Supply Chain

ETI 6134

Dr. Karla Moore

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Lecture1. Supply Chain key concepts2. SCOR model 3. SCOR level of Detail4. SCOR Terminology5. SCOR Case Study

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Supply Chain Key Concepts Process Supply Chain Suppliers Customers Process owners, Management, etc.

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Supply Chain Key Concepts

InputMaterials

MoneyInformation

Data

ProcessPeople

EquipmentMethod

ProceduresEnvironment

Materials

OutputInformation

DataProductService

Feedback

Conditions

Outcomes

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Supply Chain Key Concepts

Supplier(s) Developer(Designer)

Producer(Manufacturer)

Distributor(Warehouser)

Customer(User)

Operational Activities

Maintenance Activities

Supply Chain Key Concepts

Requirementsand feedback

Requirementsand feedback

Your Suppliers

YourProcesses

YourCustomers

Inputs Outputs

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Supply Chain Factors Capability: Ability to accomplish all the

functions required. Availability: Ability to respond to any, or all, of

the requirements at any point in time when

needed. Quality: Process responsiveness in terms of the

objectives to satisfy customers’ needs.

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Introduced in 1996 by Supply Chain Council. The SCC is an independent, not-for-profit,

global corporation with membership open to all companies and organizations.

Over 800 Company Members. Chapters in Australia/New Zealand, Brazil,

Europe, Japan, North America, Southern Africa, and South East Asia with petitions for additional chapters pending.

SCOR Model

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SCC Organization - Chapters & Staffing

Australia/New Zealand Chapter Australia/New Zealand Chapter Sydney, AustraliaSydney, Australia

Owens Global LogisticsOwens Global Logistics

Australia/New Zealand Chapter Australia/New Zealand Chapter Sydney, AustraliaSydney, Australia

Owens Global LogisticsOwens Global Logistics

South East Asia Chapter South East Asia Chapter SingaporeSingapore

Venture Inc.Venture Inc.

South East Asia Chapter South East Asia Chapter SingaporeSingapore

Venture Inc.Venture Inc.

Japan Chapter Japan Chapter Tokyo, JapanTokyo, Japan

NECNEC

Japan Chapter Japan Chapter Tokyo, JapanTokyo, Japan

NECNEC

SCC Global Headquarters SCC Global Headquarters Pittsburgh, Pennsylvania, Pittsburgh, Pennsylvania,

USAUSA

HPHP

SCC Global Headquarters SCC Global Headquarters Pittsburgh, Pennsylvania, Pittsburgh, Pennsylvania,

USAUSA

HPHP

EuropeEurope

Oslo, NorwayOslo, Norway

Modus MediaModus Media

EuropeEurope

Oslo, NorwayOslo, Norway

Modus MediaModus Media

Southern Africa Southern Africa Johannesburg, South AfricaJohannesburg, South Africa

UTiUTi

Southern Africa Southern Africa Johannesburg, South AfricaJohannesburg, South Africa

UTiUTi

North America North America ChapterChapter

AVNETAVNET

North America North America ChapterChapter

AVNETAVNET

Brazil ChapterBrazil Chapter

Effective 9/1/03Effective 9/1/03

Brazil ChapterBrazil Chapter

Effective 9/1/03Effective 9/1/03

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Integrates the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross-functional framework.

Engineering approach that helps to analyze, design, and improve supply chain performance.

SCOR Model

SCOR Model

Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results

Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results

Benchmarking

Characterize the management practices and software solutions that result in “best-in-class” performance

Characterize the management practices and software solutions that result in “best-in-class” performance

Best Practices

Analysis

Process Reference Model

Capture the “as-is” state of a process and derive the desired “to-be” future state

Capture the “as-is” state of a process and derive the desired “to-be” future state

Business Process Reengineering

Capture the “as-is” state of a process and derive the desired “to-be” future state

Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results

Characterize the management practices and software solutions that result in “best-in-class” performance

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SCOR Model Covers many different departments and

contribute enterprises, each with its own values, information systems, structures, and economics.

