Best Practice Adoption of SCOR An APICS Supply Chain Council Executive Briefing APICS Canadian and Northeast District Joint Meeting Ottawa, Canada September 18 and 19, 2015

Discussion Topics APICS Supply Chain Council What is SCOR? Best Practice Corporate Adoption

Introduction Peter Bolstorff, CSCP, SCOR-P Executive Director | APICS Supply Chain Council Delegate from 3M and then Imation for SCOR 1.0 in 1996 Expertise in Manufacturing and Planning including Center of Excellence Leadership for Sales and Operations Planning Authored, Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR Model, 3rd Edition First Supply Chain Council non-staff Certified Instructor and now SCOR-P and CSCP From 2002 to 2014, Helped 30+ Companies Analyze $13.5B USD Deriving $200M USD in Operating Income Improvements Have volunteered with the SCC since the beginning Industry experience includes Chemical, Retail, Food and Grocery, Electronics, Durable Goods, Consumer Packaged Goods, and Aerospace and Defense

About the APICS Supply Chain Council 1:30 pm

Improved Economies Improve Lives Purpose APICS Develops People People Improve Supply Chains Supply Chains Improve Economies Improved Economies Improve Lives APICS SCC Develops Organizations Organizations Improve Supply Chains Script APICS and the APICS Supply Chain Council offer a comprehensive corporate engagement experience that can be tailored to support the organizational goals of our corporate clients. Through research, industry-leading frameworks, and benchmarking, as well as professional training and certification programs, APICS and the APICS Supply Chain Council enable supply chain organizations to develop and access supply chain talent and elevate supply chain performance. APICS is unique as it offers the only single-source solution for individuals and organizations looking to advance supply chain knowledge and performance. 

New Value Proposition APICS Value Proposition APICS APICS SCC Training, certification and networking Research, benchmarking and frameworks APICS APICS SCC APICS Value Proposition Individuals Corporate, Public Sector and Academic Institutions Script This graphic represents the new APICS value proposition post merger. APICS, the leading authority on the supply chain and operations management body of knowledge (and certification) plus the supply chain council, the standard reference model for supply chain across the globe Now positions APICS as one largest nonprofits supporting individual AND organizational supply chain performance. APICS delivers a total individual and corporate value proposition. We help individuals achieve career development goals. We help corporations achieve strategic supply chain goals.

APICS SCC The legacy SCC integrated with the former APICS Foundation to form the new APICS SCC. The new organization continues the tradition of funding scholarships and student programs; still operates as a global, non-profit entity; and actively manages the Supply Chain Operations Reference (SCOR) model. Programs and Services Plossl Dissertation, Scholars Program, Student Case Competition Research Projects, Corporate Advisory Board, Executive Summit SCORmark™ Benchmark Publications, Resource Library, and Case Studies Other Value Chain Frameworks including M4SC, DCOR®, CCOR®, and PLCOR® Training is now available through APICS Script For those who have a legacy of supply chain council involvement, we have maintained our nonprofit status. We are no longer a trade association but a public charity. It keeps our unbiased advantage and further our mission toward the greater good. Being generally a data person, I was able to get a peek at the 40,000 plus records that migrated from the legacy system into the APICS system – 5,000 organizations have utilized SCOR across the planet since 1996. APICS SCC Services (accessed through a company subscription) include continued engagement in projects, a seat on the APICS Corporate Advisory Board which helps us prioritize our research agenda, and we are bringing back our executive summit slated for February 2016. We have greatly expanded our SCORmark benchmark capability to include practices maturity, complexity, and SCOR L1, 2, and 3 performance comparatives. SCOR training is the biggest change – it is being managed and offered through the traditional APICS channels. This is one of many best practices that will help SCOR become more widely accessible. Our full website is slated to be back on line in March – stay tuned. In April, we are introducing the SCOR App; similar to the APICS Learn It dictionary App, this will be available to all APICS constituents.

404 253 131 253 64 17 14 12 Affiliate Snapshot 2015 91 60 AFFILIATES CORPORATE AFFILIATES ACADEMIC AFFILIATES PUBLIC SECTOR AFFILIATES TOP 10 COUNTRIES AFFILIATES 131 RK COUNTRY # 1 United States 146 2 Germany 32 3 China 31 4 Switzerland 16 5 South Africa 15 6 Netherlands 14 7 United Kingdom 13 8 Canada 10 9 France Sweden 253 64 17 14 12

What is SCOR? 1:45 pm Script So for those of you who are not familiar with SCOR, the next 9 slides are for your benefit. For those who are familiar with SCOR, we hope that you will pick up some implementation hints to make your experience better. What is SCOR? Process and Metrics Why do companies use SCOR? How do companies implement SCOR? What are the benefits from implementing SCOR?

Other APICS SCC Frameworks Customer processes Supplier processes Product & Portfolio Management PLCOR™ Supply Chain SCOR® Product & Process Design DCOR™ Sales & Support CCOR™ Script SCOR is one of four processes that have been introduced through the supply chain council. SCOR is the oldest and most mature followed by DCOR, CCOR, and newly introduced PLCOR. M4SC, which is not pictured here is a supply chain leadership framework that we hope to introduce on a larger scale in 2015.

