SCOR Modeling in Supply Chain

performance analysis
 Supply Chain Performance indicators –some basic
issues
• Objective – customer satisfaction at low costs ensuring long-
term competitive capability

• To refine a competitive business strategy

• Indicators should be easy to define, simple to apply and easy

to comprehend, so that managers can react quickly and
suitably

• Performance both for reflecting outcome of operating

procedures externally and financial potentials as internal
performance

• Focus on defined corporate objectives and strategies

 Business Process Methodology

1st generation: BPR, Six Sigma etc,

– A business process treated as a unique one.
– Sub-processes and the measurement metrics for assessing
the performance vary from process to process or business
to business.
2nd generation:
• More efficient analysis (by providing a common vocabulary)
• More effective improvement plan by using a set of standard
measurement units.
SCOR model: A second Generation Business Process
Methodology, a process focused and framework based
approach.
 SCOR methodology concepts

• Business Process Reengineering – analysis of existing

process and redesign for improvement (or process
improvement).

• Benchmarking – measurement, comparison with best

practices and improvement.

• Process Reference Model – use of a general and

standardized framework for process analysis.
 Phases of SCOR Project Roadmap
SCOR Project Roadmap comprises five phases and
SCOR model implementation may be treated as a
project.

0. Review Corporate Strategy

1. Define Supply Chain Process
2. Determine the performance of the existing supply
chain
3. Establish your supply chain Strategy, Goals and
Priorities
4. Redesign the supply chain
5. Enable the redesign and implement
 Review Corporate Strategy
• Review of company’s supply chain strategy to
consider whether the supply chain demands
improvement.

• Set up and training of a project team for SCOR

implementation.

• This initial phase, in fact, stands outside SCOR

project.
 Define Supply Chain Process
• Objectives
• to decompose the supply chain process using some
common vocabulary
• to depict it as a standardized graphical model.

• Two aspects of process representation.

– Depiction/ definition of the supply chain as a multi – level
combination of 5 standard processes Plan, Source, Make,
Deliver and Return.
– Representation of the relationships among processes as
Geography Map (As- Is Map in Phase I) and Thread
Diagram.
• SCOR model
• Comprises four levels.
• Level 4 is beyond the scope of model.
• Basic operational processes
• Source, Make, Deliver and Return.
• In addition SCC defines a Plan process (in essence a management process).
• Level 1
• Operational processes are the overall processes of the supply chain.
• Plan process includes the scope and content of the overall supply chain.
• Level 2
• Operational processes further classified as variations or categories.
• Three variations for Source, Make and Delivery processes, namely Stocked
product, Make- to- order and Engineer- to- order products.
• Two types of Returns – Source Returns and Delivery Returns.
 Defective products, MRO (Maintenance, Repair and Overhaul) products and
Excess products.
• Level 1 and Level 2 normally depicted with corresponding numbering:
(established by SCC)

– Plan: P1 Plan Supply Chain; P2 Plan Source; P3 Plan Make;

P4 Plan Deliver; P5 Plan Return
– Source: S1 Source Stocked Products; S2 Source MTO products;
S3 Source ETO Products.
– Make: M1 Make – to – stock; M2 Make- to- order;
M3 Engineer- to- order
– Deliver: D1 Deliver Stocked Products; D2 Deliver MTO products;
D3 Deliver ETO Products
– Return:
 Source Return: SR1 Return Defective Products; SR2 Return MRO
Products; SR3 Return Excess Products.
 Delivery Return: DR1 Return Defective Products; DR2 Return MRO
Products; DR3 Return Excess Products.
 • In case of any intermediary organization like customs or outside
shipper, it would be represented by a Source or Delivery process.
However, there would not be any Make process in this case.

• Level 3
– Level for further decomposition.
– Source Stocked Product (S1) is broken to sub-processes like Schedule
Product deliveries (S1.1), Receive Product (S1.2), Verify product (S1.3),
Transfer Product (S1.4) and Authorize Supplier Payment (S1.5).
– These five sub-processes are similar to the generic activities Plan,
Source, Make, Deliver and Return under the Sourcing of Stocked
Product, a process of Level 2.
 As – Is Geography Map
• A spatial representation with prime focus on geographic location of
supply chain partners and their linkages. (Figure 1)
• Initial requirements
– To rethink on the scope issues of the supply chain under consideration.
• How much of your supplier’s supply chain do you want to include in your
analysis?
• Do you distribute through wholesalers and do you want to include them in
analysis?
• Is this analysis meant for one specific product line or for all the products
produced by your company covering all the customers?
• For the purpose of overall improvement and to avoid complexity in
analysis, the level 3 sub processes are rarely used in As – Is Geography
Map .
• For more detailed analysis or detailed description of elemental
processes the Level 3 sub-processes may be included in later stage.
 Thread Diagram
• Geography Map more location-focused diagram.

• Thread Diagram focuses on processes, their multiple linkages

and the organizations managing those processes. (Figure 2)

• The standardized letters and numbers (as established by SCC) are

used inside arrows, each of which is representing a specific
process and they are subsequently linked together.

