Integrated Supply Chain Management with
SCOR
Youssef Kenawy CSCP – SCOR-P
Founder & Chief Executive Officer, Just Supply Chain
&
Mohamed Shalaby
Sites Manager, Kraft Foods (Mondelēz International )
Agenda
• What is Supply Chain about?
• What is Integrated Supply Chain?
• SCOR in brief
• Integrated Supply Chain at Mondelez
• Implementation Methodology
A Bit of History: 1930-1950
• Bank Robber “Slick Willie”
Sutton
• When asked why he robbed
banks, Sutton simply
replied
• "Because that's where the
money is."
Supply Chain is…not just about customer service, but
is also about customer value creation, and….
…Where the Money Is
• Supply-chain generally accounts for between 60% and 90% of all company costs1
• A 2% improvement in process efficiency for supply-chain processes has 3000% 5000% the impact of a 2% improvement in efficiency for… IT, HR, Finance1…
Sales…
• Most Process Methodologies or techniques had their origin primarily in SupplyChain Management?
• Six-Sigma Lean BPR ERP ISO MRP-II TQM…
Fortune-10 Company Supply-Chain Cost % Total Costs2
GM
Ford
Conoco
Wal-Mart
Chevron
IBM
Exxon
GE
94%
93%
90%
90%
88%
77%
75%
63%
1 Exclusive of Financial Services companies
2 Source: Hoovers 2006 Financial Data, 2006 SCM Benchmark data on SCM cost for discrete & process industries
4
What’s Your Vision In Life ?
Timothy D. Cook
Future CEO’s ….. Integrated Supply Chain
What’s Integrated Supply Chain?
It’s a Supply Chain that Involves the change from managing the individual Functions of a
business into an integrated process of value generation to formulate a business competitive
advantage based on “Customer Value” management ….
Why Integrated Supply Chain?
1- Generates Value Proposition for each Individual SKU
2- Increase Speed to Market
3- Reduce Total Cost
4- Establish Competitive Advantage
5- Make Tough Choices (Resilience & Collaborative Supply Chains)
Features of Integrated Supply Chain
Traditional SC
Integrated SC
-
Focus on Product Innovation
-
Focus on Customer “Value” Proposition
-
Marketing driven business
-
ISC driven business Model
-
Sales is the focus point of operation
-
-
Manufacturing and Supply Chain are
looked on as Tool of Efficient Supply
Marketing and Sales are Tools to evaluate
Customer Need & Deliver Business
Opportunities
-
Integrated Supply Chain is the Center of
Gravity of the Business operations
-
Competitive advantages: Optimized
Customer Value Management
-
Traditional Competitive advantages:
Quality, Price, Availability … ect
Integrated Supply Chain Evolution
Before Supply Chain
Supply Chain Transformation
It Breaks the Silo’s between Functions and transforms the Flow of business –
Chain of flow of Information - Goods - Money
Traditional Supply Chain
About SCOR – A Process Framework
10
• Combining 4 techniques into a single integrated approach
Business Process Reengineering
Capture the ‘as-is’
business activity and
design the future
‘to-be’ state
Performance
Benchmarking
Quantify relative
performance of similar
supply chains and
establish internal targets
Best Practices Analysis
Identify practices and
software solutions that
result in significantly
better performance
Organizational Design
Assess skills and
performance needs and
align staff and staffing
needs to internal targets
Process Reference Framework
Processes
Performance (metrics)
Practices
People
(skills)
About SCOR – Supply Chain
11
• Viewing a company as processes (domains)
Product
& Process
Design
Product
Design
DCOR™
Supply Chain
SCOR ®
Sales &
Sales & Support
Support
CCOR™
CCOR™
Customer processes
Supplier processes
Product & Portfolio
Product/Portfolio
Management
Management
About SCOR – Supply Chain
• SCOR defines supply chain as:
“ The processes that plan and execute the acquisition of materials,
transformation of materials in sellable products, delivery and
return of products and services in support
of customer orders ”
Whether from Cow to Cone,
Crude to Car or from Rock to
Ring, SCOR is not limited by
organizational boundaries
SCOR can be applied to
supply chains in any
industry and to any
organization in the chain
Plan
Deliver
Return
Source
Return
Plan
Make
Enable
Suppliers’
Supplier
Supplier
Internal or External
Deliver
Return
Source
Return
Make
Deliver
Return
Enable
Your Company
Source
Return
Plan
Make
Deliver
Return
Source
Return
Enable
Customer
Internal or External
Customers’
Customer
Industry Membership Scope
Integrated Supply Chain Evolution
Before Supply Chain
Supply Chain Transformation
It Breaks the Silo’s between Functions and transforms the Flow of business –
Chain of flow of Information - Goods - Money
Traditional Supply Chain
Integrated Supply Chain Evolution
Integrated Supply Chain
-
Plan/ Source / Make & Deliver - At the
heart of organizational business flow,
focus on Customer Value Creation and
Management
-
ISC Leads the transformation based on
Business Enablers.
