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April 2005 1 Overview Presentation Supply Chain Operations Reference-model (SCOR)

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Presentation on theme: "April 2005 1 Overview Presentation Supply Chain Operations Reference-model (SCOR)"— Presentation transcript:

1 April Overview Presentation Supply Chain Operations Reference-model (SCOR)

2 SCOR Overview April 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. 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 Over 800 Company Members Cross-industry representation 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. 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 Supply Chain Operations Reference-model (SCOR) as the cross- industry standard for supply chain managementThe Supply-Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference-model (SCOR) as the cross- industry standard for supply chain management

3 SCOR Overview April SCC Organization - Chapters and Staffing Australia/New Zealand Chapter Sydney, Australia South East Asia Chapter Singapore Venture Inc. South East Asia Chapter Singapore Venture Inc. Japan Chapter Tokyo, Japan NEC NEC SCC Global Headquarters Washington D. C. SCC Global Headquarters Washington D. C. Europe Brussels, Belgium Modus Media Europe Brussels, Belgium Modus Media Southern Africa Johannesburg, South Africa UTi UTi North America Chapter Washington D.C. Disney Disney Brazil Chapter

4 SCOR Overview April SCC Leadership Teams Australia/New Zealand Owens Global Logistics – C Health Purchasing Victoria – VC Oracle RMIT University MI Services BHP EAN Australia Europe Diversey Lever– C Siemens AG – VC Euro-Chain Bomardier Tansportation BASF AG Borealis SAP AG Oracle EMEA Rhodia Swiss Federal Institute of Technology EDS UK and SA South East Asia Vemture Corporation – C Phillips CFT – VC Modus Media Deloitte Singapore Institute of Mfg. Technology SCM Institute Autoscan Technology Polyolefin Company Asia Pacific Breweries I2 Technologies iPerintis Sdn Bhd Japan NEC – C JBC Create – VC Mitsui Global Strategic Studies Olympus Optical EXA Chubu Electric Power J.D. Edwards Nihon Unisys Hitachi Hokkaido University Matsushita Electric Industrial Yamaha Toray Systems Center Board of Directors Disney - C Eaton - VC DaimlerChrysler MOPAR Business Process Training Center Europe PeopleSoft I2 Technologies Georgia Institute of Technology IBM SCE Limited ICI Supply Chain Phillips Lighting PRTM McCormick & Company, Inc. HP North America Toys R Us - C Raytheon IBM Adjoined Consulting Avicon Bayer Chemicals The Boeing Company Center for Supply Chain Research / Penn State Air Products and Chemicals Raytheon SAP Elections Pending South Africa Brazil China

5 SCOR Overview April Membership Member by TypeMembers by Region 800+ SCC members, 800+ SCC members, Composition Composition 40%: Practitioners40%: Practitioners 25%: Enabling Technology Providers25%: Enabling Technology Providers 20%: Consultants20%: Consultants 15%: Universities, Associations, Government Organizations15%: Universities, Associations, Government Organizations

6 SCOR Overview April Current Technical Projects C – Paul Schiller – BP Chemicals C- Lt Col Scott Koster (USMC) Returns C- Michael Memmel - Siemens Metrics MRO Returns C- Joe Burak (Boeing) SCOR Technical Development Steering Committee Best Practice C- Paul Janke (Nokia)

7 Supply Chain Operations Reference- Model (SCOR) Overview

8 SCOR Overview April Quantify the operational performance of similar companies and establish internal targets based on “best-in- class” results Benchmarking Characterize the management practices and 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 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-in- class” performance What is a process reference model? Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross- functional framework Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross- functional framework

9 SCOR Overview April Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make DeliverMakeSource Deliver Source Deliver Internal or External Your Company Source SCOR is structured around five distinct management processes SCOR Model Return Building Block Approach ProcessesMetrics Best PracticeTechnology

10 SCOR Overview April Customers Suppliers P1 Plan Supply Chain Plan P2 Plan Source P3 Plan Make P4 Plan Deliver SourceMakeDeliver S1 Source Stocked Products M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order D1 Deliver Stocked Products D2 Deliver MTO Products D3 Deliver ETO Products S2 Source MTO Products S3 Source ETO Products Supply-Chain Operations Reference-model (SCOR) Processes Return Source P5 Plan Returns Return Deliver Enable D4 Deliver Retail Products

