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June 2003June 2003 11

Overview PresentationOverview Presentation

Supply ChainSupply Chain

Operations Reference-modelOperations Reference-model

(SCOR)(SCOR)


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SCOR OverviewJuly 2004 2

The SCC is an independent, not-for-profit, global corporation withThe SCC is an independent, not-for-profit, global corporation with

membership open to all companies and organizations interested inmembership open to all companies and organizations interested inapplying and advancing state-of-the-art supply chain managementapplying and advancing state-of-the-art supply chain management

systems and practices.systems and practices.

Over 800 Company MembersOver 800 Company Members

Cross-industry representationCross-industry representation

Chapters in Australia/New Zealand, Brazil, Europe, Japan,Chapters in Australia/New Zealand, Brazil, Europe, Japan,

North America, Southern Africa, and South East Asia withNorth America, Southern Africa, and South East Asia with

petitions for additional chapters pending.petitions for additional chapters pending.

The Supply-Chain Council (SCC) has developed and endorsed theThe Supply-Chain Council (SCC) has developed and endorsed the

Supply Chain Operations Reference-model (SCOR) as the cross-Supply Chain Operations Reference-model (SCOR) as the cross-

industry standard for supply chain managementindustry standard for supply chain management


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Quantify theoperationalperformance ofsimilar companiesand establishinternal targetsbased on best-in-

class results

Quantify theoperationalperformance ofsimilar companiesand establishinternal targetsbased on best-in-

class results

Benchmarking

Characterize themanagementpractices andsoftware solutionsthat result inbest-in-classperformance

Characterize themanagementpractices andsoftware solutionsthat result inbest-in-classperformance

Best PracticesAnalysis

Process ReferenceModel

Capture the as-isstate of a processand derive thedesired to-befuture state

Capture the as-isstate of a processand derive thedesired to-befuture state

Business ProcessReengineering

Capture the as-is stateof a process and derivethe desired to-be futurestate

Capture the as-is state

of a process and derivethe desired to-be futurestate

Quantify the operationalperformance of similarcompanies and establishinternal targets based onbest-in-class results

Characterize themanagementpractices andsoftware solutionsthat result in best-in-class performance

What is a process reference model?What is a process reference model?

Process reference models integrate the well-knownProcess reference models integrate the well-known

concepts of business process reengineering,concepts of business process reengineering,benchmarking, and process measurement into a cross-benchmarking, and process measurement into a cross-

functional frameworkfunctional framework


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Supplier

Plan

Customer CustomersCustomer

SuppliersSupplier

MakeDeliverSource Make DeliverMakeSourceDeliver SourceDeliver

Internal or External Internal or External

Your Company

Source

SCOR is structured around five distinctSCOR is structured around five distinct

management processesmanagement processes

SCOR ModelSCOR Model

Return Return ReturnReturn Return Return

Return Return

Building Block Approach

Processes Metrics

Best Practice Technology


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Cus

tom

ers

Cus

tom

ers

Supp

liers

Supp

liers

P1 Plan Supply ChainP1 Plan Supply Chain

PlanPlan

P2 Plan SourceP2 Plan Source P3 Plan MakeP3 Plan Make P4 Plan DeliverP4 Plan Deliver

SourceSource MakeMake DeliverDeliver

S1 Source Stocked ProductsS1 Source Stocked Products M1 Make-to-StockM1 Make-to-Stock

M2 Make-to-OrderM2 Make-to-Order

M3 Engineer-to-OrderM3 Engineer-to-Order

D1 Deliver Stocked ProductsD1 Deliver Stocked Products

D2 Deliver MTO ProductsD2 Deliver MTO Products

D3 Deliver ETO ProductsD3 Deliver ETO Products

S2 Source MTO ProductsS2 Source MTO Products

S3 Source ETO ProductsS3 Source ETO Products

Supply-Chain Operations Reference-modelSupply-Chain Operations Reference-model

(SCOR) 6.1 - Processes(SCOR) 6.1 - Processes

ReturnReturn

SourceSource

P5 Plan ReturnsP5 Plan Returns

ReturnReturn

DeliverDeliver

EnableEnable

D4 Deliver Retail ProductsD4 Deliver Retail Products


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SCOR BoundariesSCOR Boundaries

SCOR Spans:SCOR Spans:

All supplier / customer interactionsAll supplier / customer interactions Order entry through paid invoiceOrder entry through paid invoice

All physical material transactionsAll physical material transactions From your suppliers supplier to your customersFrom your suppliers supplier to your customers

customer, including equipment, supplies, spare parts,customer, including equipment, supplies, spare parts,

bulk product, software, etc.bulk product, software, etc.

