SCOR Professional Training Introduction to the SCOR Supply Chain Operations Reference Model: Overview

Introduction: Course Leader Name Company/organization Position Instructor Introduction APICS certifications Experience with SCOR Other accomplishments APICS training experience

Introductions: Participants Name Company/organization Position Introduce yourself APICS certifications Other accomplishments SCOR experience Your objectives

Learning Objectives Explore the origins and goals of the SCOR Reference Model framework. Understand the structure of the SCOR Reference Model framework sourcebooks. Work with the five central parts of the SCOR framework: performance, processes, practices, people, and green SCOR. Develop and work with a SCOR improvement program.

SCOR OVERVIEW Introduction to the SCOR Framework

What is SCOR? SCOR is an acronym for supply chain operations reference model, which was developed to assist businesses in understanding, structuring, and evaluating the performance of supply chains.

SCOR Definition The SCOR model describes the business activities associated with satisfying a customer’s demand, which include plan, source, make, deliver, and return. Use of the model includes analyzing the current state of a company’s processes and goals, quantifying operational performance, and comparing company performance to benchmark data. SCOR has developed a set of metrics and best practices information that companies can use to evaluate their supply chain performance. APICS Dictionary

About SCOR: A Process Framework Combining four techniques into a single integrated approach Business Process Improvement Performance Benchmarking Best Practices Analysis Organizational Design Capture the “as-is” business activity and design the future “to-be” state Quantify relative performance of similar supply chains and establish internal targets Identify practices and software solutions that result in significantly better performance Assess skills and performance needs and align staff and staffing needs to internal targets Process Reference Framework Process Performance (metrics) Practices People (skills)

Anatomy of SCOR Frameworks Product and process design (DCOR) Sales and support (CCOR) Management for supply chain (M4SC) Supply chain operations reference model Product life cycle operations reference (PLCOR)

SCOR Reference Sources Complete SCOR Model Reference sourcebooks. Two volumes containing the complete SCOR reference framework A quick reference guide providing a detailed summary of SCOR Processes, Metrics, Practices, and People on a single easy-to-use card An easy to access and use application for mobile devices available through iTunes, App Store, and Android Store – Search: APICS SCOR

Advantages of Using the SCOR Framework Scope of the SCOR framework applies to the entire supply chain Orients supply chain improvements around standardized set of performance, process, practice, and skills metrics Enables supply chain performance and practice benchmarking Centers supply chain improvement efforts on creating value for customers Applies detailed supply chain metrics to measure supply chain performance Provides metric and activity alignment across organizational boundaries Establishes a common repository of supply chain performance terms and toolsets

SCOR OVERVIEW Using the SCOR Reference Sourcebook

Structure of the SCOR Reference Sourcebook The SCOR reference sourcebook consists of five main sections: Performance Standard metrics to describe process performance and define strategic goals Standard descriptions of management processes and process relationships Processes Management practices that produce significant better process performance Practices Standard definitions for skills required to perform supply chain processes People Green Standard definitions for sustainable business models and environmental accounting

SCOR Codification Each of the four SCOR sourcebook sections has its own codification nomenclature. SCOR Performance and Processes have a hierarchy of SCOR activities. SCOR Practices are determined by three separate practices: emerging, best, and standard. Each practice contains a set of relevant practice activities. SCOR People are determined by a single-level list of skills and processing activities. Green SCOR is determined by a single-level list of skills and processing activities. Most of the SCOR activities are crossed referenced across the four SCOR sourcebook sections.

Reading SCOR Tables ID name definition metrics practices skills outputs inputs

Reading SCOR Graphics process ID SCOR graphics should be considered as example process configurations. Different supply chains and practices may require different sequences and/ or workflow. process steps inputs outputs

SCOR OVERVIEW Review of SCOR Performance

Objectives of SCOR Performance Performance (SCOR section 1) helps companies: Translate business strategy to supply chain strategy: How closely is the supply chain strategy meeting business plan objectives? Measure supply chain performance: How are we doing, how are we trending? Understand relative performance compared to competitors: How are we doing compared to our supply chain strategy Identify and monitor processes that most likely cause the performance gaps: What improvement targets should we pursue?

Supply Chain Performance: Definitions Performance attribute: a characteristic used to describe a strategy. Performance attributes serve as classification for metrics and formulate strategic direction Key performance indicator (KPI): a metric to measure the overall performance or state-of-affairs. SCOR level 1 metrics are considered KPIs Metric: a standard for measurement Measurement: an observation that reduces the amount of uncertainty about the value of a quantified metric SCOR metrics = diagnostic metrics Monitor and diagnose overall supply chain health. Diagnostic relationships (hierarchy) enables gap analysis.