• Bold vertical lines separate companies. Dashed vertical lines

represent divisions within the same organization
 Determine the performance of the existing supply chain

• SCOR methodology defines five generic performance attributes, used in four

levels of measurement of the entire supply chain process.
• Three performance attributes are Customer Facing Attributes (externally
affected) and two attributes are Internal Facing Attributes (internally affected)
as shown in figure 3.
• Levels of measurement - m0, m1, m2 and m3.
• m0 measures the performance of the organization as a whole.
• m1 measures the performance of the whole supply chain process
• SCOR normally refers to m0 measures as Internal Facing Measures and to m1 as
Customer Facing Measurers.
• m2 measures the performance of each of the Level 2 processes,
• m3 measures the performance of specific sub-processes within a Level 2
process as shown in figure 4.
• Prioritization of one set of measures over other as per the
strategic bias of a company.
• Measures at lower levels are aligned with that at Level 1 (i.e. m1).

• At m2 level, the performance attributes will be more related to

the specific process under consideration (in Level 2 of SCOR
framework). For example, for S1 process i.e. Source Stocked
Products process, the following metrics may be considered as the
performance attributes.
 Reliability: Percent of orders received and transferred
 Responsiveness: Total sourcing cycle time
 Flexibility: Time and cost related to expediting the sourcing processes i.e.
procurement, delivery, receiving and transfer.
 Cost: Product acquisition costs.
 Assets: Inventory days of supply.
• Now Benchmarking - assess the ranking of the supply chain relative to best-
in-class in the industry.
• Performance Measurement Group (working closely with SCC) may supply
specific benchmark data on payment and supply of existing performance
data of the company.

• Normally SCOR refers to a Supply Chain SCORcard.

– Prepared on the basis of comparative analysis of performance of the

company under consideration.
– Depicts all performance attributes and relevant metrics and the
corresponding actual performance and industry benchmarks.

• The comparison leads to gap analysis for improvement of supply chain

performance in its redesign to be carried out in subsequent phase.
 Establish your supply chain strategy, Goals and Priorities

• To establish road map for getting competitive advantage and

planning for implementation of the supply chain strategy in line
with the corporate strategy of the company.
• The performance attributes are assigned actual values for As – Is
and expected or derived values for To – Be supply chain.
• SCOR convention
– Assign one black ball to the box corresponding to a performance attribute
that dominate (in case of As – Is process) or expected to dominate (in To –
Be process).
– Bold circles are meant for the above average performance.
– Narrow circle for parity (at least on per with the competition).
• Assignment in To- Be boxes reflects the constraints or reality on
the one hand and competitive priority of the company on the
other.

• Both priority of a performance and gap between As – Is and To –

Be performance are equally important in framing the guidelines
for improvement of the supply chain.

• The gap analysis also throws some light on the possible benefit
and cost associated with eliminating the gap between As – Is and
To – Be supply chain.
 Redesign the supply chain

• To redesign the To- Be supply chain on the basis of targets for each
performance attributes and prioritized gaps to be eliminated.
• A To- Be Geographical map and Thread Diagram is created introducing the
changes in process and activities for better performance.
• The designers start with a tentative redesign and create the corresponding map
and thread diagram.
• The team looks for opportunities, explores possibilities and studies the problem
in depth.
• The To- Be thread diagram may be changed several times for getting the
ultimate redesign of the supply chain.
• Once the first draft of the Level II Thread Diagram is complete team moves to
Level III.
• Sometimes swimlane type diagram is used to incorporate functional
responsibilities in analyzing the activities at Level III as shown in figure 5.
• The SCOR project team essentially refers to the list of best practices
(available for external service providers like PMG) corresponding to a
process element (i.e. a sub process created in level III).
• The team is to decide what changes they might make, if they were to adopt
one or more of the best practices.
• Best practice suggestions may be categorized under three types
– new management practices
– new employee practices and
– use of software applications or automation for supporting activities or
employees.
• By management process we mean the generic “plan” process.
• Plan processes are activities that are assigned to managers who must
oversee operational processes.
• These processes can be improved by best management practices
• P2 i.e. Plan Source process may be improved utilizing the
following information collected from SCOR card.
– Reliability: Supplier delivery as on- time delivery performance.
– Responsiveness: Cumulative source cycle time.
– Flexibility: Source flexibility.
– Cost & Assets: None identified.

• Best practices:

1. EDI links integrating supplier resource information (inventory, capacity

availability etc.) with own resources by inter- company resource planning
with EDI/ Internet communication.
2. Levels of “flexibility” within stated lead times are defined as per joint
service agreements.
3. All key supply chain partners have full visibility of the demand/ supply
plan.
• Redesign plan
– may suggest tools and activities, employees need to utilize for realization of the
improvement.
– may require job changes and new job descriptions to implement the changes.
• A wide variety of software modules and applications are now available for
process automation.
• Some modules do not exactly match with the sub process descriptions used
in SCOR.
• After deciding changes in existing supply chain test the new design by a
simulation tool.
• Essence of simulation
– Model the To-Be process
– Identify assumptions about the cost and efficiency of new activities
– Run the simulation through the system to see if it performs as anticipated.
– Helps designer to identify bottlenecks and improve the To-Be supply chain.
 Enable the redesign and implement

• This phase is in Level 4.

• It is beyond the scope of SCOR.
• Different companies operate under different constraints and
business environments.
• Finding common vocabulary in this phase is quite difficult.
• All the processes involved in enabling changes in supply chain
system are grouped under the term Enable.
• This primarily include software development and human
resource efforts in this category.