11 SCOR Overview April SCOR Boundaries SCOR Spans: SCOR Spans: All supplier / customer interactionsAll supplier / customer interactions Order entry through paid invoice Order entry through paid invoice All physical material transactionsAll physical material transactions From your supplier’s supplier to your customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc. From your supplier’s supplier to your customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc. All market interactionsAll market interactions From the understanding of aggregate demand to the fulfillment of each order From the understanding of aggregate demand to the fulfillment of each order ReturnsReturns

12 SCOR Overview April SCOR Boundaries (cont’d) SCOR does not include: SCOR does not include: Sales administration processesSales administration processes Technology development processesTechnology development processes Product and process design and development processesProduct and process design and development processes Some post-delivery technical support processesSome post-delivery technical support processes SCOR assumes but does not explicitly address SCOR assumes but does not explicitly address TrainingTraining QualityQuality Information Technology (IT) administration (non-SCM)Information Technology (IT) administration (non-SCM)

13 SCOR Overview April Material Flow SCOR Level 1 Operations Strategy Analyze Basis of Competition SCOR Level 2 Configure supply chain Align Performance Levels, Practices, and Systems Implement supply chain Processes and Systems Implement supply chain Processes and Systems SCOR Project Roadmap Competitive Performance Requirements Performance Metrics Supply Chain Scorecard Scorecard Gap Analysis Project Plan AS IS Geographic Map AS IS Thread Diagram Design Specifications TO BE Thread Diagram TO BE Geographic Map Information and Work Flow AS IS Level 2, 3, and 4 Maps Disconnects Design Specifications TO BE Level 2, 3, and 4 Maps Develop, Test, and Roll Out Organization Technology Process People SCOR Level 3

14 SCOR Overview April Mapping material flow Latin American Suppliers (D1) Warehouse Other Suppliers (D1)Manufacturing European Supplier (S1) (SR1,SR3) (S1, D1) (SR1,DR1,DR3) (D2) (DR1) Warehouse Warehouse Warehouse (S1, D1) (SR1, DR3) (S1, D1) (SR1,DR1,DR3) (S1) (SR1,SR3) (S1, S2, M1, D1) (SR1,,DR1)

15 SCOR Overview April Mapping the execution processes S1 D1S1 M2 S2 D2 M1 D1 S1 S2 D1 M1 European RM Supplier Key Other RM Suppliers Alpha Regional Warehouses S1 DR1SR1 DR1SR1DR1SR1 DR3SR3 RM Suppliers DistributorsALPHA DR3SR3 S1 Americas Distributors Americas Distributors SR1 SR3

16 SCOR Overview April Identifying Plan Activities Consumer P2P2 P4P4P4P4 P4P4P4P4 P3P3 P4P4P4P4 P4P4P4P4 S1 D1S1 P2P2P2P2 P2P2P2P2 P2P2 P3P3P3P3 P3P3P3P3 P4P4P4P4 P4P4P4P4 M2 S2 D2 M1 D1 S1 S2 D1 M1 European RM Supplier Key Other RM Suppliers S1 Alpha Regional Warehouses RM Suppliers DistributorsALPHA P1P1P1P1P1P1

17 SCOR Overview April Linking Supply Chain Performance Attributes and Level 1 Metrics

18 SCOR Overview April Supply Chain Scorecard & Gap Analysis NEW Product Line - Representative of All Scorecards Supply Chain SCORcard v. 7.0 Performance Versus Competitive Population Overview MetricsSCOR Level 1 MetricsActualParityAdvantageSuperiorValue from Improvements EXTERNAL Perfect Order Fulfillment 80%85%90% Order Fulfillment Cycle Time 7 days 5 days3 days Flexibility Responsiveness Upside Supply Chain Adaptability Total SCM Management Cost 19%13%8%3% INTERNAL Cost Assets Cash-to-Cash Cycle Time 196 days80 days46 days 28 days Return on SC Fixed Assets Upside Supply Chain Flexibility 82 days55 days13 days Supply Chain Reliability Downside Supply Chain Adaptability Cost of Good Sold 0% $30M Revenue Key enabler to cost and asset improvements $30M Indirect Cost $7 M Capital Charge 35 days 97 days 0% 54% N/A 50%

