10. Value of Using SCOR 1 Hughes & Michels (1998) Transform your supply chain. Releasing value in business. London, UK Area Improvement Raw materials purchase cost 25% Cost of Distribution 35% Total resource deployed 50% Manufacturing space 50% Investment in Tooling 50% Order cycle time 60% New product development cycle 60% Inventory 70% Paperwork and Documentation 80% Quality Defects 100%
15. Latin America All Chapters SCC Affiliations AAIA – Automobile Aftermarket Industry Association APICS – Association for Operations Management RLA – Reverse Logistics Association WBENC – Women's Business Enterprise National Council
16. Hosted by Supply Chain Council, the Committee is industry funded, with all research and program results of the Committee's work made public Talent Committee Project team established to integrate SCOR with other tools and methods - such as Six Sigma and Lean SCOR Convergence Project team to enhance SCOR to help organizations avoid/minimize cost, mitigate disruptions and thus offer competitive edge Risk Management Industry working group reviews the adaptability of SCOR for the reverse logistics industry. A joint effort of SCC and RLA. Reverse Logistics Industry working group focuses on the development and integration of models specifically for the Energy, Oil and Gas industry Energy, Oil & Gas SIG Technical Development and Steering Committee and Training and Education Committee. Elected positions. Steering Committee Project team established to develop the framework, training and tools for the design chain (product/process engineering processes) DCOR Development Project team established to develop the framework, training and tools for the customer chain (sales & support processes) CCOR Development Special Interest Group brings together practitioners in the automotive supply chain to share practices and experiences Automotive SIG Special Interest Group to provide a source of knowledge, referral and research for members in the A&D industry Aerospace & Defense SIG Description Group
21. What is a Reference Model? Quantify the operational performance of similar companies & establish internal targets based on “best-in-class” results Benchmarking Characterize the management practices & software solutions that result in “best-in-class” performance Best Practices Analysis Process Reference Model Capture the “as-is” state of a process and derive the desired “to-be” future state Business Process Reengineering Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Characterize the management practices and software solutions that result in “best-in-class” performance Capture the “as-is”state of a process and derive the desired “to-be” future state
22. Process Models SCOR™ CCOR™ DCOR™ MCOR™ 2005 1996 2007 2008 Supply Chain Supply Chain Supply Chain Supply Chain Markets Marketing Sales Design HR IT Finance Process Suppliers Business Customers
24. Structured around 5 distinct management processes Supplier Customer Customer’s Customer Supplier’s Supplier Internal or External Internal or External Your Company SCOR Model Building blocks Processes Metrics Best Practices Enablers Plan Make Deliver Make Deliver Make Source Deliver Source Source Return Return Source Deliver Return Return Return Return Return Return
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26. 5 Processes Customers Suppliers Deliver Make Source Plan Return Source Return Deliver Enable Execution Management Planning
29. SCOR Mapping M2 S2 D2 S1 European RM Supplier Other RM Suppliers Plant ALPHA Local Distributors M1 S1 D1 D1 S1 D1 M2 S2 D2 S1 China Customs - POE China OEM Distribution n Centers S1 D1 Brazil Customs - POE S2 M1 D1 Fiscal Inspection - POE DC’s in other states S1 D1 S1 D1 S1 D1 S1 D1 M1.1 M1.2 M1.3 M1.4 M1.5 Production Planning Production Orders Production & Testing Packaging Unitization & protection M1.6 Release to dispatch SR1 DR1 SR1 SR1 DR1 DR1 P4 P3 P2 P1 Production Rules Mngmnt EM.1 Production Performance Mngmnt EM.2 Production Reports Mngmnt EM.3 WIP Mngmnt EM.4 Equipment & Utilities Mngmnt EM.5 Internal Transport Mngmnt EM.6 Production Relations Mngmnt EM.7 Claims & Internal Standards Mngmnt EM.9 P4 P3 P2 P1
30. Integrated set of performance metrics Level 3 metrics provide details on performance issues and highlight potential corrective actions Process Element Level (Decompose Processes) 3 Level 2 metrics characterize performance of the configured processes Configuration Level ( Process Categories) 2 Level 1 metrics characterize performance of the supply chain as a whole , define the basis of competition, and enable the setting of business-wide performance targets Top Level (Processes) 1 Metrics Schematic Description Level Supply Chain Operations Reference-model (SCOR) Balance Production Resources with Production Requirements Establish Detailed Production Plans Identify, Prioritize, and Aggregate Production Requirements Identify, Assess, and Aggregate Production Resources P3.1 P3.3 P3.4 P3.2 Plan Deliver Make Source Return Return
40. The SCOR Practitioner Lifecycle How do I use it? Pilot What is SCOR? Learn How do I grow it? Deploy How do I refine it? Mature What’s Next? Renew
41. SCOR Curriculum Proposed/Future SCC offering Available Late 2007/2008 SCOR for Management SCOR Financials Advanced Track Executive Track Basis Training Executive SCOR Business Trends Executive SCOR Business Benefit Executive SCOR Team Executive SCOR Implementation Executive SCOR Framework DCOR SCOR and Six-Sigma/Lean SCOR Team SCOR Implementation SCOR Framework SCOR for Risk Management SCOR for PBL Advanced SCOR Modeling SCOR Adviser SCOR Practices Benchmarking SCOR for IT Advanced SCOR Analysis SCOR for SOX404 SCOR for Services SCOR Practicum SCOR for ISO9000 SCOR for Industries Rapid SCOR SCOR for M&A SCOR for HR Advanced SCOR Workshop Renew Mature Deploy Pilot Learn
