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Version 5.0aAugust, 2001

Supply Chain Council&Supply Chain Operations Reference (SCOR)

Model Overview

Scott Stephens

Chief Technology Officer

Supply-Chain Council, Inc.

303 Freeport Road

Pittsburgh, PA 15215 USA

www.supply-chain.org

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Version 5.0aAugust, 2001 2

Supply Chain Management Changing Times

Eighteen months ago boom

Central issues Revenue Capture Demand forecast Speed

One month ago bust Central Issues

Cost Inventory

Now Uncertainty Emerging Issues

Just-in-case vs. just-in-time Consumer confidence

Supply chain management is now a watchword in business, Wall Street,and in the news media

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Version 5.0aAugust, 2001

Supply Chain Management&

The Supply Chain Council

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The SCC is an independent, not-for-profit, global corporation with

membership open to all companies and organizations interested inapplying and advancing state-of-the-art supply chain managementsystems and practices.

Over 700 Company Members

Cross-industry representation

Chapters in Australia/New Zealand, Europe, Japan, Korea,Latin America, and South East Asia with petitions for additionalchapters pending.

Over 30 new members per month

The Supply-Chain Council (SCC) has developed and endorsed theSupply Chain Operations Reference-model (SCOR) as the cross-industry standard for supply chain management

The SCC was organized in 1996 by Pittiglio Rabin Todd & McGrath (PRTM) and Advanced

Manufacturing Research (AMR), and initially included 69 voluntary member companies

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SCC Organization - Chapters and Staffing

SydneyAustralia / New

Zealand Accantia

SingaporeSouthEast Asia

Intel

Tokyo, Japan

Hitachi

Seoul, Korea

KoreanManagement

Assoc.

Mexico City, LatinAmerica

EXEL

Pittsburgh,PA Bayer

HeadquartersHeadquarters*Executive

Director

Amsterdam-Europe

Siemens

Under Development: Hong Kong, India

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C-Dennis Zagrodnik Daimler/ChrylserVC -Paul Welch - Nokia

Current Technical Committee Structure

Integration Committee

Plan Committee

Source Committee

Make Committee

Deliver Committee

Metrics Committee

C-Peter Bolstorff PragmatekV-Larry Gray CobreGroup

C-Katie Kaspar -VC -Oscar Chappel Tech ConnectionC -Ed Biancarelli Washington Group

VC -Irving Briks BellSouth

C - Dan Swartwood PragmatekVC - Rick Hughes Lockheed Martin

Intel SiemensRosettaNet

George Brown INTELHerbert Heinzel -Siemens

C- Major Scott Koster (USMC)

Return Committee

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Quantify theoperationalperformance ofsimilar companies

and establishinternal targetsbased on best-in-class results

Benchmarking

Characterize themanagementpractices andsoftware solutionsthat result inbest-in-class

performance

Best PracticesAnalysis

Process ReferenceModel

Capture the as-isstate of a processand derive thedesired to-befuture state

Business ProcessReengineering

Capture the as-is state

of a process and derivethe desired to-be futurestate

Quantify the operationalperformance of similarcompanies and establishinternal targets based on

best-in-class resultsCharacterize themanagementpractices andsoftware solutionsthat result in best-in-class performance

What is a process reference model?

Process reference models integrate the well-known concepts ofbusiness process reengineering, benchmarking, and processmeasurement into a cross-functional framework

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Supplier

Plan

Customer CustomersCustomer

SuppliersSupplier

MakeDeliverSource Make DeliverMakeSourceDeliver SourceDeliver

Internal or External Internal or External

Your Company

Source

SCOR is structured around five distinctmanagement processes

SCOR ModelSCOR Model

Return Return ReturnReturn Return Return

Return Return

Building Block Approach

Processes Metrics

Best Practice Technology

S C O f

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Customers

Suppliers

P1 Plan Supply ChainPlanPlan

P2 Plan Source P3 Plan Make P4 Plan Deliver

Source Make Deliver

S1 Source Stocked Products M1 Make-to-Stock

M2 Make-to-Order

M3 Engineer-to-Order

D1 Deliver Stocked Products

D2 Deliver MTO Products

D3 Deliver ETO Products

S2 Source MTO Products

S3 Source ETO Products

Supply-Chain Operations Reference-model(SCOR) 5.0 - Processes

Return

Source

P5 Plan Returns

Return

Deliver

Enable

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Mapping material flow

Latin AmericanLatin American

SuppliersSuppliers

(D1)

WarehouseWarehouse

Other SuppliersOther Suppliers(D1)

ManufacturingManufacturing

European SupplierEuropean Supplier(S1)

(SR1,SR3)

