Membership. Overview Presentation. Supply Chain Operations Reference-model (SCOR)

Transcription

1 Overview Presentation Operations Reference-model (SCOR) June The SCC is an independent, not -for -profit, global corporation with membership open to all companies and organizations interested in applying and advancing state-of-the-art supply chain management systems and practices. Over 800 Company Members Cross-industry representation Chapters in Australia/New Zealand, Brazil, Europe, Japan, North America, Southern Africa, and South East Asia with petitions for additional chapters pending. The Supply-Chain Council (SCC) has developed and endorsed the Operations Reference-model (SCOR) as the crossindustry standard for supply chain management January, Membership Member by Type Members by Region Europe Practitioners Software Vendors Consultants Non-Profits Japan SEA ANZ USA/Canada/Mex ROW SAfrica 800+ SCC members, Composition 40%: Practitioners 25%: Enabling Technology Providers 20%: Consultants 15%: Universities, Associations, Government Organizations January,

2 Operations Referencemodel (SCOR) Overview What is a process reference model? Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a crossfunctional framework Business Process Reengineering Capture the as-is state of a process and derive the desired to-be future state Benchmarking Quantify the operational performance of similar companies and establish internal targets based on best-inclass results Best Practices Analysis Characterize the management practices and software solutions that result in bestin-class performance Process Reference Model Capture the as-is state of a process and derive the desired to-be future state 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-inclass performance January, What is a process reference model? A Process Reference Model describes Standard descriptions of management processes A framework of relationships among the standard processes Standard metrics to measure process performance Management practices that produce best-inclass performance Software tools that enable best practices January,

3 Why use a process reference model? A process reference model allows companies to: Communicate, using common terminology and standard descriptions of the process elements Leverage metrics and benchmarking to determine performance goals, set priorities, and quantify the benefits of process changes Understand the best practices that yield the best performance Understand the overall SCM process and evaluate overall performance Identify the software tools best suited for their process requirements Once a business process has been captured in a process reference model it can be: Described unambiguously Communicated consistently (Re)designed to achieve competitive advantage Measured, managed, controlled, and refined to meet specific purposes January, SCOR Boundaries SCOR Spans: All supplier / customer interactions Order entry through paid invoice All physical material transactions From your supplier s supplier to your customer s customer, including equipment, supplies, spare parts, bulk product, software, etc. All market interactions From the understanding of aggregate demand to the fulfillment of each order s January, SCOR Boundaries (cont d) SCOR does not include: Sales administration processes Technology development processes Product and process design and development processes Some post-delivery technical support processes SCOR assumes but does not explicitly address Training Quality Information Technology (IT) administration (non-scm) January,

4 SCOR is structured around five distinct management processes Plan Deliver Source Make Deliver Internal or External Source Make Deliver Source Make Deliver Your Company Customer Internal or External Source Customer s Customer SCOR Model Building Block Approach Processes Best Practice Metrics Technology January, Processes that balance aggregate demand and supply to develop a course of action which best meets the business rules processes Plan January, Demand/supply planning Assess supply resources, aggregate and prioritize demand requirements, plan inventory, distribution requirements, production, material, and roughcut capacity for all products and all channels Manage planning infrastructure Make/buy decisions, supplychain configuration, long-term capacity and resource planning, business planing, product phasein/phase-out, manufacturing ramp-up, end-of-life management, product-line management Continued Processes that procure goods and services to meet planned or actual demand Source Sourcing/material acquisition Obtain, receive, inspect, hold, and issue material Manage sourcing infrastructure Vendor certification and feedback, sourcing quality, inbound freight, component engineering, vendor contracts, initiate vendor payments January,

