Supply Chain Operations

Reference Model (SCOR)

Supply Chain Operations Reference Model
(SCOR): Information about (SCC)
Developed by Supply Chain Council (SCC)
SCC: Independent, not-for-profit corporation organized in 1996 by:
Global management-consulting firm, Pittiglio Rabin Todd &
McGrath (PRTM) and
Market research firm, Advanced Manufacturing Research (AMR)
in Cambridge, Massachusetts.
Started with 69 voluntary companies; now close to 1000 members.
SCC Objective: To develop a standard supply-chain process reference
model enabling effective communication among the supply chain
partners, by
Using standard terminology to better communicate and learn the supply
chain issues
Using standard metrics to compare and measure their performances
 Supply Chain Operations Reference Model
(SCOR)
SCOR:
Integrates Business Process Reengineering, Benchmarking, and
Process Measurement into a cross-functional framework.

Capture the “as-is” state

Capture the “as-is” of a process and derive
state of a process the desired “to-be”
and derive the future state
desired “to-be” Quantify the
future state operational
performance of Quantify the operational
similar companies performance of similar
and establish companies and establish
internal targets internal targets based on
based on “best-in- “best-in-class” results
class” results Characterize the
management Characterize the
practices and management
software solutions practices and
that result in software solutions
“best-in-class” that result in “best-in-
performance class” performance

Business Process Benchmarking Best Practices Process Reference

Reengineering Analysis Model
Supply Chain Operations Reference Model
(SCOR)
The Primary Use of SCOR:
To describe, measure and evaluate supply chain configurations.
SCOR contains:
Standard descriptions of management processes
A framework of relationships among the standard processes
Standard metrics to measure process performance
Management practices that produce best-in-class performance
Enables the companies to:
Evaluate and compare their performances with other companies
effectively
Identify and pursue specific competitive advantages
Identify software tools best suited to their specific process
requirements
Supply Chain Operations Reference Model
(SCOR): Boundaries
SCOR spans:
• All customer interactions, from order entry through paid invoice.
• All product (physical material and service) transactions, from supplier’s
supplier to customer’s customer, including equipment, supplies, spare parts,
bulk product, software, etc.
• All market interactions, from the understanding of aggregate demand to the
fulfillment of each order
SCOR does not attempt to describe every business process or activity,
including:
• Sales and marketing (demand generation)
• Research and technology development
• Product development
• Some elements of post-delivery customer support
 Supply Chain Operations Reference Model
(SCOR):Basic Management Processes
Plan-Source-Make-Deliver-Return

Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Return Return Return Return

Supplier’s Return Return

Customer’s
Supplier Customer
Supplier Customer
(Internal or (Internal or
Your Company External)
External)

Plan-Source-Make-Deliver-Return provide the organizational structure of the SCOR-model

 Scopes of Basic Management Processes
Plan (Processes that balance aggregate demand and supply to develop a course of
action which best meets sourcing, production and delivery requirements)
Balance resources with requirements
Establish/communicate plans for the whole supply chain
Source (Processes that procure goods and services to meet planned or
actual demand)
Schedule deliveries (receive, verify, transfer)
Make (Processes that transform product to a finished state to meet planned or
actual demand)
Schedule production
Deliver (Processes that provide finished goods and services to meet planned or
actual demand, typically including order management, transportation
management, and distribution management)
Warehouse management from receiving and picking product to load and ship
product.
Return (Processes associated with returning or receiving returned products)
Manage Return business rules
 Level
Three Levels of Process Detail
# Description Schematic Comments

1 Level 1 defines the scope and content for the

Plan Supply chain Operations Reference-model. Here
Top Level Source Make Deliver basis of competition performance targets are set.
(Process Types)
Return Return
Supply Chain Operations Reference

2
A company’s supply chain can be “configured-
Configuration Level to-order” at Level 2 from the core “process
(Process categories.” Companies implement their
Categories) operations strategy through the configuration
they choose for their supply chain.

