INTEGRATING THE SUPPLY CHAIN TO REAP THE REWARDS CHAPTER 7 INTEGRATING THE SUPPLY CHAIN TO REAP THE REWARDS

Learning Objectives Understand the History and Context of SCOR Learn the Components of the SCOR Framework Process Nomenclature Process Metrics Process Best Practices Understand how to model a Supply-Chain with SCOR Understand how to characterize a Supply-Chain with SCOR metrics Apply the SCOR framework using a simplified SCOR Project Roadmap

Supply Chain Operation Reference Model(SCOR): Information about (SCC) Developed by Supply Chain Council SCC:Independent , not for profit xorganisation that developed and actively manages the Supply Chain Operations Reference (SCOR) model. Membership open to all companies and organizations The SCOR® model is globally recognised as the standard framework that links supply chain process, performance, practices, people (organizations) and technology into a unified structure.

Supply Chain Operation Reference Model(SCOR): Information about (SCC) APICS defines Supply Chain Management as the“planning, organizing, and controlling of supply chain activities.” Developer and endorser of the Supply Chain Operations Reference (SCOR®) as a cross-industry standard for supply chain management Offers Training, Certification, Benchmarking, Research, Team Development, Coaching, and Cross-standard Integration focused on the SCOR® framework Founded in 1996

SCOR: A Process Framework Process frameworks deliver the well-known concepts of business process reengineering, benchmarking, and best practices into a cross-functional framework Standard processes: Plan, Source, Make, Deliver, Return, Enable Standard metrics: Perfect Order Fulfillment, Cash-to-Cash Cycle Time, Cost of Goods Sold, Order Fulfillment Cycle Time, etcetera Standard practices: EDI, CPFR, Cross-Training, Sales & Operations Planning, etcetera Pre-defined relationships between processes, metrics and practices and inputs and outputs

Combines Best Techniques Business Process Re-Engineering Benchmarking Best Practices Analysis Process Reference Framework Capture the ‘As-is’ business activity structure and derive the future ‘To-be’ 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 superior performance Capture the ‘As-is’ business activity structure and derive the future ‘To-be’ 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 superior performance 3 techniques become 1 integrated approach

Supply Chain Operation Reference Model(SCOR) The Primary use of SCOR: TO describe, measure and evaluate supply chain configuration Effective Supply Chain Management is when individuals work together collaboratively to focus on the end customer and provide benefit to all the links. SCOR contains: Standard description of management processes A framework of relationships among the standard processes Standard metrics to measure process performance Management practices that produce best-in-class performance Enable the companies to: Evaluate and compare their performances with other companies effectively Identify and pursue specific competitive advantages Identify software tools best suited to their specific process requirements

SCOR Boundaries SCOR spans: All supplier/customer interaction Order entry through paid invoice All Physics material interactions From your supplier’s supplier to your customer’s customer, including equipment, supplies, spare parts, bulk products, software etc.s All market interactions From the understanding of aggregate demand to the fulfillment of each order Retrurns

SCOR Boundaries(cont’d) SCOR doesn’t include: Sales and marketing (demand generation) Research and technology development Product development Some elements of postdelivery customer support

Supply Chain Operation Refernce Model(SCOR): Basic Management Processes Supplier Customer Suppliers’ Supplier Source Internal or External Your Company Return Deliver Make Plan Customers’ Customer SCOR reference model Plan-Source-Make-Deliver-Return provide the organizational structure of the SCOR Model

Scopes of Basic Management Processes Plan (Processes that balance aggregate demand and supply to develop a course of action which best meets sourcing, production and delivery requirements) Balance resources with requirements Establish/communicate plans for the whole supply chain Source (Processes that procure goods and services to meet planned or actual demand) Schedule deliveries (receive, verify, transfer) Make(Processes that transform product to a finish state to meet planned or actual demand) Schedule production Deliver (Processes that provide finished goods and services to meet planned or actual demand, typically including order management , transportation, management and distribution management) Warehouse management from receiving and picking product to load and ship product Return (Processes associated with returning or receiving returned products) Manage Return business rules

SCOR Contains Three Levels of Process Detail

Performance Measurement SCC has done in great job in providing level 1 metrics in the SCOR model by which to measure the performance of the overall supply chain.

Observations SCOR describes processes not functions. In other words, the Model focuses on the activity involved, not the person or organizational element that performs the activity.

Summary Business process re-engineering and organizational project management maturity model are tools that can assist a company in putting together a successful project BPR will help develop rationale for moving from a legacy system to an ERP system OPM3 will assess the company’s skills and abilities to implement an ERP successfully. BPM will institutionalize small incremental changes to improve the success of ERP systems

Review Questions What are the steps in business process reengineering? Why is BPR important in an ERP implementation? What does the organizational project management maturity model do for a company‘s ERP implementation? What are the steps involved in OPM3? What is the role of the project management office in an ERP implementation? Why is change management critical to the success of a project from the beginning?

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