An unofficial and unauthorized overview of the SCOR Model from the first CTO of the Supply Chain Council. Why and how the SCOR model was constructed for supply chain management and how it was applied. For current and official documentation please visit - www.supply-chain.org

1. Scott Stephens
http://measuredperformance.blogspot.com
scottstephens@businessforerunners.com

2. • Back to Basics - Origins of the SCOR Model
• Balancing Theory and Reality
• Logistics, Supply Chains, and Value Chains
• The Business Imperative
• SCOR Introduction
• Consensus definitions, best practice, metrics
• Model, Tables and Graphics
• Using the SCOR Model
• Geographic Mapping
• Process Mapping
• Using Metrics to Link Performance to Processes and the
Organization
• Case Studies
• Q&A
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3. “…we must develop yardsticks [measurements] – with
some way to distinguish between creative and
parasitical overhead; the impact on productivity of time
utilization, product mix, process mix, organization
structure and the balance of activities.”
Peter F. Drucker – The Practice of Management
(1954)
PULL
PUSH
3

4.  Practitioners (business leaders) created the SCOR
Model and the Supply Chain Council to improve
competitiveness
 Competitiveness improved in three ways:
◦ Reducing costs
◦ Increasing revenue
◦ Improving the efficiency of asset management
4

5. 2004
1990s
2007
“Among the interesting patterns discovered, the firms
making greater progress have moved from a cost-
only perspective to primary objectives that are more
customer-focused. These goals were oriented around
such things as faster and more personalized order
fulfillment, shorter order fulfillment lead times,
creating and delivering perfect orders, and enhanced
cash-to-cash cycle and asset turns.” 2007 Annual
Supply Chain Survey - SCMR
5

6. Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Marketing Service
Operations Outbound
Logistics Logistics &
Sales
Marketing Sales Force Sales Force Technical
Advertising Promotions
Management Administration Operations Literature
6

7. Revenue
Time to Market
Time to Volume
Market Cost
Research
Develop Service Level
Buy
Capacity
Source
Make Forecast
Deliver
Sell Inventory
Transport
Support Warranty
7

9.  Process reference models integrate the well-known
concepts of business process reengineering,
benchmarking, and process measurement into a cross-
functional framework
Business Process Best Practices Process Reference
Reengineering Benchmarking Analysis Model
Capture the “as-is” state
Capture the “as-is” of a process and derive
state of a process the desired “to-be” future
and derive the state
desired “to-be” Quantify the
future state operational
performance of Quantify the operational
similar companies performance of similar
and establish companies and establish
internal targets internal targets based on
based on “best-in- “best-in-class” results
class” results Characterize the
management Characterize the
practices and management
software solutions practices and
that result in “best- software solutions
in-class” that result in “best-in-
performance class” performance
9

10. Plan
Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source
Return Return Return Return Return
Return
Return Return
Customer’s
Suppliers’ Supplier Your Company Customer
Customer
Supplier
Internal or External Internal or External
SCOR Model
Building Block Approach
Processes Metrics
Best Practice Technology
10

