average time associated with receiving MRO product returns from the customer Best Practices: . Inputs: . Product being returned for maintenance.5 Return MRO Product A collection of related receipt data records organized in a specific manner. policies and agreements for the transportation activities around return process. government.2 Schedule MRO Return Receipt Return Transportation Guidelines. © Copyright 2006 Supply-Chain Council. Receipt Discrepancy Notification to Enable Return Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt. .3 Manage Return Data Collection Return Regulatory Requirements from ER.6 Manage Return Transportation Returned MRO Product from SR2.Bar code interface for data collection devices .DR2. 276 June 2006 . including: damage. . quantity. Notification of a discrepancy relating to a receipt. . repair.RFID Electronically link Return authorization. etc.e. Guidelines. Outputs: . . packaging. . Inc. Return requirements dictated by process standards set by external entities (i. . etc. Notification of a discrepancy relating to a receipt. Cost to Receive MRO Product Receive MRO Product Cycle Time The sum of the costs associated with receiving MRO product returns. Receipt Data from ER. or overhaul. quantity.). Policies.4 Manage Return Inventory Receipt Data from ER. . . Metrics (see Appendix A for metrics attributes): . including: damage. packaging. & Agreements from ER. etc. .Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver. Minimize time spent in product movement. A collection of related receipt data records organized in a specific manner.8 Manage Return Regulatory Requirements Return Schedule Instructions from DR2. None Identified .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).Generate bar coded receiving documents . 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 . .

Product being returned for maintenance. . © Copyright 2006 Supply-Chain Council.2 Identify. Assess. Inc. 277 June 2006 .4 Manage Return Inventory Return Inventory Transfer Data to P5. repair.. Return Inventory Transfer Data to ER. and Aggregate Return Resources Returned MRO Product to DR2. .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. 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.

2 Receive Product Return Inventory Transfer Data to S2. . Repair and Overhaul spare parts used to support of operations and maintenance. . .4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination.4 Manage Return Inventory Returned MRO Product from DR2.4 Manage Return Inventory Return Inventory Transfer Data to P5. Inc. . or overhaul. © Copyright 2006 Supply-Chain Council.1 Schedule Product Deliveries Return Inventory Transfer Data to ER. 278 June 2006 .2 Receive Product MRO Products to S1. 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. . Return Inventory for Transfer from ER. can be funded. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Inputs: .1 Schedule Product Deliveries Return Inventory Transfer Data to S1. 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. 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. Metrics (see Appendix A for metrics attributes): . . if needed. Outputs: .DR2. and Aggregate Return Resources Maintenance.4 Transfer MRO Product The process where the service provider transfers the MRO product to the appropriate process to implement the disposition decision. . Maintenance. . 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. MRO Products to S2. Product being returned for maintenance. repair. . Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment. Assess. . 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. 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.

279 June 2006 . Return Inventory Transfer Data to S3. Inc..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.

Deliver. requesting authorization from the designated return center. The Category SR3 includes five Level 3 Elements: 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. Source. SR3. This includes the fixed assets used in Plan. determining what that action should be. and physically returning the excess product. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. SR3.SR3 Source Return Excess Product The process. business rules and product inspection as criteria to identify and confirm that material is in excess of the current requirements. with the correct part and documentation The average actual cycle time consistently achieved to fulfill customer orders.1 Identify Excess Product Condition The process where the customer utilizes planned policies. transportation and import / export requirements to facilitate the efficient return of the excess product. inventory. The levels of aggregation can be at any element associated with a supply chain asset. of returning material deemed in excess of current requirements to the designated return center. accounts payable. and Return. Additionally.3 Request Excess Return Authorization The process of a customer requesting and obtaining authorization. from the designated return center. for the return of excess product. supply chain revenue. 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. and handles the excess product in preparation for shipping in accord with pre-determined conditions. according to the schedule. cost of goods sold and supply chain management costs. SR3.5 Return Excess Product The process where the customer packages. Components include accounts receivable. SR3. preparing scheduling documentation and managing overall scheduling administration. 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. handling. Activities include selecting the carrier and rates.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. generating return documentation. Make. 280 June 2006 . preparing the item for transfer. initiated by the customer. 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. the customer and designated return center would negotiate enabling conditions such as return credit or cash discount. Inc. Process includes: customer identification that an action is required.4 Schedule Excess Product Shipment The process where the customer develops the schedule for a carrier to pick-up the excess product. packaging.

Manage Regulatory Return Policy from ER. developing and maintaining customer and channel performance standards of an return processes such as service levels. 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. i. © Copyright 2006 Supply-Chain Council. . Business rules align Return process policies with business strategy. government. Inc. Returned Excess Product to SR3. Business Rules for Return Processes from ER. supply chain revenue.e.e. . Best Practices: . Value of Excess Inventory in Identification Stage/ Total Inventory Value . 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.1 Manage Business Rules for Return Processes Rules for conducting business. cost of goods sold and supply chain management costs.) when planning for the Return and Recovery of Assets. trade officials. given service requirements by supply chain stakeholders/trading partners.SR3. 281 June 2006 .1 Identify Excess Product Condition The process where the customer utilizes planned policies. The process of identifying and complying with regulatory documentation and process standards set by external entities (i. . . inventory. Components include accounts receivable. and objectives. goals. accounts payable. business rules and product inspection as criteria to identify and confirm that material is in excess of the current requirements.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: . Web based access to enterprise level business rules Inputs: . Metrics (see Appendix A for metrics attributes): . etc.

SR3. .8 Receive Product from Source or Make Authorization to Scrap to D1. . Inc.8 Receive Product from Source or Make Return Inventory Availability to ER. . . 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. 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: .4 Establish and Communicate Return Plans Returned Excess Product from SR3. Outputs: . Inventory relative to return process available for use.3 Request Excess Return Authorization Permission to return to service an item that has been repaired and found to be within specifications and operable. 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 Return Product Location to ER. . © Copyright 2006 Supply-Chain Council. 282 June 2006 . Return Plans from P5. .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. Authorization to Return to Service to D1.4 Manage Return Inventory Returned Excess Product to SR3. 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. Inputs: . Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. .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. Metrics (see Appendix A for metrics attributes): . .

repair of the repairable item. . . for the return of excess product.2 Disposition Excess Product The process of a customer obtaining authorization. the customer and designated return center would negotiate enabling conditions such as return credit or cash discount. Metrics (see Appendix A for metrics attributes): . Clarification of policy if authorizations are not processed within the expected cycle time.SR3. Additionally. handling. . 283 June 2006 . None identified Inputs: . from the designated return center. % 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: . Request disposition instructions for an excess item from the Supplier. . Outputs: . 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. Clarification as to who will pay in-bound and out-bound freight cost. for the return of excess product Inventory relative to return process available for use. . credit for the cost of the item. Weight.4 Schedule Excess Product Shipment Excess Product Disposition Request to DR3.3 Request Excess Return Authorization The process of a customer requesting and obtaining authorization. packaging. Excess Product Return Authorization Response from DR3.1 Authorize Excess Product Return Return Inventory Availability from ER. A list of operations and procedures for scheduling the return of product. Credit/ Exchange Options to SR3. Inc. . . Description and Class to Minimize Guesswork & Wrong Estimates Long-Term Return Agreements / Partnerships Electronic rules for business relationships and transactions. .4 Manage Return Inventory Return Schedule Instructions from DR3. 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. receipt of a serviceable item from stock. transportation and import / export requirements to facilitate the efficient return of the excess product.1 Authorize Excess Product Return The options available on the return of a repairable item.2 Schedule Excess Return Receipt Returned Excess Product from SR3. . © Copyright 2006 Supply-Chain Council. . from a service provider.

1 Authorize Excess Product Return The process of a customer requesting authorization from a service provider. © Copyright 2006 Supply-Chain Council. A validated and approved Return Product Authorization (RPA).4 Schedule Excess Product Shipment Ship-to Data to SR3. handling.1 Assess. Historical Return Rates to P5. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. 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. . transportation and import / export requirements to facilitate the efficient return of excess to the service provider. such as the return history on a similar product.4 Schedule Excess Product Shipment Validated Return Material Authorization to SR3. packaging. for the return of excess.4 Schedule Excess Product Shipment . Excess Product Return Authorization Request to DR3. Returned Excess Product to SR3. 284 June 2006 . . In addition to discussing the excess. Data about the destination of a return delivery. the customer and service provider would discuss enabling conditions such as return replacement or credit. A judgmental forecasting technique based upon the a return history that is analogous to a present situation. and Aggregate Return Requirements .. Inc. and using the past pattern to predict future returns.

preparing scheduling documentation and managing overall scheduling administration. . . Returned Excess Product to SR3. .3 Request Excess Return Authorization Plan and Build Loads Information from D1. 285 June 2006 .4 Inventory relative to return process available for use.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.SR3. . © Copyright 2006 Supply-Chain Council.1 Authorize Excess Data about the destination of a retun delivery. Planned or scheduled returning of material deemed in excess of current requirements for some certain time or times. Validated Return Material Authorization from SR3. . . carrier selection.3 Request Excess Return Authorization Credit/ Exchange Options from SR3. Manage Return Inventory Ship-to Data from DR3. and rating Outbound logistics software to assist with route.3 Request Excess Return Authorization Ship-to Data 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. .5 Transportation modes are selected and efficient loads are built. Metrics (see Appendix A for metrics attributes): . preparing the item for transfer. . % 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: .4 Schedule Excess Product Shipment The process where the customer develops the schedule for a carrier to pick-up the excess product. .5 Return Excess Product Scheduled Excess Product Return to SR3. Activities include selecting the carrier and rates. . Inc. .3 Request Excess Return Authorization Returned Excess Product from SR3. None identified Inputs: . . Build Loads Return Inventory Availability from ER. Product Return Outputs: .

11 Load Vehicle & components.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. and products. way bill. Return Inventory Availability from ER. Scheduled Excess Product Return from SR3. export papers. Generate Shipping Documentation weighing. .. Returned Excess Product to DR3. . Information from D1.. Shipping. etc.).4 Schedule Excess Product Shipment Load. and Credit The function that performs tasks for the outgoing shipment of parts.g.).4 Schedule Excess Product Shipment Returned Excess Product from SR3. bill of lading. . 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 last known holder or designated return center.. Legal documentation of the contents of a shipment (e.4 Manage Return Inventory Inventory relative to return process available for use. way bill. export papers.. export papers. . Legal documentation of the contents of a shipment (e.5 Return Excess Product The process where the customer packages.. It includes packaging. etc. Also. . Verify. and loading for shipment. Advanced Shipping Notice Shipment Tracking and Tracing Integrated data sharing with repair facility. 286 June 2006 . . GPS. . verify the shipment and customer credit information.g.g. ... bill of lading. 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 Excess Product Inventory in Physical Return and Transportation Stage/ Total Excess Inventory Value Best Practices: .SR3. Metrics (see Appendix A for metrics attributes): . Outputs: . Inc.).. © Copyright 2006 Supply-Chain Council. and handles the excess product in preparation for shipping in accord with pre-determined conditions. .. etc. . . marking. RFID Inputs: . way bill. Satellite communications.

The process where the designated return center evaluates an authorized excess material return to determine packaging and handling requirements. Inc. accounts payable. Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in supply chain fixed assets. The Category DR3 includes four Level 3 Elements: DR3. Make. Accepting the request would include negotiating the conditions of the return with the customer. upon receipt. Administrate any discrepancies that arise. The scheduling activity would also inform the Return Center’s Receiving department when to expect the shipment and where to send the product. This includes the fixed assets used in Plan. for disposition. 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.DR3 Deliver Return Excess Product The processes of the designated return center authorizing and scheduling the excess product return. The levels of aggregation can be at any element associated with a supply chain asset. according to the schedule. 287 June 2006 . 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 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. determines if the item can be accepted and communicates their decision to the customer.1 Authorize Excess Product Return The process where the designated return center receives an excess product return authorization request from a customer. and Return.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. The number of days required to achieve an unplanned sustainable 20% increase in the return of finished goods from customers. DR3. inventory.2 Schedule Excess Return Receipt DR3. Rejecting the request would include providing a reason for the rejection to the customer. Components include accounts receivable. The maximum sustainable percentage increase in returns of finished goods from customers that can be achieved in 30 days. cost of goods sold and supply chain management costs. supply chain revenue. Return on Working Capital Upside Deliver Return Adaptability Upside Deliver Return Flexibility © Copyright 2006 Supply-Chain Council. 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. including authorizing credit or cash discount.3 Receive Excess Product DR3. Source. with the correct part and documentation The average actual cycle time consistently achieved to fulfill customer orders. Deliver. The process where the designated return center transfers the excess product to the appropriate process to implement the disposition decision.

The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Manage Integrated Supply Chain Inventory Information from EP. The ability the supply chain has to return products in a valid and accurate way. handling. Rejecting the request would include providing a reason for the rejection to the customer. The sum of the costs associated with authorizing the return of excess product. Accepting the request would include negotiating the conditions of the return with the customer. In addition to discussing the excess. Best Practices: . any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal.3 Request Excess Return Authorization Excess Product Return Authorization Request from SR3. including authorizing credit or cash discount. Business rules align Return process policies with business strategy. 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: . . for the return of excess. and objectives. i. Excess Product Disposition Request from SR3.3 Request Excess Return Authorization . and. The process of a customer requesting authorization from a service provider. Return Plans from P5. Inc. the customer and service provider would discuss enabling conditions such as return replacement or credit. transportation and import / export requirements to facilitate the efficient return of excess to the service provider. . 288 June 2006 .DR3.4 Manage Integrated Supply Chain Inventory Product Return Capabilities from P5.4 Establish and Communicate Return Plans .1 Authorize Excess Product Return The process where the designated return center receives an excess product return authorization request from a customer. goals. Business Rules for Return Processes from 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. 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. . . determines if the item can be accepted and communicates their decision to the customer. Authorize Excess Product Return Cycle Time Cost to Authorize Excess Product Return The average time associated with authorizing the return of excess product. given service requirements by supply chain stakeholders/trading partners. packaging.4 Establish and Communicate Return Plans © Copyright 2006 Supply-Chain Council. .1 Manage Business Rules for Return Processes Rules for conducting business. Metrics (see Appendix A for metrics attributes): . Request disposition instructions for an excess item from the Supplier. developing and maintaining customer and channel performance standards of an return processes such as service levels.e.

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

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

DR3.5 Return Excess Product A collection of related receipt data records organized in a specific manner. Minimize time spent in product movement. © Copyright 2006 Supply-Chain Council. Cost to Receive Excess Product Receive Excess Product Cycle Time The sum of the costs associated with receiving excess returns. etc. Receipt Discrepancy Notification to Plan Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt. packaging. None Identified . policies and agreements for the transportation activities around return process. A list of operations and procedures for scheduling the return of product. including: damage.Generate bar coded receiving documents . Return schedule and shipping documents. . quantity. . trade officials. packaging.RFID Electronically link Return authorization. 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 . Receipt Data from ER. Return requirements dictated by process standards set by external entities (i. . . etc. government.4 Manage Return Inventory Return Regulatory Requirements from ER.Receiving quality criteria connected to ISO 9000 practices Buyer’s name for every receipt is clearly visible on Receiver. . 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 Return Schedule Instructions from DR3. . including: damage. Inc. quantity.6 Manage Return Transportation Returned Excess Product from SR3. . The average time associated with receiving excess product returns from the customer Best Practices: . & Agreements from ER. . 291 June 2006 . Notification of a discrepancy relating to a receipt.2 Schedule Excess Return Receipt Return Transportation Guidelines.Push inspection to SOURCE . . Metrics (see Appendix A for metrics attributes): .Bar code interface for data collection devices . Outputs: . Inputs: . Administrate any discrepancies that arise.Product serial number used as identifier . . .e. . etc.3 Manage Return Data Collection Receipt Data from ER. A collection of related receipt data records organized in a specific manner.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. Policies. . Guidelines.