SCOR Performance Attributes Strategy Reliability (RL) Consistently getting the orders right, product meets quality requirements Responsiveness (RS) The consistent speed of providing products/ services to customers Agility (AG) The ability to respond to changes in the market (external influences) Cost (CO) The cost associated with managing and operating the supply chain Assets (AM) The effectiveness in managing the supply chain’s assets in support of fulfillment Customer Internal

SCOR Performance Attributes: Level 1 Level 1 Strategic Metrics Reliability RL.1.1 Perfect order fulfillment Responsiveness RS.1.1 Order fulfillment cycle time Agility AG.1.1 Upside supply chain flexibility AG.1.2 Supply chain upside adaptability AG.1.3 Downside supply chain adaptability AG.1.4 Overall value at risk (VAR) Cost CO.1.001 Total cost to serve Asset management efficiency AM.1.1 Cash-to-cash cycle time AM.1.2 Return on supply chain fixed assets AM.1.3 Return on Working Capital Customer Internal

SCOR OVERVIEW Review of SCOR Processes

Anatomy of SCOR Processes Plan Source Make Deliver Supplier processes Customer processes Return Process, arrow indicates material flow direction Process, no material flow Information, goods, financial flow Enable

Objectives of SCOR Processes SCOR Processes help companies: Document the consensus view of how the business and the enterprise supply chain is organized—What do we do and where? (as-is) Document the consensus view of the capabilities of the business and the enterprise supply chain—How do we do this? (as-is) Document and test alternative ways to organize the business and the enterprise supply chain—Test different scenarios (what-if) Document the desired way to organize the business and the enterprise supply chain—What will we do and where? (to-be) Document future processes—how will we do this going forward? (to-be)

SCOR Processes and the Supply Chain Plan Plan Plan Deliver Source Deliver Source Make Deliver Source Deliver Source Make Make Return Return Return Return Return Return Enable Enable Return Enable Suppliers’ Return Customer’s Customer Supplier Supplier Internal or external Your organization Internal or external Customers The integrated process of plan, source, make, deliver, return, and enable spanning from the suppliers’ supplier to the customers’ customer

Question: Source Process Flows Which of the following flows is/are correct? sS2.2 Receive Product sS2.4 Transfer Product sS2.5 Authorize Supplier Payment sS2.1 Schedule Product Deliveries sS2.3 Verify Product

SCOR OVERVIEW Review of SCOR Practices

Introduction to SCOR Practices: Definition The Practices section of the SCOR reference manual provides a collection of industry-neutral practices companies have recognized for their value. A practice is a unique way to configure a process or set of processes.

Four Types of SCOR Practices: Definitions Emerging practice: a practice that introduces new technology, knowledge, or radically different ways of organizing processes Best practices: practices that are current, structured, and repeatable and have a proven and positive impact on supply chain performance Standard: practices that have been used by a wide range of businesses over a long period of time and that produce acceptable, positive results Declining: practices that have been used for long periods of time but have become obsolete and even harmful to business and supply chain performance

Classification of Practices Practices by classifications: business process analysis/improvement customer support distribution management information management inventory management manufacturing/production material handling new product introduction order engineering (ETO) order management people management (training) planning and forecasting product lifecycle management purchasing reverse logistics risk/security management sustainable supply chain management transportation management warehousing

Levels of SCOR Practices Emerging practices Best practices Standard practices SCOR practices repository SCOR processes SCOR practices Level 2 processes Level 3 processes Application

Best Practice Selection Are all best practices equally important for you? SCOR contains more than 170 practices today: do you need all? Implement a best practice IF it makes sense for your specific processes, business, or industry. Low effort/risk High effort/risk quick wins Sponsor issue nice to have consider carefully How to determine fit? Assign each best practice a pin. Determine risk, investment. Determine return. Push the pin in the resulting quadrant. Some pins may not make the table at all if they are not appropriate for your supply chain, business or industry. High return Low return

Example: Practices Benchmarking Benchmarking results for a benchmark of 5 supply chains

SCOR OVERVIEW Review of SCOR People

Introduction to SCOR People: Definition The People section of the SCOR reference manual introduces standards for managing talent in the supply chain. This skills management framework within SCOR compliments process reference, metrics reference, and practice reference components with an integrated view of supply chain skills.

Key Elements of the People Section Skill: Capacity to deliver pre-determined results with minimal input of time and energy Experience: The knowledge or skill acquired by observation or active participation Aptitude: A natural, acquired, learned, or developed ability to perform a certain kind of work at a certain level. Training: A particular skill or type of behavior learned through instruction over a period of time Competency level: The state or quality of being qualified, having the ability, to perform a specific role

SCOR Competency Levels The state or quality of being qualified, having the ability to perform a specific role Level Characteristics Expert Intuitive understanding of the situation and zooms in on the central aspects; experts understand what is possible and apply experience and knowledge to master new situations. Proficient Sees the situation as a whole and acts from personal knowledge and conviction; proficients can prioritize importance based on situational aspects. Competent Goal oriented; possesses the skills to perform necessary understands activities and can determine priorities to reach goals Beginner Has fully not mastered work skills and has a limited "situational perception" of work activities Novice New to the field or activity; a novice needs standard/written procedures or step-by-step detailed instructions; no ability to make judgments based on problem situations

SCOR People Competency Grid Linking People competencies to SCOR. Novice Beginner Competent Proficient Expert Instructions Written Familiar Orientation Task Goal Decision making Analytical Intuitive Problem recognition Measuring In SCOR terms, focus on: Processes Practices Metrics Projects Domains

Defining Skills People (skill) Each skill is defined by its description And by association to: experiences, training and aptitudes Experiences, training, and aptitudes are not directly connected to any other framework element. Perform-ance (metric) Aptitude Process Experience Practice (best practice) People (skill) Training

SCOR OVERVIEW Review of Green SCOR

Introduction to Green SCOR: Definition The Green SCOR section of the SCOR reference manual introduces a set of strategic environmental metrics that effectively allow the SCOR Model to be used as a framework for environmental sustainability and audit.