11. Level
# Description Schematic Comments
Plan
1 Level 1 defines the scope and content for the Supply
Supply Chain Operations Reference model
Source Make Deliver
Top Level Chain Operations Reference model
Return
(Process Types) Return
Here basis of competition performance targets are set
2 A company’s supply chain can be “configured-to- order” at
Configuration Level 2 from approximately30 core “process categories.”
Level
(Process Companies implement their operations strategy through
Categories) their unique supply chain configuration.
3 Process Level 3 defines a company’s ability to compete
Element Level successfully in its chosen markets and consists of:
(Decompose • Process element definitions
Processes) • Process element information inputs and outputs
P3.1
• Process performance metrics
Identify, Prioritize, and Aggregate
• Best practices, where applicable
• System capabilities required to support best
Production Requirements
P3.3 P3.4
P3.2
Balance Production Resources with
Production Requirements
Establish Detailed
Production Plans
practices
Identify, Assess, and Aggregate
Production Resources
Companies “fine tune” their Operations Strategy at Level
3
Companies implement specific supply chain management
4 Implementation practices at this level
Not Level
in (Decompose Level 4 defines practices to achieve competitive advantage
Scope Process and to adapt to changing business conditions
Elements)
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12. Plan
P1 Plan Supply
Chain
P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns
Source Make Deliver
Suppliers
Customers
S1 Source Stocked Products M1 Make-to-Stock D1 Deliver Stocked Products
S2 Source MTO Products M2 Make-to-Order D2 Deliver MTO Products
S3 Source ETO Products M3 Engineer-to-Order D3 Deliver ETO Products
D4 Deliver Retail Products
Return Return
Source Deliver
Enable
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13. Process Element: Receive, Enter & Validate Order Process Element Number: D1.2
Process Element Definition
Receive orders from the customer and enter them into a company’s order processing system. Orders can
be received through phone, fax, or electronic media. “Technically” examine orders to ensure an
orderable configuration and provide accurate price. Check the customer’s credit. Optionally accept
payment.
Performance Attributes Metric
Reliability None Identified
Responsiveness Receive, Enter and Validate Order Cycle Time
Flexibility Upside Deliver Flexibility
Downside Deliver Adaptability
Upside Deliver Adaptability
Cost Order cost / type of order
Order Entry and Maintenance Costs as % of (S+M+D)
cost
Assets Return on Supply Chain Assets
Best Practices Features
Electronic Commerce (customer visibility EDI applications and integrated order management
of stock availability, use of hand-held
terminals for direct order entry,
confirmation, credit approval), On-line
stock check and reservation of inventory
Enable real-time visibility into backlog, None Identified
order status, shipments, scheduled material
receipts, customer credit history, and
current inventory positions
Continuous Replenishment Programs; Integrated demand/deployment planning to customer
Vendor Managed Inventory, Telemetry to location driven by POS; Customer movement data
automatically communicate replenishment
of chemicals
Remote (sales, customers) order entry None Identified
capability
Automatic Multi-level Credit Checking: Integrated Order/Financial Management
Dollar Limits; Days Sales Outstanding;
Margin Testing
Value Pricing based on “Cost to Serve”; Activity Based Costing; Integrated Order Management by
EDLP; Cost Plus Pricing Customer by Line Item
Inputs Plan Source Make Deliver Return
(Customer) Customer Order
(Customer) Deliver Contract Terms
(Customer) Customer Replenish Signal
Outputs Plan Source Make Deliver Return
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14. • (P2) Supply Plans • (Customer) Customer
• (P3) Production Order
• Routing Guide Plans • (Customer) Deliver
(carrier) • (P4) Deliver Plans Contract Terms
• Rated Carrier • (S) (M) (D) Inventory • (Customer) Customer • (Customer)
Data (Carrier) • (M) Scheduled Replenish Signal Inquiry
Output
D1.7 D1.6 D1.5 D1.4 D1.3 D1.2 D1.1
Select Carriers Receive,
Plan and Build Reserve Process Inquiry
and Rate Route Consolidate Enter &
Loads Inventory and & Quote
Shipments Shipments Orders Validate
Determine Order
Delivery Date
• Scheduled • Daily Shipment • Delivery Commit • Validated Order
Deliveries (P) Volume Date
• (D)
Consolidated • (D) Advanced
• (S) (M) Scheduled
Product Ship Notice
Receipts • (D) Inventory
D1.8 D1.9 D1.10 D1.11 D1.12 D1.13 D1.14 D1.15
From Load Vehicle
Generate Ship Ship Receive &
Make or Product Verify at Install Invoice
Source Receive Product Pick Pack Docs
Product Product Customer Product
Site
• (D) Inventory • Shipping Documents • Payment
(carrier, cust, gov.)
• Delivered End Items
(cust)
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15.  SCOR Spans:
◦ Order entry through paid invoice
◦ Physical material transactions, financials, information flow
◦ Market interactions
 From the understanding of aggregate demand to the
fulfillment of each order
◦ Returns
 SCOR Considers but does not include process descriptions
and measurement for related activities including:
◦ Sales and Marketing
◦ Research and Development / Product Design
◦ QA
◦ It
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16. Analyze Basis •Competitive Performance Requirements
Operations •Performance Metrics
of
Strategy •Supply Chain Scorecard
Competition •Scorecard Gap Analysis
•Project Plan
SCOR Level 1
•AS IS Geographic Map