5 Processes that transform goods to a finished state to meet planned or actual demand Continued Make January, Production execution Request and receive material, manufacture and test product, package, hold and/or release product Manage make infrastructure Engineering changes, facilities and equipment, production status, production quality, shop scheduling/sequencing, short-term capacity Processes that provide finished goods and services to meet planned or actual Continued Deliver Order demand management Enter and maintain orders, generate quotations, configure product, create, and maintain customer database, manage allocations, maintain product/price database, manage accounts receivable, credits, collections, and invoicing Warehouse management Pick, pack, and configure products, create customer specific packaging/labeling, consolidate orders, ship products Transportation and installation management Manage traffic, manage freight, manage product import/export Schedule installation activities, perform installation, verify performance Manage deliver infrastructure Manage channel business rules, order rules, manage deliver inventories, manage deliver quality January, A process reference model differs from classic process decomposition models Classic process decomposition models are strictly hierarchical Level Contains: Process 1 Process Element Process Element Task Task Activities Activities Process decomposition models are developed to address one specific configuration of process elements January, Process Reference Models accommodate a number of constructs Provide a balanced horizontal (cross-process) and vertical (hierarchical) view Designed to be (re)configurable Used to represent many different configurations of a similar process Aggregate a series of hierarchical process models 5

6 P3.1 Identify, Prioritize, and Aggregate Production Requirements P3.2 Identify, Assess, and Aggregate Production Resources Source Plan Make P3.3 P3.4 Balance Production Resources with Production Requirements Establish Detailed Production Plans Deliver SCOR contains three levels of process detail Level # Description Schematic Comments Operations Reference -model Top Level (Process Types) Configuration Level (Process Categories) Process Element Level (Decompose Processes) Level 1 defines the scope and content for the Operations Reference-model Here basis of competition performance targets are set A company s supply chain can be configured-to - order at Level 2 from approximately 19 core process categories. Companies implement their operations strategy through the configuration they choose for their supply chain Companies fine tune their Operations Strategy at Level 3 Level 3 defines a company s ability to compete successfully in its chosen markets and consists of: Process element definitions Process element information inputs and outputs Process performance metrics Best practices, where applicable System capabilities required to support best practices Systems/tools by vendor Not in Scope 4 Implementation Level (Decompose Process Elements) Companies implement specific supply-chain management practices at this level Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions January, Supply-Chain Operations Reference-model (SCOR) Processes Plan P1 Plan P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan s Source Make Deliver Source Stocked Products M1 Make-to-Stock D1 Deliver Stocked Products 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 Customers Source Deliver Enable January, Each basic supply chain is a chain of Source, Make, and Deliver Execution processes Plan Plan Plan Plan A... Source Make Deliver Customer & Customer & Customer & Each intersection of two execution processes (Source-Make-Deliver) is a link in the supply chain Planning processes manage these customersupplier links January,

7 Customer Customer Customer Customer SCOR Project Roadmap Analyze Basis of Competition Operations Strategy Competitive Performance Requirements Performance Metrics Scorecard Scorecard Gap Analysis Project Plan SCOR Level 1 Configure supply chain Material Flow AS IS Geographic Map AS IS Thread Diagram Design Specifications TO BE Thread Diagram TO BE Geographic Map SCOR Level 2 Align Performance Levels, Practices, and Systems Information and Work Flow AS IS Level 2, 3, and 4 Maps Disconnects Design Specifications TO BE Level 2, 3, and 4 Maps SCOR Level 3 Implement supply chain Processes and Systems Develop, Test, and Roll Out Organization Technology Process People January, Mapping material flow (, D1) (SR1,DR1,DR3) Manufacturing Warehouse () (SR1,SR3) Other (D1) Warehouse (, D1) (SR1,DR1,DR3) (,, M1, D1) (SR1,,DR1) Warehouse (, D1) (SR1, DR3) Latin American (D1) European (D2) (DR1) () (SR1,SR3) Warehouse (, D1) (SR1,DR1,DR3) () (SR1,SR3) () (SR1,SR3) January, Mapping the execution processes Americas Distributors SR1 European RM M2 D2 SR3 M1 D1 D1 DR1 SR1 DR1 SR1 DR1 SR1 DR3 SR3 DR3 SR3 Key Other RM M1 D1 RM ALPHA Alpha Regional Warehouses Distributors January,

