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Accompanying presentation for the free SCE Ltd. webinar highlighting a best-practice application of SCOR®, and summarizing the key steps to effectively utilize SCOR® in your company’s supply chain improvement initiatives. We strongly urge attending the webinar (http://www.scelimited.com/education/free-scor-best-practice-case-study/) in order to get the most out of the presentation. It is appropriate for anyone who is thinking about using the SCOR® framework, or those who are doing so and want exposure to additional expertise. Topics covered: +Principles of SCOR Application +Metrics, Performance, and the Business Case +Process and System – Work and Information +Organizational Learning Plan +Next Steps
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Using SCOR® A Best Practice Case Study of a Typical SCOR® Project
Objective
§ This webinar highlights a best-practice application of SCOR®, and summarizes the key steps to effectively utilize SCOR® in your company’s supply chain improvement initiative.
§ It is appropriate for anyone who is thinking about using the SCOR® framework, or those that are doing so and want exposure to additional expertise.
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Agenda
1. Principles of SCOR Application
2. Metrics, Performance, and the Business Case
3. Process and System – Work and Information
4. Organizational Learning Plan and Next Steps
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Principles of SCOR® Application
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§ Roadmap
§ Organization
§ Supply Chain Definition
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Roadmap
Phase FOCUS Major Deliverables Challenge
0 BUILD ORGANIZATION SUPPORT
• Sponsor and Key Stakeholder Support
• Education
Finding the Tipping Point for Change
1 DEFINE THE PROJECT
• Business Context Summary • Supply Chain Definition • Project Scope and Charter
Planning and Organizing a Supply Chain Excellence Initiative
2 ANALYZE PERFORMANCE
• Scorecard • Defect Analysis • Process Analysis
Defining the Metric and Process Performance Gap
3 DEVELOP THE PROJECT PORTFOLIO
• Project Portfolio • Implementation Priority
Developing the Project List and Priority for Implementation
4 IMPLEMENT A PROJECT
• Development, Pilot, and Implementation of a Portfolio Project
• Results
Low Risk Implementation of a Project that Demonstrates Results
Organization
§ The Active Executive Sponsor(s)
§ Resource Provider
§ Buck Stops Here
§ Steering Team
§ Review and Approve Recommendations
§ Champion Implementation Projects
§ The Project Leader
§ Manage to Schedule
§ Escalate Issues
§ Design Team
§ Analyze and Recommend
§ Commit the Time
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Supply Chain Definition
Retail Markets
Distributor Markets
Direct-to-Consumer Markets
OEM and Key
AccountsGovernment Home
DeliveryInternational
Food Products X X X
Technology Products
X X Developing X X X
Durable Products
X X X
Fowlers North America
Customer/Market Channels
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Metrics, Performance, and the Business Case
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§ Scorecard
§ Portfolio
§ Priority
§ Benefits
9
Scorecard
Technology Products Group Benchmark Data
2-May-11 Performance Attribute or Category
Level 1 Performance Metrics 2010 Act
Parity 50th
Percentile
Advantage 70th
Percentile
Superior 90th
Percentile Parity Gap Competitive
Gap
Competitive Gap
Analysis Source
External
Supply Chain Delivery Reliability
Perfect Order Fulfillment 30.2% 74.0% 81.0% 88.0% -43.8% -57.8%
$6,750,000
SCORmark
Supply Chain Responsiveness
Order Fulfillment Cycle Time 11.0 10.0 6.50 3.0 -1.0 -4.5 SCORmark
Supply Chain Flexibility Upside Supply Chain Flexibility 91.5 60 45.0 29 -31.5 -46.5 SCORmark
Internal
Supply Chain Cost
Cost of Goods 63.6% 54.7% 44.3% 26.0% -8.9% NA $40,050,000 Hoovers
Supply Chain Management Cost 12.8% 9.5% 6.8% 3.9% -3.3% -3.3% $14,850,000 SCORmark
Supply Chain Asset Management Efficiency
Inventory Days of Supply 60.5 20.4 8.9 0.0 -40.1 -40.1 $31,442,000 Hoovers
Portfolio
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Project Number Project Phrase Project Description Revenue ($) Perfect Order
Fulfillment (%)
Order Fulfillment Cycle Time (days)
Upside Supply Chain Flexibility (days)
Total Supply Chain Management Cost ($)
COGS ($) Inventory ($)
$450,000,000 30.2% 11.0 91.5 $57,600,000 $286,200,000 $47,437,000
1
Improve Demand Management and Forecasting
This project will improve poorly defined practices, underutilized modeling techniques, and untrained personnel.
8.0% $1,660,000
Baseline
11
Establish Formal Return Management
This project will define and implement a reverse logistics processes from goods movement to policy to the authorization process.
$1,350,000 $660,000
12
Eliminate Poor Inventory Control Practices
This project will focus on defects that relate to inventory record accuracy, shrinkage, and cycle counting.