C u s t o m e r

C u s t o m e r

C u s t o m e r

C u s t o m e r

(S1, D1)(SR1,DR1,DR3)

(S1, S2, M1, D1)

(SR1,SR3,DR3)

(D2)(DR1)

WarehouseWarehouse

WarehouseWarehouse

WarehouseWarehouse

(S1, D1)(SR1,DR1,DR3)

(S1, D1)

(SR1,DR1,DR3)

(S1, D1)(SR1,DR1,DR3)

(S1)

(SR1,SR3)

(S1)

(SR1,SR3)

(S1)

(SR1,SR3)

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Mapping the processes

Consumer

P2

P4

P3

P4

S1 D1 S1

P2

P2

P3

P4

M2S2 D2

M1 D1 S1S2D1

M1

EuropeanRM Supplier

Key OtherRM

Suppliers

S1

Alpha RegionalWarehousesRM

SuppliersConsumerALPHA

P1 P1 P1

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PerformanceAttribute

Performance Attribute Definition Level 1 Metric

Supply Chain DeliveryReliability

The performance of the supply chain indelivering: the correct product, to the correctplace, at the correct time, in the correct conditionand packaging, in the correct quantity, with thecorrect documentation, to the correct customer.

Delivery Performance

Fill Rates

Perfect Order Fulfillment

Supply ChainResponsiveness

The velocity at which a at which a supply chainprovides products to the customer.

Order Fulfillment Lead Times

Supply ChainFlexibility

The agility of a supply chain in responding tomarketplace changes to gain or maintaincompetitive advantage.

Supply Chain Response Time

Production Flexibility

Supply Chain Costs The costs associated with operating the supplychain.

Cost of Goods Sold

Total Supply Chain ManagementCosts

Value-Added Productivity

Warranty / Returns ProcessingCosts

Supply Chain AssetManagementEfficiency

The effectiveness of an organization in managingassets to support demand satisfaction. Thisincludes the management of all assets: fixed andworking capital.

Cash-to-Cash Cycle Time

Inventory Days of Supply

Asset Turns

Linking Supply Chain Performance Attributes andLevel 1 Metrics

S ppl Chain SCORcard & Gap Anal sis

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Supply Chain SCORcard & Gap AnalysisNEW Product Line

50%

$30M Revenue

$30M Indirect Cost

35 days

97 days

0%

63%

Supply Chain SCORcard Performance Versus Competitive Population

Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements

Delivery Performance toCommit Date

85% 90% 95%

Fill Rates 94% 96% 98%

EXTERNAL

SupplySupply

ChainChain

ReliabilityReliability

Perfect Order Fulfillment 80% 85% 90%

Order Fulfillment Lead times7 days 5 days 3 days

Flexibility

Responsiveness

Production Flexibility 30 days 25 days 20 days

Total SCM ManagementCost 19% 13% 8% 3%

INTERNAL Cost Warranty Cost NA NA NA NA NA

Value Added Employee

Productivity NA $156K $306K $460K NA

Inventory Days of Supply 119 days 55 days 38 days 22 days NA

AssetsCash-to-Cash Cycle Time

196 days 80 days 46 days 28 days

Net Asset Turns (Working

Capital) 2.2 turns 8 turns 12 turns 19 turns NA

Supply Chain ResponseTime 82 days 55 days 13 days

45 days

$7 M Capital Charge

Key enabler to cost andasset improvements

$30M Revenue

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S1 D1 S1

M2S2 D2

M1 D1 S1

S2

D1M1

S1

Cycle Time

ScheduleAchievement

Perfect OrderFulfillment

DeliveryPerformance

Supplieron time delivery




On Time

In Full

Docs

Damage

On Time

In Full

Docs

Damage

RevenueAccounts Receivable

Cash Flow

Decomposing Metrics

EuropeanRM Supplier

Key OtherRM

Suppliers

Consumer



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Consumer

RMSuppliers

S1 D1 S1

M2S2 D2

M1 D1 S1

S2

D1M1

S1

Cycle Time

ScheduleAchievement


DeliveryPerformance





On Time

In Full

Docs

Damage

On Time

In Full

Docs

Damage

RevenueAccounts Receivable

Cash Flow


Actual - 85%

Perfect Order

FulfillmentGoal 95%

ScheduleAchievementActual 95%


Actual 90%

DeliveryPerformanceActual 99%


Actual 85%

MetricsConflict

Inventory

Under-performance

Process

Systems Under-performanceProcessSystems

Performance Measurement

Consumer



EuropeanRM Supplier

Key OtherRM

Suppliers

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Material FlowMaterial Flow

SCOR Level 1

OperationsOperationsStrategyStrategy

Analyze Basis

ofCompetition

SCOR Level 2

Configuresupply chain

AlignPerformance

Levels,Practices, and

Systems

Implementsupply chain

Processes andSystems

SCOR Project Roadmap

Competitive Performance Requirements

Performance MetricsSupply Chain ScorecardScorecard Gap AnalysisProject Plan

AS IS Geographic MapAS IS Thread DiagramDesign Specifications

TO BE Thread DiagramTO BE Geographic Map

Informationand Work Flow

AS IS Level 2, 3, and 4 MapsDisconnectsDesign SpecificationsTO BE Level 2, 3, and 4 Maps