Inc. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.. . Assess.4 Transfer Excess Product Notification of a discrepancy relating to a receipt. Receipt Discrepancy Notification to Enable Return Return Inventory Transfer Data to ER. © 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. 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. packaging.2 Identify. . etc. 292 June 2006 .4 Manage Return Inventory Return Inventory Transfer Data to P5. including: damage. quantity. and Aggregate Return Resources Returned Excess Product to DR3.

. . Make. © Copyright 2006 Supply-Chain Council. . An aggregate material requirements plan used to schedule material deliveries to meet production plan.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. Material in excess of the current requirements. 293 June 2006 . . Excess Products Scheduling Identifies Next Destination (Source. can be funded. Best Practices: . Outputs: . . 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.1 Schedule Product Deliveries Material in excess of the current requirements. Inputs: . Assess. Metrics (see Appendix A for metrics attributes): . . and Aggregate Return Resources Return Inventory Transfer Data to S1. Excess Products to S2. 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.2 Receive Product Excess Products to S1.3 Schedule Product Deliveries Return Inventory Transfer Data to P5. 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.4 Transfer Excess Product The process where the designated return center transfers the excess product to the appropriate process to implement the disposition decision.1 Schedule Product Deliveries Return Inventory Transfer Data to S3. Return Inventory for Transfer from ER.2 Receive Product Return Inventory Transfer Data to S2. 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.4 Manage Return Inventory Returned Excess Product from DR3. Utilize Bar coding Periodic review of capital asset plan to determine if additional equipment.3 Receive Excess Product Sourcing Plans from P2. .DR3. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer.4 Establish Sourcing Plans Inventory relative to return process available for transfer to other destination. . Inc. . if needed. .

Return Inventory Transfer Data to ER. © Copyright 2006 Supply-Chain Council. 294 June 2006 . Inc..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. (2) Enable a service provider to confirm a part is authorized to be returned.3 Manage Return Data Collection The process of collecting. cleansing. Inc. determining resource availability and conducting gap analysis and resolution.) when planning for the Return of Assets. (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. Locations include retail and wholesale customer and supplier sites. maintaining.(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. These rules align Return process policies with business strategy. ER. and stocking locations.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. information systems and equipment in receiving docks that are utilized in support of Return. Includes defining and implementing a Return transportation strategy throughout the supply chain. and enforcing decision support criteria for Return Planning that are translated into rules for conducting business. The process includes lease-buy and outsourcing decisions. Examples of business rules include those that (1) Enable customers to identify when scheduled and unscheduled conditions occur that require a return authorization request. ownership. How unserviceable material flow throughout the network is governed by the specific supply chain’s business rules. goals. ER. warehouses. © Copyright 2006 Supply-Chain Council. ER. 295 June 2006 . or manage information or relationships on which planning and execution processes rely. maintain. Can include interim transportation activities conducted within more than one service provider locations. both inter and intra company. ER. Includes Customs requirements and Import / Export Controls. The Category ER includes eight Level 3 Elements: ER. and objectives.1 Manage Business Rules for Return Processes The process of establishing.5 Manage Return Capital Assets The process of acquiring. government.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. 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.8 Manage Return Regulatory The process of identifying and complying with regulatory documentation Requirements and process standards set by external entities (i. distribution centers. manufacturing facilities. maintaining and dispositioning capital assets such as fork lift trucks. maintaining transportation-related information (rates. etc. Management activities would include defining asset requirements. given service requirements by supply chain stakeholders/trading partners.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. (See ER1) ER. integrating and maintaining the accuracy of return execution information necessary to plan the recovery of supply chain resources. repair depots and military bases. ER.e. lead times) and managing transportation performance. product mix.ER Enable RETURN Enable Processes prepare.

maintaining. i. and objectives. developing and maintaining customer and channel performance standards of an return processes such as service levels. goals. i. Standard Inventory Policy to Determine None Identified Excess Utilize Real-World Cases in Employee None Identified Training Inputs: Process Procedures from P5. goals. Rules and policies align the Return process with the organization’s business strategy. given service requirements by supply chain stakeholders/trading partners. or established procedures to manage and execute all activities in the process. goals. i. Excess Material Return Process Publish Return Policy Easy access to return business rules. and objectives. Return Rules and Policies from P5. Rules for conducting business. 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. Business Rules for Return Processes to ER.e. Business rules align Return process policies with business strategy. given service requirements by supply chain stakeholders/trading partners. given service requirements by supply chain stakeholders/trading partners. developing and maintaining customer and channel performance standards of return processes such as service levels.1 Authorize Excess Product Return Rules for conducting business. given service requirements by supply chain stakeholders/trading partners.4 Manage Return Inventory © Copyright 2006 Supply-Chain Council. developing and maintaining customer and channel performance standards of an return processes such as service levels. and enforcing decision support criteria for Return Planning that are translated into rules for conducting business.4 Establish and A planned series of actions or operations that advances returns from one Communicate Return Plans stage to another.4 Establish and Communicate Return Plans Rules and Policies for conducting business.1 Manage Business Rules for Return Processes The process of establishing. Maintenance Evaluate the Benefits of Out-Sourcing the Enables customer to focus on core competencies. (2) Enable a service provider to confirm a part is authorized to be returned. 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.(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. goals and objectives. and objectives. 296 June 2006 . Outputs: Business Rules for Return Processes to DR3.e. Inc. Business rules align Return process policies with business strategy. 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.

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

or established procedures to manage and execute all activities in the process. A collection of related receipt data records organized in a specific manner.4 Manage Return Inventory Return Benchmark Data from Source: Company A collection of related receipt data records organized in a specific manner. e. Assess.3 Manage Return Data Collection Supply-Chain Performance Metrics to EP.g. and Aggregate Return Resources Return Performance to ER.5 See “Product Return Capabilities“ Manage Return Capital Assets Process Procedures from P5. delivery reliability. etc.4 Establish and A planned series of actions or operations that advances returns from one Communicate Return Plans stage to another. © Copyright 2006 Supply-Chain Council.2 Manage Performance of Supply Chain The return history of product including failure rates. 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. Inc. Data relative to the return process utilized to compare the company’s actual results to selected values identified as reference. with the Customer Continuous Improvement is Planned through Avenue to receive customer comments.5 Manage Return Performance measurement information for the Return Process (the actual Capital Assets value of measured for the criterion).6 Manage Return Performance measurement information for the Return Process (the actual Transportation value of measured for the criterion). flexibility and responsiveness. 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. Outputs: See “Product Return Capabilities“ MRO Product Return Capabilities to P5.2 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.3 Manage Return Data Collection Receipt Data from ER. cost. failure causes. Return Performance to ER. and asset management.ER. Process Reviews and Customer Feedback Inputs: MRO Product Return Capabilities from ER. Receipt Data from ER. 298 June 2006 .2 Identify. Standard measures that indicate how well a supply chain performs within certain categories of performance known as Performance Attributes. Return Product History to ER.

ER. A collection of related receipt data records organized in a specific manner.3 Manage Return Data Collection The process of collecting.3 Receive Defective Product Receipt Data to ER.2 Identify. A collection of related receipt data records organized in a specific manner.Use trend analysis to influence inventory level decisions. Assess. etc. 299 June 2006 . A collection of related receipt data records organized in a specific manner. 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 . List of requirements of the data system that insure cleansed data is compatible and usable.3 Receive MRO Product Receipt Data to DR3. The return history of product including failure rates.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. 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.3 Receive Excess Product Information required in the process of integrating and maintaining the accuracy of return execution. cleansing. Inc. or the data system requirements to fully automate the return process. A collection of related receipt data records organized in a specific manner. Outputs: Data About Return Capabilities to P5.Web-based alerts to identify update occurred and when pre-determined thresholds are exceeded. and Aggregate Return Resources Receipt Data to DR1.2 Manage Performance of Return Processes Receipt Data to DR2. © Copyright 2006 Supply-Chain Council. 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. integrating and maintaining the accuracy of return execution information necessary to plan the recovery of supply chain resources. failure causes. .

developing and maintaining customer and channel performance standards of an return processes such as service levels. and objectives. This sample is then extrapolated across the inventory population.3 Receive Excess Product Return Inventory Transfer Data from DR2. Return Inventory Transfer Data from DR2. Furthermore. with extrapolation the net and gross percentage of error is determined.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.e. goals. Business rules align Return process policies with business strategy. and stocking locations.ER.2 Disposition MRO Product Return Inventory Transfer Data from DR3.2 Disposition Excess Product Return Inventory Availability from SR2.4 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. given service requirements by supply chain stakeholders/trading partners.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. product mix. i. both inter and intra company. Return Inventory Transfer Data from DR1. ownership. © Copyright 2006 Supply-Chain Council. Unique Identifier Tag for Each Repairable Asset management software using bar code. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. 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. Inventory relative to return process available for use. 300 June 2006 .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.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. Comparisons to Industry Benchmarks Real Time Data on Current Status Dynamic calculation of safety stock based on actual sales. Asset Inputs: Business Rules for Return Processes from ER. 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. RFI tag. etc. The average time associated with managing return inventory Best Practices: Periodic Review of Metrics and Strategy with Real time view of data. Return Inventory Availability from SR1. Inc. which provides an indicative measure of entire inventory population. Inventory relative to return process available for use. Return Inventory Transfer Data from DR3.1 Manage Business Rules for Return Processes Rules for conducting business.2 Disposition Defective Product Return Inventory Availability from SR3. Inventory relative to return process available for use.

2 Disposition Excess Product Return Product Location from SR1.4 Schedule Excess Product Shipment Return Inventory Availability to SR1. Inventory relative to return process available for use. © Copyright 2006 Supply-Chain Council.2 Manage Performance of Return Processes Receipt Data to DR3. 301 June 2006 . Inc.5 Return Defective Product Return Inventory Availability to SR2.4 Transfer Defective Product Return Inventory Targets to P5.4 Establish and Communicate Return Plans Return Product Location from SR3.3 Request Excess Return Authorization Return Inventory Availability to SR3.Return Inventory Transfer Data from DR1.4 Transfer MRO Product Return Inventory for Transfer to DR3. Outputs: Receipt Data to DR1. Inventory relative to return process available for use. A collection of related receipt data records organized in a specific manner.3 Receive MRO Product Receipt Data to ER.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.5 Return Excess Product Return Inventory Availability to SR1.3 Request MRO Return Authorization Return Inventory Availability to SR3. Inventory relative to return process available for use. Inventory relative to return process available for use. Inventory relative to return process available for use.3 Receive Defective Product Receipt Data to DR2. Inventory relative to return process available for use.2 Disposition Defective Product Returned Product Location from SR2. Inventory relative to return process available for use.2 Identify. and Aggregate Return Resources A collection of related receipt data records organized in a specific manner. Inventory relative to return process available for transfer to other destination. Assess. Return Plans from P5. Inventory relative to return process available for transfer to other destination.5 Return MRO Product Return Inventory Availability to SR1. Inventory relative to return process available for transfer to other destination.4 Schedule MRO Shipment Return Inventory for Transfer to DR2.3 Receive Excess Product Return Inventory Availability to SR2.3 Request Defective Return Authorization Return Inventory Availability to SR2.4 Transfer Excess Product Return Inventory for Transfer to DR1. 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.4 Schedule Defective Product Shipment Return Inventory Availability to SR3. A collection of related receipt data records organized in a specific manner. The goals and approach to the management of return inventories. A collection of related receipt data records organized in a specific manner. Inventory relative to return process available for use.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. Inventory relative to return process available for use.

1 Manage Business Rules for Return Processes Rules for conducting business. . determining resource availability and conducting gap analysis and resolution.2 Manage Performance of Return Processes Return Plans from P5. 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. Performance measurement information for the Return Process (the actual value of measured for the criterion). 302 June 2006 . developing and maintaining customer and channel performance standards of an return processes such as service levels. Inc. 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. and Aggregate Return Resources See “Product Return Capabilities“ See “Product Return Capabilities“ © Copyright 2006 Supply-Chain Council. i. information systems and equipment in receiving docks that are utilized in support of Return.2 Manage Performance of Return Processes MRO Product Return Capabilities to P5. maintaining and dispositioning capital assets such as fork lift trucks. Business rules align Return process policies with business strategy. Management activities would include defining asset requirements. goals. 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.Real time shipping tracking Use 4PL to manage and move.5 Manage Return Capital Assets The process of acquiring. Assess.2 Identify.4 Establish and Communicate Return Plans Outputs: MRO Product Return Capabilities to ER.e. Inputs: Business Rules for Return Processes from ER. given service requirements by supply chain stakeholders/trading partners.ER. and objectives.Advanced shipping notices . Return Performance from ER.

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.ER. (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. Ground Parcel. 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. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. 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 . Cost. Product. both intra and inter-company within the supply with Each One Geared Toward Continually chain. etc. 303 June 2006 . lead times) and managing transportation performance. Warehouse Transportation Management System (TMS) Maintenance Management Management. Includes defining and implementing a Return transportation strategy throughout the supply chain. Product.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. Treat Them as Utilization of transportation management system (TMS) to manage returns. maintaining transportation-related information (rates. LTL. both intra and inter-company within the supply throughout the Chain chain.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.) Based on Customer Service Requirements Real-Time Shipment Tracking. Can include interim transportation activities conducted within more than one service provider locations. Limit the Number of Carriers. Possible to Leverage Transportation Maximization of TMS use. Inc. Partners and Build a Strong Relationship Maximization of TMS use. Metrics (see Appendix A for metrics attributes): Cost to Manage Return Transportation The sum of the costs associated with managing return transportation. Cost.

Agreements to P5. 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.3 Receive Defective Product Return Transportation Guidelines. Policies. & Guidelines.3 Receive Excess Product Return Transportation Guidelines. & Guidelines.2 Identify. Policies. policies and agreements for the transportation activities around return process. Agreements to DR3. and Aggregate Return Resources Return Transportation Guidelines. Assess.2 Manage Performance of Return Processes Return Plans from P5. © 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). Inc. & Guidelines. Agreements to DR1. Policies. Outputs: Return Transportation Guidelines.Inputs: Return Performance from ER. policies and agreements for the transportation activities around return process. policies and agreements for the transportation activities around return process. & Guidelines. Policies. 304 June 2006 . policies and agreements for the transportation activities around Agreements to DR2.3 Receive MRO Product return process.