8 Identifying Plan Activities P1 P1 P1 P2 P3 P4 P3 P2 P2 P4 P4 European RM M2 D2 Key Other RM M1 M1 D1 D1 D1 RM ALPHA Alpha Regional Warehouses Consumer Distributors January, Linking Performance Attributes and Level 1 Metrics Performance Attribute Performance Attribute Definition Level 1 Metric Delivery Reliability Responsiveness Flexibility The performance of the supply chain 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. The velocity at which a at which a supply chain provides products to the customer. The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage. Delivery Performance Fill Rates Order Lead Times Response Time Production Flexibility Costs The costs associated with operating the supply chain. Cost of Goods Sold Total Management Costs Value-Added Productivity Asset Management Efficiency The effectiveness of an organization in managing assets to support demand satisfaction. This includes the management of all assets: fixed and working capital. Warranty / s Processing Costs Cash- to-cash Cycle Time Inventory Days of Supply Asset Turns January, Level 1 Performance Metrics SCOR Level 1 supply chain Management Customer-Facing Reliability Responsiveness Flexibility Internal -Facing Cost Assets Delivery performance Fill rate Perfect order fulfillment Order fulfillment lead time Response Time Production flexibility Total SCM management cost Cost of Goods Sold Value-added productivity Warranty cost or returns processing cost Cash-to-cash cycle time Inventory days of supply Asset turns January,

9 Scorecard & Gap Analysis EXTERNAL SCORcard Performance Versus Competitive Population Parity Advantage Superior Overview Metrics SCOR Level 1 Metrics Actual Value from Improvements Delivery Performance to 85% 90% 95% Supply Commit Date 50% Chain Fill Rates 63% 94% 96% 98% Reliability 80% 85% 90% 0% $30M Revenue Responsiveness Order Lead times 35 days 7 days 5 days 3 days $30M Revenue 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 19% 13% 8% 3% $30M Indirect Cost INTERNAL Cost Warranty Cost NA NA NA NA NA Value Added Employee NA $156K $306K $460K NA Productivity Inventory Days of Supply 119 days 55 days 38 days 22 days NA Assets Cash-to-Cash Cycle Time 196 days 80 days 46 days 28 days $7 M Capital Charge Net Asset Turns (Working Capital) 2.2 turns 8 turns 12 turns 19 turns NA January, Cycle Time Decomposing Metrics Revenue Accounts Receivable Cash Flow on time delivery Schedule Achievement European RM Key Other RM M2 Delivery Performance D2 M1 D1 M1 D1 D1 On Time In Full Docs Damage on time delivery On Time In Full Docs Damage RM ALPHA Alpha Regional Warehouses Consumer Consumer January, Performance Measurement Revenue Accounts Receivable Cash Flow Cycle Time Inventory Goal 95% European RM Key Other RM Metrics Schedule Conflict on time delivery Achievement Schedule on time delivery Achievement Actual 85% Actual 95% On Time Actual 90% On Time Actual - 85% Delivery Delivery In Full Performance In Full Performance Docs Actual 99% Docs Under-performance Damage Damage M2 D2 Process Systemson time delivery Under-performance M1 D1 M1 D1 D1 Process Systems RM RM ALPHA Alpha Regional Warehouses Consume Consumer Consumer r January,

10 Intel As-Is Modeled in Easy SCOR Assemble/ Package Distribution Centers Geo Ports of Entry Americas--- > Europe--- > Asia ---> January, SCOR Projects A Wide Range of Adoption Consumer Foods Project Time (Start to Finish) 3 months Investment - $50,000 US 1 st Year - $4,300,000 US Electronics Project Time (Start to Finish) 6 months Investment - $3-5 Million US Projected on Investment - $ 230 Million US Software and Planning SAP bases APO key performance indicators (KPIs) on SCOR Model Aerospace and Defense SCOR Benchmarking and use of SCOR metrics to specify performance criteria and provide basis for contracts / purchase orders January, info@supply-chain.org 10