SCOR ®: A Journey of Supply Chain Process ExcellenceUsing SCOR to Drive Process ImprovementsDerinda Ehrlich

VP, Corporate and Channel Services, APICS

Introductions

Topics

• APICS and Supply Chain Council merger• What is SCOR?• Using SCOR to Drive Process

Improvements• Implementing SCOR• Next steps for YOUR organization

APICS merger with Supply Chain Council

Leading the Industry

• APICS is globally the leading association advancing supply chain and operations management.

• Our research, education and certification programs elevate individual and corporate supply chain performance, innovation and resilience.

• APICS Products and Services

– Professional Membership

– Research and Publications

– Education

– Certification

– Events

– APICS and the Supply Chain Council – officially merged August 2014

APICS Supply Chain Council (APICS SCC)• We are a global, non-profit organisation that developed and actively manages

the Supply Chain Operations Reference (SCOR) model.

• 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.

• Since 1996, over 5,000 companies worldwide have used SCOR®.

• APICS SCC Services

– Research Projects, Corporate Advisory Board, Executive Summit

– SCORmark™ Benchmark

– Training is now available through APICS

– Publications, Resource Library, and Case Studies

– Other Value Chain Frameworks including M4SC, DCOR®, CCOR®, and PLCOR®

APICS and APICS Supply Chain Council

APICS SCCAPICS

Training, certification and networking

Research, Benchmarking and

Process Frameworks

APICS Value Proposition

APICS delivers a total individual and corporate value proposition.

We help individuals achieve career development goals.

We help corporations achieve strategic supply chain goals.

Individuals Corporations, and Institutions

What is SCOR®?

A Process Framework

• Process frameworks deliver the well-known concepts of business process reengineering, benchmarking, and best practices into a cross-functional framework

– Process Standards: Plan, Source, Make, Deliver, Return, Enable

– Performance Standards: Perfect Order Fulfillment, Cash-to-Cash Cycle Time, Cost of Goods Sold, Order Fulfillment Cycle Time, etcetera

– Practices: EDI, Cross-Training, Sales & Operations Planning, …

– People/Skills: Process, practices, and metrics cross-referenced with personnel skills that include experience, aptitude and training needs

History of SCOR• In 1996, 69 companies collaborated• Described the Supply Chain in terms of a Process Framework• Currently on SCOR version 11• Since 1996 more than 5000 companies used SCOR

Business Process Re-engineering

Performance Benchmarking

Best Practices Analysis

Organizational Design

Capture the ‘as-is’ business activity and design the future ‘to-be’ state

Quantify relative performance of similar supply chains and establish internal targets

Identify practicesand software solutions that result in significantly better performance

Assess skills and performance needs and align staff and staffing needs to internal targets

Process Reference Framework

Processes Performance (metrics)

Practices People (skills)

SCOR® Processes

Supplier CustomerSuppliers’Supplier

Source

Internal or External

Your Organization

Return

Deliver MakeSource

Return

Plan

Deliver

Return

Source

Return

MakeSource

Return

Plan

Deliver

Return

DeliverMake

Plan

Return Return

Customers’Customer

Enable

Internal or External

EnableEnable

SCOR MODEL

SCOR® Process DecompositionLevel Description Examples Comments1

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

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

SCOR Quick Reference Guide

SCOR QRG is a handy reference for SCOR Processes and Performance (metrics) across the main SCOR processes

Other APICS SCC FrameworksC

ustomer processesS

uppl

ier

proc

esse

s

Product & PortfolioManagement PLCOR™

Supply Chain SCOR®

Product & Process Design

DCOR™

Sales & Support

CCOR™

Using SCOR® to DriveProcess Improvements

Nigel Clements, from the Deming Forum estimates that up to 70% of process improvement projects fail.

2012 WSJ by S. Chakravorty estimate 60% of Six Sigma projects fail.

Typical Lean and Six Sigma ChallengesTop Five Challenges with Lean/Six Sigma projects

1. Executive alignment / change management2. Project selection (typically through brainstorming)3. Projects aligned to functions (silos and departments)4. Access to meaningful metrics and performance data 5. Quantifying the benefit/outcome

Source: © 2003 Dan Swartwood

End to End ViewStrategic Metric

(Attribute)Strategy

Perfect Order(Reliability)

Consistently getting the orders right, and product meets quality requirements

Order Fulfilment Cycle-Time (Responsiveness)

The consistent speed of providing products/services to customers

Flexibility, Adaptability & Risk(Agility)

The ability to respond to upside or downside changes and overall value at risk

Cost to Serve(Costs)

The cost associated with managing and operating the supply chain

Asset Management (Asset Management

Efficiency)

The effectiveness in managing the supply chain’s assets in support of fulfillment