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. distribution centers.8 Manage Return Regulatory Requirements Return Process Workflow Definition and Policies to P5.e. Assess.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.e. goals. and Aggregate Return Resources The business rules that govern the flow of unserviceable material through the network. i. Business rules align Return process policies with business strategy. 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.4 Establish and Communicate Return Plans Outputs: Return Network Configuration to ER. i. How unserviceable material flow throughout the network is governed by the specific supply chain’s business rules. developing and maintaining customer and channel performance standards of an return processes such as service levels. manufacturing facilities. given service requirements by supply chain stakeholders/trading partners. (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. repair depots and military bases. 305 June 2006 .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.2 Identify.1 Manage Business Rules for Return Processes Rules for conducting business. Locations include retail and wholesale customer and supplier sites. the network configuration. and objectives. Inc. Return Plans from P5. warehouses.

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

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

Inc. 308 June 2006 .Workflow Graphics © Copyright 2006 Supply-Chain Council.

Inc. 309 June 2006 .© Copyright 2006 Supply-Chain Council.

Inc.© Copyright 2006 Supply-Chain Council. 310 June 2006 .

© Copyright 2006 Supply-Chain Council. Inc. 311 June 2006 .

Inc. 312 June 2006 .© Copyright 2006 Supply-Chain Council.

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

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

© Copyright 2006 Supply-Chain Council. 315 June 2006 . Inc.

© Copyright 2006 Supply-Chain Council. 316 June 2006 . Inc.

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

© Copyright 2006 Supply-Chain Council. 318 June 2006 . Inc.

Inc. 319 June 2006 .© Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. 320 June 2006 . Inc.

Inc.© Copyright 2006 Supply-Chain Council. 321 June 2006 .

Inc. 322 June 2006 .© Copyright 2006 Supply-Chain Council.

Inc. 323 June 2006 .© Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. 324 June 2006 . Inc.

© Copyright 2006 Supply-Chain Council. 325 June 2006 . Inc.

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

© Copyright 2006 Supply-Chain Council. 327 June 2006 . Inc.

© Copyright 2006 Supply-Chain Council. Inc. 328 June 2006 .

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

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

Inc.© Copyright 2006 Supply-Chain Council. 331 June 2006 .

Inc.© Copyright 2006 Supply-Chain Council. 332 June 2006 .

Inc. 333 June 2006 .© Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. Inc. 334 June 2006 .

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

Inc. 336 June 2006 .© Copyright 2006 Supply-Chain Council.

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

© Copyright 2006 Supply-Chain Council. Inc. 338 June 2006 .

© Copyright 2006 Supply-Chain Council. 339 June 2006 . Inc.

© Copyright 2006 Supply-Chain Council. Inc. 340 June 2006 .

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

© Copyright 2006 Supply-Chain Council. Inc. 342 June 2006 .

© Copyright 2006 Supply-Chain Council. Inc. 343 June 2006 .

Inc. 344 June 2006 .© Copyright 2006 Supply-Chain Council.

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

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

Inc. 347 June 2006 .© Copyright 2006 Supply-Chain Council.

© Copyright 2006 Supply-Chain Council. Inc. 348 June 2006 .

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

Inc. 350 June 2006 .© Copyright 2006 Supply-Chain Council.

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

© Copyright 2006 Supply-Chain Council. 352 June 2006 . Inc.

© Copyright 2006 Supply-Chain Council. 353 June 2006 . Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4 M1.3.1. D1.3.13. M3.4. S3.g. S3.. S3.15 Invoice D1.g.4. telephone number) Wrong Product Information (e. D3.g. D2.14 Install Product D3. S2. D1. S2. product description) Wrong Price (e. S3. ED % Product Transferred On-Time to Demand Requirement % Product Transferred without Transaction Errors % Return % Schedules Changed within Supplier's Lead Time S1.12. D2.1. or finished goods that are there when needed.15 Invoice D2. Correct destination.3. D3.1.1. 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. S3. M2.4 Stock Shelf DR3 Deliver Return Excess Product SR3 Source Return Excess Product D2.3.12. S2.14 Install Product D1. according to the schedule. D3.6 R1 Return Defective Product R2 Return MRO Product S1..2. S3. name.1. June 2006 . D1. Inc.4.13.2.6 S1.13. S2. with the correct part and documentation The number of invoices processed without issues and or errors divided by the total number of invoices.5 S1. S2.12.2. S2.4 % Orders/ Lines Received Defect Free % Orders/ Lines Received On-Time To Demand Requirement S1. 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. Examples of potential invoice defects are: Change from customer purchase order without proper customer involvement Wrong Customer Information (e.2. S2.3.4 % Orders/ Lines Received with Correct Shipping Documents % of Orders Delivered In Full S1. D2. components. address.METRICS METRIC % In-Stock % of Excess Product Returns Delivered Complete to the Designated Return Center % of Faultless Invoices DEFINITION Percentage of materials.2. S3. % 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 D4.15 Invoice % Orders/ Lines Processed Complete S1.. part number.3 © Copyright 2006 Supply-Chain Council.2.4.

PROCESS EM.1 Authorize Excess Product Return DR2. S3. M2. The average time associated with building shipment loads.1.2 Assess Supplier Performance M1.3. M3.5 Build Loads D2. Cycle time for implementing change notices divided by total number of changes.3. The average time associated with balancing return resources and return requirements. The average time associated with balancing production resources with production creation requirements.3 Balance Production Resources with Production Requirements P5. Inc.3 S1. S3.5 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.3 Balance Delivery Resources and Capabilities with Delivery Requirements P2.5 DR1. M1. The average time associated with balancing deliver resources and deliver requirements.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.1. S3. # of days each schedule change impacts the delivery date divided by the total # of changes.3 Balance Product Resources with Product Requirements P3. S2. The average time associated with balancing supply chain resources and supply chain requirements.9 Align Supply Chain Unit Plan with Financial Plan ED.3 Balance Return Resources with Return Requirements P1. © Copyright 2006 Supply-Chain Council.1 Authorize MRO Product Return S3. The average time associated with balancing product resources and product requirements.5 EP.4.3 S1.3 Balance Supply Chain Resources with Supply Chain Requirements D1. 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. Total gross product revenue ÷ Total net assets The average time associated with authorizing the return of defective product.5 Authorize Supplier Payment S1.5 Authorize Supplier Payment S1.3 P4. The average time associated with assessing the performance of supplier processes.1 Authorize Defective Product Return DR3.1. M2. 369 June 2006 . The average time associated with authorizing the return of excess product. S2. The average time associated with authorizing payment to suppliers. 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.1.2 Assess Delivery Performance ES.1.7 Authorize Supplier Payment S2. S2. M3.4.1.5 Build Loads D3.

S3.3 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. M1. D4 Checkout Cycle Time Consolidate Orders Cycle Time Cost of Compliance Including Administrative Costs Cost of Goods Sold D4. P3.3 Balance Product Resources with Product Requirements P3. D2.4.2. Total MAKE cost to comply with regulatory requirements.3 Balance Production Resources with Production Requirements P5. [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. M2. D3. For services. M2.7 Authorize Supplier Payment S2. The sum of the costs associated with authorizing the return of defective product. S1. The sum of the costs associated with balance of product resources with product requirements. P2. The sum of the costs associated with assessing delivery performance. materials) and indirect costs (overhead).9 Align Supply Chain Unit Plan with Financial Plan ED. M3.5 Authorize Supplier Payment S1.1 Authorize Defective Product Return DR3.4 Consolidate Orders EM. or overhauled. . M1. The sum of the costs associated with authorizing the return of excess product. The sum of the costs associated with balance of return resources with return requirements. M3. D1.8 M2 Make-to-Order M1 Make-to-Stock M3 Engineer-to-Order EP.1 Authorize Excess Product Return DR2. P4.2 Assess Delivery Performance ES.6 Checkout D1.3. PROCESS M1.4 Consolidate Orders D2.5 Authorize Supplier Payment P4. S2. The cost associated with buying raw materials and producing finished goods.1.2 Assess Supplier Performance DR1. The sum of the costs associated with authorizing the return of product to be maintained.1 Authorize MRO Product Return S3. This cost includes direct costs (labor. 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. M1.4. The average time required for customer checkout. repaired.3. 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.1.4. The sum of the costs associated with authorizing supplier payment. 370 © Copyright 2006 Supply-Chain Council. The sum of the costs associated with assessing supplier performance. The sum of the costs associated with aligning supply chain performance plans with financial plans.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.5 P1. M3. M2. Inc.3 Balance Delivery Resources and Capabilities with Delivery Requirements P2. M2. direct labor availability and key components/materials availability. constraining processes. The average time required for customer order consolidation.

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

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

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

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

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

376 June 2006 . The amount of sales outstanding expressed in days. D2. D3.15 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. Inc.6 Transfer Product S2. D3.2 ES. (Other names: Average payment period for materials.15 Invoice.15 Invoice.5 Verify Product EM.4 Transfer MRO Product S3. The average time required to deliver and install product.8 Manage Import/Export Requirements D1. The average time associated with Deliver Processes Days Sales Outstanding D1.3 Verify 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.8 Manage Import/Export Requirements ED. Days’ outstanding in accounts payable) The “5 point rolling average” calculation uses a combination of both historical and forward-looking data.15. The [5 point rolling average of gross accounts payable (AP)] / [total gross annual material purchases / 365]. D2. Days purchases in accounts payable.3 Verify Product S3.7 Deliver and/or Install D3 Deliver Engineer-to-Order Product D2. The average time associated with clearing an order through customs PROCESS DR1.4 Transfer Defective Product DR3.4 Transfer Product S1. Ratio of Cost for Managing Production Performance to Manufacturing Controllable Cost. labor and/or conversion resources until cash payments must be made expressed in days.4 Transfer Product S2.4 Transfer Excess Product DR2.15 Deliver and/or Install Cycle Time Deliver Cycle Time D4.15 Invoice D1 Deliver Stocked Product D2 Deliver Make-to-Order Product D4 Deliver Retail Product © Copyright 2006 Supply-Chain Council.15. 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.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.

12. D1. ED. D2. Commit Resources & Launch Program P5. Inc. 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.2 Downside Deliver Adaptability Downside Make Adaptability Enter Order. For services.5 Fill Shopping Cart M3. D2. D1.3. D3. including packing slips. M1. D1. 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. D2.3.15. etc.13. D1.3.15. [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.9 D4.15.4 Establish and Communicate Return Plans P1.1 Finalize Production Engineering © Copyright 2006 Supply-Chain Council.13 D1.3. P4.12. D3.4 Establish Production Plans P2. The average time associated with entering an order. D1.11. 377 June 2006 .4 Establish Supply Chain Plans P4.4 Establish Sourcing Plans P1. D3.11. PROCESS DR1 Deliver Return Defective Product DR Deliver Return DR2 Deliver Return MRO Product D1. 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. D2.METRIC Deliver Return Cycle Time DEFINITION The average time associated with returns. D3.4.3 Enter Order. invoices. D2.11.3. D3. 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.3.12.13.4 Establish Delivery Plans P3. bills of lading.

Prioritize. Example: If 2 items a day are sold and 20 items are held in inventory. prioritizing.METRIC Forecast Accuracy DEFINITION Forecast accuracy is calculated for products and/or families for markets/distribution channels. and Aggregate Delivery Resources and Capabilities P2. June 2006 .11. and aggregating production requirements The average time associated with the identifying.14 Install Product P1. and Aggregate Return Resources Cycle Time Identify.4. P1. and aggregating product requirements The average time associated with the identifying. P1. P4.8. and Aggregate Supply Chain Requirements D1. D1. and Aggregate Return Requirements P1.14 Install Product D3.14.3.2 Generate Stocking Schedule Cycle Time Identify Sources of Supply Cycle Time Identify. D2. and Aggregate Return Requirements Cycle Time Identify. D3. Assess.2 Identify.3. The [5 point rolling average of gross value of inventory at standard cost] / [annual cost of goods sold (COGS) / 365].1 Identify. P4. assessing. Assess. Prioritize.2 Identify. P3.Sum of Variance) / Sum Actuals to determine percentage error. and Aggregate Production Resources Cycle Time Identify. Assess. and aggregating product resource availability The average time associated with the identifying. Prioritize. 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. D1. Assess. and aggregating delivery resource availability The average time associated with the identifying. Prioritize. Prioritize.4. assessing. and Aggregate Production Resources P5. and Aggregate Return Resources P1. and aggregating delivery requirements The average time associated with the identifying.3. and Aggregate Supply Chain Resources P4.1 Identify. Assess.14 Install Product D2. D1.2 Identify. P2. Prioritize. Common calculation (Sum Actuals . S1.11.6.1 Generate Stocking Schedule S3. ED.14. in unit measurement. Assess. *monitoring the delta of Forecast Accuracy over measured time periods can determine success rates.1.4 Inventory Days of Supply (Finished Goods) D1.4. D3. P1. assessing. Assess.14 © Copyright 2006 Supply-Chain Council. and Aggregate Supply Chain Resources Cycle Time Identify. and aggregating return requirements The average time associated with the identifying.1 Identify. D2. P1. Assess. and aggregating supply chain resource availability The average time associated with the identifying. and aggregating return resource availability The average time associated with the identifying. Assess. Days’ sales in inventory). D3. and Aggregate Product Requirements Cycle Time Identify. Assess.4.1. and Aggregate Delivery Requirements P2.4. this represents 10 days’ (20/2) sales in inventory. EM.1 Identify. and Aggregate Supply Chain Requirements Cycle Time Install Product Cycle Time Inventory Days of Supply D4. and Aggregate Product Resources Cycle Time Identify.1.7. prioritizing.3. assessing.5. Prioritize. prioritizing. And Aggregate Product Resources P3. D2.8. Prioritize. S2.2 Identify.11. EP. prioritizing.1 Identify Sources of Supply P4. 378 PROCESS EP. and Aggregate Delivery Resources Cycle Time Identify. EP. and Aggregate Production Requirements P5.2.6. and Aggregate Product Requirements P3. ES.8. Inc. D3. S3. EP. and aggregating production resource availability The average time associated with the identifying. prioritizing.4. Prioritize. and Aggregate Production Requirements Cycle Time Identify. D2. P4. assessing. Plant finished goods inventory days of supply are calculated as gross plant finished goods inventory ÷ (value of transfers/365 days).1. and Aggregate Delivery Requirements Cycle Time Identify.2 Identify. and aggregating supply chain requirements The average time associated with product installation The amount of inventory (stock) expressed in days of sales.1 Assess. (Other names: Days cost-of-sales in inventory.

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 P3.2 Issue Material M2.4.8 Manage Import/Export Requirements ES.11 Load Vehicle & Generate Shipping Documentation D2.5. M2.1.3 Maintain Source Data M1 Make-to-Stock M3 Engineer-to-Order M2 Make-to-Order EP.6 D1.3 Manage Deliver Information ED. M2. M1. 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 .4 Manage Integrated Supply Chain Inventory EP.1 Manage Deliver Business Rules ED.5 Manage Deliver Capital Assets ED.2.4 Manage In-Process Products (WIP) EP.3.METRIC Inventory Days of Supply (Raw Material) DEFINITION Value of raw materials ÷ (COGS ÷ 365).5.2 Issue Sourced/InProcess Product M3.1 Manage Business Rules for Return Processes ES.15 Invoice M1.8 Manage Import/Export Requirements ES.3 Issue Sourced/InProcess Product D1.11 Load Product & Generate Shipping Documentation D3.11 Load Product & Generate Ship Documents ES. Inc.6 Manage Integrated Supply Chain Transportation EM.6 Manage Incoming Product EM.5 Manage Integrated Supply Chain Capital Assets EP.4 Manage Finished Goods Inventories ED. M3. M3.5 Manage Equipment and Facilities EM.15 Invoice D3. M1.3 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.1 Manage Business Rules for PLAN Processes ER.1. 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).5 Manage Capital Assets ED. P3.