About SCOR: A Process Framework Combining four techniques into a single integrate approach

SCOR® Processes SCOR MODEL Plan Source Make Supplier Your Organization Deliver Plan Deliver Source Make Deliver Source Make Deliver Source Return Return Return Return Return Return Return Return Enable Enable Enable Suppliers’ Supplier Customers’ Customer Supplier Your Organization Customer Internal or External Script From a trading partner scope and process point of view, SCOR is the integrated processes of plan, source, make, deliver, and return from suppliers’ supplier to customers’ customer. To get accustomed to thinking this way, imagine your organization in the center. Who are your customers? Who are your customer’s customers? Likewise, who are your suppliers? And, who are your supplier’s suppliers? One of the projects the APICS SCC is embarking on in 2015 is a collaboration integration maturity model that depicts the desired and current level of collaboration on the supplier and/or customer ends of the supply chain. Internal or External SCOR MODEL

SCOR® Metrics Attribute SCOR 11.0 Metrics Reliability RL.1.1 Perfect Order Fulfillment Responsiveness RS.1.1 Order Fulfillment Cycle Time Agility AG.1.1 Upside Supply Chain Flexibility AG.1.2 Supply Chain Upside Adaptability AG.1.3 Downside Supply Chain Adaptability AG.1.4 Overall Value At Risk (VAR) Cost CO.1.1 Total Cost to Serve Asset Management Efficiency AM.1.1 Cash-to-Cash Cycle Time AM.1.2 Return on Supply Chain Fixed Assets Script So let’s flip the quick reference guide around. The SCOR metric hierarchy another valuable feature of SCOR. There are over 250 metrics codified in the SCOR reference manual spanning from the level one metrics listed here to level two decomposition to level three diagnostic. Review the breakdown of the quick reference guide. APICS is excited to introduce the SCOR App in April of this year – stay tuned to the website.

SCOR® Decomposition Level Description Examples Comments Current scope of SCOR 1 Process Types (Scope) Plan, Source, Make, Deliver, Return and Enable Level-1 defines scope and content of a supply chain. At level-1 the basis-of-competition performance targets for a supply chain are set. 2 Process Categories (Configuration) Make-to-Stock, Make-to-Order, Engineer-to-Order Defective Products, MRO Products, Excess Products Level-2 defines the operations strategy. At level-2 the process capabilities for a supply chain are set. (Make-to-Stock, Make-to-Order) 3 Process Elements (Steps) Schedule Deliveries Receive Product Verify Product Transfer Product Authorize Payment Level-3 defines the configuration of individual processes. At level-3 the ability to execute is set. At level-3 the focus is on the right: Processes Inputs and Outputs Practices Technology capabilities Skills of staff Future scope 4 Activities (Implementation) Industry-, company-, location-, and/or technology specific steps Level-4 describes the activities performed within the supply chain. Companies implement industry-, company-, and/or location-specific processes and practices to achieve required performance. Script I would like all of you to take out your Quick Reference Guides. Turn to the side that focuses on the processes. As you can see from this table and from looking at the guide, there are three levels decomposition. So for those of you familiar with Sales and Operations Planning, let’s trace the levels. Plan is the level 1 process where S&OP is located. P1 Plan Supply Chain is the level 2 process designated to represent S&OP. P1.1 is the level 3 process most closely associated with the demand planning process. P1.2 is the level 3 process most closely associated with the supply planning process and so on. In the past, though the level four processes were needed to implement SCOR, they were not regarded as in scope to the model. As part of the APICS SCC research plan, we have a project targeted on developing a standard set of level 4 processes for sales and operations planning. It has been a long standing request from our user community to add a standard set of SCOR level 4 processes.

SCOR Reference Sources Complete SCOR Model Reference sourcebooks. Two volumes containing the complete SCOR reference framework A quick reference guide providing a detailed summary of SCOR Processes, Metrics, Practices, and People on a single easy-to-use card An easy to access and use application for mobile devices available through iTunes, App Store, and Android Store – Search: APICS SCOR

Best Practice SCOR Adoption

Top Motivations to Use SCOR®

Live Poll Question 1

https://www.polleverywhere.com/multiple_choice_polls/5Pg52yRqPnYsnbI

Live Poll Question 2

https://www.polleverywhere.com/multiple_choice_polls/6fFQ3NYRLq6umMI

What are your organization's main motivations in considering the use of SCOR?

