How to Organize the Systems Selection Process Using the SCOR Framework Pittiglio Rabin Todd & McGrath April 12, 2000 David Kennedy, Principal

© Copyright 2000 Pittiglio Rabin Todd & McGrath Today’s Objectives Provide an overview of a proven process for system selection Describe how the SCOR-model can be used to help organize the process

© Copyright 2000 Pittiglio Rabin Todd & McGrath Each stage represents a step-level change in people, processes, and technology Companies Progress Through Distinct Stages As They Improve Their Supply Chain Performance Average PerformanceBest-in-Class Performance Stage 1 Functional Stage 2 Internal Process Integration Plan Sour ce MakeDeliv er Stage 3 The Extended Enterprise Functional orientation sub-optimizes performance Poor SC performance Alignment across sub- processes and levels of management Above-average SC metric performance Internal and external process integration Each link in the chain focuses on its customers, competencies and creating value

© Copyright 2000 Pittiglio Rabin Todd & McGrath Systems and Tools Are Critical to Improving Supply-Chain Performance

© Copyright 2000 Pittiglio Rabin Todd & McGrath Companies Can Follow a Proven and Simple Process to Help Select Systems Solutions Fact-Based Systems Selection Assess Current Supply Chain Performance Define the Future Operating Model ISC Benchmarking SCOR Levels 1 & 2 Mapping SCOR Qualitative Assessment - Practices - Process Constraints - Systems and Enablers - Measurements - Organization and Decision Making Develop Value Potential SCOR Level 3 & 4 Practices Organizational and Decision Making Requirements using SCOR Framework - Business Requirements - Systems Requirements Develop Initial Business Case Vendor Responses to SCOR Requirements Document Vendor Demonstrations RFP Evaluations Finalize Business Case Select Software Solution

© Copyright 2000 Pittiglio Rabin Todd & McGrath Benchmarking Provides a Level 1 SCORcard and Helps Quantify the Potential Value in the Supply Chain Benchmarking performance is the foundation for the qualitative assessment Asset Management

© Copyright 2000 Pittiglio Rabin Todd & McGrath The SCOR Model is the Basis of the Qualitative Assessment LevelSchematic Comments Configuration Level (Process Categories) Process Element Level (Decompose Processes) Plan Deliver Make Source A company’s supply chain can be “configured” at Level 2 from 17 core “process categories” F/C Net Demands Check Capacity Check Material Check Inventory Release MPS 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 Benchmarks, where applicable Best practices, where applicable System capabilities required to support best practices Systems/tools by vendor Implementation Level (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. SCOR Process Reference Model Top Level (Process Types) The basis of competition and supply-chain performance targets are set Not in Model Description

© Copyright 2000 Pittiglio Rabin Todd & McGrath Each Level 3 Process Element Identifies Metrics, Best Practices, and Software Features Process Element: Schedule Manufacturing Activities Process Element Number: M1.1 Process Element Definition Given plans for the manufacture of specific parts, products, or formulations in specified quantities and planned availability of required materials, the scheduling of the operations to be performed in accordance with these plans. Scheduling includes sequencing, and, depending on the factory layout, any standards for setup and run. In general, intermediate manufacturing activities are coordinated prior to the scheduling of the operations to be performed in producing a finished product. Performance AttributesMetric Cycle TimeSchedule cycle time Schedule interval Cost WIP inventory days of supply Material losses Scheduled resource cost Service/QualitySchedule achievement AssetsCapacity utilization Best PracticesSoftware Features Required Cross training/CertificationHR/Certification support Maintain data and system integrity by ensuring production data, inventory levels, and schedule requirements are 99+% accurate Detailed production model that synchronizes PLAN and MAKE activities Schedule optimizes use of shared resources, such as production equipment and tooling Detailed production scheduling model and simulation capabilities Schedule includes preventive maintenance program Interface between maintenance management system and scheduling system Schedule minimizes changeover costs Detailed production scheduling model and simulation capabilities Real-time feedback from Manufacturing and Test (1.3) activities Re-synchronization of MAKE activities

© Copyright 2000 Pittiglio Rabin Todd & McGrath Current State Assessments Workshops Can Be Conducted Using SCOR

© Copyright 2000 Pittiglio Rabin Todd & McGrath Current Practices Can Be Compared to SCOR-based Best Practices Sample Element of Maturity Framework: Source Execution

© Copyright 2000 Pittiglio Rabin Todd & McGrath Fully Developing a Future Operating Model Identifies Critical Business Requirements

© Copyright 2000 Pittiglio Rabin Todd & McGrath Future Business and Systems Requirements Can Be Organized Using SCOR

© Copyright 2000 Pittiglio Rabin Todd & McGrath Software Demonstrations, Evaluations, and Selections Can Be Conducted Using SCOR Software Demonstrations Software Evaluations Software Selection Negotiations and Business Case Justification

© Copyright 2000 Pittiglio Rabin Todd & McGrath Conclusions The SCOR framework can be easily applied to the systems selection process u Current state assessments of processes, practices, and metrics u Future operating models can be based on the SCOR process elements u Business and systems requirements to enable the future models can be developed referencing SCOR u Software demonstrations can given using the plan, source, make and deliver structure