2.5% $1,660,000
$4,500,000 64.5% 1.0 35.0 $14,715,540 $16,182,000 $16,900,000$454,500,000 94.7% 10.0 56.5 $42,884,460 $270,018,000 $30,537,000
BenefitProjected Performance Level
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Priority
Benefits
§ Average OI improvement of 3% to sales (high 4.5% - low 1.5%)
§ Typical Inventory Turn improvements of 20%
§ 30% Faster System Implementations with 30% more Functionality
§ Continuous Improvement Portfolios Refreshed at a Value of 0.5%
§ Mitigation of costs associated with risk management
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ROI
Fowlers Project Portfolio
FY 1 FY 2 FY 3100% 25% 40% 100%
1 (250)$ 75$ 120$ 300$ 1.98
2 -$ -$ -$ -$ -
3 (6,500)$ 625$ 1,000$ 2,500$ 0.63
4 -$ -$ -$ -$ -
5 (1,800)$ 1,400$ 2,240$ 5,600$ 5.13
6 (1,100)$ 625$ 1,000$ 2,500$ 3.75
7 (250)$ 1,250$ 2,000$ 5,000$ 33.00
8 (2,200)$ 2,025$ 3,240$ 8,100$ 6.08
9 (2,250)$ 4,375$ 7,000$ 17,500$ 12.83
10 -$ -$ -$ -$ -
11 (750)$ 775$ 1,240$ 3,100$ 6.82
12 (125)$ 75$ 120$ 300$ 3.96
(15,225)$ 11,225$ 17,960$ 44,900$
Improve Supplier Flexibility
Implement Formal Product Life Cycle Management ProcessEngineer an Integrated Tactical Planning Process
Eliminate Poor Inventory Control Practices
Implement Sales and Operations Planning
Improve Efficiency and Effectiveness of the Physical Supply Chain Network
Tighten Up Order Management Discipline
Establish Formal Return Management
Improve Demand Management and Forecasting
Optimize Supply Management Practices
Improve Information Technology Effectiveness
Improve Data Integrity
Ist Year Cost
Investment
3 Year BenefitGross EVA Benefit ($ in 000's) 3 YR ROI
% of Annualized Benefit Achieved
Grand Total
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Value
Process and System – Work and Information
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§ Staple Yourself to an Order
§ SCOR® Level 3 Process Analysis
§ SCOR® Level 4 Process Development
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SCOR®
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Hierarchy
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Worksheet
Interviewees
Accountable Function
Level 4 Step Description System Module Responsible Event Time
1
Enter the description of each of the process steps; often referred to as Level 4 process steps
Enter the System Module and/or Transaction
Enter the title(s) of those doing the work
This is an effort of the amount of time (often calculated in minutes) and is normalized to one of four transactions, i.e. purchase order, work order, sales order, return authorization, or forecast
2
0
Initials Relative Weight
Interviewee's Initial
This compares the relative impact to the rest of the disconnects in the list
Enter the primary transactional input(s) to this process
Enter the SCOR Level 3 Process element ID and description, i.e., M1.1 Schedule Production Activities
Enter the primary transactional output(s) to this process
Process Steps (>4 and <11)
Total Event Time for Process Steps
Enter the interviewees from the interview planning worksheet.
Enter the title of the ultimate role accountable to the performance of this SCOR Level 3 process.
Primary Input(s) SCOR Element Primary Output(s)
Disconnects causing rework and/or extended wait time
Disconnect Description
Describe major disconnects that cause process steps to be reworked and/or add to process wait time (delay)
Business Rules
Enter the business rules, both formal and informal, that directly or indirectly influence process performance
Process Analysis
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S1.1Schedule Product Deliveries
S1.2Receive Product
S1.3Verify Product
S1.5Authorize Supplier Payment
S1.4Transfer Product
Mx.1Schedule Production Activities
Mx.2Issue Product
Mx.3Produce and Test
Mx.4Package
Mx.5Stage Product
Mx.6Release Product to Deliver
Dx.1Process Inquiry & Quote
Dx.2Receive, Enter, & Validate Order
Dx.3Reserve (Resources) Inventory and Determine Delivery Date
Dx.4Consolidate Orders
Dx.5Build Loads
Dx.6Route Shipments
Dx.7Select Carriers and Rate Shipments
Dx.8Receive Product from Source or Make
Dx.9Pick Product
Dx.13Receive & Verify Product by Customer
Dx.12Ship Product
Dx.15Invoice
Dx.11Load Product & Generate Shipping Docs
Dx.10Pack Product
P1Plan Supply Chain
P2Plan Source
P3Plan Make
P4Plan Deliver
Mx.7Waste Disposal
SCOR® Level 4
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P3.1.1Complete month end validation
P1.1.1Analyze forecast error and BIAS performance
P1.1.2Generate and validate statistical forecast
P1.1.4Conduct Demand Review and Approve Plan
P1.1.5Update launch and replenishment NPD plans and forecasts
P1.1.7Update promotional event calendar
P1.1.8Update customer account plans
P1.1.6Identify demand shaping opportunities
P1.1.3Conduct Pre-Demand Detailed Review
FINANCE
1
DEMAND PLANNING
2
DEMAND PLANNING
3
DEMAND PLANNING
4
SALES & MARKETING
5
SALES
15
MARKETING
13
MARKETING
10
SUPPLY PLANNING
11
P1.2.3Update Forecast
SUPPLY PLANNING
6
SCOR® P1.1S&OP: Demand Plan
Organizational Learning Plan and Next Steps
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§ Organizational Learning
§ Individual Development
§ Next Steps
Organizational Learning
1. Executive Brief
2. Using SCOR® Workshop – On Line
3. Using SCOR® Workshop – On Site
4. Supply Chain Excellence Project – Pilot 1. Broad Scope Strategy 2. Narrow Scope Kaizen Event
5. Supply Chain Excellence Continuous Improvement
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Individual Development
1. SCOR-P Certification – the Supply Chain Council
2. SCOR-S Certification – the Supply Chain Council
3. SCOR® Coach – SCE Limited
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Next Steps
§ Identify a sponsor
§ Hold an Executive Brief
§ Conduct an on-site Using SCOR® Workshop
§ Evaluate individual learning requirements
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Case Study
25
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Thank You! § Scelimited.com
§ Using SCOR® Series § Supply Chain Excellence: The Blog § Linked in - http://www.linkedin.com/in/peterbolstorff § facebook -
http://www.facebook.com/pages/Supply-Chain-Excellence/257802574290912
§ Twitter - https://twitter.com/#!/SCEsupplychain
§ Email: [email protected]
§ +1 651 439 3422