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SCOR Model

(Supply Chain Operations Reference)

Aug 2010
Supply Chain Council & SCOR
 SCOR - Developed by Supply Chain Council (SCC)

 SCC: Organized in 1996 by


 Global management-consulting firm, Pittiglio Rabin Todd &
McGrath (PRTM) and
 Market research firm, Advanced Manufacturing Research (AMR) in
Cambridge, Massachusetts.
 Started with 69 voluntary companies

 SCC Objective
 To develop a standard supply-chain Process Reference Model
enabling effective communication among the supply chain
partners, by
 Using standard terminology to better communicate and
learn the supply chain issues
 Using standard metrics to compare and measure their
performances
Supply Chain Council & SCOR
• “The SCC is an independent, not-for-profit, global
corporation with membership open to any organization...”
• About 1000 Company Members
• Cross-industry representation

The Supply-Chain Council (SCC) has developed


and endorsed the Supply Chain Operations
Reference-model (SCOR)
• Process Reference Model
•Cross-industry standard for supply chain
management
What is a
Process Reference Model?
 SCOR describes processes not functions. In
other words, the Model focuses on the activity
involved, not the person or organizational
element that performs the activity.

 Process Reference Model integrates the well-


known concepts of business process
reengineering, benchmarking, and process
measurement (metrics) into a cross-functional
framework
SCOR - Process Reference Model
Integrates Business Process Reengineering, Benchmarking, and
Process Measurement into a cross-functional framework.

Business Process Best Practices Process Reference


Reengineering Benchmarking Analysis Model
Capture the “as-is” state
Capture the “as-is” of a process and derive
state of a process the desired “to-be” future
and derive the state
desired “to-be” Quantify the
future state operational
performance of Quantify the operational
similar companies performance of similar
and establish companies and establish
internal targets internal targets based on
based on “best-in- “best-in-class” results
class” results Characterize the
management Characterize the
practices and management
software solutions practices and
that result in “best- software solutions
in-class” that result in “best-in-
performance class” performance
Original SCOR Plan
Processes Source Make Deliver

Personal Computer E.g. Desktop


Production
(S, M, D)
Laptop
Production
(S, M , D)
Monitor
Laptop Production (S, M, D)
Retailers
(S, D)
Laptop
Distributor Desktop
(S, D) ACME
Retailer
Taiwan (D)
Semiconductor (S, D)
Distributor
(S, D)

Semiconductor
Manufacturer
(S, M, D)
Evolved
SCOR Processes
Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Return Return Return Return Return Return


Return Return
Suppliers’ Supplier Your Company Customer Customer’s
Supplier Customer
Internal or External Internal or External

SCOR Model

Building Block Approach

Processes Metrics
Best Practice

Plan-Source-Make-Deliver-Return provide the structure of the SCOR-model


SCOR Process Modeling
European
Supplier

S2 M2 D2

S2
M1 D1 S1 D1

S1

Key Other S1 M1 D1
RM
Suppliers
Manufacturing Warehouse
RM Supplier Company Distributors
Plan-Source-Make-Deliver-Return

SCOR Processes
 Plan (Processes that balance aggregate demand and supply to develop a course of
action which best meets sourcing, production and delivery requirements)
 Balance resources with requirements
 Establish/communicate plans for the whole supply chain

 Source (Processes that procure goods and services to meet planned or


actual demand)
 Schedule deliveries (receive, verify, transfer)

 Make (Processes that transform product to a finished state to meet planned or actual
demand)
 Schedule production

 Deliver (Processes that provide finished goods and services to meet planned or
actual demand, typically including order management, transportation management, and
distribution management)
 Warehouse management from receiving and picking product to load and ship
product.

