SCOR ®: A Journey of Supply
Chain Process Excellence
Using SCOR to Drive Process
Improvements
Derinda Ehrlich
VP, Corporate and Channel Services, APICS
Introductions
Topics
• APICS and Supply Chain Council merger
• What is SCOR?
• Using SCOR to Drive Process
Improvements
• Implementing SCOR
• Next steps for YOUR organization
APICS merger with Supply Chain
Council
Leading the Industry
•
APICS is globally the leading association advancing supply chain and
operations management.
•
Our research, education and certification programs elevate individual and
corporate supply chain performance, innovation and resilience.
•
APICS Products and Services
– Professional Membership
– Research and Publications
– Education
– Certification
– Events
– APICS and the Supply Chain Council – officially merged August 2014
APICS Supply Chain Council
(APICS SCC)
•
We are a global, non-profit organisation that developed and actively manages
the Supply Chain Operations Reference (SCOR) model.
•
The SCOR® model is globally recognised as the standard framework that links
supply chain process, performance, practices, people (organizations) and
technology into a unified structure.
•
Since 1996, over 5,000 companies worldwide have used SCOR®.
•
APICS SCC Services
– Research Projects, Corporate Advisory Board, Executive Summit
– SCORmark™ Benchmark
– Training is now available through APICS
– Publications, Resource Library, and Case Studies
– Other Value Chain Frameworks including M4SC, DCOR®, CCOR®, and PLCOR®
APICS and APICS Supply Chain
Council
Training, certification
and networking
APICS
Individuals
Research,
Benchmarking and
Process Frameworks
APICS Value
Proposition
APICS SCC
Corporations, and
Institutions
APICS delivers a total individual and corporate value proposition.
We help individuals achieve career development goals.
We help corporations achieve strategic supply chain goals.
What is SCOR®?
A Process Framework
•
Process frameworks deliver the well-known concepts of business process
reengineering, benchmarking, and best practices into a cross-functional
framework
– Process Standards: Plan, Source, Make, Deliver, Return, Enable
– Performance Standards: Perfect Order Fulfillment, Cash-to-Cash Cycle Time,
Cost of Goods Sold, Order Fulfillment Cycle Time, etcetera
– Practices: EDI, Cross-Training, Sales & Operations Planning, …
– People/Skills: Process, practices, and metrics cross-referenced with personnel
skills that include experience, aptitude and training needs
History of SCOR
•
•
•
•
In 1996, 69 companies collaborated
Described the Supply Chain in terms of a Process Framework
Currently on SCOR version 11
Since 1996 more than 5000 companies used SCOR
Business Process
Re-engineering
Performance
Benchmarking
Best Practices
Analysis
Capture the ‘as-is’
business activity and
design the future
‘to-be’ state
Quantify relative
performance of
similar supply chains
and establish
internal targets
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)
SCOR® Processes
Plan
Deliver
Source
Return
Return
Plan
Make
Deliver
Source
Make
Deliver
Return
Source
Plan
Make
Return
Return
Deliver
Source
Return
Return
Return
Enable
Enable
Enable
Suppliers’
Supplier
Supplier
Your Organization
Internal or External
Customer
Customers’
Customer
Internal or External
SCOR MODEL
SCOR® Process Decomposition
Level
1
Description
Examples
Comments
Process Types
(Scope)
Plan, Source, Make,
Deliver, Return and
Enable
Level-1 defines scope and content of a supply
chain. At level-1 the basis-of-competition
performance targets for a supply chain are set
Process
Categories
(Configuration)
Make-to-Stock, Maketo-Order, Engineer-toOrder Defective
Products, MRO
Products, Excess
Products
Level-2 defines the operations strategy. At
level-2 the process capabilities for a supply
chain are set. (Make-to-Stock, Make-to-Order)
•
•
•
•
•
Level-3 defines the configuration of individual
processes. At level-3 the ability to execute is
set. At level-3 the focus is on the right:
• Processes
• Inputs and Outputs
• Practices
• Technology capabilities
• Skills of staff
2
3
Process
Elements
(Steps)
Schedule Deliveries
Receive Product
Verify Product
Transfer Product
Authorize Payment
SCOR® Metrics
Attribute
SCOR 11.0 Metrics
Reliability
RL.1.1 Perfect Order Fulfillment
Responsiveness
RS.1.1 Order Fulfillment Cycle Time
Agility
AG.1.1 Upside Supply Chain Flexibility
AG.1.2 Supply Chain Upside Adaptability
AG.1.3 Downside Supply Chain Adaptability
AG.1.4 Overall Value At Risk (VAR)
Cost
CO.1.1 Total Cost to Serve
Asset Management
Efficiency
AM.1.1 Cash-to-Cash Cycle Time
AM.1.2 Return on Supply Chain Fixed Assets
SCOR Quick Reference Guide
SCOR QRG is a handy
reference for SCOR
Processes and
Performance (metrics)
across the main SCOR
processes
Product & Portfolio
Management PLCOR™
Product &
Process Design
DCOR™
Sales &
Support
CCOR™
Supply Chain
SCOR®
Customer processes
Supplier processes
Other APICS SCC Frameworks
Using SCOR® to Drive
Process Improvements
Nigel Clements, from
the Deming Forum
estimates that up to
70% of process
improvement projec
fail.
