Professional Documents
Culture Documents
1
IMS-LAPS/GRAI, University of Bordeaux, UMR 5218 CNRS - 351 Cours de la Libération, 33405 Talence, France
2
LISTIC, University of Savoie, BP 806 - 74016 Annecy cedex, France
Email: {yves.ducq@laps.ims-bordeaux.fr; lamia.berrah@univ-savoie.fr}
Abstract: Complex Supply Chains cannot be controlled without a coherent decision system and a coherent
set of performance indicators. So, first of all, this paper presents a decision system model using GRAI
method. This model is presented at the global level (i.e. the whole supply chain level) and at the local level
(i.e. the level of each company of the chain). Then, performance indicators are proposed at both levels, using
ECOGRAI Method. But in order to collect and aggregate such performance indicators at the global level, it is
necessary for the various companies to use compatible decision support system. This leads to an
interoperability problem which is highlighted in the last part of this paper, insisting on solutions to solve this
problem.
Keywords: Supply Chain management - SCM, Performance Measurement System - PMS, SCOR model,
GRAI model, Interoperability.
control it. In this sense, the involved indicators must be Second, the aggregation operator must be “significant” w.r.t.
enriched by the knowledge of the links between them (Lohman the elementary expressions. For example, if the aggregation
et al, 2004; Cliville et al, 2007). Therefore, the interest for an operator is the arithmetic mean, the significance condition is
overall performance expression for all or a part of the SC is translated into the following proposition: for each criterion,
acknowledged, as is the case for process control in individual the same difference between two values must have the same
companies. More precisely, for a SC, this expression helps meaning (e.g. [0.8 - 0.5] and [0.4 - 0.1]). This condition
decision-makers to (Chan et al, 2003): ensures that an elementary performance can be compensated
compare different organizations (e.g. the localization of by another one (Krantz et al, 1971).
the warehouses), Besides, the problem of SC performance measurement cannot
manage and improve the whole SC (e.g. a change of be only focused on the definition of PMS’s but also on their
supplier, the transition from make-to-stock to assembly- implementation. According to the second condition
to-order…), mentioned before, the main problem is to make the PMS’s
evaluate effect of local actions on the whole software communicating in order to calculate the aggregated
performance, performance expression at the SC level. This communication
benchmark all or a part of the SC (e.g. the delivery implies not only an “interoperability” from an IT point of
reliability is worse than the median of the class). view but also the necessity to have coherent performance
expressions in the database of each company in order to
But in order to implement such performance evaluation, two express the global performance by aggregating them.
conditions must be satisfied:
the coherent definition of the performance expressions, This study presents some reflections about the notion of PMS’s
both local and global ones, “interoperability” in a SCM context. More precisely, the aim of
the “interoperability” of decisional tool components this work is to think about the necessary conditions to the
(ETL, datawarehouse, OLAP). definition of indicators and aggregation mechanisms in a SCM
context. So, we present first some modelling principles and
The first condition is related to the performance structure, points of view around both the global control of a SC and the
which is widely considered in the literature. Most of the local control of each of the involved companies. These
Performance Measurement Systems – PMS’s - proposals are principles are mainly based on both the SCOR model and the
logical frameworks for linking strategic objectives, GRAI Methodology, these approaches being complementary.
structuring the tactical and operational criteria affecting them We suggest thus how they can be combined. The fourth section
(Ravelomanantsoa, 2006). For instance, the SMART (System concerns reference models for the global and local controls
Measurement Analysis and Reporting Technique) model using the concepts of the two described models. We propose
proposes to break down the objectives of the company along then performance indicators associated to the global and local
four levels – company, business units, business operating controls. Finally, we focus on some elements to ensure
units and departments and work centres - according to ten interoperability in the SC, in particular thanks to enterprise
measures such as delay, quality, customer satisfaction… models. For concluding, we discuss about the main challenges
(Cross et al, 1989). The ABC/ABM (Activity Based to have a coherent and efficient SC and in particular the need of
Costing/Activity Based Modelling) model identifies the interoperability between chain members at different levels.
activities and processes which generate value in the company
(Brimson, 1991). The BSC (Balanced Scorecard) defines four 2. SCM: GLOBAL AND LOCAL POINTS OF VIEW
axes (criteria) - processes, organisational learning, financial
In the frame of a SC, the suppliers, customers, sub-contractors
and customers - in order to express company performance
of various levels must be considered as partners working
(Kaplan et al, 1996). In the same way, the PPMS (Process
together for the benefits of all in winning-winning relationships.
