how scor model enhance global sourcing effectiveness scor model enhance global sourcing... ·...
TRANSCRIPT
What are the challenges in global sourcing?
» Supplier selection
» Supplier performance monitoring
» MOQ
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» MOQ
» Complex Logistics
» And many more …
» The Supply-Chain Operations Reference-model (SCOR) is a process reference model that has been developed and endorsed by the Supply-Chain Council as the cross-industry standard diagnostic tool for supply-chain management. SCOR enables users to address, improve and communicate supply-chain management practices within and between all interested parties.
» SCOR has been adopted by major industries over the past 10 years and the latest
What is Supply Chain Operation Reference (SCOR) Model?
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version of SCOR (v. 9.0).
What are the benefits of SCOR model?
» Provides a structured approach and practical methodology for supply chain process improvements.
» Provides a common language to share operational views, and communicate changes or definitions of processes .
» Provide a set of common, easy to understand terminology, proc ess building blocks with definitions and performance me trics.
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building blocks with definitions and performance me trics.
» SCOR offers companies insights and suggestions on best practices to build a project portfolio for improvement.
Process Classification
Management
ProcessReturn
Deliver
Make
Source
Plan
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Process Type
ProcessManufacturing
Environment
Return
Engineer-to-Order
Make-to-Order
Make-to-Stock
Enable
Execution
Planning
What Can You Tell From The Process Map?
M2S2 D2
S2
S1
SR1
SR3
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
M2S2 D2
S2
S1
SR1
SR3
What Can You Tell From The Process Map?
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
Your RegionalWarehouses
Your Production Site
Raw Material Supplier’s Production Site
Customer’s Warehouses
M2S2 D2
S2
S1
SR1
SR3
What is the implication of S2+S1->M1
What Can You Tell From The Process Map?
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
Your RegionalWarehouses
Your Production Site
Raw Material Supplier’s Production Site
Customer’s Warehouses
M2S2 D2
S2
S1
SR1
SR3
What is the implication of SR3->DR1
What Can You Tell From The Process Map?
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
Your RegionalWarehouses
Your Production Site
Raw Material Supplier’s Production Site
Customer’s Warehouses
Business Process Reengineering
• Change the performance of a business process by capturing the “As-Is” state of a process, deriving the desired “To-Be” future state and closing the gap between the two states.
• The operational states can be documented by SCOR process building blocks and measured by SCOR metrics.
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blocks and measured by SCOR metrics.
• The gap can be closed through applying SCOR best practices.
P1
P2 P3 P4 P4
P1
D1
NORTH & SOUTH AMERICAN
S1 M3
D2S1 M3
D1S1 M3
“As-Is”
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D2 S2 M2
D1 S1 M1
D2
D1
D2 S2 M2
D1 S1 M1
D2
D1
ROW CUSTOMERS
INDIAN &BANGLADESHICUSTOMERS
AMERICANCUSTOMERS
CUSTOMERS
D2
D1S1 M3
D2S1 M3
D1
P1
P2 P3 P4P4
D1
D1
NORTH & SOUTH AMERICAN
“To-Be”
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D2 S2 M2
D1 S1 M1
D2
D1
D2 S2 M2
D1 S1 M1
D2
D1 D1
ROW CUSTOMERS
INDIAN &BANGLADESHICUSTOMERS
CUSTOMERSD1
AMERICANCUSTOMERS
Measuring Performance
• Measuring how well the supply chain performs is as essential as understanding how it operates» Measurements must link to business objectives» Measurements must be repeatable
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» Measurements must be repeatable» Measurements must provide insights into how to
manage the supply chain more effectively» Measurements must be appropriate for the
process activity they are measuring- Same level
Attribute Strategic metric
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
Cus
tom
erSupply-chain Performance Risks (Performance Metrics of SCOR)
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AG.1.2 Supply Chain Upside Adaptability
AG.1.3 Supply Chain Downside Adaptability
Cost CO.1.1 Supply Chain Management Cost
CO.1.2 Cost of Goods Sold
Assets AM.1.1 Cash-to-Cash Cycle Time
AM.1.2 Return on Supply Chain Fixed Assets
AM.1.3 Return on Working Capital
Copyright © Supply Chain Council, 2008. All rights reserved
Cus
tom
erIn
tern
al
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Measuring Process Performance with SCOR Performance Metrics
Cycle Time
Perfect OrderFulfillment
Perfect OrderFulfillment
M2S2 D2
S2
S1
SR1
SR3
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
Benchmarking - Parity, Advantage, Superior
Attribute Metric (level 1) P A S
Reliability Perfect Order Fulfillment
Responsiveness Order Fulfillment Cycle Time
Agility Supply Chain Flexibility
Cost Supply Chain Mgmt Cost
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Compare to:
» Lines of business in your company
» Businesses in your industry
» Businesses across industries
Assets Cash-to-Cash Cycle Time
Parity Median of
Statistical Sample
Advantage Midpoint of Parity
and Superior
Superior 90th percentile of
population
Supply-Chain Strategy Matrix
» Each unique combination of ratings defines Your Supply Chain Strategy for the channel
Supply-ChainStrategy Matrix
Supply
Chain
A
Supply
Chain
B
Supply
Chain
C
External
Reliability P P S
Responsiveness A P A
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» Think of the rating as a desired state, NOT where you want to improve the most
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External
Agility P P P
Internal
Cost S A P
Assets P S P
Benchmarking
• Quantify the operational performance of similar companies and establish internal targets based on the “best-in-class” results.