SCOR spans over: All supplier / customer interactions. Order entry through paid invoice. All physical material transactions.

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SCOR Model SCOR Spans:

From the supplier’s supplier to the customer’s customer, including equipment, supplies, spare parts, bulk product, and software.

All market interaction. From the understanding of aggregate demand

to the fulfillment of each order. Returns.

Describes the business activities associated with all phases of satisfying a customer’s demand.

Suppliers’Supplier

SCOR Management Processes

SCOR Model SCOR Model

Building Block Approach

Processes Metrics

Best Practice Technology

Supplier

Plan

Customer Customer’sCustomer

Make DeliverSource Make DeliverMakeSourceDeliver SourceDeliver

Internal or External Internal or External

Your Company

Source

Return Return ReturnReturn Return Return Return Return

The Plan process, assesses supply resources;

aggregates and prioritizes demand requirements;

plans inventory for distribution, production, and

material requirements; and plans rough-cut

capacity for all products and all channels.

The Source process, obtains, receives, inspects, holds, issues, and authorizes payment for raw materials and purchased finished goods.

The Make process, requests and

receives material; manufactures

and tests product; packaging, holds,

and/or releases product.

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SCOR Level of Detail

#

Level

Schematic Comments

1

2

3

4

ConfigurationLevel

(ProcessCategories)

ProcessElement Level

(Decompose

Processes)

Plan

DeliverMakeSource

A company’s supply chain can be “configured-to- order” at Level 2 from approximately 24 core “process categories.”

Companies implement their operations strategy through their unique supply chain configuration.

Companies “fine tune” their Operations Strategy at Level 3

Level 3 defines a company’s ability to compete successfully in its chosen markets and consists of:• Process element definitions • Process element information inputs and outputs• Process performance metrics • Best practices, where applicable • System capabilities required to support best practices

•

•

ImplementationLevel

(Decompose

Process

Elements)

Companies implement specific supply chain management practices at this level

Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions

Su

pp

ly C

ha

in O

pe

rati

on

s R

efe

ren

ce

mo

de

l

Top Level

(Process Types)

Level 1 defines the scope and content for the Supply Chain Operations Reference model

Here basis of competition performance targets are set

Notin

Scope

Description

Balance Production Resources with

Production RequirementsEstablish Detailed

Production Plans

Identify, Prioritize, and Aggregate

Production Requirements

Identify, Assess, and Aggregate

Production Resources

P3.1

P3.3 P3.4

P3.2

ReturnReturn

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SCOR Terminology

SCOR Management Processes1. Plan: P2. Source: S3. Make: M4. Deliver: D5. Return: R

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Process Types and Categories 1. Planning: P1, P2, P3, P4, P5

P1: Plan Supply ChainP2: Plan SourceP3: Plan MakeP4: Plan DeliverP5: Plan Return

SCOR Terminology

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Process Types and Categories:2. Execution: S1-S3, M1-M3, D1-D4, R1-R3

S1: Source Stocked ProductS2: Source Make-to-Order ProductS3: Source Engineer-to-Order ProductM1: Make-to-StockM2: Make-to-OrderM3: Engineer-to-OrderD1: Deliver Stocked ProductD2: Deliver Make-to-OrderD3: Deliver Engineer-to-Order ProductD4: Deliver Retail Product

SCOR Terminology

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Process Types and Categories2. Execution: S1-S3, M1-M3, D1-D4, R1-R3

SR1: Source Return Defective ProductDR1: Deliver Return Defective ProductSR2: Source Return MRO ProductDR2: Deliver Return MRO ProductSR3: Source Return Excess ProductDR3: Deliver Return Excess Product

MRO: Maintenance, Repair, and Operating Supplies

SCOR Terminology

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Process Types and Categories 3. Enable: EP, ES, EM, ED, ER