All market interactionsAll market interactions

From the understanding of aggregate demand to theFrom the understanding of aggregate demand to thefulfillment of each orderfulfillment of each order

ReturnsReturns


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Material FlowMaterial Flow

SCOR Level 1

OperationsOperationsStrategyStrategy

Analyze Basis

ofCompetition

SCOR Level 2

Configuresupply chain

AlignPerformance

Levels,Practices, and

Systems

Implementsupply chain

Processes andSystems

Implementsupply chain

Processes andSystems

SCOR Project RoadmapSCOR Project Roadmap

Competitive Performance Requirements

Performance MetricsSupply Chain ScorecardScorecard Gap AnalysisProject Plan

AS IS Geographic MapAS IS Thread DiagramDesign Specifications

TO BE Thread DiagramTO BE Geographic Map

InformationInformationand Work Flowand Work Flow

AS IS Level 2, 3, and 4 MapsDisconnectsDesign SpecificationsTO BE Level 2, 3, and 4 Maps

Develop,Develop,Test, and RollTest, and Roll

OutOut

OrganizationTechnologyProcessPeople

SCOR Level 3


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Mapping material flowMapping material flow

Latin AmericanLatin American

SuppliersSuppliers

(D1)

WarehouseWarehouse

Other SuppliersOther Suppliers(D1)

ManufacturingManufacturing

European SupplierEuropean Supplier

(S1)(SR1,SR3)

Customer

Customer

Customer

Customer

(S1, D1)

(SR1,DR1,DR3)

(D2)(DR1)

WarehouseWarehouse

WarehouseWarehouse

WarehouseWarehouse

(S1, D1)

(SR1, DR3)

(S1, D1)

(SR1,DR1,DR3)

(S1, D1)

(SR1,DR1,DR3)

(S1)

(SR1,SR3)

(S1)

(SR1,SR3)

(S1)

(SR1,SR3)

(S1, S2, M1, D1)

(SR1,,DR1)


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Mapping the execution processesMapping the execution processes

S1S1

D1D1 S1S1

M2M2S2S2 D2D2

M1M1 D1D1 S1S1

S2S2

D1D1M1M1

EuropeanEuropeanRM SupplierRM Supplier

Key OtherKey OtherRMRM

SuppliersSuppliers

AlphaAlpha

RegionalRegionalWarehousesWarehouses

S1S1

DR1DR1 SR1SR1

DR1DR1 SR1SR1 DR1DR1 SR1SR1

DR3DR3 SR3SR3

RMRM

SuppliersSuppliersDistributorsDistributorsALPHAALPHA

DR3DR3 SR3SR3

S1S1

AmericasDistributors

SR1SR1

SR3SR3


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Identifying Plan ActivitiesIdentifying Plan Activities

Consumer

P2P2P2P2

PP

44

PP

44

P3P3P3P3

PP44

PP44

S1S1 D1D1 S1S1

PP

22

PP

22

P2P2P2P2

PP

33

PP

33

PP

44

PP44

M2M2S2S2 D2D2

M1M1 D1 S1S1S2S2D1D1

M1M1

EuropeanEuropeanRM SupplierRM Supplier

Key OtherKey OtherRMRM

SuppliersSuppliers

S1S1

AlphaAlpha

RegionalRegionalWarehousesWarehouses

RMRM

SuppliersSuppliersDistributorsDistributorsALPHAALPHA

P1P1P1P1

P1P1P1P1

P1P1P1P1


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Supply Chain Scorecard & Gap AnalysisSupply Chain Scorecard & Gap Analysis

50%

$30M Revenue

$30M Indirect Cost

35 days

97 days

0%

63%

Supply Chain SCORcard Performance Versus Competitive Population

Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements

Delivery Performance toCommit Date 85% 90% 95%

Fill Rates 94% 96% 98%

EXTERNAL

SupplySupply

ChainChainReliabilityReliability

Perfect Order Fulfillment 80% 85% 90%

Order Fulfillment Lead times7 days 5 days 3 days

Flexibility

Responsiveness

Production Flexibility 30 days 25 days 20 days

Total SCM Management

Cost 19% 13% 8%3%

INTERNAL Cost Warranty Cost NA NA NA NA NA

Value Added Employee

ProductivityNA $156K $306K $460K NA

Inventory Days of Supply 119 days 55 days 38 days 22 days NA

AssetsCash-to-Cash Cycle Time

196 days 80 days 46 days 28 days

Net Asset Turns (Working

Capital)2.2 turns 8 turns 12 turns 19 turns NA

Supply ChainResponse Time 82 days 55 days 13 days

45 days

$7 M Capital Charge

Key enabler to cost andasset improvements

$30M Revenue


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www.supply-chain.orgwww.supply-chain.org

[email protected]@supply-chain.org

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