3 Level 3 defines a company’s ability to compete

Process Element
successfully in its chosen markets, and consists
Level (Decompose
of:
Processes)
Process element definitions
P1.1
Identify, Prioritize, and Aggregate Process element information inputs, and outputs
Supply-Chain Requirements
P1.3
Balance Production Resources with
P1.4
Establish and
Process performance metrics
Model

P1.2 Best practices, where applicable

Supply-Chain Requirements Communicate
Supply-Chain Plans
Identify, Assess, and Aggregate
Supply-Chain Requirements
System capabilities required to support best
practices
Systems/tools

4 Implementation Companies implement specific supply-chain

Level (Decompose management practices at this level. Level 4
Not Process Elements) defines practices to achieve competitive
in Scope advantage and to adapt to changing business
conditions.
 Level 1 Customer-Facing Internal-Facing
Performance Metrics Supply Chain
Reliability
Responsiveness Flexibility

Cost Assets
Performance Attributes
Delivery performance 
Fill rate 
Perfect order fulfillment 
Order fulfillment lead time 
Supply Chain Response Time 
Production flexibility 
Total SCM cost 
Cost of Goods Sold 
Value-added productivity 
Warranty cost or returns processing cost 
Cash-to-cash cycle time 
Inventory days of supply 
Asset turns 
 Level Metrics Facts
Level 1 Metrics are primary, high level measures that may cross multiple
SCOR processes.
They do not necessarily relate to a SCOR Level 1 process (Plan-Source-
Make-Deliver-Return).
There is hierarchy among the metrics in different levels.
Level 1 Metrics are created from lower level calculations (Level 2 metrics)
Level 2 Metrics:
Associated with a narrower subset of processes.
Example:
Metric related with Delivery Performance: Total number of
products delivered on time and in full based on a commit date.
Metric related with Production: Ratio Of Actual To Theoretical
Cycle Time
Level 2 Process Types and Definitions
Planning: A process that aligns expected resources to meet expected
demand requirements.
Balance aggregated demand and supply
Consider consistent planning horizon
(Generally) occur at regular, periodic intervals
Execution: A process triggered by planned or actual demand that
changes the state of material goods.
Scheduling/sequencing
Transforming product
Moving product to the next process
Enable: A process that prepares, maintains, or manages information or
relationships on which planning and execution processes rely
P1: Plan Supply Chain
P2-P5: Plan SCOR Process
S1: Source Stocked Product
S3: Source Engineer-to-Order Product Level 2 Process Categories
S2: Source Make-to-Order Product
M1: Make-to-Stock
M2: Make-to-Order
M3: Engineer-to-Order
D1: Deliver Stocked Product
D2: Deliver Make-to-Order Product
D3: Deliver Engineer-to-Order Product
D4: Deliver Retail Product (New in Version 6.0)
SR1/DR1: Return Defective Product (Source
Return/Deliver Return)
SR2: Source Return MRO Product (Maintenance,
Repair and Overhaul)
DR2: Deliver Return MRO Product
SR3/DR3: Return Excess Product (Source
Return/Deliver Return)
EP, ES, EM, ED, ER: Enable corresponding SCOR
Processes
 Example Continued

Process Number: S1

Process Category: Source Stocked Product

Process Category Definition
The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and
or services.
Performance Attributes Metric
Reliability % Orders/lines processed complete
Responsiveness Total Source Cycle Time to Completion
Flexibility Time and Cost related to Expediting the
Sourcing Processes of Procurement,
Delivery, Receiving and Transfer.
Cost Product Acquisition Costs
Assets Inventory DOS
Best Practices Features
Joint Service Agreements None Identified
Alliance and Leverage agreements
Example Continued
Process Element Number: S1.4

Process Element: Transfer Product

Process Element Definition
The transfer of accepted product to the appropriate stocking location within the supply chain.
This includes all of the activities associated with repackaging, staging, transferring and stocking
product. For service this is the transfer or application of service to the final customer or end
user.
Performance Attributes Metric
Reliability % Product transferred damage free
% Product transferred complete
% Product transferred on-time to demand
requirement
% Product transferred without transaction errors
Responsiveness Transfer Cycle Time
Flexibility Time and Cost Reduction related to Expediting
the Transfer Process.
Cost Transfer & Product storage costs as a % of
Product Acquisition Costs
Assets Inventory DOS
Best Practices Features
Drive deliveries directly to stock or point-of- Pay on receipt
use in manufacturing to reduce costs and Specify delivery location and time (to the minute)
cycle time
Specify delivery sequence
Capability Transfer to Organization None Identified
Example Continued

Inputs Plan Source Make Deliver

Product Pull Signals M D
Product Inventory Location ES.4
WIP Inventory Location EM
Finished Goods Inventory ED
Location

Outputs Plan Source Make Deliver

Inventory Availability P2.2 ES.4 M1.2, D1.8,
M2.2, D4.2
M3.3
Daily Replenishment D4.1
Requirements
Loaded Cart D4.4
Questions?
Thank you.

American Academy of Supply Chain

Management 19