The Five Green SCOR Metrics Units Basis Carbon Emissions Tons CO2 equivalent This is the unit of measure currently used for green house gas emissions and is a measure of the climate impact from CO2 and other global warming air emissions. Air pollutant emissions Tons or kg This includes emissions of major pollutants—Cox, Nox, Sox, Volatile Organic Compounds (VOC) and Particulate. These are the major emissions that the US EPA tracks. Liquid waste generated This includes waste that is either disposed of or released to open water or sewer systems (these emissions are generally listed on water emission permits). Solid waste generated The total solid waste generated by the process Percent recycled waste Percent The percent of the solid waste that is recycled

Green SCOR Levels 1 and 2 Level 1 Level 2 GS.1.001 Total Supply chain carbon footprint Level 1 GS.1.002 Total supply chain environmental footprint GS.2.001 Plan carbon emissions GS.2.002 Source carbon emissions GS.2.003 Make carbon emissions GS.2.004 Deliver carbon emissions GS.2.005 Return carbon emissions GS.1.001 Level 2 GS.2.006 Total supply chain air emissions GS.2.007 Total supply chain liquid emissions GS.2.008 Total supply chain solid emissions GS.2.009 Total supply chain percent recycled GS.1.002

Green SCOR Level 3 GS.2.001 Plan carbon emissions GS.2.002 Source carbon emissions GS.2.003 Make carbon emissions GS.2.004 Deliver carbon emissions GS.2.005 Return carbon emissions 5 Level 3 Metrics 2 Level 3 Metrics GS.2.006 Total Supply chain air emissions GS.2.007 Total Supply chain liquid emissions GS.2.008 Total Supply chain solid emissions GS.2.009 Total supply chain percent recycled 5 Level 3 Metrics 6 Level 3 Metrics

Green SCOR Table: Level 2

SCOR OVERVIEW SCOR Improvement Program: Concepts and Practices

Applying the SCOR Framework How do project teams use the SCOR Reference Model framework to create and continuously apply a program capable of achieving sustainable supply chain improvement?

SCOR Improvement Program Racetrack

SCOR Improvement Program Workshop Objectives Learn how to organize a SCOR supply chain improvement program. Learn how to use the SCOR Model Reference framework to develop an effective supply chain improvement program. Develop an understanding of the typical steps of a SCOR improvement program. Develop an understanding of how to use the SCOR supply chain improvement program racetrack. Develop knowledge and skills to complete key implementation program deliverables. Explore a case study illustrating the application of the SCOR program racetrack and the SCOR framework.

SCOR Global Organization: Example Corporate Planning Merchandising Operations Sales Support Americas EMEA APAC Americas= North, Middle and South America, EMEA = Europe, Middle East & Africa, APAC = Asia and Pacific

Supply Chain Definition Matrix: Example Criteria: geographical region, country, products Customers: GE GB SEU Mp3 Inc. product groups Germany Belgium Nether-lands England and Ireland France Italy Spain Mp3 players 300* 125 95 265 110 75 Phones 200 planned 250 185 55 PCs 35 21 * Sales expressed in millions Adapted from Supply Chain Excellence by Peter Bolstorff and Robert Rosenbaum ©2012 Peter Bolstorff and Robert Rosenbaum, AMACOM books, division American Management Association International, New York, NY, p. 47.

Supply Chain Geographic Map: Example

SCORmark™ Benchmarking: Example

SCORmark™ Benchmarking: Level 2 Metrics

Future State Map: Example

Future State Thread Diagram

Alternative Process Workflows: Example

Prioritization Matrix CPFR Retail sales out data Retail inventory data Retail promotions data Group promotions data Monthly management review Aging status flags Aging reporting Monthly review 24-hour testing equipment Return ownership transfer Renegotiate contracts

Return on Investment: CPFR Projects

Begin Next Improvement Project

Continue the Conversation Peter Bolstorff, CSCP, SCOR-P Dominic Longo, CSCP – Key Account Business Development Executive Vice President, Corporate Development APICS pbolstorff@apics.org dlongo@apics.org Carolyn Lawrence, SCOR-P – SCOR Product Group Josh Meyers, CSCP – Key Account Business Development Director, Corporate Development clawrence@apics.org jmeyers@apics.org Melinda Spring, SCOR-P – Research Projects Director, Corporate Programs mspring@apics.org

SCOR OVERVIEW