4 Manage Return Inventory ER.1 Manage Sourcing Business Rules ES. PROCESS EM.4 Manage Product Inventory ED.9 Manage Supplier Agreements ES. credit check. 380 June 2006 .8 Manage Regulatory Compliance ER.7 Manage Supplier Network EM.7 Manage Return Network Configuration ER.2.8 Manage PLAN Regulatory Requirements and Compliance EP.3 Manage Return Data Collection ER.2 Manage Production Performance EM.5 Manage Return Capital Assets ER.2 © Copyright 2006 Supply-Chain Council.6 Manage Transportation D3.2 Negotiate & Receive Contract D3.7 Manage Production Network EM.7 Manage Planning Configuration ES.2 Manage Performance of Return Processes EP. Inc.1 Manage Production Rules ER.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.6 Manage Transportation ED.1 Obtain and Respond to RFP/RFQ D1.8 Manage Return Regulatory Requirements ER.7 Manage Product Life Cycle EM.6 Manage Return Transportation ES.3 Manage PLAN Data Collection EP. accepting new orders and adding them to the order system as well as later order modifications. D2.2 Manage Performance of Supply Chain EP.

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

© Copyright 2006 Supply-Chain Council, Inc.

381

June 2006

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
June 2006

© Copyright 2006 Supply-Chain Council, Inc.

382

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
June 2006

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.
383

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

© Copyright 2006 Supply-Chain Council, Inc.

384

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

385

June 2006

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.

© Copyright 2006 Supply-Chain Council, Inc.

386

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

387

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

388

June 2006

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

© Copyright 2006 Supply-Chain Council, Inc.

389

June 2006

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.

390

June 2006

8 Manage Return Regulatory Requirements ER.6 Route Shipments D2. And Aggregate Product Resources P2.5 Manage Equipment and Facilities ES.4 Schedule Defective Product Shipment SR3.11 Load Product & Generate Ship Documents S3.8 Manage Return Regulatory Requirements 391 June 2006 . Prior to Returning © Copyright 2006 Supply-Chain Council.2 Receive Product ES.4 Receive Product S2. State or Local Regulation. Obsolete) for Appropriate Action Route scheduling.BEST PRACTICE Carrier Agreement DEFINITION Carrier agreements are agreements between a company and its domestic and global carriers (for both.6 Route Shipments & Select Carriers D3. Participants at all customer and service provider locations involved clearly understand all regulatory requirements at each step in the return process .11 Load Vehicle & Generate Shipping Documentation SR2. Formal Authorization from the Service Provider per Federal.2 Receive Product D1. carrier selection. Software to identify operational constraints to the MAKE processes to assist in directing resources toward bottleneck functional areas. Usable.7 Manage Supplier Network S1. and measurement tool. ER. 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. Excess. which can be used to prioritize and track results of improvement efforts.11 Load Product & Generate Shipping Documentation D3.6 Route Shipments P2. Clarify in Advance Hazardous Material Packaging. Carrier Selection Based on Performance Criteria at Least Cost Scheduling.2 Identify.6 Route Shipments D1. instructional directions to conduct changeover. Overseas packaging. carrier selection.1 Identify. Labeling and Shipping Requirements Clarify in Advance If the Product to be Returned Requires Specific.4 Schedule MRO Shipment SR1. inbound raw materials and outbound finished goods) specifying service levels. labeling and shipping regulatory requirements are given specific attention.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.2 Assess Supplier Performance ES. and rating Carrier/Route Optimization Based on Continuous Movement and Consolidation/Pooling Categorize 100% of Total Inventory (Active. and Aggregate Product Requirements M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock M3. Prioritize.4 Schedule Excess Product Shipment D3.9 Manage Supplier Agreements ES. Assess. payment terms. and other conditions. Inc.2 Schedule Production Activities P1 Plan Supply Chain EM.

Problems. In Sourcing) Confirm All Documentation and Inspection Requirements Before Shipping M1.1 Authorize Defective Product Return DR2. on-line planning/scheduling systems.1 Identify.html) Interactive. 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.2 Assess Supplier Performance ER.. using a set of process and technology models. Inc. Claims. Forecasting and Replenishment is a concept that allows collaborative processes across the supply chain.4 Establish Supply Chain Plans P1. Capacity planning systems with accurate production capability data.cpfr.BEST PRACTICE Clarify Point of Contact and Return Location Collaboration among Operations Strategy Team DEFINITION Electronic rules for business relationships and transactions.1 Manage Sourcing Business Rules D1.1 Authorize MRO Product Return ES.4 Consolidate Orders DR3. Supply Chain Advanced Planning Systems Supply Chain Integration Systems Integration between supply chain advanced planning and ERP execution systems PROCESS SR1.7 Manage Production Network ES.3 Request Excess Return Authorization P1.2 Issue Product M1.3 Request Defective Return Authorization SR3.2 Issue Sourced/InProcess Product ED. (From www. Etc..2 Issue Material M2.org/intro. Forecasting.1 Identify Sources of Supply None Identified ER.1 Authorize Excess Product Return DR1. Concurrent Engineering is Used to Tightly Link Sourcing into the Product Development Process Make/Buy Decision Process (Outsourcing vs.8 Manage Return Regulatory Requirements © Copyright 2006 Supply-Chain Council. and Aggregate Supply Chain Requirements Collaborative Planning. 392 June 2006 .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.3 Manage Deliver Information S3. Web based access to current spend data available from enterprise to part level None identified None identified P1 Plan Supply Chain EM.. Prioritize.

5 Plan & Build Loads D3. cause and effect analysis.BEST PRACTICE Confirm Asset Return Condition Codes Are Clearly Understood by All Employees. planning.3 Manage MAKE Information ES.2 Disposition Defective Product P3.6 Route Shipments D1.6 Route Shipments & Select Carriers D3.4 Consolidate Orders ER.5 Build Loads SR2.1 Identify.2 Receive.1 Schedule Product Deliveries S3. 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.4 Consolidate Orders D1.2 Manage Performance of Return Processes D2.2 Receive. Enter and Validate Order D1. 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. Consideration of Supplier's Material Availability in Company's Supply Resources (Including Supplier's Production Plans & Capability. and Key Performance Indicators Scheduling reviews of processes for possible improvements None identified Avenue to receive customer comments.5 Build Loads D3.4 Schedule Defective Product Shipment SR3. Inventory. Vendor Managed Inventory.1 Schedule Product Deliveries S2.4 Schedule MRO Shipment 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.6 Manage Return Transportation D3.3 Schedule Product Deliveries D2. Customer movement data © Copyright 2006 Supply-Chain Council. Enter & Validate Order None identified Digital linkage to supplier quoting. Telemetry to Automatically Communicate Replenishment of Chemicals Historical trending.Coordinate with Other Shipments Consolidation of Carriers DEFINITION None identified PROCESS SR1. Source. Carrier.4 Schedule Excess Product Shipment EM. and Aggregate Production Requirements S1. Prioritize.5 Build Loads D2. Etc.6 Route Shipments D2. Consolidate Shipments Through Cross Docking .6 Route Shipments D1.5 Plan & Build Loads D1.5 Plan & Build Loads and Shipments D2.2 Assess Supplier Performance ER. Configure. Integrated demand/deployment planning to customer location driven by POS.2 Disposition Defective Product SR1. 393 June 2006 . and Delivery Plans) Consignment Agreements Are Used to Reduce Assets and Cycle Time While Increasing the Availability of Critical Items Consolidate Orders by Customer. Inc. Traffic Lane.

the receiving process is disjointed from the shipping process and storage acts as an intermediary between the two processes.2 Schedule Production Activities M2. 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. In a DC.6 Checkout Customer Profile Drive Recognition Upon Checkout None identified © Copyright 2006 Supply-Chain Council.12 Ship Product D2.8 Receive Product from Source or Make D2.5 Plan & Build Loads D2.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.2 Assess Supplier Performance ES. Cross docking actively links the receiving and shipping processes. 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 P5.12 Ship Product D2.6 Route Shipments & Select Carriers D2.5 Build Loads D2.11 Load Product & Generate Ship Documents D3. In a traditional DC.8 Receive Product from Source or Make D3. Inc.3 Manage Deliver Information ED.5 Plan & Build Loads D1.6 Route Shipments D1. 394 June 2006 .3 Balance Return Resources with Return Requirements ES.1 Schedule Production Activities D1.5 Build Loads D3.2 Access Delivery Performance ED.6 Route Shipments D3.2 Assess Delivery Performance D4.5 Build Loads D1. both cross docking (no storage) and traditional (with storage) operations might take place.11 Load Product & Generate Shipping Documentation D3.8 Receive Product from Source or Make D1. CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems CRP/VMI Integrated Load Building.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.11 Load Vehicle & Generate Shipping Documentation D1.12 Ship Product D3.6 Route Shipments ED.1 Schedule Production Activities M3.

395 June 2006 .4 Receive Product S2. P1.3 Balance Delivery Resources and Capabilities with Delivery Requirements Repetitive scheduling and sequencing M2. 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. Etc.5 Verify Product S3. Production Plans. 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.4 Transfer Defective Product D4.1 Schedule Production Activities M3.3 Receive MRO Product ED.2 Receive Product S2. Software that provides multiple data models including the business rules and metrics for the entire supply chain planning process.3 Receive Excess Product DR1. Prioritize. Product Plans. Inc.3 Maintain Source Data ER.3 Manage Return Data Collection DR1. Make.2 Receive Product S1. . collaborative data-sharing environment. 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.3 Balance Supply Chain Resources with Supply Chain Requirements None identified None identified Delivery Schedules Are Collaboratively Developed with Customers Demand Planning.BEST PRACTICE Customer Relationship and Digital Linkages (XML.1 Identify. Return schedule and shipping documents.2 Schedule Production Activities © Copyright 2006 Supply-Chain Council.3 Verify Product M2 Make-to-Order M3 Engineer-to-Order P1.3 Pick Product from Backroom S3.3 Receive Defective Product DR2. Demand Flow Leadership Demand Priorities Reflecting Strategic Customer Relationships as Business Policies Are Automatically Followed in Allocating Resources.3 Balance Supply Chain Resources with Supply Chain Requirements None identified Web based access to various levels of enterprise data Utilize electronic links DR3. EDI. Algorithms use the business rules and metrics as the drivers for the planning engine.3 Manage Deliver Information ES.3 Verify Product S1. Electronically link Return authorization. Rules-based distribution planning system Trading partner agreements P4.) Provide Accurate Visibility into Actual Demand via Customer Forecasts. First-In-FirstOut (FIFO) is Utilized as the Default Scheduling Priority Demand Pull Mechanisms Web-based access to plant scheduling status.

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

Download P.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. 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.9 Pick Product © Copyright 2006 Supply-Chain Council.9 Pick Product D3. Zoned Picking. Quality Assurance D2. also referred to as Synchronous Manufacturing or Constraint Management) A technique used to manage resources to maximize throughput. Best practice is to remove the dunnage as soon as possible unless part / product damage will result.4 Transfer Product S1.4 Transfer Product S3.8 Receive Product from Source or Make D1. stock locator.O.8 Manage Import/Export Requirements D2. Reuse of intermediate WIP containers for finished goods.1 Schedule Production Activities M2.1 Manage Production Rules ED.9 Pick Product D2. revise and access information Electronic documentation submission via EDI and/or internet.8 Receive Product at Warehouse D1.2 Disposition Defective Product SR3. Advanced planning and scheduling logic with constraint.2 Disposition Excess Product M1. 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 Manage Import/Export Requirements ES.7 Pick Staged Product D1.3 Reserve Resources & Determine Delivery Date D2.8 Pick Staged Product D3. System data field to specify where the part / product shipping container should be removed. 397 June 2006 .8 Receive Product from Source or Make D2.8 Receive Product from Source or Make D3. and rules based picking logic Dunnage Control SR1. & Advanced Ship Notices for Automated Receiving and Put Away DEFINITION Bi-directional Digital Links (XML. EDI. EM.8 Receive Product from Source or Make S2. Inc.4 Manage In-Process Products (WIP) Dynamic Deployment Based on Constraint Based Planning and Optimal Scheduling Dynamic Location Assignment Including Lot Control.1 Schedule Production Activities M3. cost.2 Schedule Production Activities EM. and resource optimization Real time inventory control.6 Transfer Product Drive Returns Directly to Return Stock Point of Disposition to Reduce Cost and Cycle Time Drum-Buffer-Rope Scheduling Technique (DBR.

7 Manage Supplier Network S3.1 Manage Production Rules D2.BEST PRACTICE Dynamic Location Assignment Including Lot Control. 398 June 2006 . specifications. 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. Use of Hand-Held Terminals for Direct Order Entry.8 Receive Product from Source or Make P5. Inc.8 Receive Product at Warehouse D1.8 Pick Staged Product D1. Enter & Validate Order ES.11 Load Vehicle & Generate Shipping Documentation © Copyright 2006 Supply-Chain Council.7 Pick Staged Product D2. Capacity Availability. Credit Approval).2 Select Final Supplier(s) and Negotiate Electronic Data Interchange None identified Graphical display of drawings. recipes/formulas. ABC Frequency of Access Dynamic Return Restocking Management Dynamic Simulation of Picking Requirements Optimized for Labor.9 Pick Product D1. to all users None identified S3. instructions.9 Pick Product D2.11 Load Product & Generate Ship Documents D1. Confirmation. Etc. Rules based picking logic and simulation PROCESS D3.2 Receive. Cost. Configure. Zoned Put Away.. Enter and Validate Order D1.11 Load Product & Generate Shipping Documentation D3.2 Manage Performance of Supply Chain D1 Deliver Stocked Product D1 Deliver Stocked Product D2. Quality Assurance. 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.) with Own Resources Efficient and Effective Benchmarking Process Leveraging Cross Industry Metrics and Definitions Efficient Consumer Response (ECR). etc. Scheduling None identified EDI applications and integrated order management EP.8 Receive Product from Source or Make D1. Quick Response Electronic Catalogues/Malls Electronic Commerce (Customer Visibility of Stock Availability. stock locator.3 Balance Return Resources with Return Requirements D3.2 Receive.9 Pick Product D3. 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.3 Reserve Inventory & Determine Delivery Date P2 Plan Source None identified Inter-company resource planning with EDI/Internet communication None identified Demand Planning.1 Identify Sources of Supply EM. diagrams. Deployment.