Performance Measurement System) measures the company
In reality, the relationships are often very different and not
performance according to five aspects - financial, innovation,
symmetric in particular for SME’s (Breuil, 2000). The main
customer, societal and employee (Kueng et al, 1999). The
manufacturer wants to influence the chain in order to achieve
ECOGRAI approach identifies three criteria - delay, quality
his own objectives and to promote his interests to the detriment
and cost – for the definition of multi-criteria performance,
of those of other partners. This is one of the symptoms of the
and this for all the processes/activities of the company (Ducq,
lack of global SC control and in particular of the lack of global
1999). In addition, quantitative approaches have been
objectives definition toward which all the suppliers and
proposed in order to deal with the performance expressions,
customers must tend. Indeed, in a lot of SC configurations, the
at the different levels, proposing to quantify the aggregation
global control exists but is imposed by the main manufacturer
link between them (Berrah et al, 2004). The MACBETH
and is not negotiated with the different partners.
(Multi Attractiveness Categorical Based Evaluation
TecHnique) methodology (Bana e costa et al, 2004) has been The second problem encountered concerns the uncertainty in
thus used to coherently express both the elementary and the the forecasts and in the planning in SC. It is obvious that even if
global performance expressions. Ensuring the coherence the uncertainty exists for each member of the SC, it is amplified
requirement implies that first the elementary expressions upstream from the chain and leads to an amplification of the
must be “commensurate”, i.e. two identical values (e.g. 0.8) variation of the demand for these partners: this is the “Bull-
according to two different criteria (e.g. lead_time and quality) whip effect” (Lee, 1997).
must have the same meaning for the decision-makers. A third problem concerns the incapacity for the main
2054
13th IFAC INCOM (INCOM'09)
Moscow, Russia, June 3-5, 2009
manufacturer to understand the performance requirements of 1996. The SCOR model has been revised many times to meet
each member. This leads him to look for a continuous reduction members needs and requirements. The version 6.0 is the latest
of costs from his partners until sometimes to the death of this version of the model. The model is highly scalable and can be
subcontractor. This disappearance can imply to look for other used to configure and improve the complete extended SC or
partners with lost of time and lost of money. More frequent is only a small part of it. SCOR offers a common language that
the lack of communication and exchange of information can be used by each partner of the extended SC. It allows a
between the members who are not then aware on the load good communication through the different parts of the chain. It
planning and constraints upstream from the chain. But in a also offers standard metrics for each management processes and
collaborative work, quicker is not always better and less benchmarking of SC performance for different industries.
expensive not always desirable. So, finally, each member gives More precisely, SCOR distinguish four abstraction levels, going
a greater importance to his own objectives instead of SC global from the more generic one (level 1) to the more particular (level
ones. That is why we think that an efficient management system 4). At level 1, the scope of the SC and the performance targets
at the local and global levels connected with an efficient PMS is set are defined, by the analysis of the gaps with the competition
an appropriate solution to avoid above problems. performances. Each company of the SC is described through
The first tentative to have a more integrated SCM is to integrate five processes: Plan – Source – Make – Deliver – Return. At
the information system. This is often set up by the level 2, the company is configuring its “as is” SC and the “to
implementation of a common ERP or an APS or a SCM be” by implementing its operation strategies. Namely, the level
software tool. Nevertheless, this integration by the way of 1 processes are specified (e.g. the Source process is identified in
information is not sufficient if the decisional control is not the S1 process i.e. Source Stocked Product process, or the S2
strongly defined. In this sense, we choose to implement this process i.e. Source Make-to-Order Product or the S3 process
control with two different dimensions: at the global level, we i.e. Source Engineer-to-Order Product). At level 3, the
propose to have a global decision system covering the whole processes of level 2 are deployed into sub-processes according
functions of the SC; at the local level, with a complete to the company organization. At level 4, the activities which
decisional system for each member coherently with the global constitute the sub-processes are defined specifically w.r.t. the
one. In order to define these global and the local control organization of the company. The implementation level is not
systems, we propose to use enterprise models like SCOR and included in the SCOR model definition.