SCOR Improvement Program Racetrack

SCOR Implementation Benefits Average Operating Income improvement of 3% to sales (high 4.5% - low 1.5%) Typical inventory turn improvements of 20% Delivery reliability improvement of 25% 20% improvement in flexibility 30% faster system implementations with 30% more functionality Continuous improvement portfolios refreshed at a value of 0.5% Mitigation of costs associated with risk management Script Of the 150 projects noted in the previous slide, 90 projects from 30 companies demonstrated results from their SCOR Implementations over a two year period. Read through the benefits and include personal example if able. Source: APICS Supply Chain Council 2002 to 2014

Key Deliverables Discussion Project Organization Supply Chain Definition Project Charter SCORmark 3:30 pm Script Between the content setup, exercise, survey, the small group discussion and the large group feedback, we have 45 minutes. Content setup – 5 minutes Exercise – 5 minutes 1 minute for each survey response 1 minute for you to comment on each survey response 10 minutes for small group discussion – 5 minutes each question 15 minutes for large group feedback – 1 minute per group to share

SCOR Improvement Program Organization Program stakeholders Executive team Channel partners Customers Executive sponsor Operations management Technology team Program champion Program team Other stakeholders Financial team Team leader Other teams Functional managers Improvement team Supply chain team Detail Project Subprojects

Supply Chain Definition Matrix: Example Criteria: geographical region, country, products Customers: GE GB SEU Mp3 Inc. product groups Germany Belgium Nether-lands England and Ireland France Italy Spain Mp3 players 300* 125 95 265 110 75 Phones 200 planned 250 185 55 PCs 35 21 * Sales expressed in millions Adapted from Supply Chain Excellence by Peter Bolstorff and Robert Rosenbaum ©2012 Peter Bolstorff and Robert Rosenbaum, AMACOM books, division American Management Association International, New York, NY, p. 47.

Improvement Program Charter Deliverable Section Subsection Discussion Introduction Purpose, table of contents, control/maintenance Improvement program charter overview Program Definition Scope Which supply chains selected Business objectives Performance metrics Improvement program objectives Supply chain performance targets Program organization Definition of program team and shareholders Program Contents Methodology Five-phased SCOR racetrack Schedule Timeline, detailed activities, meetings Roles Program activity responsibles Deliverables and milestones Detailed deliverables and milestones Risks and dependencies Critical risks and avoidance strategies Benefits Measures of success, analysis

Measuring Supply Chain Excellence Attributes Metrics Parity Advantage Superior Target Level Performance Your Organization Gap to Target Customer Facing Metrics Reliability Perfect Order Fulfillment (%) 77.5% 85.6% 93.7% 69.2% 16.4% Responsiveness Order Fulfillment Cycle Time (days) 9.1 6.5 3.9 7.1 – Agility Supply Chain Flexibility (days) 45.0 33.0 21.0 15.0 Supply Chain Adaptability (%) 35.5% 51.3% 72.0% 10.0% 41.3% Internal Facing Metrics Cost Total Supply Chain Management Cost % Revenue 8.7% 5.6% 2.4% 8.1% -5.7% Asset Management Efficiency Cash to Cash Cycle Time (days) 55.4 30.5 5.5 160.5 -105.1 Script The Level 1 SCORmark broken down into five performance attributes (name them). The data consists of your actual performance based on a survey instrument, your benchmark result based on a statistical sample of similar supply chains, and a gap to your competitive requirement – an exercise we will complete next.

APICS Education 4:30 pm

APICS Development Model Gartner Maturity Stage Knowledge and Skills Process-Practice-Performance-People Orchestration SCOR-P and M4SC Leadership Series Supplier’s Supplier to Customer’s Customer Supply Chain Community Collaboration CSCP – Certified Supply Chain Professional Supplier to Customer Single Instance Anticipating CPIM – Certified in Production and Inventory Management Internal Process Reacting Principles of Operations Management Single Process

APICS Principles Program APICS Principles of Operations Management Modular courseware system Foundational knowledge spanning major operations management activities 5 customizable modules; each includes 9 sessions and two exams Classroom-based, instructor-led learning approach Suitable for certificate programs

APICS CPIM Designation APICS Certified in Production and Inventory Management Preferred by employers 100,000+ individuals certified Self-study and group study programs Online and classroom courses 5 study modules and exams Content reviewed annually

APICS CSCP Designation APICS Certified Supply Chain Professional Preferred by employers 17,000+ individuals certified Self-study and group study programs Online and classroom courses 3 study modules; 1 exam Content reviewed annually

SCOR-P Designation SCOR® Professional Introduction to SCOR® model, problem solving, practical application and exercises 3-day workshop; 1 exam Classroom-based, instructor-led learning approach Suitable for certificate programs Available both publicly and in-house

Managing for Supply Chain Leadership Series Align Strategy mAS.01 Business Plan Analysis mAS.02 Supply Chain Segmentation mAS.03 Supply Chain Prioritization mAS.04 Competitive Landscape Analysis mAS.05 Supply Chain Organizational Analysis mAS.06 Supply Chain Strategy Analysis mAS.07 Supply Chain Network Definition mAS.08 Scorecard Definition mAS.09 Supply Chain Data Collection mAS.10 Supply Chain Benchmarking mAS.11 Metrics Organizational Analysis mAS.12 Supply Chain Gap Analysis

Visit APICS SCC online

Q&A 4:15 pm

Thank You!