EP1-EP9ES1-ES9EM1-EM8ED1-ED8ER1-ER8

SCOR Terminology

SCOR Terminology

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P1: Plan Supply ChainP1.1: Identify, Prioritize, & Aggregate Supply-Chain RequirementsP1.2: Identify, Assess, & Aggregate Supply-Chain ResourcesP1.3: Balance Supply-Chain Resources with Supply-Chain RequirementsP1.4: Establish & Communicate Supply-Chain Plans

P2: Plan SourceP2.1: Identify, Prioritize, & Aggregate Product RequirementsP2.2: Identify, Assess, & Aggregate Product ResourcesP2.3: Balance Product Resources with Product RequirementsP2.4: Establish & Communicate Sourcing Plans

SCOR Terminology

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P3: Plan MakeP3.1: Identify, Prioritize, & Aggregate Production RequirementsP3.2: Identify, Assess, & Aggregate Production ResourcesP3.3: Balance Production Resources with Production RequirementsP3.4: Establish & Communicate Production Plans

P4: Plan DeliverP4.1: Identify, Prioritize, & Aggregate Delivery RequirementsP4.2: Identify, Assess, & Aggregate Delivery ResourcesP4.3: Balance Delivery Resources with Delivery RequirementsP4.4: Establish & Communicate Delivery Plans

SCOR Terminology

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P5: Plan ReturnP5.1: Identify, Prioritize, & Aggregate Return RequirementsP5.2: Identify, Assess, & Aggregate Return ResourcesP5.3: Balance Return Resources with Return RequirementsP5.4: Establish & Communicate Return Plans

Enable PlanEP1: Manage Business Rules for Plan ProcessesEP2: Manage Performance of Supply ChainEP3: Manage Plan Data CollectionEP4: Manage Integrated Supply Chain InventoryEP5: Manage Integrated Supply Chain Capital AssetsEP6: Manage Integrated Supply Chain TransportationEP7: Manage Planning ConfigurationEP8: Manage Plan Regulatory Requirements & ComplianceEP9: Align Supply Chain Unit Plan with Financial Plan

SCOR Terminology

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S1: Source Stocked ProductS1.1: Schedule Product DeliveriesS1.2: Receive ProductS1.3: Verify ProductS1.4: Transfer ProductS1.5: Authorize Supplier Payment

S2: Source Make-to-Order ProductS2.1: Schedule Product DeliveriesS2.2: Receive ProductS2.3: Verify ProductS2.4: Transfer ProductS2.5: Authorize Supplier Payment

SCOR Terminology

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S3: Source Engineering-to-Order ProductS3.1: Identify Sources of SupplyS3.2: Select Final Supplier(s) and NegotiateS3.3: Schedule Product DeliveriesS3.4: Receive ProductS3.5: Verify ProductS3.6: Transfer ProductS3.7: Authorize Supplier Payment

Enable SourceEP1: Manage Sourcing Business PlanEP2: Assess Supplier PerformanceEP3: Maintain Source DataEP4: Manage Product InventoryEP5: Manage Capital AssetsEP6: Manage Incoming ProductEP7: Manage Supplier NetworkEP8: Manage Import/Export RequirementsEP9: Manage Supplier Agreements

SCOR Terminology

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M1: Make-to-StockM1.1: Schedule Product ion ActivitiesM1.2: Issue ProductM1.3: Produce and TestM1.4: PackageM1.5: Stage ProductM1.6: Release Product to deliver

M2: Make-to-Order M2.1: Schedule Product ion ActivitiesM2.2: Issue ProductM2.3: Produce and TestM2.4: PackageM2.5: Stage ProductM2.6: Release Product to deliver

SCOR Terminology

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M3: Engineering-to-Order M3.1: Finalize EngineeringM3.2: Schedule Production ActivitiesM3.3: Issue ProductM3.4: Produce and TestM3.5: PackageM3.6: Stage ProductM3.7: Release Product to Deliver