2012 WSJ by S.
Chakravorty
estimate 60% of
Six Sigma
projects fail.
Typical Lean and Six Sigma
Challenges
Top Five Challenges with Lean/Six Sigma projects
1. Executive alignment / change management
2. Project selection (typically through brainstorming)
3. Projects aligned to functions (silos and departments)
4. Access to meaningful metrics and performance data
5. Quantifying the benefit/outcome
Source: © 2003 Dan Swartwood
Internal
External
End to End View
Strategic Metric
(Attribute)
Strategy
Perfect Order
(Reliability)
Consistently getting the orders right, and product
meets quality requirements
Order Fulfilment Cycle-Time
(Responsiveness)
The consistent speed of providing products/services
to customers
Flexibility, Adaptability & Risk
(Agility)
The ability to respond to upside or downside
changes and overall value at risk
Cost to Serve
(Costs)
The cost associated with managing and operating
the supply chain
Asset Management
(Asset Management
Efficiency)
The effectiveness in managing the supply chain’s
assets in support of fulfillment
Hierarchy of SCOR Metrics
Level 1
Strategic Metric
Level 1
Level 2
Level 3
Level 2
Process Metrics
Level 3
Diagnostic Metrics
Hierarchy of SCOR Metrics
Level 1
Ability to execute the strategy
Level 1
Level 2
Level 3
Level 2
Explains why the strategy not
achieved
Level 3
Diagnose the gap
Hierarchy of SCOR Metrics
Level 1
Customer
StrategicPerfect
MetricOrder
Level 1
Level 2
Level 3
Level 2
Process
Metrics
Orders Delivered
In Full
Customer Perfect
Order Fulfilment
Orders
Delivered in
Full
Delivery
Item
Accuracy
Delivery
Quantity
Accuracy
Level 3
- Delivery Item
Accuracy
Diagnostic
Metrics
- Delivery Quantity Accuracy
Competitive Requirements
Competitive Requirements
• Identify Customer Groups or Market Segments
• Based on the expectations for that supply chain, define
performance requirements for each segment
– One assigned superior (S)
– Two assigned advantage (A)
– Two assigned parity (P)
• Each unique combination of ratings defines the Supply Chain
Strategy for the channel
• Think of the rating as a desired state, NOT where you want to
improve the most
Example
Competitive
Requirements
Retail
Channel
Distributor
Channel
Delivery Reliability
S
A
Responsiveness
A
P
Agility
A
P
P
A
P
S
Total Supply Chain
Management Cost
Asset Management
Efficiency
What are YOUR targets?
Determine your Competitive Requirements
• Identify your largest channel
• Determine where you desire to perform at best in class
• Determine two attributes where you desire to be better than average
• The remaining two get parity rankings
Delivery Reliability
Responsiveness
Agility
Total Supply Chain Management Cost
Asset Management
Discussion
• Q: Where did you place your S?
• Q: Where is your largest performance
gap?
• Q: What insight did you learn?
How do you know the size of the
gap?
Lean and Six Sigma driven with
SCOR
SCOR with Lean/Six Sigma projects
1.
Executive alignment and sponsorship of improvement projects
•
•
2.
Roadmap, data and criteria
Defined people (roles/responsibilities) and practices
Project selection
• Portfolio of improvement projects aligned to Supply Chain data and strategic
direction
3.