Ext

ern

alIn

tern

al

Hierarchy of SCOR Metrics

Level 1

Level 2

Level 3

Level 1Strategic Metric

Level 3

Diagnostic Metrics

Level 2Process Metrics

Hierarchy of SCOR Metrics

Level 1

Level 2

Level 3

Level 1Ability to execute the strategy

Level 3

Diagnose the gap

Level 2Explains why the strategy not achieved

Hierarchy of SCOR MetricsLevel 1Strategic Metric

Level 3

Diagnostic Metrics

Level 2Process Metrics

Customer Perfect Order

Orders Delivered In Full

- Delivery Item Accuracy- Delivery Quantity Accuracy

Level 1

Level 2

Level 3

Customer Perfect Order Fulfilment

Orders Delivered in

Full

Delivery Item

Accuracy

Delivery Quantity Accuracy

Competitive Requirements

Competitive Requirements

• Identify Customer Groups or Market Segments• Based on the expectations for that supply chain, define

performance requirements for each segment– One assigned superior (S)– Two assigned advantage (A)– Two assigned parity (P)

• Each unique combination of ratings defines the Supply Chain Strategy for the channel

• Think of the rating as a desired state, NOT where you want to improve the most

ExampleCompetitive Requirements

Retail Channel

Distributor Channel

Delivery Reliability S A

Responsiveness A P

Agility A PTotal Supply Chain Management Cost P A

Asset Management Efficiency P S

What are YOUR targets?

Determine your Competitive Requirements• Identify your largest channel• Determine where you desire to perform at best in class• Determine two attributes where you desire to be better than average• The remaining two get parity rankings

Delivery Reliability

Responsiveness

Agility

Total Supply Chain Management Cost

Asset Management

Discussion

• Q: Where did you place your S?• Q: Where is your largest performance

gap?• Q: What insight did you learn?

How do you know the size of the gap?

Lean and Six Sigma driven with SCORSCOR with Lean/Six Sigma projects

1. Executive alignment and sponsorship of improvement projects• Roadmap, data and criteria • Defined people (roles/responsibilities) and practices

2. Project selection • Portfolio of improvement projects aligned to Supply Chain data and strategic direction

3. Projects often aligned to functions and silos versus end-to-end• Projects aligned to SCOR processes (end to end) Plan, Source, Make, Deliver and

Return

4. Opportunities for improvement often not data driven• Standardised operational definition for performance measures• Quantified performance gaps through SCORMark™ data

5. Quantifying the benefit/outcome• Comparative data to measurable outcomes for similar Supply Chains

Implementing SCOR

SCOR® Implementation RoadmapStep FOCUS Major Deliverables Touch Points APICS Enabler

1BUILD ORGANISATION SUPPORT

• Sponsor and Key Stakeholder Support

• EducationORIENTATION

Executive Brief

Orientation Webinar

Public SCOR-P Training

In-house SCOR-P Training

2 DEFINE THE PROJECT

• Business Context Summary• Supply Chain Definition• Project Scope and Charter

3 ANALYSE PERFORMANCE

• Scorecard • Metric Defect Analysis• Process Analysis

BENCHMARKSCORmark®

Benchmarking Orientation

4DEVELOP THE PROJECT PORTFOLIO

• Project Portfolio• Implementation Priority

PORTFOLIO DEVELOPME

NT

Roadmap Progress Webinar

5 IMPLEMENT A PROJECT

• Development, Pilot, and Implementation of a Portfolio Project

• Results

SATISFACTION SURVEY

APICS Instructor List

APICS SCC Sponsor List

Top Motivations to Use SCOR®

1. Building a Technology Investment Roadmap

2. In Search of Return on Investment (ROI) for Capacity

3. Creating a Supply Chain Strategy4. Implementing Supply Chain

Performance Improvements5. Improving Sales and Operations

Planning6. Developing Organizational Talent,

Support and Competence7. Maximising Use of Existing

Technology

8. Achieving Operational Excellence9. Due Diligence as part of a Merger or

Acquisition10. Globalising and Managing Business

Processes11. Integrating with the greater Value

Chain12. Integrating Lean, Six Sigma, and

SCOR to Build a Better Project Portfolio

13. Defining and Building an Effective and Efficient Supply Chain Organization

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

Shareholder Value

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

Potential SCOR Implementation Role

What potential role would you play in a SCOR Project?• A. Sponsoring Executive• B. Key Stakeholder• C. Evangelist –Subject Matter Expert

Discussion

• Q: Are you prepared?• Q: What is your approach?

Continue the Conversation

Learn More About SCOR® Training

SCOR® Training Options

APICS SCC offers training that provides in-depth understanding of the Supply Chain Reference (SCOR®) model, widely recognised as the global standard for supply chain management.

– SCOR® Group Training: Cost-effective, customized group learning at your location

– SCOR® Training:Thorough, effective, skills development in public classroom setting2015 schedule - http://www.apics.org/careers-education-professional-development/events/conferences/scor-professional-training

SCOR Mobile App

• Official launch soon, but you can check it out now!

• www.APICS.org/SCORapp • Enhanced digital version of the

SCOR Quick Reference Guide• Offers an outline of the processes

under the four main areas of the model – Process, Performance, Practices and People

Continue the Conversation

Peter BolstorffExecutive Director APICS Supply Chain Councilpbolstorff@apics.org

Carolyn Lawrence – For Affiliate Subscription and On BoardingDirector Corporate Development APICS Supply Chain Councilclawrence@apics.org

Derinda EhrlichVP Corporate and Channel ServicesAPICSDehrlich@apics.org

Dominic Longo, CSCP – For TrainingDirector Corporate ServicesAPICS dlongo@apics.org

Q&A

Thank You!