scor model convergence with lean & six sigma

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  • 1. Supply Chain Operations Reference (SCOR) Model Convergence with Lean and Six SigmaUsing Supply Chain Architecture to Manage Enterprise TransformationSCOR Matthew J. MilasConverge SIXLEANSIGMA

2. 2006 Matthew MilasAgenda What is ConvergenceHow is SCOR Used for ConvergenceComparison of M th d l iC i f MethodologiesBenefits of ConvergencegWhy Convergence 2 3. 2006 Matthew Milas Integrated Improvement SCOR, Six Sigma and Lean SCOR, Six Sigma and Lean aim to improve thebusiness by optimizing system performance,reducing variation, and eliminating wastefulactivities.SCOR Six SigmaLean Y= f (X1 , ... , XN ) Top-Down Analysis Variation reduction Speed in the value chain End-to-End View Problem solving methodology Waste elimination Optimizing supply-chain Stability and accuracy Value system redesignas a whole 3 4. 2006 Matthew MilasConvergence is a Coordinated ApproachSCORCombinedBusiness Lean 6Strategy SSupply Chain YSCORBenchmarking M B Supply Chain I Assessment OValue StreamValue Stream T SYNERGISTIC IMappingMappingLean Six CSix Sigma ProjectsSix ProjectsSigma and Kaizenand KaizenBottom-line Bottom-line ResultsResults4 5. 2006 Matthew Milas The SCOR Framework SCOR defines supply chain as the integrated processes of Plan, Source, Make, Deliver and Return, spanning your suppliers supplier t your customers customer, aligned with O li tot t li d ith Operational ti l Strategy, Material, Work & Information Flows. Plan Plan Plan Plan PlanDeliver Source Make DeliverSourceMakeDeliver Source Make Deliver Source Suppliers YOUR COMPANY CustomersSupplier Customer SupplierCustomerInternal or ExternalReturn Internal or ExternalSupply Chain Operations Reference Model5 6. 2006 Matthew Milas What is a Process Reference Model? Process reference models integrate the well-known concepts ofbusiness process reengineering benchmarking and process reengineering, benchmarking,measurement into a cross-functional frameworkBusiness Process Best Practices Process ReferenceReengineering BenchmarkingAnalysis ModelCapture the as-is Capture the as-is state state of a processof a process and derive and derive thethe desired to-be futureto-be desired to-beQuantify the state future state operationalperformance ofsimilar companiesQuantify the operationaland establishperformance of similarinternal targets companies and establishbased on best-in- internal targets based onclass results Characterize thebest-in-class results management practices and Characterize the software solutionsmanagement that result in best- practices and in-class in class software solutionsftl ti performance that result in best-in- class performance 6 7. 2006 Matthew MilasSCOR Structure for Convergence 7 8. 2006 Matthew Milas Example SCOR Geo Map Aerospace Mod KitsSqdn ManufacturerS1, S2, M2, D2S1, DR1, DR2 S1, DR1, DR2Supp eSupplier BSqdn Supplier AD2 Supplier CD1D2 SqdnS1, DR1, DR2 DistributionS1, D1, DR1, DR2 8 9. 2006 Matthew Milas Example Problem IdentificationDeliveryPerformance Goal 90% DeliveryPPerformanceP1Actual - 66% 1 Supplieron time deliveryP Actual 95% 3PP Candidate for: P P 24 Level2 3 Process Review 4D2 S2 KaizenD2 S2 Lean Event Six SigmaD1 S1M1D1 Process Improvement S1 S1D1 SuppliersManufacturerDistribution center SquadronS d Level 1Level 29 10. Level 3 SCOR VSM Map 2006 Matthew Milas S 1.4 Exceeding Requirements Meeting Requirements Transfer Missing RequirementsProduct Unknown Transportation0.5 days ManufacturingM 2.1M 2.2 M 2.3 M 2.4M 2.5 M 2.6 IssueRelease Schedule Sourced /Stage Finished ProductioIn- Produce Finished Product nProcess and TestPackage Product to Deliver ActivitiesProduct I 10 days5 days3 days1 day30daysSalesD 2.1D 2.2D 2.4D 2.5 D 2.6 D 2.7 D 2.8 D 2.9D 2.3ReserveReceive, ResourceConfigurSelect Receives&Process e, Enter CarriersProduct DeterminInquiry andConsolidRoute & Rate from e Delivery Pickand Validate ate BuildShipmentShipmentSource orDate Product Quote QuoteOrders Loadss s Make I I I I I 25 days4 days 6 days15 days1 day5 days1015 12 5 days60daysdays days days10 11. 2006 Matthew MilasConvergence Implementation Approach IdentifyOpportunitiesPlan Strategy& BenchmarkSCORPrioritizeOpportunitiesMeasureAllocateImprovement ResourcesLeanImplement Six Sigma Select Solutions ApproachDiscover Root Causes11 12. 2006 Matthew MilasComparison of Methodology Strengths12 13. 2006 Matthew MilasBenefits of Convergence Standard frameworkSystems opportunity identificationSystem visibilityS t i ibilit13 14. 2006 Matthew Milas Benefits of a Standard Framework Standard process and metrics framework fororganizing enterprise processes andimprovements Manage processes across enterprise Common processes across different products,programs,programs & business units Measure, track, categorize, and align operationalimprovements Library of categorized best practices Cataloging system for process improvement ideas14 15. 2006 Matthew MilasBenefits of Opportunity Identification High-level systems process assessment tool Identifying, prioritizing, and aligning improvements Prioritizing based on alignment to specific strategies, systemg gp g , y impact, focus area, or other criteria Linking business strategy to improvement efforts Resource planning and allocation Strategic competitive assessment and benchmarking Internal processes across enterprise External competitive performance with system metrics15 16. 2006 Matthew Milas Benefits of System Visibility A systems view of processes & performance Map the whole system to avoid system sub-optimization through local optimization Identify constraints and critical paths to improveperformance Manage multiple projects running concurrently across gjgyenterprise Identify high-level improvement disconnects andopportunities Collaborate with suppliers and customers to improverelations 16 17. 2006 Matthew Milas Why Convergence Large companies experience disarray implementingcontinuous i tiimprovementt Lack of true leadership and cultural change management Lack of architecture for managing enterprise transformation An Imperfect world is the reality, but we mustcontinue to compete pConvergence instills a structured approach that ismore systematic, manageable, and holisticy g Mitigates imperfections and augments continuous improvementConvergence bridges the gap between strategic enterprise planning, continuous improvement, and transformation17