Develop,Test, and Roll

Out

OrganizationTechnologyProcessPeople

SCOR Level 3

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SCOR Implementations

Plan, development, and formation of a company to support a new product line(Complete)

Re-engineering of supply chain processes for a corporation (138 divisions, 190countries, 770 sites) (In process)

Implementation of SCOR processes corporate-wide Level 1 Metrics used as executive evaluation criteria

Re-organization of logistics groups into Plan, Source, Make, Deliver (Complete) Multiple organizations

Collaborative forecasting Contracts and purchase orders

Thinking is easy, acting is difficult, and

to put one's thoughts into action is the

most difficult thing in the world. Goethe

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Supply Chain Council Outreach

SCOR Workshops (2000)

Atlanta, January 20-21 Chandler, AZ (Intel), February 8-9

Fountainbleu, March 9-10

Oregon (Intel) March 28-29

Chicago, April 12-13

Sydney, May 4-5

Singapore, June 1-2

Detroit, June 22-23

London, July 11-12

Philadelphia (SAP), July 18-19

Waldorf, Germany (SAP), August 1-2 Auckland, NZ, August 3-4

Singapore (SAP), August 8-9

Chandler, AZ (Intel) August

Amsterdam, September 28-29

Tokyo, October 5-6

Mexico City, October 12-13

St. Louis, October 26-27

Sydney, November 6-16 (3 - public, SAP, CHH)

Hanover, Germany November 9-10

Oslo, Norway Dec 3-5

Currently working with Intel to develop an instructor training course

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Supply Chain Council Outreach

SCOR Workshops (2001)

Anaheim, January 20-21

Singapore, February 20-21

Singapore (BASF), February 22-23

Cancun, Mexico March 7-8

New Orleans, April 5-6

Melbourne (BHP), April 20-22

Tokyo, April 23-24

Brussels (Medtronics), May 2-3 Gohteburg, May 9-10

Singapore, May 18-19

Charlotte, June 18-19

Albany, GA (USMC) September 6-7

Einhoven (Origin) Sept 19-19

Chicago, September 27-28

Berlin, October 4-5

Frankfurt (BASF), October 23-25

Washington DC, November 12-13

Gotheburg, December 4-5

Events

Supply-Chain World-Europe Berlin, Germany,Oct 1-3, 2001

Supply-Chain World-Japan Tokyo, Japan, Nov 1,2001

SCOR Users Seminar Washington, DC, USA, Nov14, 2001

SCC Winter Meetings Charlotte, North Carolina,

USA, Jan 23-24, 2002 Senior Supply-Chain Executive Retreat Phoenix,

Arizona, USA, Feb. 27 Mar. 1, 2002

Supply-Chain World-Latin America, Monterrey,Mexico, March dates TBD

Supply-Chain World-North America New Orleans,Louisiana, USA, April 22-24, 2002

Supply-Chain World-South East Asia Singapore,May 15-16, 2002

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2000 - 2001 Technical Accomplishments

Released Version 5.0

Completed Return Processes Began updating the Models best practice (e-business) Began metrics restructure and glossary update

(Note of caution to users previous to SCOR 5.0) Research

Joint APICS research publication

Continued support of Penn State / Manugistics Research Formation of Research Strategies Advisory Board

Workshop material development and conduct

5 versions of workshop developed and delivered Over 500members have attended SCOR Workshops with companies likeIntel, HP, EDS, US Department of Defense, Compaq Baxter, SAP,

hosting in-house Workshops

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SCOR Model Timeline - 6.0

After completing Version 5.0 changes committees began workingVersion 6.0 - tentatively scheduled for release in Spring 2002

Metrics Revision and Decomposition Trees

Return Metrics and Best Practice Complete

Best Practice and e-Business Improvement Collaboration

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SCOR Model Directions

Changes anticipated to shift from structural issues to implementation

issues Product Development Customer/Supplier Relationship Management Import / Export E-business Reverse logistics / warranty returns Inventory optimization Service environment Synchronizing advanced planning and business planning

Special Industry Groups / International Chapters Finance and metrics

Benchmarking regional issues

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scor overview 9.25.01

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