GRAI Methodology (Doumeingts, 2001). Both models are
considered because of their complementarities. The SCOR 3.2 The GRAI Model
model is well detailed but restricted to a specific part of a Our purpose is not to describe the GRAI method. Therefore, for
supply chain. The GRAI Model is more generic but can be a best understanding we only propose a short description of the
extended to all parts of a SC, from the commercial to the GRAI grid because this concerns the main formalism for the
recycling through the design activities. The interests of decisional modelling. The GRAI grid takes up the hierarchical
enterprise modelling methods as GRAI methodology are to: and functional approach. It allows identifying the set of decision
represent and then to understand and design decisional centres of the studied system, as well as their links. The GRAI
mechanisms, grid is presented in the form of a matrix (figure 1) with:
allow a relevant and rapid specification of ERP or APS or the managerial axis or control axis which represents the
SCM software tools, various decision levels which can be found in the
involve future users of the SC in the definition of the company. This axis is decomposed hierarchically in
control system and in particular in the definition of several levels, defined by the horizon and the period of
objectives, decision variables and performance indicators; decision making.
knowing that the non appropriateness of human resources the function axis which describes the various activities
to the SC principles and specifications is often a cause of required to the product life cycle. It is decomposed into
failure for the implementation of the chain, several functions which group a set of activities having a
allow the standardisation of business processes for all the same identified finality (engineering, manufacturing,
members of the chain. This standardisation is an quality, maintenance, delivery, recycling...). Each function
important point to facilitate the implementation of of this axis can be decomposed in three control functions:
common IT tools, to manage the products (internal or external, it means
show the cooperation relationships and to allow a procurement and purchasing), to manage the resources
continuous progress of the running of the supply chain (human or technical) and to plan (to synchronize at each
with updating the knowledge and then of the models. This level product and resource management).
can support the complete implementation of quality
accreditation for the chain. A decision centre is defined as the set of decisions made in one
3. THE SCOR AND GRAI MODELS function and one decision level. The decision centres are
controlling a part of the physical system more or less global
3.1. The SCOR Model depending on the decision level (at a higher or less level), the
whole GRAI Grid controlling the whole physical system. The
The SCOR model (SCC, 2008) is a cross-industry standard for links between decision centres can be information links – one
modelling and improving complete or partial SCM system. It decision centre uses the information coming from other
has been developed and supported by the Supply-Chain Council decision centres to make the decision – or decisional links: the
SCC, an independent not-for-profit corporation founded in
2055
13th IFAC INCOM (INCOM'09)
Moscow, Russia, June 3-5, 2009
decision frame. This decision frame is a hierarchical link and policy to the definition of the quality action plan at the tactical
represent the transmission of the decision items (objectives, level. As mentioned above, two functions are added: the
decision variables, constrains and criteria) from one decision sale/marketing and the design. The Sale/marketing function
centre to another to allow the decision-making. manages the sales of the SC from the sale forecast and
marketing strategy to the customer re-launch planning. The
4. MODELLING OF GLOBAL AND LOCAL CONTROLS Design function prepares and then manages the co-design
Now, how is-it possible to use the concepts of SCOR and GRAI between the SC partners. Note that at the strategic level, it s
models for defining global and local controls of SC? In this necessary to define the technologies to be used and developed
combination, we would like to keep the functions of SCOR and, at the tactical level, the new products to design and the
with adding some other relevant ones to have the most complete existing ones to modify. One can remark that at the global
model for SCM. This model is based, at two levels, on the control level, the problem of capacity and resource management
GRAI formalism, especially the GRAI Grid. is not clearly a concern because this is planned at the local level
in each company involved in the chain.