Enter and Validate Order D1.2 Issue Product M3.2 Receive.1 Manage Sourcing Business Rules ES. 399 June 2006 . Prioritize.15 Invoice D1. Order Status.5 Stage Product ER.3 Issue Sourced/InProcess Product M2.5 Stage Finished Product M3. and Aggregate Delivery Requirements M1.9 Manage Supplier Agreements D3.15 Invoice D2. Prioritize. and Aggregate Delivery Requirements Clarification of policy if authorizations are not processed within the expected cycle time. Cheaper to Administer) Enable Customer-Service Representatives to Complete the Bill Of Lading for the Customer Including Carrier Routing. SR1.6 Manage Return Transportation P4.6 Stage Product M2. Enter & Validate Order None identified © Copyright 2006 Supply-Chain Council.1 Identify. Lowers Safety Stock Requirements.3 Request Excess Return Authorization D2. Shipments. Description and Class to Minimize Guesswork & Wrong Estimates Enable Real-Time Visibility into Backlog.2 Issue Sourced/InProcess Product M1.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.11 Invoice & Receive Payment D1. Weight.12 Invoice & Receive Payment D3.1 Identify. Inc. 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.3 Request Defective Return Authorization SR3.3 Receive MRO Product P4.3 Receive Excess Product DR1.1 Manage Business Rules for Return Processes ES.13. Invoice & Receive Payment D2.2 Receive.6 Stage Finished Product M2.15 Invoice DR3.6 Manage Transportation ER.5 Stage Product M1. Configure. and Current Inventory Positions None identified PROCESS ES.6 Manage Incoming Product ED.3 Receive Defective Product DR2.2 Issue Material M3. Scheduled Material Receipts. Customer Credit History.

5 Manage Capital Assets ED. 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.7 Manage Supplier Network ER.9 Manage Supplier Agreements SR1. quality. 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.4 Establish and Communicate Return Plans D2. and Aggregate Delivery Requirements P5.1 Manage Business Rules for Return Processes DR3. Inc.5 Manage Deliver Capital Assets EM.1 Manage Sourcing Business Rules ES.1 Identify.1 Identify Excess Product Condition ES. asbuilt documentation None identified Pilot by Wal-Mart. Prioritize. Utilize electronic links PROCESS ES.7 Manage Supplier Network ES.5 Manage Equipment and Facilities First In . 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. Make. 400 . 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. IT © Copyright 2006 Supply-Chain Council.1 Identify.11 Load Vehicle & Generate Shipping Documentation EM. Prioritize.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.1 Manage Sourcing Business Rules ES.1 Manage Production Rules D4.9 Manage Supplier Agreements DR3.4 Manage In-Process Products (WIP) P4. 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 SR3.11 Load Product & Generate Ship Documents D1.5 Manage Equipment and Facilities ES.4 Transfer Excess Product EM.2 Schedule Excess Return Receipt ES.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.11 Load Product & Generate Shipping Documentation D3.7 Deliver and/or Install P4.

6 Manage Return Transportation ER. 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.1 Manage Business Rules for PLAN Processes D2.11 Load Vehicle & Generate Shipping Documentation D3.2 Schedule Defective Return Receipt DR2. and real time point of consumption reporting.7 Manage Supplier Network ES. Product.7 Manage Supplier Network ES.7 Manage Supplier Network ES. 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.11 Load Product & Generate Shipping Documentation D1. Inc. Supply Chain performance dashboard capability. Algorithms use the business rules as the driver for the planning engine. 401 June 2006 . Integrated Edit at Order Entry Time Integrated Facility Management Integrated Order Management.4 Produce and Test EP. Warehouse Management.2 Schedule MRO Return Receipt EP. and Transportation Management Systems View for analysis for all orders and shipments the following data: Logistics. and Replenishment.5 Manage Return Capital Assets . Collaborative Planning.4 Manage In-Process Products (WIP) DR1.1 Manage Deliver Business Rules ED. Forecasting.6 Manage Transportation ER. Vendor Managed Inventory.Advanced shipping notices .11 Load Product & Generate Ship Documents EP. Interface to supplier's shipping system to financials EM.3 Manage PLAN Data Collection Integrated Demand and Supply Planning . genealogy Both customer and Service Provider departments are alerted at the same time and viewing the same information.Demand Planning. Supply Planning and especially the Supply Plan Execution Are no longer disconnected.7 Manage Product Life Cycle ES.7 Manage Supplier Network M2 Make-to-Order M1 Make-to-Stock M3. Customer Master Record None identified Transportation Management System (TMS) Maintenance Management ED.7 Manage Planning Configuration Supplier managed inventories with scheduling interfaces to external supplier systems to replenish None Identified None Identified Tracking.6 Manage Incoming Product ED.Real time shipping tracking © Copyright 2006 Supply-Chain Council. All required planning and execution data is integrated and shared in between all functional areas within an organization. Cost.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.

None identified None identified None identified None identified Digital Linkages using XML standards (RosettaNet. and Aggregate Supply Chain Requirements S3 Source Engineer-to-Order Product S2 Source Make-to-Order Product S1 Source Stocked Product P1. Schedule visibility. Scan store shelves / bar codes to confirm put-a-way.2 Identify. smart cart or customer self-service reduces system inventory upon item pick.2 Identify. PROCESS ES. Assess.3 Balance Production Resources with Production Requirements P3.4 Stock Shelf D4.2 Identify. And Aggregate Product Resources P2.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. And Aggregate Supply Chain Resources P1.2 Identify.4 Establish Supply Chain Plans P1. 402 June 2006 .3 Reserve Inventory & Determine Delivery Date P2. And Aggregate Product Resources ER. 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. and Aggregate Production Resources P2.7 Manage Production Network P1. And Aggregate Product Resources P3. Assess. both intra and inter-company within the supply chain. 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.1 Identify. Assess.6 Manage Return Transportation D4.5 Fill Shopping Cart EM. RFID.7 Manage Supplier Network D1 Deliver Stocked Product D1. Prioritize.2 Identify. Inc. Maximization of TMS use. Assess. Exchanges will also support more traditional catalog-based sales. on-line communications between source and demand Collaborative Planning Systems © Copyright 2006 Supply-Chain Council. accessible to any buyer and focused on new Internet-enabled purchasing models like spot buys or reverse. eBXML. Exchanges are an open procurement network. Assess. buyer-driven auctions. Assess. OAGI) to automatically query inventory levels.2 Identify. businessto-business trading network.

Assess.4 Produce and Test ES. Fab & Hold Agreements. Assess. and between internal functions such as Field Service. None identified M3. Marketing and Order Management) Collaborative planning tools with the Source suppliers None identified P5. and Aggregate Return Resources P2 Plan Source Demand-pull mechanisms Workforce management solution with flexible rules.4 Produce and Test M2.3 Request Defective Return Authorization SR3.1 Manage Sourcing Business Rules ES. Manufacturing.2 Receive Product at Store D4.3 Produce and Test D4.2 Identify. Assess. Use a team based systematic approach to identifying and eliminating wasteful. both intra and inter-company within the supply chain.2 Identify.BEST PRACTICE Joint Service Agreements to Document Acceptable Service Levels in Terms of Installation Costs. or nonvalue adding activities within your manufacturing organization Utilization of transportation management system (TMS) to manage returns.11 Test & Install Product D2. M2 Make-to-Order M1 Make-to-Stock M3. Installation Cycle Time.6 Manage Return Transportation Use for comparison to previous sales activity/track new consumers.3 Request Excess Return Authorization D4. DEFINITION Collaborative planning tools with the Source suppliers PROCESS D1. None identified Lean Manufacturing Limit the Number of Carriers.1 Schedule Production Activities June 2006 403 .5 Fill Shopping Cart M3. Inc. and Aggregate Supply Chain Resources M1 Make-to-Stock ER. None identified Electronic rules for business relationships and transactions: Vendor-managed Inventory Agreements. 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. 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. Etc.3 Produce and Test M2.1 Schedule Production Activities M2.2 Identify. And Aggregate Supply Chain Resources P1.3 Produce and Test M1.14 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. and Schedule Requirements Are 99+% Accurate © Copyright 2006 Supply-Chain Council.3 Produce and Test M1.4 Produce and Test M1. etc.9 Manage Supplier Agreements SR1.14 Install Product D2. Inventory Levels. Just-In-Time Agreements. Maximization of TMS use.1 Generate Stocking Schedule P1.

).3 Produce and Test Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a single customer shipment. quality.9 Pick Product © Copyright 2006 Supply-Chain Council.8 Receive Product from Source or Make D1. period ago. Inventory Levels.3 Schedule Product Deliveries D1. Identifies stock-outs from shrinkage or item misplacement.5 Manage Deliver Capital Assets D4. at a plant or a supplier) as well as make-to-order items. None identified Maximize Data Integrity and System Accuracy by Ensuring 99%+ Accuracy of BOM Configuration.6 Manage Return Transportation P2. items on stock elsewhere (e. This includes items on stock in the distribution center. labor and equipment data and dissemination of information on factory floor Electronic Kanban support ES. scrap.8 Manage Regulatory Compliance ES.1 Schedule Product Deliveries S2. Prioritize. etc. Merging is usually performed in a shipper's distribution center (DC) or in a carrier's terminal.6 Manage Incoming Product ED. from which the shipment is sent. Inc. 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. items on stock in other distribution centers. The items to be merged are cross-docked from inbound receipt to outbound shipping.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). and Aggregate Delivery Requirements M3.6 Manage Incoming Product ED.5 Fill Shopping Cart None identified Electronic data collection of completion.g. 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. Prioritize. Electronic Document Management System features.6 Manage Transportation ER. Transportation Management System (TMS) Maintenance Management PROCESS EM. Transportation Management System (TMS) Maintenance Management ED.1 Identify.BEST PRACTICE Maintaining Repository of Current Regulatory Requirements Manage Information Across 100% of Shipments DEFINITION Electronic subscription and publication of conformance documentation.6 Manage Return Transportation D4. and Aggregate Product Requirements P4. S1.1 Schedule Product Deliveries S3. 404 June 2006 .1 Identify.6 Manage Transportation ER.7 Deliver and/or Install M1.

Web based access to current supplier/source data Delivery of tooling and equipment details drawings ERP © Copyright 2006 Supply-Chain Council.7 Manage Planning Configuration ER.5 Manage Equipment and Facilities M3. 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.2 Identify. For example. Assess.7 Manage Supplier Network S3.BEST PRACTICE Migrate From Build to Stock to Configure to Order. Inc.6 Checkout P3.5 Package M2.3 Maintain Source Data EM. Assess. 405 June 2006 . And Aggregate Product Resources D4. None identified EM.4 Package EM. 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. changeover.2 Select Final Supplier(s) and Negotiate Hazardous material regulations are given specific attention.4 Manage In-Process Products (WIP) DR2. 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). webbased maintenance/diagnostic assistance and MRO parts.4 Transfer MRO Product ED.4 Manage In-Process Products (WIP) EM.4 Stock Shelf ES. or layout WIP Storage Management System Efficient Space Utilization Implementing Pull Systems Move high frequency used inventory close to point of use.8 Manage Return Regulatory Requirements D4.8 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. and Aggregate Production Resources P2.4 Package M1. Automatic download of production equipment with setup parameters Graphical display of setup.1 Manage Production Rules ES. Utilize electronic links None identified Planned and tracked via a plan-o-gram system.2 Identify. Location specific product labeling.

etc.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). and operator instructions Use 4PL to manage and move.2 Select Final Supplier(s) and Negotiate EM.1 Identify Sources of Supply S3. No discarded material. Optimized Supplier Count.2 Select Final Supplier(s) and Negotiate ED.5 Package M1.4 Manage In-Process Products (WIP) ES.4 Package M2. Including Formal Orders and Ad Hoc Requests Customers Have One Point of Contact for All Products Organize to Enhance Flexibility: Few Job Classifications. process type None identified ED. Web based access to preferred and recommended suppliers. to enable data collection None identified PROCESS S3. Magnetic Stripe. Configure. supplier.5 Manage Return Capital Assets M3. Radio Frequency Communication.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. supplier performance data & spend data stratified by commodity.1 Manage Deliver Business Rules P1 Plan Supply Chain ED. Smart Cards. 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. Machine Interface. None identified M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock ER. 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. Enter and Validate Order Support for modular skills inventory with links to training databases. compensations systems. Self-Directed Work Force.4 Package June 2006 406 .3 Manage MAKE Information ES. Recyclable or no containers where appropriate. 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.7 Manage Product Life Cycle EM.1 Manage Sourcing Business Rules ES.3 Manage MAKE Information EM. business unit/site.7 Manage Supplier Network S3. This could include using PLC. both Currently Available and Committed (Pegged) Operations and Network Analysis Optimize Packing Optimized Supply-Chain Processes. 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. Flat Management Structure. part type..2 Receive. bar code. Radio Frequency Identification. Inc.9 Manage Supplier Agreements D2.

Allow customer access to production status and inventories using internet technologies and web site features. report writing.3 Produce and Test M1 Make-to-Stock D3.) None identified None identified ED. Quality. Electronic dispatch of operations Paperless Production Order and Inventory Tracking Partnership with Outside Design Firms to Provide Skills and Capacity. Inc. Real time view of data.1 Identify. Periodic Review of Standards Planning and Forecasting Outsourced Return process Planogram Flexibility for Seasonal/Promotional changes Plans that Violate Business Rules (e.3 Produce and Test M2.1 Obtain and Respond to RFP/RFQ S3.4 Package M2. Joint Service Agreements) Are Addressed Cross-Functionally.4 Manage Return Inventory EM.4 Manage Finished Goods Inventories ES.5 Package M1. and Aggregate Delivery Requirements P4. etc. Considering Total Business Impacts (Revenue.2 Manage Production Performance P5 Plan Return P4. reverse drop shippers.5 Authorize Supplier Payment S2. 407 June 2006 .4 Produce and Test M3.e. Cost. as Needed Pay on Receipt Electronic dispatch and data collection.) 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. real time data base and EI systems P4. None identified Electronic Invoice Processing PROCESS M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order M3.4 Establish Delivery Plans M2 Make-to-Order M3 Engineer-to-Order M1 Make-to-Stock © Copyright 2006 Supply-Chain Council.4 Manage Product Inventory ER.7 Authorize Supplier Payment S1. report writing.g. Prioritize.BEST PRACTICE Paperless Order Tracking and Customer Visibility of Orders Paperless Production Control DEFINITION Electronic dispatch and data collection with external interface to internet.5 Authorize Supplier Payment ES.4 Package M1.2 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. Capacity. real time database and Executive Information systems that are easily accessible.4 Establish Delivery Plans None identified Data warehouse. Use of web-based technologies for dissemination of information. Etc. 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. Customer Service.