Enable MakeEM1: Manage Production RulesEM2: Manage Production PerformanceEM3: Manage Make InformationEM4: Manage In-Process Products (WIP)EM5: Manage Equipment and FacilitiesEM6: Manage TransportationEM7: Manage Production NetworkEM8: Manage Production Regulatory Compliance

SCOR Terminology

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D1: Deliver Stocked ProductD1.1: Process Inquiry & QuoteD1.2: Receive, Enter & Validate OrderD1.3: Reserve Inventory & Determine Delivery DateD1.4: Consolidate OrdersD1.5: Build LoadsD1.6: Route ShipmentsD1.7: Select Carries & Rate ShipmentsD1.8: Receive Product from Source or MakeD1.9: Pick ProductD1.10: Pack ProductD1.11: Load Product & Generate Shipping DocsD1.12: Ship ProductD1.13: Receive & Verify Product by CustomerD1.14: Install ProductD1.15: Invoice

SCOR Terminology

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D2: Deliver Make-to-OrderD2.1: Process Inquiry & QuoteD2.2: Receive, Configure, Enter & Validate OrderD2.3: Reserve Inventory & Determine Delivery DateD2.4: Consolidate OrdersD2.5: Build LoadsD2.6: Route ShipmentsD2.7: Select Carries & Rate ShipmentsD2.8: Receive Product from Source or MakeD2.9: Pick ProductD2.10: Pack ProductD2.11: Load Product & Generate Shipping DocsD2.12: Ship ProductD2.13: Receive & Verify Product by CustomerD2.14: Install ProductD2.15: Invoice

SCOR Terminology

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D3: Deliver Engineer-to-Order ProductD3.1: Obtain & Respond to RFP/RFQD3.2: Receive and Review Contract D3.3: Enter Order, Commit, Resources & Launch ProgramD3.4: Schedule InstallationD3.5: Build LoadsD3.6: Route ShipmentsD3.7: Select Carries & Rate ShipmentsD3.8: Receive Product from Source or MakeD3.9: Pick ProductD3.10: Pack ProductD3.11: Load Product & Generate Shipping DocsD3.12: Ship ProductD3.13: Receive & Verify Product by CustomerD3.14: Install ProductD3.15: Invoice

SCOR Terminology

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D4: Deliver Retail ProductD4.1: General Stocking ScheduleD4.2: Receive Product at the StoreD4.3: Pick Product from BackroomD4.4: Stock ShelfD4.5: Fill Shopping CartD4.6: CheckoutD4.7: Deliver and/or install

Enable SourceED1: Manage Deliver Business RulesED2: Assess Deliver PerformanceED3: Manage Deliver InformationED4: Manage Finished Product InventoryED5: Manage Deliver Capital AssetsED6: Manage TransportationED7: Manage Product Life CycleED8: Manage Import/Export Requirements

SCOR Terminology

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SR1: Source Return Defective Product SR1.1: Identify Defective Product ConditionSR1.2: Disposition Defective ProductSR1.3: Request Defective Product Return AuthorizationSR1.4: Schedule Defective Product ShipmentSR1.5: Return Defective Product

DR1: Deliver Return Defective Product DR1.1: Authorize Defective Product ReturnDR1.2: Schedule Defective Return Receipt DR1.3: Receive Defective Product (includes verify)DR1.4: Transfer Defective Product

SCOR Terminology

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SR2: Source Return MRO Product SR2.1: Identify MRO Product ConditionSR2.2: Disposition MRO ProductSR2.3: Request MRO Return AuthorizationSR2.4: Schedule MRO ShipmentSR2.5: Return MRO Product

DR2: Deliver Return MRO Product DR2.1: Authorize MRO Product ReturnDR2.2: Schedule MRO Return Receipt DR2.3: Receive MRO Product (includes verify)DR2.4: Transfer MRO Product

SCOR Terminology

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SR3: Source Return Excess Product SR3.1: Identify Excess Product ConditionSR3.2: Disposition Excess ProductSR3.3: Request Excess Product Return AuthorizationSR3.4: Schedule Excess Product ShipmentSR3.5: Return Excess Product

