Supply Chain Excellence

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1 Supply Chain Excellence A Handbook for Dramatic Improvement Using the SCOR Model Third Edition Peter Bolstorff and Robert Rosenbaum AMACOM American Management Association New York Atlanta Brussels Chicago Mexico City San Francisco Shanghai Tokyo Toronto Washington, D.C.

2 Contents Preface xv Acknowledgments xvii Introduction 1 Chapter 1 The Supply Chain Operations Reference Model 9 > The Cross-Industry Standard for Supply Chain The Supply Chain Council The SCOR Framework Value Chain Processes Using SCOR to Drive Supply Chain Improvement Build Organizational Support Define Project Scope Analyze Performance > Develop Project Portfolio?> Implement Projects Extend to the Greater Value Chain The Value of a SCOR Initiative Chapter 2 Phase 0: Build Organizational Support for Supply Chain Improvement 17 > Finding the Tipping Point for Change The Evangelist The Evangelist's Resume Experience vii

3 viii Contents The Active Executive Sponsor Educate-for-Support Behaviors of the Active Executive Sponsor Planning and Organizing Behaviors of the Active Executive Sponsor Measures and Strategy Behaviors of the Active Executive Sponsor Design Solutions Behaviors of the Active Executive Sponsor Establishing Core Team Buy-In Collective Experience Attitude Effective Communication Skills Ability to Cope Well in Chaos Picking the Project Design Team Problem-Solving Experience Personality Factors Dedication: Discipline to Tasks Access to Data Chapter 3 Phase 1: Define Project Scope 37 > Planning and Organizing a Supply Chain Excellence Initiative The Business Context Summary Strategic Background, : Financial Performance Internal Profile External Profile The Supply Chain Definition Matrix /( The Project Charter ^ Chapter 4 Phase 2: Analyze Performance 55 > April 18 and 25: Project KickofFand SCOR Metrics The Project Kickoff Picking a Balanced Set of Supply Chain Metrics Data Collection and Benchmarks Chapter 5 Phase 2: Data, Benchmarks, and Competitive Requirements 73 > May 2 and 9: Putting Performance in Perspective Initial Data Review

4 Contents ix The SCORmark Survey Competitive Requirements Analysis Rules for Prioritization Metric Defect Analysis Sponsor Update Considerations Chapter 6 Phase 2: Scorecards and Gap Analysis 87 May 16 and 23: Estimating the Size of the Opportunity The Scorecard Review The Scorecard Gap Analysis Chapter 7 Phase 2: Defect Analysis 95 May 30 and June 6: Answering the Questions of Who, What, Where, When, and How Much and Then Telling the Steering Team Defect Analysis Perfect Order Fulfillment Order Fulfillment Cycle Time Upside Supply Chain Flexibility Supply Chain Management Cost Inventory Days of Supply Planning for the First Team On-Site The Steering Team Review Change Management: Dealing witji.denial Change Management: Placing Blame Change Management: Book the Numbers Chapter 8 Phase 3: Develop the Project Portfolio 107 June 16 and July 11-15: Building Shared Vision and the Project List Planning the Brainstorm Event Invitees Effective Communication Organized Brainstorm Categories

5 x Contents The Appropriate Venue Predefined Leadership Roles Documentation Approach Conducting the Brainstorm Session Chapter 9 Phase 3: Refine the Project Portfolio 119 July 11-15: Validating the Project Benefits and SCOR Processes Consolidating Problems to Projects Using SCOR Validating the Problem Weight Chapter 10 Phase 3: Opportunity Analysis 129 July 11-15: Due Diligence for the Project List Summarizing the Opportunity The Project Opportunity Worksheet Identify Further Validation Resources Conducting Steering Team Review Number Three Chapter 11 Phase 4: Lay Groundwork to Implement Projects 137 Mapping Out the Details and Portfolio Implementation F'lans Implementation Project Charters Chapter 12 *-r Phase 4: From Portfolio Development to Implementation 145 Organizing Supply Chain Improvement as Part of Daily Life: Faster, Better, and Cheaper Initiating Implementation Chapter 13 Phase 4: Initiate Implementation 149 Getting Organized, Getting People, Getting Data Identify and Approve Project Resource Plan Establish the Project Schedule and KickoffDate Review Project Background and Develop the Performance Baseline

6 Contents xi Chapter 14 Phases 2-4: The Staple Yourself Interview and SCOR Level 3 Process Diagram 163 June 13-17: How the Work Really Gets Done; a Tool for All Phases Preparing for the Staple Yourself Interview Understanding the Staple Yourself Interview Worksheet Fowlers Analysis of P3 Plan Make Assembling the AS IS Process and RACI Diagrams Chapter 15 Phase 4: Solution Design 179 Defining How the Process Should Work at SCOR Level 3 The SCOR Level 3 Blueprint Configuring the Level 3 Blueprint for Project 7 Chapter 16 Phase 4: Level 4 Process Development and the Storyboard 191 How Business Process Improvement Is Like a Good Cartoon Constructing a SCOR Level 4 Process Plan Supply Chain (PI) Level,4 Samples Fowlers P3 Level 4 Processes and Storyboard Chapter 17 Phase 4: Configure, Solution Test, Pilot? Refine, and Roll Out 219 Moving the Needle on Performance Configuration (or Build) Solution Test Pilot One, Refine, and Pilot Two Rollout Chapter 18 Phase 4: Supply Chain Strategy 229 Supply Chain Excellence as a Way of Life What Is Supply Chain Strategy?

7 xii Contents Trading Partner Trading Partner Dimensional Challenges Organization Organization Dimensional Challenges Processes Process Dimensional Challenges Technology Technology Dimensional Challenges Performers Performer Dimensional Challenges Chapter 19 Extend to the Greater Value Chain 239 > Analyzing Barriers to Profitable Growth Value Chain Excellence Build Organizational Support Identify Value Chain Improvement Roles, Evangelists, Active Executive Sponsor(s), Core Steering Team, and Design Team Assemble and Deliver Appropriate Educational Content and Gain Consensus for a Pilot Project Define Value Chain Project/Scope Calculate the Number of Value Chains Assemble High-Level Industry Comparison Decide on the Project Scope Analyze Value Chain Performance and^roject Portfolio Development Identify Appropriate Value Chain Performance Metrics and Assemble Appropriate Benchmark Comparisons (Deliverables 1 and 2) Assess and Prioritize Competitive Requirements Perform Metric Defect Analysis Develop a Project Portfolio Implementation Considerations Product-to-Market Map Level 2 Process Diagrams Staple Yourself Interviews TO BE Level 4 Process Diagrams with Information System Storyboards Conclusion

8 Contents xiii Appendix Fowlers Inc. Supply Chain Excellence Project Charter 261 I. Introduction Purpose of the Project Charter Project Charter Contents Maintenance of the Project Charter II. Project Overview Scope Business Objectives Project Objectives III. Project Approach Methodology Project Schedule Steering Team Meetings Risks and Dependencies Project Organization Roles and Responsibilities Benefits and Measures of Success Benchmark Sources Benefit Analysis Project Communication Index 273

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