SCOR ®: A Journey of Supply

Chain Process Excellence

Using SCOR to Drive Process
Improvements
Derinda 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
Training, certification Research,
and networking Benchmarking and
Process Frameworks

APICS Value APICS SCC

APICS
Proposition

Individuals Corporations, and

Institutions
APICS delivers a total individual and corporate value proposition.
We help individuals achieve career development goals.
We help corporations achieve strategic supply chain goals.
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 Performance Best Practices Organizational

Re-engineering Benchmarking Analysis Design
Capture the ‘as-is’ Quantify relative Identify practices Assess skills and
business activity and performance of and software performance needs
design the future similar supply chains solutions that result and align staff and
‘to-be’ state and establish in significantly better staffing needs to
internal targets performance internal targets

Process Reference Framework

Processes Performance Practices People
(metrics) (skills)
SCOR Processes ®

Plan

Plan Plan
Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source
Return Return Return Return Return Return
Return Return
Enable Enable
Enable
Suppliers’ Customers’
Supplier Supplier Your Organization Customer Customer

Internal or External Internal or External

SCOR MODEL
 SCOR® Process Decomposition
Level Description Examples Comments
1 Level-1 defines scope and content of a
Plan, Source, Make,
Process Types supply chain. At level-1 the basis-of-
Deliver, Return and
(Scope) competition performance targets for a supply
Enable
chain are set
2 Make-to-Stock, Make-
to-Order, Engineer-to- Level-2 defines the operations strategy. At
Process
Order Defective level-2 the process capabilities for a supply
Categories
Products, MRO chain are set. (Make-to-Stock, Make-to-
(Configuration)
Products, Excess Order)
Products
3 Level-3 defines the configuration of individual
processes. At level-3 the ability to execute is
• Schedule Deliveries
set. At level-3 the focus is on the right:
Process • Receive Product
• Processes
Elements • Verify Product
• Inputs and Outputs
(Steps) • Transfer Product
• Practices
• Authorize Payment
• 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 AM.1.1 Cash-to-Cash Cycle Time
Efficiency
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 Frameworks
Product & Portfolio
Management PLCOR™

Customer processes
Supplier processes

Product & Sales &

Process Design Support
DCOR™ CCOR™

Supply Chain
SCOR®
Using SCOR to Drive
®

Process Improvements
Nigel Clements, from
the Deming Forum
estimates that up to
70% of process
improvement projec
fail.
2012 WSJ by S.
Chakravorty
estimate 60% of
Six Sigma
projects fail.
Typical Lean and Six Sigma Challenges

Top Five Challenges with Lean/Six Sigma projects

1. Executive alignment / change management
2. 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 View
Strategic Metric
Strategy
(Attribute)
Perfect Order Consistently getting the orders right, and product
(Reliability) meets quality requirements
External

Order Fulfilment Cycle-Time The consistent speed of providing products/services

(Responsiveness) to customers
Flexibility, Adaptability & Risk The ability to respond to upside or downside
(Agility) changes and overall value at risk
Cost to Serve The cost associated with managing and operating
(Costs) the supply chain
Internal

Asset Management
The effectiveness in managing the supply chain’s
(Asset Management
assets in support of fulfillment
Efficiency)
Hierarchy of SCOR Metrics
Level 1
Strategic Metric
Level 1
Level 2
Process Metrics
Level 2
Level 3

Level 3 Diagnostic Metrics

Hierarchy of SCOR Metrics
Level 1
Ability to execute the strategy
Level 1
Level 2
Explains why the strategy not
Level 2 achieved
Level 3

Level 3 Diagnose the gap

Hierarchy of SCOR Metrics
Customer Perfect
Level 1 Order Fulfilment

Strategic MetricOrder
Customer Perfect
Orders

Level 1
Delivered in
Full

Level 2 Delivery
Item

Process Metrics
Orders Delivered In Full
Accuracy

Level 2 Delivery
Quantity
Accuracy

Level 3

Level 3 Diagnostic Metrics

- 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
Example
Competitive Retail Distributor
Requirements Channel Channel
Delivery Reliability S A
Responsiveness A P
Agility A P
Total 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 SCOR
SCOR 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 Roadmap
Step FOCUS Major Deliverables Touch Points APICS Enabler
BUILD • Sponsor and Key Executive Brief
1 ORGANISATION Stakeholder Support
Orientation Webinar
SUPPORT • Education
ORIENTATION Public SCOR-P Training
• Business Context Summary
2 DEFINE THE • Supply Chain Definition In-house SCOR-P
PROJECT • Project Scope and Charter Training
• Scorecard SCORmark®
3 ANALYSE • Metric Defect Analysis BENCHMARK Benchmarking
PERFORMANCE • Process Analysis Orientation
DEVELOP THE • Project Portfolio PORTFOLIO
4 Roadmap Progress
PROJECT • Implementation Priority DEVELOPME
PORTFOLIO Webinar
NT
• Development, Pilot, and APICS Instructor List
IMPLEMENT A Implementation of a SATISFACTIO
5 Portfolio Project APICS SCC Sponsor
PROJECT N SURVEY
• Results List
Top Motivations to Use SCOR®
1. Building a Technology Investment 8. Achieving Operational Excellence
Roadmap 9. Due Diligence as part of a Merger or
2. In Search of Return on Investment Acquisition
(ROI) for Capacity 10. Globalising and Managing Business
3. Creating a Supply Chain Strategy Processes
4. Implementing Supply Chain 11. Integrating with the greater Value
Performance Improvements Chain
5. Improving Sales and Operations 12. Integrating Lean, Six Sigma, and
Planning SCOR to Build a Better Project
6. Developing Organizational Talent, Portfolio
Support and Competence 13. Defining and Building an Effective
7. Maximising Use of Existing and Efficient Supply Chain
Technology 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 setting
2015 schedule -
http://www.apics.org/careers-education-professional-development/events/co
nferences/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 Bolstorff Derinda Ehrlich
Executive Director VP Corporate and Channel
APICS Supply Chain Council Services
pbolstorff@apics.org APICS
Dehrlich@apics.org
Carolyn Lawrence – For
Affiliate Subscription and On Dominic Longo, CSCP – For
Boarding Training
Director Corporate Development Director Corporate Services
APICS Supply Chain Council
APICS
clawrence@apics.org
dlongo@apics.org
Q&A
Thank You!