DR3: Deliver Return Excess Product DR3.1: Authorize Excess Product ReturnDR3.2: Schedule Excess Return Receipt DR3.3: Receive Excess Product (includes verify)DR3.4: Transfer Excess Product

SCOR Terminology

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Enable ReturnER1: Manage Business Rules for Return ProcessesER2: Manage Performance of Return ProcessesER3: Manage Return Data CollectionER4: Manage Return InventoryER5: Manage Return Capital AssetsER6: Manage Return TransportationER7: Manage Return Network ConfigurationER8: Manage Return Regulatory Requirements &

Compliance

SCOR Terminology

SCOR Terminology

SCOR Terminology

SCOR Terminology

Mapping Material Flow

Latin AmericanSuppliers

(D1)

Warehouse

Other Suppliers(D1)

Manufacturing

European Supplier(S1)(SR1,SR3)

C ustom er

C ustom er

C ustom er

C ustom er

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

(D2)(DR1)

Warehouse

Warehouse

Warehouse

(S1, D1)(SR1, DR3)

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

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

(S1)(SR1,SR3)

(S1)(SR1,SR3)

(S1)(SR1,SR3)

(S1, S2, M1, D1)(SR1,,DR1)

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Consumer Foods Project Time (Start to Finish) – 3 months. Investment - $50,000 US. 1st Year Return - $4,300,000 US.

Electronics Project Time (Start to Finish) – 6 months. Investment - $3-5 Million US. Projected Return on Investment - $ 230 Million US.

SCOR Benefits

SCOR level of detailSCOR level of detailAgenda Review Process SCOR Level 1 Supply Chain

INTERNAL•Building & Fire Inspection Division•Community Resources Division•Development Review Division•Planning and Zoning Division

ENABLING PROCESSES• ENGINEERING• QUALITY• IM

Plan

DeliverMake

ReturnReturn

Source

Agenda Review Process CUSTOMERS

•Building & Fire Inspection Division•Community Resources Division•Development Review Division•Planning and Zoning Division

CUSTOMER’SCUSTOMER

Board of County Commissioner

SUPPLIERSSUPPLIER’SSUPPLIER

EXTERNAL•Applicant

• Application Form• Site Plan• Legal Description

• Agenda Memorandum• Maps

Processing Item

Agenda Package

Planning and Scheduling the Item

Decomposition/ Drill-Down mechanicsDecomposition/ Drill-Down mechanics

Agenda Review Process SCOR Level 1 Agenda Process Strategic Plan What we want to accomplish Top Level Business Plan How we will accomplish it ( Process Types) SCM Process How we implement and manage the plan

ERP The tools we use to implement

Agenda Review Process Level 2Configuration Level(Process Categories)

M1Agenda Review Process Supply Chain

PLAN-P3 SOURCE-S2 MAKE-M1 DELIVER-D1

Task PlanScheduling

Agenda Review Process Level 3Process Elements Level

(Decompose Process)

AS-IS STATE

Agen

da S

ched

ule

Months

Attorney Office

Department Director

Deputy County ManagerCounty Manager

Agen

da Item

Review

ed A

gend

a Item

Customer Acceptance

1-9 Months1-6 Months 1 Week1-2 Months1 Week

S2 Source Element SOURCE MAKE DELIVER

Information Flow SC Response Material Flow

1-6 Months2-4 Months 1 day4-6 Months1-2 Weeks

RETURN RETURN

Define critical part of the processDefine critical part of the process

70% OVERLOAD,REWORK,

TIME CONSUMING

PROCESS PEOPLE

PROCEDURE COMPUTER RESOURCES

COMUNICATION

No Database

No Standard

A lot of papers

Redundancy

No Training

Communication tools not Available

Many changeswithout interaction

Lack of coordinationamong Divisions, Departments

Lack of consistency