 Return (Processes associated with returning or receiving returned products)


 Manage Return business rules
Plan-Source-Make-Deliver-Return

• Demand/supply planning
– aggregate and prioritize demand
requirements, plan inventory,
plan distribution requirements
Plan
• Manage Planning
infrastructure
– supply-chain configuration, long-
term capacity and resource
planning, business planning,
product phase-in/phase-out,
end-of-life management
Plan-Source-Make-Deliver-Return

• Sourcing/material
acquisition
– Obtain, receive, inspect,
hold, and
Source issue material
• Manage sourcing
infrastructure
– Vendor certification,
sourcing quality, in-bound
freight, vendor contracts,
initiate vendor payments
Plan-Source-Make-Deliver-Return

• Production execution
– Request and receive
material, manufacture (repair)
and test product, package,
Make
hold and / or release product
• Manage make
infrastructure
– Engineering changes,
facilities and equipment,
production status, production
quality, shop scheduling

*Source: The Supply Chain Council


Plan-Source-Make-Deliver-Return

• Order management
• Warehouse management
• Transportation and
Deliver installation management
• Manage deliver
infrastructure
– Manage channel business
rules, order rules, manage
deliver inventories, manage
deliver quality
Plan-Source-Make-Deliver-Return

 Handling of returns

 Return Source
 Activities associated with returning
material to a supplier including the
communication with the trading partner,
the generation of documentation, and the
physical return / shipment of product.
Return
 Return Deliver
 Activities associated with receiving and
disposing of returned material from a
customer including the communication
with the trading partner, the generation of
Reverse Logistics documentation, and the physical return /
receipt and dispositioning of product.
SCOR is a hierarchical model

SCOR
SCOR Levels
Level

# Description Schematic Comments


Supply Chain Operations Reference model

Plan
1 Source Make Deliver
Level 1 defines the scope and content for the Supply
Top Level Chain Operations Reference model
Return
(Process Types) Return
Here basis of competition performance targets are set

2 A company’s supply chain can be “configured-to-


Configuration order” at Level 2 from approximately30 core “process
Level categories.”
(Process Companies implement their operations strategy
Categories) through their unique supply chain configuration.

3 Process Level 3 defines a company’s ability to compete


Element Level successfully in its chosen markets and consists of:
(Decompose • Process element definitions
Processes) • Process element information inputs and outputs
P3.1
• Process
• performance metrics
Identify, Prioritize, and Aggregate
• Best practices, where applicable
• System capabilities required to support best
Production Requirements
P3.3 P3.4

P3.2
Balance Production Resources with
Production Requirements
Establish Detailed
Production Plans
practices
Identify, Assess, and Aggregate

Production Resources

Companies “fine tune” their Operations Strategy at


Level 3

Companies implement specific supply chain


4 Implementation management practices at this level
Not Level
in (Decompose Level 4 defines practices to achieve competitive
Scope Process advantage and to adapt to changing business
Elements) conditions
SCOR – Level 1 Process
SCOR – Level 2 Process

Identify, Prioritize and Aggregate Supply Chain Requirements

Identify, Prioritize and Aggregate Supply-Chain Resources

Balance Supply Chain Resources with SC Requirements

Establish & Communicate Supply-Chain Plans


SCOR – Level 2
SCOR - Level 3
Supply Chain Operations Reference
Model (SCOR)
 The Primary Use of SCOR:
 To describe, measure and evaluate supply chain configurations.
 SCOR contains:
 Standard descriptions of management processes
 A framework of relationships among the standard processes
 Standard metrics to measure process performance
 Management practices that produce best-in-class performance
 Enables the companies to:
Evaluate and compare their performances with other companies
effectively
Identify and pursue specific competitive advantages
Identify software tools best suited to their specific process
requirements
SCOR Boundaries
 SCOR applies to

 All supplier / customer interactions


 Order entry through paid invoice
 All physical material transactions
 From your supplier’s supplier to your customer’s
customer, including equipment, supplies, spare parts,
bulk product, software, etc.
 All market interactions
 From the understanding of aggregate demand to the
fulfillment of each order
 Returns
SCOR Boundaries
 SCOR does not include:
 Sales administration processes
 Technology development processes
 Product and process design and development
processes

 SCOR assumes but does not explicitly


address
 Training, Quality, Information Technology (IT)
administration (non-SCM)