• A question that managers should always ask themselves is “How is my company’s performance compared with other similar companies?”
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• It may be easy to compare on financial performance, but how about responsiveness to customer need, flexibility in dealing with changes and reliability of the supply chain?
• SCOR defines a set of metrics to measure operational performance which enable direct comparison of supply chains similar to those of financial performance.
Supply-chain Performance Scorecard
Strategic Metrics Actual Parity(50th)
Advantage Superior(90th)
Parity gap
Require-ment gap
Reliability[Perfect order fulfillment]
60 % 74 % 81 % 88 % 14 % 14 % [P]
Responsiveness[Order cycle time] 9 days 10 days 6.5 days 3 days -- 6 d [S]
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[Order cycle time] 9 days 10 days 6.5 days 3 days -- 6 d [S]
Agility[Upside supply chain flexibility]
110 d 60 d 45 d 29 d 50 d 81 d [P]
Cost[Supply Chain Management Cost]
14.0 % 9.5 % 6.7 % 3.9 % 4.5% 7.3% [A]
Asset[Cash-to-cash cycle time] 197 d 98 d 64 d 30 d 99 d 99 d [P]
Best Practice
• A current, structured, proven and repeatable method for making a positive impact on desired operation results.» Current : Must not be emerging & must not be antiquated.» Structured : Has clearly stated goal, scope, process & procedure.» Proven : Success has been demonstrated in a working
environment.» Repeatable : The practice has been proven in multiple
environments.
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environments.» Method : Used in a very broad sense to indicate business process,
practice, organizational strategy, enabling technology, business relationship, business model and information or knowledge management.
» Positive impact on desired operation results : The practice shows operational improvement related to the stated goal and could be linked to key metrics. The impacts should show either as gain (increase in speed, revenue, quality) or reduction (resource utilizations, costs, loss, returns, etc.)
(Defined by SCC Best Practices Team 2003)
Best Practices Analysis
• Characterize the management practices and software solutions that result in “best-in-class” performance
• Not all best practices are suitable to all industries / companies, things to be considered include but not limited to the following items:» Geographical location
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» Geographical location» Industry» Management practices» Software solutions» ..etc
Improving Process Performance with SCOR Best Practices
VMI
EDI
AutomaticIdentificationM2S2 D2
S2
S1
SR1
SR3
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S1
D1 S1M1 D1 S1
D1M1
S1
DR1 SR1
DR1 SR1 DR1 SR1
DR3 SR3DR3 SR3
Practice Relevance
(Y/N)
Importance
(H/M/L)
Implemented
(Y/N)
ATP
Carrier Agreements
CPFR
Best Practice Analysis
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Copyright © Supply Chain Council, 2006-2010. All rights reserved
Co-located Procurement
Cross Docking
TOC-DBR
Postponement
S&OP
VMI
Wave Picking
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How to Start Supply Chain Improvements?
Education FeasibilityStudy
Competitive& StrategyAnalysis
1 2 3
As-Is Operation Modeling
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To-Be Operation Modeling
5
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Gap Identification & ProjectPortfolio
ProjectJustification
6 7ProjectImplement-ation
8
Align Internalunderstanding
Define Areas of Improvement
Define Supply ChainPerformance
Define CurrentProcess Description
Set Improvement Targetand Projects Portfolio
Justify Project Based onSavings or Benefits
Implement SCOROperations
Improvement Audit
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Audit on Result of Project Implementation
Define RequiredProcess Description
Step 1
Education FeasibilityStudy
Competitive& StrategyAnalysis
1 2 3
As-Is Operation Modeling
4
To-Be Operation Modeling
5
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Gap Identification & ProjectPortfolio
ProjectJustification
6 7ProjectImplement-ation
8
Align Internalunderstanding
Define Areas of Improvement
Define Supply ChainPerformance
Define CurrentProcess Description
Set Improvement Targetand Projects Portfolio
Justify Project Based onSavings or Benefits
Implement SCOROperations
Improvement Audit
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Audit on Result of Project Implementation
Define RequiredProcess Description
Education – SCOR Workshop
» 4-days workshop» 2-days workshop on the SCOR Framework» 2-days workshop on SCOR Project.
» The SCOR Framework focus on» how to map their current operations using SCOR’s process building blocks (the “As-is”
operations) and define the required SCOR process (the “To-be” operations) based on management requirements
» define performance metrics to measure the performance of individual process
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» define performance metrics to measure the performance of individual process» provide recommended best practices for the right direction on supply-chain process
improvements
» The SCOR Project workshop focus on» how to implement successful SCOR projects using the implementation roadmap that
was developed based on more than 60 SCOR projects.
