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SCOR Benchmarking - Presentation

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  • Keeping SCOR in your Supply ChainBenchmarking

    Joseph FrancisExecutive Director Supply-Chain Council

    SCOR Benchmarking - Presentation

  • SCOR BenchmarkingUnderstand the Context of SCORProcessMetricsBest PracticesUnderstand the 7 Steps of a Benchmarking ProgramSupply Chain CouncilHistoryValue*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • What is a Supply-ChainSCOR Benchmarking - PresentationSupplier processesProduct DesignDCORCustomer processesSupply Chain SCORSales & Support CCORProduct Management*

    SCOR Benchmarking - Presentation

  • The SCOR model an industry open standard SCOR is a supply chain process reference model containing over 200 process elements, 550 metrics, and 500 best practices including risk and environmental management Organized around the five primary management processes of Plan, Source, Make, Deliver and ReturnAny interested organization can participate in its continual developmentSCOR Benchmarking - PresentationSupplierCustomerCustomers CustomerSuppliers SupplierMakeDeliverMakeDeliverMakeSourceDeliverSourceInternal or ExternalInternal or ExternalYour CompanySource*

    SCOR Benchmarking - Presentation

  • SCOR ProcessesSCOR Benchmarking - PresentationS1 Source Stocked ProductSupply-ChainSourceS1.2 Receive ProductStandard SCOR definitionsCompany/Industry definitionsEDIXML*

    Level 1Level 2Level 3Level 4Level 5ScopeConfigurationActivityWorkflowTransactions

    Differentiates BusinessDifferentiates ComplexityNames TasksSequences StepsLinks TransactionsDefines ScopeDifferentiates CapabilitiesLinks, Metrics, Tasks and PracticesJob DetailsDetails of AutomationFramework LanguageFramework LanguageFramework LanguageIndustry or Company Specific LanguageTechnology Specific Language

    SCOR Benchmarking - Presentation

  • Performance MetricsSCOR metrics: Standard Strategic (Level 1) MetricsSCOR Benchmarking - Presentation upside and downside adaptability metrics CustomerInternal*

    AttributeMetric (Strategic)ReliabilityPerfect Order FulfillmentResponsivenessOrder Fulfillment Cycle TimeAgilitySupply Chain FlexibilitySupply Chain AdaptabilityCostSupply Chain Management CostCost of Goods SoldAssetsCash-to-Cash Cycle TimeReturn on Supply Chain Fixed AssetsReturn on Working Capital

    SCOR Benchmarking - Presentation

  • Best PracticesBest practice: "A current, structured, proven and repeatable method for making a positive impact on desired operational results."

    Current Must not be emerging and can not be antiquatedStructured Has clearly stated Goal, Scope, Process, and ProcedureProven Success has been demonstrated in a working environment and can be linked to key metricsRepeatable The practice has been proven in multiple environments.

    SCOR Benchmarking - Presentation*

    SCOR Benchmarking - Presentation

  • BenchmarkingThe SCOR Reference ProcessSCOR Benchmarking - Presentation*

    SCOR Benchmarking - Presentation

  • What is BenchmarkingQualitative BenchmarkingComparing best practices among organizationsMaturity AssessmentsQuantitative BenchmarkingComparing levels of measured performanceAssessment of Performance GapsCompetitive BenchmarkingQuantitative Benchmarking between companiesIdentifies superior relative performance*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • 7 Steps of a Benchmarking ProgramSupply Chain DefinitionSupply Chain PrioritizationSupply Chain StrategySelecting MetricsSourcing DataCreating a Balanced SCORcardPerforming Benchmark*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • What is a Supply-ChainSCOR Benchmarking - PresentationSupplier processesProduct DesignDCORCustomer processesSupply Chain SCORSales & Support CCORProduct Management*

    SCOR Benchmarking - Presentation

  • Supply-Chain DefinitionSupply Chains are the Totality of processes spanning operations from supplier to end-customer, focused on material, work and information flowWe use a tool called the Supply Chain Definition Matrix to define the supply-chains within an enterpriseThe Supply Chain Definition (i/o Matrix) Matrix helps determine the number and size of supply chainsColumns: Customers (Output)Rows: Products (Input)The intersection of each column and row if the goods or services flow to the customer is a supply chain*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • The columns in the matrix are focused on demand e.g. channels or segments or customers start with making a list of customer groups, level by level.Ask your Sales or Marketing functions for customer segmentation informationWhere you have one customer base with different fulfillment models create two customer segments one for each modelIn general you can go to any level of detail you want but be sensible.Examples:

    Column Definition*SCOR Benchmarking - Presentation

    Level 1Level 2Level 3Europe, Asia, USMajor AccountsSame-Day ShippingCommercial, RetailGrouped AccountsBulk ShippingEastern, Western RegionOne-Time BuyerMOQ 1 Ordering

    SCOR Benchmarking - Presentation

  • The rows in the matrix are focused on supply e.g. business lines or products or locations or suppliers start by making a list of products, level by levelAsk product divisions for product hierarchy dataIf you have the same product that may be build two different create two different products.In general you can go to any level of detail you want but be sensible.Examples:

    Row Definition*SCOR Benchmarking - Presentation

    Level 1Level 2Level 3Business DivisionsProduct LinesProduct FamiliesFulfillment ModelsSupplier GroupsPartsPlanning ModelsWarehouses

    SCOR Benchmarking - Presentation

  • We now place the customer list as column headings repeating until finishedAnd then the products list as row headings repeating until finishedFor each product that flows to a customer, we put an X in the cellIts that simple.The Matrix*SCOR Benchmarking - PresentationXXXXXXX

    Group 1Group 2Customer ACustomer BCustomer CCustomer D

    Group 1Group 2Customer ACustomer BCustomer CCustomer DBusiness 1Product 1Product 2Business 2Product 3Product 4

    SCOR Benchmarking - Presentation

  • Columns are Retail/Commercial, and sub-segmentedRows are the Major Product Lines

    Example: Air Conditioning Company*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • Some supply-chains are not unique, group supply chains together where they have common management and goalsEach group is considered a logical supply chainKey Differentiators:Logical Supply Chain*SCOR Benchmarking - Presentation

    Build StrategyModelLifecycleOtherMakeBTOIntroductionRegionBuyBTSMid-LifeTax RegimeETOCommodityLogistics StrategyEOLCustoms/DutyERP System

    SCOR Benchmarking - Presentation

  • Columns are Retail/Commercial, and sub-segmentedRows are the Major Product Lines

    Example: Air Conditioning Company*SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • Supply Chain PrioritizationWe use a tool called the Supply Chain Prioritization Matrix to order the supply-chains according to relevanceEach supply chain can be ranked by a number of featuresWe suggest: size (revenue, volume, and margin),complexity (# SKUs)strategic importanceYou can also look at them byCash ConsumptionRiskVolume variabilityEtc.

    *SCOR Benchmarking - Presentation

    SCOR Benchmarking - Presentation

  • Each supply chain is given a rank in each categoryThe total of the values gives the final overall rankingWeightings and other criteria may apply

    Supply Chain Priority*SCOR Benchmarking - Presentation1=low 3=high

    RevenueGross Margin %# of SKUsUnit VolumeStrategic ValueRankBig Air3222211Small Air2133110Commercial131139

    SCOR Benchmarking - Presentation

  • We use a tool called the Supply Chain Strategy Matrix to Identify priority strategic features or attributes of supply-chains.Each supply chain strategy is indicated by a collection of ranked features:

    Supply Chain Strategy*SCOR Benchmarking - Presentation

    ReliabilityOn time? Complete? Undamaged?ResponsivenessFrom Customer Request to final acceptanceFlexibilityHow long to scale up? How expensive to scale down?CostCost of Processes? Cost of Goods Sold?AssetsWorking Capital? Return on Investments?

    SCOR Benchmarking - Presentation

  • We advocate using a simple ranking system for industry comparisonEach rank corresponds to a specific percentile in industry performanceWe do not use averages or other statistical testsOur key ranks:

    Comparative Ranking*SCOR Benchmarking - Presentation

    PerformancePercentileChoicesInterpretationSuperior90th1Top 10 performerAdvantage70th2Top Half performerParity50th2Half better/Half worse

    SCOR Benchmarking - Presentation

  • Supply Chain Strategy in 5 MinutesSCOR Benchmarking - Presentation*

    Build StrategyModelLifecycleLikely PriorityBuyAssetsCostMakeETOReliabilityResponseBTOAssetsReliabilityBTSStartFlexibilityResponseMiddleCostReliabilityCommodityCostAssetsEOLAssetsCost

    SCOR Benchmarking - Presentation

  • Each unique combination of ratings defines Your Supply Chain Strategy for the channelThink of the rating as a desired state, NOT where you want to improve the most

    Supply-Chain Strategy Matrix*SCOR Benchmarking - PresentationSAAPP

    SCOR Benchmarking - Presentation

  • The SCORcardWe use a tool called the Supply Chain SCORcard to Identify performance characteristics of supply-chains.Each SCORcard is built from a subset of hundreds of SCOR metrics.For supply-chain benchmarking we generally use only Level 1, 2 and 3 metricsThe SCOR Manual provides all necessary definitions

    SC