52. Quantitative performance scorecard for factual comparison to similar companies Your Company Supply Chain Performance Versus Custom Population Customer-Facing Internal-Facing Delivery Performance/ Quality Flexibility and Responsiveness Cost Assets Delivery Performance to Request Order Fulfillment Lead Time Perfect Order Fulfillment Upside Flexibility (20% Increase) Supply Chain Response Time Supply Chain Management Cost Total Inventory Days of Supply Cash-to-Cash Cycle time Fill Rate Key Perspectives Level 1 Metrics 0 – 20% Major Opportunity 20 – 40% Disadvantage 40 – 60% Average Or Median 60 – 80% Advantage 80 – 100% Best- In-Class 88% 87% 3.5 Days 85% 26 Days 57 Days 72 Days 10.2% 90 Days 12.8% 97 79 25 139 4 82% 88% 84% Sample Data 93% 98% 2.0 Days 90% 10 Days 32 Days 28 Days 43 Days 8.1%
53. Basis of competition targets can be translated into quantitative values Total of Potential Annualized Profit Benefit (US$) $28M Total of Potential One-Time Cash Savings (US$) $36M SC Performance Versus Custom Population Key Perspectives Level 1 Metrics Major Opportunity Disadvantage Average or Median Advantage Best- In-Class Value from achieving Supply Chain Goals Delivery Performance to Request Order Fulfillment Lead Time Perfect Order Fulfillment Upside Flexibility (20% Increase) Supply Chain Response Time Increase in Customer Satisfaction Levels Supply Chain Management Cost – $22M/year Total Inventory Days of Supply – $32M one-time Cash-to-Cash Cycle Time -$3.4M one-time Delivery Performance/ Quality Flexibility and Responsiveness Cost Assets Customer-Facing Internal-Facing Fill Rate 3 – 5% increase in revenue ($6M Oper. Profit) 12.8% 97 72 139 4 82% 88% 84% 25 Sample Data
54. Andres von Simson – LATAM Chapter Administration [email_address] Further info www.supply-chain.org Elcio Grassia – LATAM Chapter Chair [email_address]
Notas do Editor
Business Process Management is the characterization at multiple levels of business process activity in a company, measurement, and guidance of the process to perform to specific goals. Many groups have focused on business process management as a key differentiator in the ‘new world’ of business and IT management. <joe to fill in later>
This slide highlights the current state of affairs of the supply-chain council (2006-2007). Instructors can highlight additional information as appropriate, including industries covered (from Oil and Gas to Automotive to Aerospace), sectors (Private, Defense, Governmental, Educational Institutions). Another point which can be supplied is that council members in two recent studies have outperformed their peers both in revenue and profit (2003 study) as well as outperformed the DOW and S&P 500 Stock indicators in the united states (2003-2006 benchmark). The council itself is a non-for-profit institution run by and for it’s membership. Structurally, it has a board of directors, day-to-day operations managed through an association management agency, and as well numerous committees and groups – Training and Education oversaw the development of this material, the Technical Development and Steering Committee (TDSC) researches, improves, and adjusts the framework content, variouis SIG’s (Special Industry Groups) look at specific application and practices with SCOR for their areas, and then committees also look at the function of the council – Legal, Marketing, and Financial oversight. It’s just like a company, but there are no ‘owners’. 2006-2007 represents the 10 th anniversary of the Council.
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Speaker/Trainer Notes SCOR 8.0 Training Day 1 About 10 years ago, a group of fairly forward-thinking manufacturing companies, consultants, and researchers got together and created a process language for describing how supply-chain worked. They needed to understand how to better link large supply-chains together, how to improve performance in supply-chain process, and how to form a standard for measurement which would allow for easy benchmarking. SCOR was formed, and managed through supply-chain council in the public interest. This Supply-Chain Operations Reference framework was used successfully by over 2500 companies over time, who continued to contribute to the core information about supply-chain process, metric and practice. About 4 years ago, another group of forward thinking companies realized that the SCOR framework wasn’t enough in itself to solve issues at the enterprise scale. So they got together and worked on a standard which extended and linked with SCOR, but addressed relationships to business goals, market goals, and more direct customer interactions – so the linked frameworks of DCOR for design, MCOR for marketing, and CCOR for sales were created, and later several contributed (by HP, the primary driver) to Supply-Chain council to be managed in the public interest. Lastly, everyone also realized that for ‘non-value stream’ processes (to use a Porter idea), you also should have references for enabling processes in Finance, HR, IT and… possibly process itself.
21 4 Building block approach Source connects to supplier Deliver connects to customer Not all companies have make We can model as far up or down the supply chain as we view important (not limited to two tiers) Customers and / or suppliers can be internal or external
Point1 Spend the time in the Model Binder, finding a good cheat sheet AND articulating what each element means...Note also that we are NOT including Suppliers Supplier and Customer's Customer for th NEW example. Point2 Be sure to articulate that ALPHA is comprised of both M and D. Point3 Use a WHITE BOARD and model the actual activity of drawing before putting the diagram on the screen.