» All students are entitled to take the SCOR-Professional Examination (awarded by Supply Chain Council) after taking the Framework and Project workshops
Certify as SCOR Professional
» Examination Format» Computer based multiple choices» 60 questions» Passing mark is 45 out of 60 (at least 45 correct answers)
» Examination Time Frame» Examination window 2010-1 2010-02-08 2010-02-19» Examination window 2010-2 2010-05-24 2010-06-04
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» Examination window 2010-2 2010-05-24 2010-06-04» Examination window 2010-3 2010-08-23 2010-09-03» Examination window 2010-4 2010-11-08 2010-11-19
» Venue» GUANGZHOU» GUANGZHOU UNIVERSITY OF FOREIGN STUDY, BAIYUN DADAO NORTH #2
GUANGZHOU, CHN 510420» HONG KONG» RM 501 HKEA SAN PO KONG SUB-OFFICE
#17 TSUEK LUK STREET, SAN PO KONGKOWLOON
Common Sourcing KPIs (ESCAB)
KPI name KPI description
Factory Certification -Technical
Measure the ability of factory, compliant with buyer's hard and soft factors/requirements
Factory Compliance -Regulatory, Environmental and
Focus on Business Behaviours (such as Operating according to government / authority laws and regulations, provides safe working environment, Code of Conduct, C-TPAT, etc.), and Compliance to required standards to best benefit both sides.
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Environmental and Social
Compliance to required standards to best benefit both sides.
Product introduction
Focus on product, supply chain management, and process.
Vertical set up To count supplier's own vertical set up, e.g. own washing mills, own weaving mills, own printing facilities, own embroidery facilities provided that it delivers economy of scale
Cost Competitiveness
Estimated Landed Cost (ELC) Comparison
Common Sourcing KPIs (ESCAB)
KPI name KPI description
Manufacturing Lead Time
The manufacturing lead time quoted by the supplier during the bid process which the will abide by.
Response time The time supplier needs to response, e.g. confirm orders, reply requests, sign agreements and others
1st Sample rejection
The sample is rejected if failure or does not meet our requirement
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rejection requirement
Sample Cycle Time Measure the number of days taken to approve sample. Can apply to various kind of sample, e.g. color sample, fit sample, etc.
Sample Iteration Measures the frequency with which samples require rework, indicate efficiency and timeliness for on time production. Can apply to various kind of sample, e.g. color sample, fit sample, etc.
Sample on time To measure if the requested sample can be submitted before the deadline
Common Sourcing KPIs (ESCAB)
KPI name KPI description1st Inspection Passing Rate
Measure final inspection passing rate
Inspection rejection rate An order is rejected during final inspection due to quality problems or formal mistakes.
Quality (Major/Minor defects during QC Inspection)
‘Quality’ reflects the product quality of the supplier. Basis for the calculation of that KPI are the inspection results.
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Inspection)
Upside Deliver Flexibility The number of days required to achieve an unplanned sustainable % increase in quantity delivered with the assumption of no other constraints (= Elasticity of ETD)
Cancellations rate (responsible party supplier)
Measures the share of order cancellations caused by the supplier
Claim to shipment ratio (dollar value)
Measure unmet customer expectations
Claim to shipment ratio (no. of incidents)
Quality problem or formal mistakes after arrival to our customer.
Common Sourcing KPIs (ESCAB)
KPI name KPI descriptionCompliance Document accuracy and completeness
material safety data sheets, GDOT, etc are complete and correct
Container Booking Timeliness
A container booking is considered submitted to 3PL within the agreed time frame
Delivery Quantity Measures the share of articles delivered correctly
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Delivery Quantity Accurary
Measures the share of articles delivered correctly concerning quantities. Only short deliveries have a negative influence.
Document submission cycle time
Meaure the average time when the supplier submit document to the document is confirmed correct and completed
Forwarder document process time
To measure the time which the forwarder needs to provide the documents e.g. airway bill (AWB), BL, SWB
On time and honouredInspection Booking
Measure the reliability of inspection booking by vendor
Common Sourcing KPIs (ESCAB)
KPI name KPI description
On time document submission
Supplier is supposed to submit document according to predefined timeframe in order to ensure accurate documents are on time for custom clearance.
On time Shipment Booking
A vessel booking is submitted within the agreed time frame.
Shipment booking cycle time
Measure the average time when the supplier submit first booking to the time carrier booking is confirmed.
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cycle time first booking to the time carrier booking is confirmed.
Shipment reliability Measure timeliness of shipments.
Shipping document accuracy and completeness
Shipping documents are complete and accurate
Space & Equipment Availability
Carriers performance on space and equipment availability
Common Sourcing KPIs (ESCAB)
KPI name KPI descriptionTimely Advanced Shipment Notification (ASN) submission
Measure the timeliness of ASN / Dispatch Advice
Withhold Payment Measure the % of payment that ware withhold due to supplier's issues
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Annual Sales Growth Measure the sales growth of a supplier
Enquiry
» Please contact us for further enquires:
» Mr. Rocky Yu Ms. Tina Ho
» Tel: 2863 9731 Tel: 2863 9758
» Email: [email protected] Email: [email protected]
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