4 Package DR3.1 Identify Sources of Supply On-line design tools facilitated by internet connections.4 Package M3.7 Deliver and/or Install None identified © Copyright 2006 Supply-Chain Council.3 Receive Defective Product DR2. which could highlight suggested actions based upon readings obtained. for Key Customers. track maintenance completed.3 Reserve Inventory & Determine Delivery Date P4 Plan Deliver Order entry specifications linked to manufacturing order None identified M2 Make-to-Order S3.1 Manage Production Rules EM. Capacity planning Real time monitoring of production status and In-Process Product (WIP) Scan store shelves / bar codes to confirm put-a-way. Inc. and have capability of generating desired reports. to the last possible supply chain location. 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. 408 June 2006 . Examples would be TQM.Receiving quality criteria connected to ISO 9000 practices Libraries of manufacturing capabilities or design envelopes Database for equipment to contain expected results of analysis.3 Produce and Test M2 Make-to-Order M1 Make-to-Stock M3. Six Sigma. such as assembly or packaging. allow entry of test readings. 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. 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. with FIFO Allocation for All Others Proactive Education of Customers to Set Expectations and Encourage Close Working Relationships (Knowledge of Long-Lead Items.5 Package M2. M3 Engineer-to-Order M2 Make-to-Order M1 Make-to-Stock EM.5 Manage Equipment and Facilities .Push inspection to SOURCE . Differentiation of the generic product into a specific end-product is shifted closer to the consumer by postponing identify changes. Visibility to Supply Resources.4 Produce and Test D4. contain a help-file to be consulted None identified None identified Priority-Based Inventory Reservations.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.3 Receive MRO Product EM.3 Receive Excess Product DR1.7 Manage Production Network D4. Noise. Scan using handheld and match with ad.4 Stock Shelf M1.

by transmitting new requirements and directives using mathematical models. Which Can Be Converted into an Order in a Single Step Rapid Reconfiguration of Return Capacity Rapid Replenishment. ED. System prioritization of items coming off trucks vs.15 Invoice D1. Standards Based (RosettaNet. 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.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. D2. outsourcing and flexible partnership agreements. EDI Rapid.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 M1.1 Identify. OAGI.1 Manage Business Rules for Return Processes D4.4 Manage Product Inventory ER. and Aggregate Return Resources D1 Deliver Stocked Product P5. and Finished Goods Inventory and Test Activities Allow dynamic re-synchronization of MAKE activities by tying in real time status information to scheduler. Inc. routings.13. But Does Not Generate Build Signal or Reserve Inventory Capacity Quote Capability. Assess. Dynamic calculation of safety stock based on actual sales. picked from back room.1 Process Inquiry & Quote P5.4 Manage Finished Goods Inventories ES. Prioritize.3 Manage Deliver Information Publish Return Policy Push Product on Trailer Arrival Easy access to return business rules.4 Manage Return Inventory M1. 409 June 2006 . eBXML.11 Invoice & Receive Payment D2.12 Invoice & Receive Payment D1. and Aggregate Supply Chain Requirements D2. VMI.2 Receive Product at Store P1.1 Process Inquiry & Quote D1. without Reserving Inventory. Raw Materials.1 Schedule Production Activities ED.2 Identify.15 Invoice ER.4 Establish and Communicate Return Plans Real Time Data on Current Status Real Time Feedback from Production.15 Invoice D2. without Reserving Inventory. Dynamic Reconfiguration of Return Process to Meet Demand D3.1 Schedule Production Activities © Copyright 2006 Supply-Chain Council. Also requires integration with the CRM system for real time redirection of customer returns based upon cost and capacity. None identified The ability to reset and reconfigure the RETURN process capacity. the Internet. etc.1 Generate Stocking Schedule D4. Invoice & Receive Payment D3.

3 Produce and Test P5.6 Manage Transportation ER.4 Transfer Defective Product DR2. Having real time data on return demand and including it in the plan and forecast.3 Produce and Test © Copyright 2006 Supply-Chain Council. Electronic collection of defect data and online SPC. (via internet) Transportation Management System (TMS) Maintenance Management Re-Balancing of Full-Stream Supply/Demand on a Daily Basis.2 Access Delivery Performance ED. Transportation Management System (TMS) Maintenance Management PROCESS ED.3 Produce and Test M1. Include packaging materials in inventory management system and treat as any other inventory to minimize potential of stock-out.4 Transfer Excess Product DR1. Move.3 Produce and Test M2. AGVs and ASRS) and process improvement (i. LTL.3 Produce and Test M1. etc. 410 June 2006 . and track progress against schedule and standards.6 Manage Return Transportation P1 Plan Supply Chain Buyer's name for every receipt is clearly visible on Receiver. Ground Parcel. Electronic collection of quality data and online SPC. shorter move paths) Use principals of Lean Manufacturing.1 Assess.4 Produce and Test M2. and Aggregate Return Requirements Real Time Statistical Control Techniques Real-Time Optimized Shipment Method Selection (Air Parcel.6 Manage Transportation M3.3 Receive Defective Product DR2.6 Manage Return Transportation ES. Requires a connection with customers.3 Produce and Test M1. possibly to the store level with retail returns.3 Receive Excess Product DR1.6 Manage Transportation ER. 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.2 Manage Production Performance M3.) Based on Customer Service Requirements Real-Time Shipment Tracking.4 Produce and Test M2. and Set-Up Times Enterprise-wide planning system customer Relationship Systems M3.4 Transfer MRO Product M2.3 Produce and Test EM. call centers or CRM system. DR3.e. Inc.4 Produce and Test M1. 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. Automatic download of production equipment with batch recipes/part programs Reduction of WIP handling through automation (i. reduction of handling steps. Including Queue.2 Assess Delivery Performance EM.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 Incoming Product ED.6 Manage Incoming Product ED.e.3 Produce and Test ES.3 Receive MRO Product DR3.

Periodic review of capital asset plan to determine if additional equipment. Inc. 411 June 2006 .4 Transfer Defective Product DR2. 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.1 Identify. and Aggregate Product Requirements © Copyright 2006 Supply-Chain Council.4 Produce and Test M3.7 Release Product to Deliver M2.4 Transfer Defective Product DR2. if needed.6 Release Product to Deliver P1.5 Manage Capital Assets ED.4 Transfer Excess Product DR1.4 Transfer MRO Product P4. Remote (Sales.6 Release Finished Product to Deliver M1.5 Manage Deliver Capital Assets EP. Prioritize. Assess.6 Release Product to Deliver M3. Configure.2 Receive. scrap.1 Identify. And Aggregate Supply Chain Resources DR3. None identified PROCESS M1. POG software/field force None identified DR3.2 Receive.BEST PRACTICE Reduce Non-Value Added Paperwork While Still Measuring Process Metrics DEFINITION Electronic data collection of completion. lot tractability.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.3 Produce and Test M3.5 Package M2. Prioritize. Enter & Validate Order ES.4 Package M2. quality. and labor data Reliable Continuous Improvement Process and Methodology.4 Package EP.4 Transfer MRO Product M2. Enter and Validate Order D1.4 Transfer Excess Product DR1. 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.9 Align Supply Chain Unit Plan with Financial Plan EP.3 Produce and Test M1.2 Manage Performance of Supply Chain D2. and Aggregate Delivery Requirements P2.2 Identify. can be funded.

g. sourcing. (From APICS online dictionary.1 Schedule Production Activities M3. 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.1 Schedule Production Activities M3. Inc. color sequencing light to dark) Scheduling utilizing optimization techniques Required production resources included in routing/process instructions M1. The process must reconcile all supply.1 Schedule Production Activities M3.) 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. manufacturing.1 Schedule Production Activities M2.2 Schedule Production Activities M2.2 Schedule Production Activities M3. and new-product plans at both the detail and aggregate levels and tie to the business plan. the sales and operation planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement. marketing.1 Schedule Production Activities ER.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.2 Schedule Production Activities M1.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. Executed properly. cleaning times. and ideal job sequences (e.. covering a horizon sufficient to plan for resources and to support the annual business planning process. The process brings together all the plans for the business (sales. 412 June 2006 .2 Schedule Production Activities M2. demand. It is the definitive statement of the company's plans for the near to intermediate term.6 Manage Return Transportation Schedule Reflects Current Plant Status (Equipment Availability. development. and financial) into one integrated set of plans.1 Schedule Production Activities M1. It is performed at least once a month and is reviewed by management at an aggregate (product family) level.

1 Authorize MRO Product Return D1.13 Receive & Verify Product by Customer D1.12 Ship Product D2.9 Receive & Verify Product at Customer Site D2.6 Route Shipments D1.5 Return Defective Product D2.13 Receive & Verify Product by Customer D3.5 Return MRO Product SR3.12 Ship Product D3.5 Return Excess Product SR1.1 Authorize Excess Product Return DR1.6 Route Shipments SR2. 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 & Select Carriers D2.7 Manage Return Network Configuration DR3. GPS.7 Manage Planning Configuration June 2006 © Copyright 2006 Supply-Chain Council.6 Route Shipments D1. business rules and transaction data. A data warehouse/data mart is the source of all planning (master) data.10 Receive & Verify Product at Customer Site D1. Inc.1 Authorize Defective Product Return DR2.11 Load Vehicle & Generate Shipping Documentation D3. 413 .11 Receive & Verify Product at Customer Site D3.6 Route Shipments & Select Carriers D3.12 Ship Product D2.3 Manage PLAN Data Collection D2. None identified None identified EP. Analyzing tools enable the ongoing maintenance and improvement of the business rules based on actual data.6 Manage Transportation Shipment Tracking None identified Shipment Tracking and Tracing Satellite communications.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 D3.1 Process Inquiry & Quote D1.7 Select Carriers & Rate Shipments D3.7 Select Carriers & Rate Shipments ER. This software then need to provide a report based on the cubic feet of material times distance moved by part number.7 Select Carriers and Rate Shipments D3.1 Process Inquiry & Quote EP.6 Route Shipments EM.

3 Pick Product from Backroom ER. Items. This minimizes restocking effort.4 Establish Delivery Plans D4.5 Manage Deliver Capital Assets M1. This sample is then extrapolated across the inventory population.4 Manage Finished Goods Inventories ES.7 Manage Product Life Cycle EM.4 Manage Product Inventory ER.1 Manage Production Rules ED.4 Manage In-Process Products (WIP) ED.4 Manage Return Inventory D4. 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. and/or substitution Supplier "Cost of Nonconformance" Data is Collected.2 Issue Product M1.5 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 Material M2. customer/supplier alignment agreements. 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. Furthermore.3 Issue Sourced/InProcess Product EP.9 Align Supply Chain Unit Plan with Financial Plan D4. crosssell. Each area of the store has its own stocking plan and items are routed specifically to that area.7 Deliver and/or Install D4.5 Manage Deliver Capital Assets ED.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. 414 June 2006 . None Identified None identified PROCESS EP.2 Manage Production Performance EM. 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.2 Assess Supplier Performance ES.4 Stock Shelf EM.2 Manage Performance of Supply Chain P4. None identified Trained staff or automated systems (Internet) that recommend up-sell. which provides an indicative measure of entire inventory population. Inc. 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.BEST PRACTICE Sound Project Management Process and Methodology Specific Changes to the Plan Are Agreed to Cross-Functionally. industry standards. with extrapolation the net and gross percentage of error is determined.1 Manage Business Rules for Return Processes ED.3 Maintain Source Data © Copyright 2006 Supply-Chain Council.

linkage of Inventory Information “Assess Supplier Performance” is the process of measuring actual supplier performance against internal and/or external standards.5 Verify Product S3.3 Balance Product Resources with Product Requirements P1.4 Establish Supply Chain Plans P1.3 Verify Product ES.5 Verify Product S2.2 Assess Supplier Performance Supplier Performance Data is Collected.5 Verify Product S1. Inc. spanning the supply chain.2 Assess Supplier Performance S3.2 Issue Product M1.2 Select Final Supplier(s) and Negotiate S3. 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.1 Identify.2 Assess Supplier Performance P2. providing feedback to achieve and maintain the performance required to meet the customers’ business and/or competitive needs.3 Verify Product ES.3 Verify Product S2.2 Issue Material M2.3 Issue Sourced/InProcess Product S3.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 .5 Manage Equipment and Facilities ES. Prioritize.1 Identify Sources of Supply EM.I.3 Verify Product S2.2 Issue Sourced/InProcess Product M3.7 Manage Supplier Network S3.4 Receive Product S1.2 Receive Product M1.4 Receive Product S1. Planning Re-planning Business Rules Plan Changes © Copyright 2006 Supply-Chain Council. and Aggregate Supply Chain Requirements None identified Collaboration among Supply Chain partners extends outwards to customers. 415 June 2006 .3 Verify Product S1.2 Receive Product S1.2 Receive Product S2.2 Receive Product S2.3 Verify Product S3.D.(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. 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. Web based relational database / management application Electronic Tag tracking to Point of Use (POU) destination None identified PROCESS S3.

parts listings.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.. crosssell. 416 © Copyright 2006 Supply-Chain Council. Prioritize. etc. Prioritize. Trained staff or automated systems (Internet) that recommend up-sell. Shop floor access to electronic data base of equipment line drawings. and Aggregate Delivery Requirements D4.4 Schedule Excess Product Shipment M3. 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. June 2006 . None identified EM.4 Schedule Defective Product Shipment SR3. and Aggregate Product Requirements P4.4 Establish Supply Chain Plans Advance Planning and Scheduling System Supply Chain Event Management Software None identified P1. parts listing reference guide and part cost lists. and Aggregate Supply Chain Requirements P2. Advance Planning and Scheduling System PROCESS P1 Plan Supply Chain P1 Plan Supply Chain EM. electrical wiring diagrams.4 Manage Return Inventory P3.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.1 Identify. electronic equipment repair history.3 Issue Sourced/InProcess Product ER.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. RFI tag. Each Functional Area Develops Prioritized Recommendations for the Subsequent Planning Period Tools Support Balanced Decision Making (e.5 Manage Equipment and Facilities ES.1 Identify. 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. Inc.g. eBXML.5 Fill Shopping Cart Asset management software using bar code. automatic store room parts purchases. OAGI) to automatically query production capacity and ATP and schedule unplanned orders. Rules for deciding appropriate disposition.5 Manage Equipment and Facilities P1. Digital Linkages using XML standards (RosettaNet.1 Identify.4 Establish Production Plans P4. Prioritize. part stores inventory & reorder points. and/or substitution.4 Schedule MRO Shipment SR1.

1 Authorize MRO Product Return P5 Plan Return P5. Invoice & Receive Payment D2.1 Authorize Defective Product Return DR2.4 Package M2. and Deliver information about the manufacturing process to management using information systems that span the enterprise None Identified © Copyright 2006 Supply-Chain Council.3 Produce and Test M3.15 Invoice D1.11 Invoice & Receive Payment D3.1 Obtain and Respond to RFP/RFQ EP.6 Manage Return Transportation EDI transaction and network services Utilize EDI Transactions to Reduce Cycle Time and Costs EDI interface for 830.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.4 Package M2.12 Invoice & Receive Payment D3.5 Package M1.9 Pick Product D1.15 Invoice D2. and project a revenue stream. predict yield rates for reusable products or components.9 Pick Product ES.7 Manage Planning Configuration D2. None identified None identified None identified PROCESS M3.3 Produce and Test M1. and Aggregate Return Requirements D3.13.3 Schedule Product Deliveries EM. FAX None identified S3.4 Produce and Test DR1.6 Manage Integrated Supply Chain Transportation EP.2 Select Final Supplier(s) and Negotiate D1.1 Assess. 856 & 862 transactions Utilize Enterprise Information Systems Utilize Internet-Based Freight Bidding Built Around Shared Shipping Volume Projections Enter. Inc.3 Manage MAKE Information ER.1 Schedule Product Deliveries S2. 417 June 2006 . Process. 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.1 Schedule Product Deliveries S3. EDI. 850.5 Manage Integrated Supply Chain Capital Assets EP.7 Manage Supplier Network None identified None identified Internet. determine demand in a resale market.15 Invoice S1.