4.1. The global control
4.2. The local control
The interest of SCOR model is to provide reference functions to
control the SC. The interest of GRAI model is to define the The reference model that is presented below is not mandatory
decision centres related to these functions and to add those applicable to all the partners of the SC. This gives guidelines to
which are missed in the SCOR model, in particular the implement local control (Fig. 2). This model is composed also
management of, design, sales and marketing. of three decision levels. It is not interesting to increase the
number of decision level because this leads to a less reactive
Three decision levels are proposed in the control structure. A decisional structure, the results of decisions taking more time to
strategic level aims to define the SC goals and in particular the go from the strategic to the operational levels. Moreover, most
business plan for two years reconsidered every six months. A of the partners of a SC are SME’s whose the decisional
first tactical level aims to set up the means to reach the goals structure needs often to be very reactive to potential events.
through the definition of the method of work and
communication means. The decisions are made for one year The two first levels - strategic and tactical - allow making the
and reconsidered every three months. The global control (Fig. synchronisation (i.e. the coherence of decisions) between the
1) includes a second tactical level in order to optimise monthly global SC and the running of each member. They allow
the flow of products in the supply chain. This optimisation is ensuring the coherence of all decisions. The operational level is
made for six months and reconsidered every month. The value mainly guided by the scheduling and launching decisions.
of horizon and periods are based on our experience of the These are made for one month and reconsidered every week.
requirements for an efficient global control. Indeed, the value of External
information
To manage sales
To manage design
of products
To manage
procurement and
purchasing
To synchronise
To manage
resources
To DELIVER
SC products
To manage
QUALITY and
returns
Internal information
activities.
To decide new Investment
P P=
= 33mois
months Firm orders - Consolidated To define To negociate
projects - To set up To define planning in human Quality steering Suppliers
Existing potential forecasts for all procurement transportation
co- enterprise MPS and technical board review performances
partners enterprise products parameters contracts
design projects resources
Strategic level
To manage H H=
= 6 6mois
months
To manage SC To manage Firm sales for
External To manage design procurement and To PLAN Supply To MAKE SC To DELIVER P P=
= 11mois
month To allocate design To define orders for To define
sales and QUALITY and Internal information enterprise products Adjustment of Monthly delivery To define quality Status of
information of SC products purchasing Chain Products SC products Orders resources for each critical enterprise load
marketing returns - Customer capacity planning action plan resources
(SOURCE) design projects procurements planning
relaunch planning
IE F F F F F F F II Tactical level
H = 2 ans H H=
= 1 1mois
H= 2 years Competition - To identify new To define quality month
P P=
= 66mois Activity planning - To define the new Logistic strategy
months Benchmarking partners and their Supply Chain Supply Chain policy Sales and SC P P=
= 11semaine
week Validation of orders To follow and To define short
Sale forecasts - technologies for (which means for Scheduling and Re-alloccation of To define urgent To launch quality Status of
results - Customer role and Business planning Production Plan (documentation, results Orders and scheduling re-orient the term orders - to
Marketing strategy the SC products which area..) launching resources delivery means actions production system
expectations relationships accreditation..) with all customers projects relaunch suppliers
Strategic level Operational level
H = 1 an Planning of To sign frame IE F F F F F F F II
H= 1 years contracts and to To define methods
P P=
= 33mois Firm orders - prospection for new SC Master To negociate
Fig. 1. The global control structure. capacity of the member to the requirements of the SC. The
decision centres (in green) concern the synchronisation between
The Source function manages the procurements and the product management and resource management. This is the
purchasing of SC products from the identification of key production planning of each member. Of course, a lot of
partners with role and relationships to the definition of orders solutions can exist for decision centres as well as for links
for critical material. between decision centres.