Projects often aligned to functions and silos versus end-to-end
• Projects aligned to SCOR processes (end to end) Plan, Source, Make, Deliver
and Return
4.
Opportunities for improvement often not data driven
• Standardised operational definition for performance measures
• Quantified performance gaps through SCORMark™ data
5.
Quantifying the benefit/outcome
• Comparative data to measurable outcomes for similar Supply Chains
Implementing SCOR
SCOR® Implementation Roadmap
Step
FOCUS
Major Deliverables
Touch Points
APICS Enabler
BUILD
ORGANISATION
SUPPORT
• Sponsor and Key
Stakeholder Support
• Education
DEFINE THE
PROJECT
• Business Context Summary
• Supply Chain Definition
• Project Scope and Charter
3
ANALYSE
PERFORMANCE
• Scorecard
• Metric Defect Analysis
• Process Analysis
BENCHMARK
SCORmark®
Benchmarking
Orientation
4
DEVELOP THE
PROJECT
PORTFOLIO
• Project Portfolio
• Implementation Priority
PORTFOLIO
DEVELOPME
NT
Roadmap Progress
Webinar
IMPLEMENT A
PROJECT
• Development, Pilot, and
Implementation of a
Portfolio Project
• Results
SATISFACTIO
N SURVEY
1
2
5
Executive Brief
Orientation Webinar
ORIENTATION
Public SCOR-P Training
In-house SCOR-P
Training
APICS Instructor List
APICS SCC Sponsor
List
Top Motivations to Use SCOR®
1.
2.
3.
4.
5.
6.
7.
Building a Technology Investment
Roadmap
In Search of Return on Investment
(ROI) for Capacity
Creating a Supply Chain Strategy
Implementing Supply Chain
Performance Improvements
Improving Sales and Operations
Planning
Developing Organizational Talent,
Support and Competence
Maximising Use of Existing
Technology
8. Achieving Operational Excellence
9. Due Diligence as part of a Merger or
Acquisition
10. Globalising and Managing Business
Processes
11. Integrating with the greater Value
Chain
12. Integrating Lean, Six Sigma, and
SCOR to Build a Better Project
Portfolio
13. Defining and Building an Effective
and Efficient Supply Chain
Organization
SCOR Implementation Benefits
•
•
•
•
•
•
•
Average Operating Income improvement of 3% to sales (high 4.5% - low 1.5%)
Typical inventory turn improvements of 20%
Delivery reliability improvement of 25%
20% improvement in flexibility
30% faster system implementations with 30% more functionality
Continuous improvement portfolios refreshed at a value of 0.5%
Mitigation of costs associated with risk management
Shareholder Value
What are your organisation's main
motivations in considering the use of SCOR?
Potential SCOR Implementation
Role
What potential role would you play in a SCOR
Project?
• A. Sponsoring Executive
• B. Key Stakeholder
• C. Evangelist –Subject Matter Expert
Discussion
• Q: Are you prepared?
• Q: What is your approach?
Continue the Conversation
Learn More About SCOR® Training
SCOR® Training Options
APICS SCC offers training that provides in-depth understanding of the Supply
Chain Reference (SCOR®) model, widely recognised as the global standard for
supply chain management.
– SCOR® Group Training:
Cost-effective, customized group learning at your location
– SCOR® Training:
Thorough, effective, skills development in public classroom setting
2015 schedule - http://www.apics.org/careers-education-professionaldevelopment/events/conferences/scor-professional-training
SCOR Mobile App
• Official launch soon, but you can
check it out now!
• www.APICS.org/SCORapp
• Enhanced digital version of the
SCOR Quick Reference Guide
• Offers an outline of the processes
under the four main areas of the
model – Process, Performance,
Practices and People
Continue the Conversation
Peter Bolstorff
Executive Director
APICS Supply Chain Council
pbolstorff@apics.org
Carolyn Lawrence – For
Affiliate Subscription and
On Boarding
Director Corporate
Development
APICS Supply Chain Council
clawrence@apics.org
Derinda Ehrlich
VP Corporate and Channel
Services
APICS
Dehrlich@apics.org
Dominic Longo, CSCP – For
Training
Director Corporate Services
APICS
dlongo@apics.org
Q&A
Thank You!