-
Business Strategy is set at ISC Strategy
Workshops
-
ISC Leads The Orchestra of “Value
Creation”
Integrated Supply Chain Evolution - Mondelez
Integrated Supply Chain Model
-
Leadership Transformation in (IL6S) on Learn/ DO/
Teach.
-
Build HPWS in Organizational Enablers (Right Structure
& Right People on the Bus)
-
Shift the organization into a Skill Matrix Development
Organization
-
Integrate SC Excellence & Lean
-
SN Pillar : Each Category & SKU has its own Finger Print
that gets optimized by (SCOR) Concept.
-
Network Sourcing Design
Integrated Business Planning
Resilient Flow Supply Chain
Evolution of Supply Network in Integrated Supply Chain
The Challenge is in Collaboration and Multi-level Visibility and ISC Organization Structure That Shares Integrated Goals and
Responsibility to drive “customer Value” management
M4SC
Management for Supply Chain
Our Journey: M4SC
Business Strategy
Drives
Segment business into supply chains,
determine performance
Drives
Supply Chain Strategy
Feedback
Supply Chain Network
Drives
Manage processes towards strategic
network goals
Feedback
Optimize network for strategic performance
requirements
Supply Chain Processes
Drives
Feedback
Supply Chain Resources
Feedback
Continuously align resources to meet
process goals
‫‪ M4SC‬اإلدارة لسالسل اإلمداد ‪ :‬رحلتنا‬
‫يقود‬
‫تجزئة األعمال في سلسلة االمداد وتحديد مستوى األداء‬
‫يقود‬
‫يقود‬
‫شبكة سالسل‬
‫اإلمداد‬
‫إدارة العمليات نحو تحقيق أهداف الشبكة االستراتيجية‬
‫يقود‬
‫عمليات سالسل اإلمداد‬
‫التغذية االسترجاعية‬
‫التغذية االسترجاعية‬
‫تحسين الشبكة لمتطلبات األداء االستراتيجي‬
‫التغذية االسترجاعية‬
‫موارد سالسل‬
‫اإلمداد‬
‫استراتيجية‬
‫سلسلة اإلمداد‬
‫استراتيجية‬
‫األعمال‬
‫التغذية االسترجاعية‬
‫محاذات الموارد بشكل مستمر لتحقيق األهداف العملية‬
Using SCOR in aligning supply chain performance with business objectives
Align Strategy
Align Strategy
• Scope: Align supply chain goals and performance with business objectives and market
needs
• Horizon: 12-18 months to 5 years; Business Plan Scope
• Outcomes:
• Performance goals
• List of performance gaps
• Prioritized list of corrective actions
Align Strategy
Business Plan
Analysis
Supply Chain
Segmentation
Supply Chain
SWOT Analysis
Supply Chain
Strategy
Definition
Supply Chain
Data Collection
Supply Chain
Grouping
Supply Chain
RACI
Analysis
SCORcard
Benchmarking
Supply Chain
Network
Definition
KPI RACI Analysis
Supply Chain
Prioritization
Supply Chain Gap
Analysis
Using SCOR in aligning supply chain configuration and processes with
performance objectives
Align Network
Align Network
• Scope: Align the configuration of the supply chain network – suppliers, plants,
warehouses, freight channels and customers - with supply chain performance objectives
• Horizon: Month, Quarter, Year, Business Plan Scope
• Outcomes:
• Defined supply chain process configuration
• Link between metric performance and processes
• List of processes with performance gap contribution
• Prioritized list of corrective actions
Align Network Modules
Supply Chain
Network
Definition
Thread
Diagram
Network Metric
Decomposition
Network RACI
Analysis
Network Metric
Prioritization
Network Best
Practices
Analysis
Network GRID
Analysis
Solution
Definition
Network
Definition
Network
Change
Prioritization
Using SCOR in aligning how processes operate to meet performance requirements
Align Processes
Align Processes
• Scope: Align process definition to network requirements
• Frequency: Weekly, Monthly
• Outcomes:
• Defined process flows
• Defined level-3 process performance requirements
• Prioritized detailed changes to processes
Align Processes Modules
Process Flow
Capture
Process Data
Capture
Process Value
Stream Model
Process RACI
Analysis
Process
Solution
Definition
Process To-Be
Definition
Process Best
Practices Analysis
Process Redesign
Simulation
Process Cycle
Efficiency
Analysis
Process Business
Rules Impact
Process
Organizational
Impact
Process Change
Prioritization
Using SCOR in aligning resources to meet performance and process design
requirements
Align Resources
Align Resources
• Scope: Align business resources to performance and process design requirements
• Frequency: Daily, Weekly, Monthly
• Outcomes:
• Defined resource requirements
• Prioritized people, process and technology changes
• Authorization to commit resources
Align Resources Modules
Skills Capture
Skills Resource
Planning
Procedures
Capture
Technology
Capture
Technology
Resource
Planning
Organizational
Review
Program
Resource
Planning
Resource Change
Prioritization
How to use SCOR in aligning supply chain performance with business objectives
Align Strategy
Align Strategy
Business Plan
Analysis
Supply Chain
Segmentation
Supply Chain
SWOT Analysis
Supply Chain
Strategy
Definition
Supply Chain
Data Collection
Supply Chain
Consolidation
Supply Chain
RACI
Analysis
SCORcard
Benchmarking
Supply Chain
Network
Definition
KPI RACI Analysis
Supply Chain
Prioritization
Supply Chain Gap
Analysis
The Matrix
• We now place the customer list as column headings repeating until finished
• And then the products list as row headings repeating until finished
• For each product that flows to a customer, we put an “X” in the cell
• It’s that simple.