The Make function plans the production inside the SC and in The principles of other functions are the same than for the
particular to determine a production plan and then a master global control but more detailed and more specific to each
production schedule and a global load planning for the whole member of the chain. For instance, the products are all managed
SC in order to avoid overload of one partner which could affect together and not considered separately if they belong to the SC
all those downstream. products or not. Indeed, it is completely possible for a member
The Deliver function manages the external logistic of the SC to produce some items for the SC and others to sell directly to
from the strategy – which transportation means for which customers.
delivery area- to the monthly delivery planning to the final
customers. 5. TOWARDS PERFORMANCE INDICATORS
The Quality-Returns function manages quality of products DEFINITION
inside the SC and returns from customers including recycling This section deals with the definition of relevant performance
decisions. This starts at the strategic level from the quality indicators to support the management at the various levels. As
2056
13th IFAC INCOM (INCOM'09)
Moscow, Russia, June 3-5, 2009
only an illustration of the approach, few indicators are presented To ensure the feasibility of enterprise MPS for all products,
for two decision centres of the management models. To integrate capacity related to SC with the one concerned
As we have previously said, performance indicators are defined by other enterprise products.
to verify the efficiency of actions on decision variables in the The proposed decision variables (action means to reach the
achievement of objectives (Fortuin, 1988; Berrah et al., 2000). objectives) are:
The domain of Performance Measurement has been To increase the capacity by supplementary hours or
investigated for more than twenty years to lead to a lot of temporary people,
methods, developed either by researchers or practitioners, in To produce in advance.
order to define and implement indicators. One can cite the most
famous ones or the more used or disseminated around the world The proposed performance indicators are:
such as Balanced ScoreCard (Kaplan, 1996), the Performance Total stock,
Prism (Neely, 2002), ECOGRAI (Ducq, 2005), IPMS (Bititci, Total capacity/permanent staff capacity.
1997), Medori (Medori, 1998) or DPMS (Ghalayini, 1997).
All these methods have been developed independently based on 6. CONCLUSION: INTEROPERABILITY PROBLEM
system theory, production management theory or accounting SOLVING FOR PERFORMANCE MEASUREMENT
methods, according to the background of designers, but none of This paper considers the mechanisms to efficiently manage a
these approaches are dedicated to SC. Nevertheless, some of SC through the definition of management models and
them can be adapted to the SCM such as BSC, or Prism or performance indicators at the global and local levels. However,
ECOGRAI. Moreover, several performance indicators were this is possible to measure the whole performance of SC only
defined for SC global measurement in the SCOR Model or in with interoperable performance measurement software tools.
the French Standard FD X50-605 (AFNOR 08). The interoperability is defined as “the ability of two or more
So, it is proposed in the following to define the performance systems or components to exchange information and to use the
indicators using ECOGRAI method because this is the most information that has been exchanged” (Blanc, 2006).
well known by the authors and because its generic approach Then, if we want to measure the performance of the whole SC,
allows adaptations with the SCM. Moreover, the method will
from all the partners point of view, it is necessary to aggregate
use the GRAI Grid previously presented. measures from different partners and then from different
Only two decision centres are presented: one at the global decision support systems. A decision support system is
control level: “Load planning at the SC level” and a second one composed of different software’s (Fig. 3).
at the local control level: “To define enterprise load planning”. DATA
ETL OLAP
These are important because a lack of load management WAREHOUSE
between partners can increase highly the total lead time.
partners,
To anticipate production. Specifications for PM tool 1
knowledge SC
Enterprise
Number of products produced in advance, performance
Sto ra
ge
Modelling measurement
The objectives must be coherent with those of upper levels, i.e. Stora
ge
2057
13th IFAC INCOM (INCOM'09)
Moscow, Russia, June 3-5, 2009
2058