19 SCOR Overview April S1 D1S1 M2 S2 D2 M1 D1 S1 S2 D1 M1 S1 Cycle Time ScheduleAchievement Perfect Order Fulfillment DeliveryPerformance Supplier on time delivery on time delivery Perfect Order Fulfillment Fulfillment Supplier on time delivery on time delivery Perfect Order Fulfillment Fulfillment On Time In Full Docs Damage On Time In Full Docs Damage Revenue Accounts Receivable Cash Flow Decomposing Metrics European RM Supplier Key Other RM Suppliers Consumer Alpha Regional Warehouses RM Suppliers ConsumerALPHA

20 SCOR Overview April Consumer RM Suppliers S1 D1S1 M2 S2 D2 M1 D1 S1 S2 D1 M1 S1 Cycle Time ScheduleAchievement Perfect Order Fulfillment DeliveryPerformance Supplier on time delivery on time delivery Perfect Order Fulfillment Fulfillment Supplier on time delivery on time delivery Perfect Order Fulfillment Fulfillment On Time In Full Docs Damage On Time In Full Docs Damage Revenue Accounts Receivable Cash Flow Perfect Order Fulfillment Fulfillment Actual - 85% Perfect Order Fulfillment Goal – 95% ScheduleAchievement Actual – 95% Perfect Order Fulfillment Fulfillment Actual – 90% DeliveryPerformance Actual – 99% Supplier on time delivery on time delivery Actual – 85% MetricsConflict Inventory Under-performance Process Process Systems Systems Under-performance Process Process Systems Systems Performance Measurement Consumer Alpha Regional Warehouses RM Suppliers ConsumerALPHA European RM Supplier Key Other RM Suppliers

21 SCOR Overview April Implementation Issues SCOR Implementations SCOR Implementations Vary in scope and objectiveVary in scope and objective Green Field Green Field Distribution analysis Distribution analysis Planning Improvements Planning Improvements Change Management / COTS-Consultant Selection Change Management / COTS-Consultant Selection How to conduct an ROI evaluation How to conduct an ROI evaluation Senior Management support vs. Middle Manager resistance Senior Management support vs. Middle Manager resistance Project timelines Project timelines BenchmarkingBenchmarking ImplementationImplementation Tools Tools

22 SCOR Overview April ATT Wireless – Fixed Wireless Operations

23 SCOR Overview April Suppliers Supplier SuppliersAssemble/ PackageDistribution CentersGeo Ports of Entry Americas---> Europe---> Asia---> Intel As-Is Modeled in Easy SCOR

24 SCOR Overview April Gold’n Plump Supply Chain Planning

25 SCOR Overview April F404 Engine HP Rotor Assy SR2DR2 NAS CV NADEP NAVICP DSC S1 S2 (carcass) M2D2S1D1S1 M2 Serviceable Rotor Assy Unserviceable Rotor Assy S1D1D2 Self Locking Nut S2 (carcass) Unserviced Engine Module D1 Svc Engine Fairchild Fasteners 164 Days 32 Days 98 days 60% of Requireme nt Accepted, 90% of that Completed on time 77%SMA 25% On- Time F/A 18 Serviceable Modules 188% of Requirement, Svc Engines 112% of Requirement

26 SCOR Overview April Best practice achieved Practice adopted Practice not yet adopted Carter Holt Harvey – Focus on Best Practice / Change Management COTS / Consultant Evaluations

27 SCOR Overview April USMC SRAC – IT Gaps and Redundancies

28 SCOR Overview April SCOR Projects – A Wide Range of Adoption Consumer Foods Consumer Foods Project Time (Start to Finish) – 3 monthsProject Time (Start to Finish) – 3 months Investment - $50,000 USInvestment - $50,000 US 1 st Year Return - $4,300,000 US1 st Year Return - $4,300,000 US Electronics Electronics Project Time (Start to Finish) – 6 monthsProject Time (Start to Finish) – 6 months Investment - $3-5 Million USInvestment - $3-5 Million US Projected Return on Investment - $ 230 Million USProjected Return on Investment - $ 230 Million US Software and Planning Software and Planning SAP bases APO key performance indicators (KPIs) on SCOR ModelSAP bases APO key performance indicators (KPIs) on SCOR Model Aerospace and Defense Aerospace and Defense SCOR Benchmarking and use of SCOR metrics to specify performance criteria and provide basis for contracts / purchase ordersSCOR Benchmarking and use of SCOR metrics to specify performance criteria and provide basis for contracts / purchase orders

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