Introduction to SCOR (Supply Chain Operations Reference) April 2012 Enrico Camerinelli Sr. Analyst

Enrico Camerinelli Sr. Analyst at Aite Group Current research focuses on Global Transaction Banking, Cash & Trade Management, and Supply Chain Finance Formerly Executive Director of the Supply Chain Council VP for Enterprise Applications at META Group Pre-sales marketing manager at J.D. Edwards Supply Chain and Plant Manager at Lear Corporation and Arvin Exhaust Co-Founder of the Supply Chain Finance Council and member of the Italian delegation of UN/CEFACT Enrico’s note: I will go very fast on this one.

Agenda The SCOR model SCOR and BSP face-to-face Linking the physical and the financial valuechains

SCC Organization - Chapters SCORboard European Chapter Brussels, Belgium Greater China, Shanghai North America Chapter Washington D.C. Japan Chapter Tokyo, Japan South East Asia Chapter Singapore Brazil Chapter Southern Africa Cape Town, South Africa Australia/New Zealand Chapter Sydney, Australia

Supply Chain Operations Reference-Model (SCOR®) Overview

SCOR - 5 distinct Management Processes Plan Source Make Deliver Deliver Source Make Deliver Source Make Deliver Source Return Return Return Return Return Return Return Return Suppliers’ Supplier Supplier Your Company Customer Customer’s Customer Internal or External Internal or External SCOR Model Processes Metrics Best Practices

SCOR is a hierarchical model

SCOR Framework Levels Plan Return Deliver Make Source Plan Return Supply Chain Plan Return Deliver Make Source Plan Return Deliver Make Source Level-1 Sets Scope and Context, Geographies, Segments and Products M3 Make Engineer to Order M2 Make Build to Order M1 Make Build to Stock Level-2 Identifies Major Configurations within Geographies, Segments and Products Each framework has three levels: Level 1 are the ‘gross level’ descriptions of major processes, corresponding roughly, by example, to the porter model ‘value chain’ steps. These are used primarily for measurement (categories of balanced scorecard drilldown), scoping of programs, and segmentation of businesses into geographies, segments, products. Level 2 are the ‘configuration’ level elements, used primarily for identify sub-segments of Level-1 – mostly used for scoping (types of supply-chains) and for introducing standard configurations which are commonly managed and measured e.g. Build-to-Order vs Build-to-Stock Level 3 are the activities within a supply-chain used for designing and managing specific sequences within a Level2 configuration. M2.01 Schedule Production Activities M2.02 Issue Product M2.03 Produce & Test M2.04 Package M2.05 Stage Product M2.06 Release Product to Deliver Level-3 Identifies key business activities within a configuration

Example of SCOR utilization

SCOR Process Modeling – Mapping AS-IS material flows Manufacturing company that Produces against a 15-days forecast Supplies raw materials in bulks from the Far East against a monthly forecast Manufacturing Company RM Supplier European Supplier of components Warehouse Ships weekly finished goods to a Distribution Warehouse based in Central Europe. Pulls components from France based on production volumes

SCOR Process Modeling – Mapping AS-IS material flows Manufacturing company that Produces against a 15-days forecast Supplies raw materials in bulks from the Far East against a monthly forecast M1 Manufacturing Company S1 D2 D1 RM Supplier S1 S2 D1 European Supplier of components Warehouse Ships weekly finished goods to a Distribution Warehouse based in Central Europe. Pulls components from France based on production volumes

SCOR Metrics

SCOR Best Practices

SCOR and BSP face-to-face

SCOR and BSP Plan Source Make Deliver Return BUY SHIP PAY

SCOR and BSP Plan Source Make Deliver Return BUY SHIP PAY

SCOR and BSP

SCOR-Plan Plan Source Make Deliver Return

SCOR-Source Plan Source Make Deliver Return

SCOR-Make Plan Source Make Deliver Return

SCOR-Deliver Plan Source Make Deliver Return

SCOR-Return Plan Source Make Deliver Return

Linking the physical and the financial value chains

Physical and financial value chain metrics

Physical and financial value chain metrics

End-to-end physical value chain processes

Extracting Liquidity From Value Chain Processes Applying SCF Components and Extracting Liquidity Fulfill - to Service Source Pay Order Cash RETURN Pre shipment finance Post Reverse factoring Buyer finance Buyer driven payables Invoice financing/discounting Warehouse ECA supplier financing Confirming Distribution BPO Receivables purchase financing/discountin Purchase order commitment Purchasing card Letter of credit Guarantees Cash on delivery Forfaiting Asset based lending Leasing Project finance Commodity

Aite Group: Partner, Advisor, Catalyst Aite Group (pronounced eye-tay) is an independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry. Enrico Camerinelli- Senior Analyst ecamerinelli@aitegroup.com +39.039.21.00.137 www.aitegroup.com