View for Analysis for All Orders and Shipments the Following Data: Logistics. 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. Enter & Validate Order D1.6 Manage Return Transportation D1. Orders can be consolidated by customer.7 Manage Return Network Configuration ER.6 Manage Transportation ER. EDLP. and the inventory is restocked to predefined levels. 418 June 2006 .2 Receive Product ES.5 Build Loads P1 Plan Supply Chain S3.2 Receive.6 Route Shipments D3. The on-site inventory is counted.6 Manage Return Transportation ER. Wave picking consolidates orders into “waves” where multiple orders with similar characteristics are picked at one time.4 Receive Product EM. in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer.7 Manage Return Network Configuration D2. damaged or outdated goods are removed. Enter and Validate Order D1.1 Manage Business Rules for Return Processes ER. In some DC’s.6 Route Shipments D2. orders are scheduled to be picked when they are received.4 Manage Product Inventory M1 Make-to-Stock P4. Prioritize. Inc.5 Build Loads D1.4 Manage In-Process Products (WIP) S2. Cost.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". Configure.2 Receive Product S1.2 Receive. and Aggregate Delivery Requirements ED.9 Pick Product Shared knowledge of resource availability and bottlenecks Activity Based Costing. © Copyright 2006 Supply-Chain Council. Integrated Order Management by Customer by Line Item VMI is a concept for planning and control of inventory.7 Manage Return Network Configuration ER. Product. or any other criteria that makes sense for the DC operation. Re-supply is performed by the vendor through regularly scheduled reviews of the on-site inventory.1 Identify. geography. Cost Plus Pricing Vendor Managed Inventory DEFINITION None Identified None Identified Total return asset visibility throughout the network Shared return forecasts PROCESS ER.

Inc. months.) Reductions of actual quantities of items in stock. The budget serves as a pattern for and a control over future operations. whether purchased or not. This can be as simple as creating shipping documents for finished goods in a make-tostock environment. year. 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..) and may contain data on inventory status. The "master" record for an item. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. functions. A contract may be oral or written. Ground. or in transit. Typically. subassembly. The loss may be caused by scrap. The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. 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. Item records are linked by bill of material records (or product structure records). evaporation. A plan that includes an estimate of future costs and revenues related to expected activities. An EDI notification of shipment of product. 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. month. Rates charged by common carriers to move goods. The commitment should be based on the available-to-promise line (ATP) in the master schedule. including design efforts for make-to-order products A plan that includes an estimate of future costs and revenues related to expected activities. week. etc. 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.INPUTS AND OUTPUTS INPUT / OUTPUT Actual Sales History Actual Shrink Advanced Ship Notice Air.. theft. assembly. etc.) and expressed in any specified increments (per day. planned orders. in process. etc. or freight. etc. The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. it contains identifying and descriptive data and control values (lead times. In the first period. 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. manufactured part. requirements. thus defining the bill of material. 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.. years. deterioration. or it might be a more complicated series of activities.Carrier Rate Tables Approved Contract Approved Item Master DEFINITION Amount of past sales spanning any specified period of time (weeks. and costs. lot sizes. 419 June 2006 . The budget serves as pattern for and a control over future operations.

cost and profit.e. and a cash flow statement. 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. and reporting tools that support strategic and business plans. 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. This process develops objectives usually accompanied by budgets. and bill of materials. Business rules align Return process policies with business strategy. 420 June 2006 .e. activity. which includes the management of critical sub processes needed to manage the life cycle of individual item numbers including item masters. developing and maintaining customer and channel performance standards of an return processes such as service levels. but provides transportation for hire for one or a limited number of shippers under a specific contract. A capacity constraint is often a bottleneck. Rules that are translated into guidelines and policies for conducting business within the enterprise and other legal entities.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. when units consume similar resources at the same rate. project management principles. i. Capacity requirements are usually expressed in terms of hours of work or. i. routings. 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. A process that identifies opportunities for performance improvement and facilitates their realization through the use of metrics. rationalization. Sourcing business rules include: supplier selection and negotiation processes. The rates charged by a carrier that does not serve the general public. fulfillment and delivery performance and relationship definition for specific levels of collaboration and partnership. Rules for conducting business. Courses of action and processes that are established to meet the requirements placed on production by external entities. projected balance sheet. given service requirements by supply chain stakeholders/trading partners. 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. process development methodologies/approaches. goals. Inc. customer satisfaction. units of production. and objectives. The process of analyzing orders to determine the groupings that result in least cost/best service fulfillment and transportation. 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.

customer preferences including shipping. Weight. customer preferences. numbers and rings. status. frequency of visits. which include address data. credit for the cost of the item. recurring. etc. 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. repair of the repairable item. Includes: the amount of direct materials. which includes history. The options available on the return of a repairable item. time frame. Corporate objectives are the goals and mission of an organization. etc. Measure of customer satisfaction with products and service. All the provisions and agreements of a contract. Report that portrays a potential customer's payment history and debt. these criteria determine type of carrier and cost of shipment Customer profile. Customer manages carrier selection. which includes history. status. and delivery requirements. customer preferences. 421 June 2006 . Contracts that customers have with specific freight carriers through which suppliers have to work for the delivery of products. Inc. 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 payment of carrier. The options available on the return of a repairable item. A promise in a contract that binds one to a specific course of action. shipment of purchased product. direct labor. Coupled with cube and route. receipt of a serviceable item from stock. and allocated overhead. credit for the cost of the item. cost. receipt of a serviceable item from stock.INPUT / OUTPUT Contract Status DEFINITION Customer profile. The cost to produce and item during a given period of time. credit and purchase histories. indicating the ability to pay in a timely manner in the future. Customer profile. and delivery requirements. etc. An order from a customer for a particular product or a number of products. status. Customer profile. which include address data. repair of the repairable item. includes customer profiles. etc. and requests for quotes. These promises maybe made by either the buyer of seller. and delivery requirements. 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. General customer inquiries for information concerning products. and delivery requirements. availability. and Freight Class Customer Profile/Data © Copyright 2006 Supply-Chain Council. credit and purchase histories. status. what purchased. It is often referred to as an actual demand to distinguish it from a forecasted demand. Input to customer profile. customer preferences including shipping.

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

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

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

supporting activities (maintenance. fluctuation (safety. 425 June 2006 . and control. Those stocks or items on hand used to support production (raw materials and work in process items). Contains the plan for total inventory limits or levels (including Raw Material. both inter and intra company. which are usually components or raw materials. In business management. Interrelated computer hardware and software along with people and processes designed for the collection. Inventory functions are anticipation. customer. ownership. maintaining. businesss rules and outputs for a new system. and stocking locations. whether raw materials. Maximum rate of output for the inventory managment and warehouse process Stored products or service parts ready for sale. hedge. The organic capability of an organization to produce output per time period. collecting.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. Inc. or finished products including order quantities and safety stock levels. decision making. which defines the system parameters with which to effectively plan and execute using ERP (MRP. and customer service (finished goods and spare parts). items. buffer or reserve). supporting activities (maintenance. The rules that determining the desired levels of items. inventory consists of a list of goods and materials held available in stock. The total supply chain inventory strategy. Communication of courses of action over the appropriate time-defined planning horizon and interval. and customer service (finished goods and spare parts). destinations. i. representing a projected appropriation of supply chain resource and input material to meet supply-chain requirements as they affect the customer. or finished products. Work In Process. Also. work in process. 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. Finished and Purchased Finished Goods) including replenishment models. files. and dissemination of information for planning. transportation (pipeline). weight. an service parts. A record of specific information for each product. but without expressing computer alternatives and technical details. Specifying the inputs. and communicating information and masterdata to support planning and execution processes. 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. Information relative to a load that is built and shipped. The standalone product is fully functional upon completion. The activities and techniques of determining the desired levels of items. repairs and operating supplies). as distinguished from stores. supporting activities (maintenance. etc) systems. and operating supplies). product mix. those stocks or items used to support production (raw materials and work-in-process items). repairs and operating supplies).e. work in process. processing. The process of preparing. whether raw materials. 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. testing and installing the product at the customer site. repair. Determination of the time required from the receipt of the order until the item should be delivered. Demand for inventory maybe dependant or independent. but there may be requirment for subseqent integration. 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). cycle (lot size). processing.

Customer profile. See “Product Return Capagilities” Maintenance. Carrier selection and management for inbound or outbound shipments (linked to terms of delivery) On-line orders that are missing due to internet. including custom products that are designed. replacements. developed. and delivery requirements. which establishes an allowance or deduction. Procedures. Inc.INPUT / OUTPUT Load. and loading for shipment. and basic cleanliness. 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. and produced in response to a specific customer request. merchandising objectives and strategies. verify the shipment and customer credit information. trade officials. projects. government. etc. Shipping. The scheduled activities. budgets.e. Repair and Overhaul spare parts used to support of operations and maintenance. Part of the Market Plan. and products. Methods. etc. etc. Processes MRO Disposition Request MRO Parts Availability MRO Product Return Capabilities MRO Products © Copyright 2006 Supply-Chain Council. etc. programs. higher average ring. and (usually) quantities held for quality problems. Reports which provide management with the process information required to evaluate prescribed activities to ensure that the stated objectives of a project. such as parts that retain their identity through the transformation process and are intended to be completed after receipt of a customer order. based upon paying early. Indication of quality in workmanship and design. including adjustments. action plans. 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. status. 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. Merchandise Category/Classification Merchandising Plan (SUPPLIER) Methods. The categorization of goods based upon the range of specifications met during the manufacturing process. backorders. It includes packaging. The on-hand MRO inventory balance minus allocations. Verify. manufactured good. Also. 426 June 2006 . Request disposition instructions for an MRO item from the Supplier. usually when the buyer meets certain stipulated conditions that reduce the price of the products purchased. components. Customer selected retail finished goods transferred to the point of sale. More units. opportunity and issue analysis. and pro forma profit and loss statement and management controls. that are recommended by the manufacturer to forestall machine breakdowns.) when planning for the Return and Recovery of Assets. granted by the seller to the buyer. The merchandising plan includes the current market position. which includes address and location data. credit and purchase histories. weighing. or service are achieved. or hardware malfunctions. customer preferences including shipping. reservations. marking. For example. software. buying in quantity. procedures and processes required to produce distinct items.

from a service provider. generally (may be manual) through the use of bar-coding. Execution information necessary to plan the balance of supply chain resources to demand requirements at both the highest aggregate and lowest SKU planning levels. The process of authorizing payments and paying suppliers for product or services. In addition to discussing the MRO issue. The relief of inventory and computation of sales data at the time and place of the sales. specifications for products and services. Planned and scheduled activities. based on failure consequences.) A planned series of actions or operations that advances returns from one stage to another. packaging. so the order can be finalized and entered into the order system. This process includes invoice collection. it is usually considered an offer to sell. and interplant operations. handling. distribution centers. that forestall machine and facility breakdowns. Payment at the time of order. 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. entering. An unfilled customer order or commitment. the customer and service provider would discuss enabling conditions such as return replacement or credit. A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand. approved. . A statement of price. When given in response to an inquiry. Transportation modes are selected and efficient loads are built. for the return of an MRO product. replacements.INPUT / OUTPUT MRO Return Authorization Request DEFINITION The process of a customer requesting authorization from a service provider. Data required to develop and build a Plan-O-Gram display to help minimize setup time by showing specific placement of all items. terms of sale. Orders that have been received and entered into the order processing system and are in a queue waiting to be processed and shipped. performance expectations. invoice matching and the issuance of checks. Also. on the display. the established frequency to change and maintain parts. 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. Any company policies that affect how a planning process is defined. Reserved inventory and/or planned capacity and delivery date for a specific order. and description of goods or services offered by a supplier to a prospective purchaser. The function encompasses receiving and entering all data necessary on orders. or established procedures to manage and execute all activities in the process. transportation and import / export requirements to facilitate the efficient return of the MRO product to the service provider. The items and services utilized to manufacture a product. including adjustments. and basic cleanliness. a bid. maybe partial or in full. or magnetic media and equipment. Receipt of payment for goods and services per contract or purchase order. Inc. The customer may need to go through several return authorization iterations with multiple service providers before authorization is received. Outsource Plans can vary in detail from simple policy statements to highly detailed plans with specifics about the third party business partners. (Well cared for equipment and facilities will last longer and cause fewer problems. Rules for the function that encompasses receiving. 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. and promising orders from customers. with frequency set per part or machine type. and performed. by product number. and contract considerations. The process of a customer obtaining authorization.

428 June 2006 . information or services. lot size and setups. Inc. and cost. or the number of products ready to be or planned to be shipped to the specific customer or market at the specific time. The time from initial research and development to the time at which the sales and support of the product to customers are withdrawn. As a whole with constituent parts. relevant tolerances. 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. raw material. work center identification. any element or factor that constrains the system or resources from achieving a higher level of performance in respect to its goal. As a whole with constituent parts. product mix. work in progress and finished goods. A statement of the output of a production facility for a specified period. all material and other resources used to add value in the supply chain for a product or services. comparing planned to actual production.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. Product on order with a selected source. The highest. etc. Claims are marketing information provided as to performance. plant. Key elements of proper Routings include proper sequence of operations. © Copyright 2006 Supply-Chain Council.g. aesthetics. 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. Production Plan includes production capability. or the portfolio of products the company has to cover the targeted customer need and the plans of how to manage that portfolio. all sources of demand for a product or service in the supply chain. or the signal that sends the estimated need of parts or services to the supplier. scheduled or available for sale. sustainable output rate which can be achieved with the current product specifications. The physical storage location where product inventory is held in stock prior to use or shipment. Attributes of the product's storage location. including e. Product routings represent the way products are made and are integrated with the Bill of Materials. worker effort. The equivalent concepts for services are the workflow processes and rules.g. The target for the total product inventory. 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. as well as its actual performance. The ability the supply chain has to return products in a valid and accurate way. run times. 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). The end object of a transformation process that includes physical objects. and equipment. The properties and characteristics of a product (e. A master production plan used to allocate capacity among manufacturing resources and schedule finite manufacturing activities or executing the performance of a service. and. The product design is the translation of a set of functional requirements into an operational product that meets both the enterprise and customer expectations. The capability of a system or resources to produce a quantity output in a particular time period.