Group 1
Customer A
Product 1
Business 1
Group 2
Customer B
Customer C
Customer D
X
X
Product 2
X
X
Product 3
X
X
Business 2
Product 4
X
Example: Air Conditioning Company
• Columns are Retail/Commercial, and sub-segmented
• Rows are the Major Product Lines
Customer/Market/Channels
Retail
Supply Chain Segmentation Matrix
A
Air Conditioners
Lines of Business Product Families
Big Box
1
Big Airco
2
Small Airco
3
Custom Industrial
4
Standard Industrial
A2
B
Commercial
C
D
Internet Mom & Pop
Building
Direct
Stores
B1
B2
E
F
Major
Account
Distrib
D1
F1
D3
D4
F3
C2
E4
Align Strategy
Business Plan
Analysis
Supply Chain
Segmentation
Supply Chain
SWOT Analysis
Supply Chain
Strategy
Definition
Supply Chain
Data Collection
Supply Chain
Grouping
Supply Chain
RACI
Analysis
SCORcard
Benchmarking
Supply Chain
Network
Definition
KPI RACI Analysis
Supply Chain
Prioritization
Supply Chain Gap
Analysis
Strategy 6: SC Strategy Analysis
• Definition
• For each supply chain in an enterprise, we examine the priorities of their
performance as required by internal and external customers. This constitutes the
supply chain strategy.
• We use a tool called the Strategic Analysis Matrix (SAM) to define the strategic
priorities of a supply chain
• Generally Part of Align Strategy
• Predecessors
• Supply Chain Segmentation Matrix
• Hazards
• Without clearly defined supply chains, strategies may create conflicting priorities
in aggregate supply chains
Strategy: Strategic Analysis Matrix (SAM)
• We use a tool called the Strategic Analysis Matrix to Identify priority strategic
features or attributes of Supply Chains.
• Each supply chain strategy is indicated by a collection of ranked features, used
to balance between external and internal priorities
Reliability
Responsiveness
Agility
Cost
Assets
On time? Complete? Undamaged?
From Customer Request to final acceptance
How long to scale up? How expensive to scale down?
Cost of Processes? Cost of Goods Sold?
Working Capital? Return on Investments?
SAM Analysis
Features
Big Box
Small Air
Standard
External
• Choose at most
Reliability
P
S
Response
P
P
A
A
Cost
A
A
Assets
S
P
Internal
Agility
• 1 “Superior” feature
• 2 “Advantage” features
• 2 “Parity” features
• Can also choose simply 1 S/A Feature
• Each unique combination of ratings defines
Your Supply Chain Strategy for the channel
• Ratings are a desired state, NOT where you
want to improve the most
• Should combine rational analysis of supply
chain needs in market as well as SWOT
opportunities
Competitive Benchmarking
• Relies on external, usually anonymized data source
• Demographics must match size, planning model, region, and product scope of
benchmarked supply chain
• Generally requires submitting data to merge into master benchmark data set
Attribute
Metric (level 1)
You
Parity
Adv
Sup
Gap
Step
97%
85%
90%
98%
1%
1
Reliability
S
Perfect Order Fulfillment
Response
A
Order Fulfillment Cycle Time
14 days
23 days
15 days
5 days
0 Days
0
Agility
P
Ups. Supply Chain Flexibility
62 days
63 days
62 days
60 days
0 Days
0
Cost
P
Supply Chain Mgmt Cost
12.2%
10.8%
10.4%
10.2%
1.4%
1
Assets
A
Cash-to-Cash Cycle Time
35 days
15 days
13 days
10 days
22 Days
2
Traditional Supply Chain
Integrated Supply Chain