Configure •AS IS Thread Diagram
supply chain Material Flow •Design Specifications
•TO BE Thread Diagram
•TO BE Geographic Map
SCOR Level 2
Align
Performance
•AS IS Level 2, 3, and 4 Maps
Levels, Practices, Information •Disconnects
and Systems and Work Flow •Design Specifications SCOR Level 3
•TO BE Level 2, 3, and 4 Maps
Implement
supply chain Develop, •Organization
Processes and Test, and Roll •Technology
Systems •Process
Out •People
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17. (S1, D1)
(SR1,DR1,DR3)
Manufacturing
Warehouse
(S1, S2, M1, D1) Customer
Customer
(SR1,,DR1) European Supplier
(S1)
(S1) (D2) (SR1,SR3
(SR1,SR3) (DR1)
Warehouse Warehouse
(S1, D1) (S1, D1)
(SR1,DR1,DR3) (SR1, DR3)
Latin American
Other Suppliers Suppliers
(D1) (D1)
Customer
Warehouse Customer
(S1)
(S1)
(S1, D1) (SR1,SR3)
(SR1,SR3)
(SR1,DR1,DR3)
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18. Americas
Distributors
S1
SR1
European
S2 M2 D2
RM Supplier
SR3
S2
M1 D1 S1 D1 S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3 DR3 SR3
S1
Key Other S1 M1 D1
RM
Suppliers
Alpha
RM
ALPHA Regional Distributors
Suppliers
Warehouses
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19. P1 P1 P1
P2 P3
P
4 P
3 P
2
P2 P P
4 4
European
S2 M2 D2
RM Supplier
Key Other S1 M1 S2 M1 D1 S1 D1 S1
RM D1
Suppliers
S1
Alpha Consumer
RM ALPHA Regional Distributors
Suppliers Warehouses
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20. Performance Performance Attribute Definition Level 1 Metric
Attribute
Supply Chain The performance of the supply chain Perfect Order Fulfillment
Reliability in delivering: the correct product, to
the correct place, at the correct time,
in the correct condition and
packaging, in the correct quantity,
with the correct documentation, to
the correct customer.
Supply Chain The speed at which a supply chain Order Fulfillment Cycle
Responsiveness provides products to the customer. Time
Supply Chain The agility of a supply chain in Upside Supply Chain
Flexibility responding to marketplace changes Flexibility
to gain or maintain competitive Upside Supply Chain
advantage. Adaptability
Downside Supply Chain
Adaptability
Supply Chain The costs associated with operating Supply Chain
Costs the supply chain. Management Cost
Cost of Goods Sold
Supply Chain The effectiveness of an organization Cash-to-Cash Cycle Time
Asset in managing assets to support
Management demand satisfaction. This includes Return on Supply Chain
the management of all assets: fixed Fixed Assets
and working capital.
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21. Reliability Reliability
Assets Responsiveness Responsiveness
Assets
Cost Flexibility Cost Flexibility
Product Introduction – Early Adopters New Product – Market Share
Reliability Reliability
Responsiveness
Assets Responsiveness Assets
Cost Flexibility Cost Flexibility
Mature Product – “Cash Cow” Mature Product – End of Life
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22. Supply Chain SCORcard Performance Versus Competitive Population
Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements
Delivery Performance to
Supply Commit Date 50% 85% 90% 95%
Chain
Reliability
Fill Rates 63% 94% 96% 98%
EXTERNAL
Perfect Order Fulfillment 0% 80% 85% 90% $30M Revenue
Responsiveness Order Fulfillment Lead times 35 days $30M Revenue
7 days 5 days 3 days
Supply Chain Key enabler to cost and
Flexibility Response Time 97 days 82 days 55 days 13 days asset improvements
Production Flexibility 45 days 30 days 25 days 20 days
Total SCM Management
Cost
3% $30M Indirect Cost
19% 13% 8%
INTERNAL
Cost Warranty Cost NA NA NA NA NA
Value Added Employee
Productivity
NA $156K $306K $460K NA
Inventory Days of Supply 119 days 55 days 38 days 22 days NA
Cash-to-Cash Cycle Time
Assets 196 days 80 days 46 days 28 days $7 M Capital Charge
Net Asset Turns (Working
2.2 turns 8 turns 12 turns 19 turns NA
Capital)
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23. Revenue
Accounts Receivable
Cash Flow
Perfect Order
Fulfillment
Cycle Time
Supplier Schedule Perfect Order
on time delivery Achievement Fulfillment
On Time
On Time
Delivery In Full
In Full
Performance
Docs
Docs
European Damage
RM Supplier Damage
S2 M2 D2
Supplier Perfect Order
on time delivery Fulfillment
Key Other S2
RM S1 M1 D1 M1 D1 S1 D1 S1
Suppliers
S1
RM Alpha
Suppliers ALPHA Regional Consumers
Warehouses
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24. Revenue
Accounts Receivable
Cash Flow
Perfect Order
Fulfillment
Perfect Order
Cycle Time
Inventory Fulfillment
Goal – 95%
Metrics Supplier Schedule Perfect Order
Conflict Supplier
on time delivery Schedule
Achievement Fulfillment Order
Perfect
on time delivery Achievement
Fulfillment Perfect Order
Actual – 85% Actual – 95%
On Time Actual – 90% On TimeFulfillment
Actual - 85%
Delivery In Full
Delivery In Full
Performance
Performance
Docs
Actual – 99% Docs
European Under-performance
Damage
Damage
RM Supplier S2 M2 D2 •Process
Supplier Perfect Order
•Systems on time delivery Fulfillment
Key Other S2 Under-performance
M1 D1
RM
Suppliers
S1 M1 D1 S1
•Process S1
D1
•Systems
S1
RM Alpha
Suppliers ALPHA Regional Consumers
Warehouses
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25.  SCOR Implementations (Practitioner)
◦ Vary in scope and objective
 Green Field – Establishing a new supply chain
 Distribution analysis – Implementing distribution strategy
 Planning – Improving planning processes
 Supply Chain Failure Analysis
 Information Technology
 SCOR Implementation (Academia)
◦ Curriculum
◦ Research Projects
 SCOR Implementation (Consultants)
 SCOR Implementation (Government)
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