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. mode. 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. all things that add value in the creation of a product or performance of a service. For example. including: damage. trial or purchase by final customers or others in the marketing channel. Feedback on the production schedule allowing for corrective action to a production problem.e. providing feedback to achieve and maintain the performance required to meet the customers' business and/or competitive needs. Information. the extent to which the supplier delivers according to quality specification (e. the fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point.other than advertising.g. a percentage of parts produced without a need for adjustment or repair. or the quality of the production. should the parts be shipped one by one or in bulks etc. The plan for a promotional product offering and how it is communicated to the customer and includes public relations. for shipments." or an estimate of the customer delivery requirements of a product or service. lane. sales promotions. The policy is sometimes stated as "our quoted delivery time. and Documents DEFINITION The operational techniques and planned and systematic activities used to fulfill requirements for quality in the production process. sales promotions. 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. government. advertising. Collecting data and organizing. A plan that authorizes the factory to manufacture or repair a certain quantity of a specific item. Shipments subject to defined and established rates A collection of related receipt data records organized in a specific manner. etc. Contract rates and tariffs from carriers by commodity. correct packaging etc). packaging. etc. Notification of a discrepancy relating to a receipt. etc. logistic quality) and to delivery specification (in time. Inc. Or. e. interest. and other tools to persuade customers to purchase the product offering during the year. In a fixed-reorder quantity system of inventory control.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. publicity. Requirements dictated by process standards set by external entities (i. Sometimes these two metrics are connected in one. advertising. as defined by the company. which kind of packaging. 429 June 2006 © Copyright 2006 Supply-Chain Council. Promotion activities .g. As a whole with constituent parts. The production policy indicates standard rules on how the production quality should be secured. Any signal that indicates when to produce or transport Items in a pull replenishment system.). trade officials. 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. Acknowledgement that the product received conforms to specified requirements and criteria. . Time phased promotion / event tasks where the product offering is communicated to the customer and includes public relations. arranging or presenting the data so that they yield an understanding not available from any single data element. product quality. and personal selling that stimulate. quantity.

the network configuration. 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 the available resources at a point in time able to generate an output. Corresponding Projections. The properties. Source. i. or MRO product. Performance measurement information for the Return Process (the actual value of measured for the criterion). including failure information. All resources that add value to. The process of receipt and verification of the returned item against the return authorization and other documentation and prepares the item for transfer. execute. 430 June 2006 . & 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. 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. excess inventory and/or serviceable or obsolete products. customer. Guidelines. Inventory relative to return process available for transfer to other destination. given service requirements by supply chain stakeholders/trading partners. An update to the aggregate Supply-Chain Forecasts of Demand by Product Family supporting the Market/Channel Plans. A list of operations and procedures for scheduling the return of product. 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. Inventory and Response Time Plans through the Supply-Chain are produced from these Forecasts Together. Inventory relative to return process available for use. The business rules that govern the flow of unserviceable material through the network. Data relative to the return process utilized to compare the company's actual results to selected values identified as reference. or overhaul. The return history of product including failure rates. The storage location of those items being returned. Rules and policies align the Return process with the organization's business strategy.e. failure causes. Return requirements dictated by process standards set by external entities (i. government.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. excess. Data concerning the return and disposition of defective products. goals and objectives. all sources of demand in the creation of a product or service. developing and maintaining customer and channel performance standards of return processes such as service levels. As a whole with constituent parts. or constrain the processes for the return of a product. Inc.). etc. Product being returned that is in a defective condition. The goals and approach to the management of return inventories. policies and agreements for the transportation activities around return process.e. © Copyright 2006 Supply-Chain Council. Deliver.e. they represent balanced Supply and Demand. etc. repair. trade officials. characteristics and information relating to returns. obsolete. The physical location where the returned product inventory is held prior to disposition As a whole with constituent parts. all sources of demand for the return of a product. Rules and Policies for conducting business. MRO. etc. after communicating with the customer. i. Product being returned for maintenance. Policies. supporting Make.

. Performance targets in service related measures (i. etc. Shipping parameters.A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors. etc. bill of lading. way bill.). A revision to plan for capital expenditures necessitated by either changes in specific business plans or factors and assumptions affecting a business plan. Request for Quote . Product due to arrive. export papers.) compared to the established service requirements. etc... etc. 431 June 2006 © Copyright 2006 Supply-Chain Council.. cube and route decide carrier and cost. Customers who are satisfied with the product or service delivered by the suppliers. Request for Proposal . Data about the destination of a retun delivery. bill of lading.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. The process of evaluating the design and build schedules relative to customer requested installation date to determine installation schedule. 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.g. Planned or scheduled returning of material deemed in excess of current requirements for some certain time or times. quality. etc. export papers. An aggregate material requirements plan used to schedule material deliveries to meet production plan. Service levels are established by balancing requirements against operational strategy. 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.) are required. such as weight..). A set of minimum acceptable values that describe service requirements of a particular industry.A document used to solicit vendor responses when the functional requirements and features are known but no specific product is in mind. status. carriers & rates. Scheduling of direct deliveries of material to a specified location on a plant floor near the operation where it is to be used.g. cost. and customer profile. All sources of demand in the Source Return of a product or service. Information used to select modes.g. Legal documentation of the contents of a shipment (e. Planned or scheduled act of installing something for some certain time or times. transportation lanes. Listing or routes. bill of lading. Transactions related to sending the product to the customer. credit and purchase histories. Legal documentation of the contents of a shipment (e. including the aspects such as time. way bill. . and/or customer segment. Permission to scrap material or item outside of specifications and possessing characteristics that make rework impractical. which includes address data. way bill. and delivery requirements.. Routes for shipping by consolidating loads. etc. Customer preferences including shipping. Shipping and documentation requirements established by a government which must be met before allowing the shipping or delivery of a product across national boundaries. These are reviewed periodically with actual results to verify the linkage of actual cause and effect. The transaction history of the physical shipment of an item to another internal location or to a customer. delivery performance. size. etc. available carriers. channel. Legal documentation of the contents of a shipment (e. lead times. export papers.

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

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

in the correct quantity. 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. at the correct time. The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage. in the correct condition and packaging. Level 1 Metrics do not necessarily relate to a SCOR Level 1 process (PLAN. to the correct place. DELIVER. SOURCE. 434 June 2006 . Inc. The speed at which a supply chain provides products to the customer. This includes the management of all assets: fixed and working capital. The costs associated with operating the supply chain. 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. The effectiveness of an organization in managing assets to support demand satisfaction. to the correct customer. high level measures that may cross multiple SCOR processes. RETURN). with the correct documentation. MAKE.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.

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

3) and the satisfaction of that commitment (Receipt and Installation (as appropriate) – D1. all of the individual components must be perfect.15). For an order line to be perfect.14. D3. A delivery is considered perfect if the location. In addition.Assess Delivery Performance (ED. D1. 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.13. D3. complete. D 2. • It receives a score of 0 if not perfect. D2. The Perfect Order Fulfillment calculation is based on the performance of each Level 2 component of the order line to be calculated (product & quantity.13. specified customer entity and delivery time ordered is met upon receipt (Delivery Performance to Customer Commit Date). invoices. customer ready. Documentation supporting the order line is considered perfect if it is all accurate. 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. D3. If the sum of the scores equal the number of components (in this case. Components include all items and quantities on-time using the customer’s definition of on-time. the documents necessary for support of the supply chain process should be scored across the set of Deliver process elements. and is accepted by the customer (Perfect Condition) Quantitative Relationship (optional.2. The Enable Deliver Process Element . D3. with no damage. an Order is Perfect if the individual line items making up that order are all perfect. © Copyright 2006 Supply-Chain Council.15.11. D2. etc.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. and documentation – packing slips. date & time & Customer. 4) the order line is perfectly fulfilled. bills of lading. These are primarily associated with the original commitment (Customer Order Processing – D1.13. D2. D3. 436 June 2006 .2) should be updated from metrics derived.11. if calculable) Calculation [Total Perfect Orders] / [Total Number of Orders] x 100% Note. documentation and condition). Inc. D1.14. The product condition is considered perfect if the product is delivered / faultlessly installed (as applicable) on specification.15.11. with the correct configuration. 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).2. D2.14. and on time (Accurate Documentation).

of course. For an order to be considered perfect the following standards must be met: • Delivered complete. a range rather than a strict value is used. invoices. 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. using the customer’s definition of on-time delivery • Documentation supporting the order including packing slips. © Copyright 2006 Supply-Chain Council. bills of lading. is complete and accurate • Faultlessly installed (as applicable). in those situations the standard measured is considered to be met perfectly if the range specified is satisfied. all items on the order line are delivered in the quantities specified • Delivered on time to the initial commitment date. quality certifications. Although condition may not be as rigorously measured as time or quantity it should be considered as a component if available. dates. Often for date and quantity issues (and occasionally product). where an order line is defined as a line representing a commitment on a sales order. This is acknowledged as a standard practice. Order changes initiated by the customer and agreed to by the supplier supersede initial commitments and form a new comparative basis for the metric..Discussion The performance of the supply chain is considered “perfect” if the original commitment made to a customer is met through the supply chain. ultimately measured by its customers. customer-ready and accepted. An order line always references a product or service. especially since this attribute measures performance of the supply chain which is. no damage. 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. correct configuration. and quantities. 437 June 2006 . etc. 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. 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. on specification Orders canceled by the customer are excluded from the metric.

D.13) Discussion Order quantities are based on item / quantity original commitments agreed to by the customer. committed quantities refer to a range that is acceptable to the customer rather than a strict value. 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. Order changes initiated by the customer and agreed to by the supplier supersede original commitments and form a new comparative basis for the metric. D3.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. 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’ (D1.3.12. M3. D2.13. such as for supplying bulk materials. This metric has no “timing” element.3 & D3. and no extra items are provided • All quantities received by the customer match the order quantities (within mutually agreed tolerances) Quantitative Relationship (optional. and the satisfaction of that commitment through the shipment and customer receiving processes (D 1. D1. In some cases.12.1. M2.13. Inc.1. such that orders deliberately split by the supplier should still be considered “in full” so long as all metric criteria are met. Orders canceled by the customer are excluded from the metric.2.4). 438 June 2006 . D3.12.3). inventory availability (M1. (ED.1) including inventory location accuracy. D2. Several SCOR diagnostic metrics exist that can be used to focus “% In Full” improvement efforts.

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

This metric has no “In Full” element. The original commitment date can refer to a range. advanced shipments). © Copyright 2006 Supply-Chain Council. D2. and the satisfaction of that commitment through the shipment and customer receiving processes (D 1. Several SCOR diagnostic metrics exist that can be used to focus delivery performance improvement efforts. 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.13.g. rather than a strict date and time.3. 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. can be an important measure of customer satisfaction. Transportation availability).12. Orders canceled by the customer are excluded from the metric. D2.12. The acceptable window for delivering on time should be defined in the customer’ service level agreement. Inc.3). 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. D1. D3.3 & D3.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.13.13). D2. Measuring the frequency of accepting the customer’s original request date. such that partial deliveries can still be considered as meeting the Customer Commit Date so long as all metric criteria are met. commit date. Discussion Order delivery performance from a timing perspective is based on original commitments agreed to by the customer.12. that is acceptable to the customer (e. Orders may also be delivered late due to carrier delivery performance / issues. 440 June 2006 . D3. vs.g.

or warranty/returns database. D1. installation (as applicable) and satisfaction of the order commitment (D1.13.14. Inc. have the correct configuration. D3.2) should be updated to reflect this metric and its components. are faultlessly installed (as applicable).Performance Attribute: Supply Chain Reliability Level 2 Metric: Perfect Condition Metric Definition Percentage of orders delivered in an undamaged state that meet specification. 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. 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. D2.13. The Enable Deliver Process Element . D2. This data is typically available from a complaints.14. 441 June 2006 . claims.14). D3.Assess Delivery Performance (ED. © Copyright 2006 Supply-Chain Council.13.

assesses the quality of products delivered through the supply chain from the customer’s perspective. Justified and non-justified product quality issues. calculated at the order level. 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. Some of these include: • Cost of Noncompliance • Damage and Shrinkage • Scrap Expense • Warranty Costs • Yield Variability © Copyright 2006 Supply-Chain Council. Inc. Improving this metric lowers the supply chain cost associated with claims and returns.Discussion This metric. 442 June 2006 .

bills of lading. correct. and readily available when and how expected by the customer. Quantitative Relationship (optional. Government and other supply chain regulatory entities. 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. etc.Performance Attribute: Supply Chain Reliability Level 2 Metric: Documentation Accuracy Metric Definition Percentage of orders with accurate documentation supporting the order. invoices. 443 June 2006 . including packing slips. 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.

D3. and delay the customer’s acceptance of the order. Inaccurate or late shipping documentation may prevent the product to be loaded or shipped. However. and ‘Invoice’ (D1. 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. D3. D2.11. Inc. Government. D2. and other regulatory entities. The timeliness and quality of the documentation is measured from the perspective of the customer.15. Inaccurate or late invoices may also lead to the inability to fulfill the customer request.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’ (D1.11.15. on-time documentation implies a scheduled ship date and scheduled invoice date. 444 June 2006 . The definition encompasses On time and Accurate documentation. increase the customs delay.11). 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. Documentation may be late or incomplete due to the inability to prepare / process the correct documentation on time.15).

445 June 2006 . which is imposed by customer requirements’. The responsiveness of the organisation is determined by the cumulative cycle time for all activities that are required to fulfill the order. 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. Order fulfillment dwell time is defined as ‘any lead time during the order fulfillment process where no activity takes place. this gross order fulfillment cycle time does not truly reflect the responsiveness of the organisation. so Order Fulfillment Cycle Time will equal Order Fulfillment Process Time. the gross fulfillment cycle time will be 96 days. the fact that the customer pre-orders does not reduce the responsiveness of the organisation. Inc. If the customer places the order 3 months ahead (pre-ordering). For each individual order. 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. Note that dwell time will equal 0 for companies who do not utilize this metric. but should exclude any dwell time where no activity takes place. However. according to the following formula: Order Fulfillment Cycle Time = Order Fulfillment Process Time + Order Fulfillment Dwell Time. this cycle time starts from the order receipt and ends with customer acceptance of the order. If the customer places the order one day in advance. 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. which is caused by inefficiencies in the organization’s processes and therefore ultimately under responsibility of the organisation. On the contrary. 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.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. Note that this dwell time is different from ‘idle time’ or ‘non-value-add lead time’. This kind of idle time should not be deducted © Copyright 2006 Supply-Chain Council. It represents all the time passed between these two events. 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. As such. the gross order fulfillment cycle time will be seven days. Take for example an organisation that needs six days to fulfill a certain customer order. Therefore the definition of Order Fulfillment Cycle Time consists of a ‘gross’ component and a ‘net’ component named Order Fulfillment Process Time. Make and Deliver process elements.

Dwell time is mostly associated with the ordering process. but also to all lower level metrics. 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). © 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.from the gross order fulfillment cycle time. consisting of the net component and dwell time. but is requested by the customer to wait (for example to follow a certain shipment schedule). but where the actual steps in the order fulfillment process take place later on. It is also common in the delivery process where the organisation may be in principle ready to ship the product/service. This means that each lower level metric can have a gross component. Inc. Note that for those organisations where dwell time does not play a role. The concept of dwell time applies not only to the level 1 metric. 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. 446 June 2006 . 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. as this is the cycle time reflecting most accurately the responsiveness of the organisation. where a customer may place an order in advance to reserve capacity/materials etc.

S2. 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 . Inc. 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. make-to-order or engineer-to-order. 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.Performance Attribute: Supply Chain Responsiveness Level 2 Metric: Source Cycle Time Process Numbers: S1. 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. S3 Metric Definition The average time associated with Source Processes. (The same hereinafter) Qualitative Relationship Description Quantitative Relationship (optional.

e. while when make-to-order or engineer-to-order is deployed. And also. when make-to-stock strategy is deployed. so the “least amount of time” should be applied rather than the total sum. M3 Metric Definition The averag