SCOR Benchmarking - Presentation
SCOR Benchmarking - Presentation
SCOR Benchmarking - Presentation
Benchmarking
SCOR Benchmarking
Understand the Context of SCOR
Process Metrics Best Practices
What is a Supply-Chain
Deliver Return
Source Return
Make
Deliver Return
Source Return
Make
Deliver Return
Source Return
Make
Deliver Return
Source Return
Suppliers Supplier
Supplier
Internal or External
Your Company
Customer
Internal or External
Customers Customer
SCOR Processes
Level 1
Scope
Supply-Chain Source
Level 2
Configuration
S1 Source Stocked Product
Level 3
Activity
S1.2 Receive Product
Level 4
Workflow
Level 5
Transactions
EDI XML
Differentiates Business
Defines Scope
Differentiates Complexity
Differentiates Capabilities
Names Tasks
Links, Metrics, Tasks and Practices
Sequences Steps
Job Details
Links Transactions
Details of Automation
Framework Language
Framework Language
Framework Language
Company/Industry definitions
Performance Metrics
SCOR metrics: Standard Strategic (Level 1) Metrics
Attribute Customer Reliability Responsiveness Agility Cost Internal Assets Metric (Strategic) Perfect Order Fulfillment Order Fulfillment Cycle Time Supply Chain Flexibility Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-to-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital
upside and downside adaptability metrics
Best Practices
Best practice: "A current, structured, proven and repeatable method for making a positive impact on desired operational results."
Current Must not be emerging and can not be antiquated Structured Has clearly stated Goal, Scope, Process, and Procedure Proven Success has been demonstrated in a working environment and can be linked to key metrics Repeatable The practice has been proven in multiple environments.
Benchmarking
What is Benchmarking
Qualitative Benchmarking
Comparing best practices among organizations Maturity Assessments
Quantitative Benchmarking
Comparing levels of measured performance Assessment of Performance Gaps
Competitive Benchmarking
Quantitative Benchmarking between companies Identifies superior relative performance
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What is a Supply-Chain
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Supply-Chain Definition
Supply Chains are the Totality of processes spanning operations from supplier to end-customer, focused on material, work and information flow We use a tool called the Supply Chain Definition Matrix to define the supply-chains within an enterprise The Supply Chain Definition (i/o Matrix) Matrix helps determine the number and size of supply chains Columns: Customers (Output) Rows: Products (Input) The intersection of each column and row if the goods or services flow to the customer is a supply chain
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Column Definition
The columns in the matrix are focused on demand e.g. channels or segments or customers start with making a list of customer groups, level by level. Ask your Sales or Marketing functions for customer segmentation information Where you have one customer base with different fulfillment models create two customer segments one for each model In general you can go to any level of detail you want but be sensible. Examples:
Level 1 Europe, Asia, US Commercial, Retail Eastern, Western Region Level 2 Major Accounts Grouped Accounts One-Time Buyer Level 3 Same-Day Shipping Bulk Shipping MOQ 1 Ordering
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Row Definition
The rows in the matrix are focused on supply e.g. business lines or products or locations or suppliers start by making a list of products, level by level Ask product divisions for product hierarchy data If you have the same product that may be build two different create two different products. In general you can go to any level of detail you want but be sensible. Examples:
Level 1 Level 2 Level 3
Business Divisions
Fulfillment Models Planning Models
Product Lines
Supplier Groups Warehouses
Product Families
Parts
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The Matrix
We now place the customer list as column headings repeating until finished And then the products list as row headings repeating until finished For each product that flows to a customer, we put an X in the cell Its that simple.
Group 1 Customer A Product 1 Business 1 Product 2 Product 3 Business 2 Product 4 Customer B Group 2 Customer C Customer D
X X X X
X X X
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Air Conditioners
x x
x x x x
x x x
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Air Conditioners
x x
x x x x
x x x
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3 2 1
1=low 3=high
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Reliability On time? Complete? Undamaged? Responsiveness From Customer Request to final acceptance Flexibility How long to scale up? How expensive to scale down? Cost Cost of Processes? Cost of Goods Sold? Assets Working Capital? Return on Investments?
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Comparative Ranking
We advocate using a simple ranking system for industry comparison Each rank corresponds to a specific percentile in industry performance We do not use averages or other statistical tests Our key ranks:
Performance Superior Advantage Parity Percentile 90th 70th 50th Choices 1 2 2 Interpretation Top 10 performer Top Half performer Half better/Half worse
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1. Assets 2. Cost
1. Reliability 2. Response 1. Assets 2. Reliability 1. Flexibility 2. Response 1. Cost 2. Reliability
1. Cost 2. Assets
1. Assets 2. Cost
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Big Airco
Small Airco
Comml
Reliability
P P A A S
Responsiveness
A A
P P
Flexibility
Each unique combination of ratings defines Your Supply Chain Strategy for the channel Think of the rating as a desired state, NOT where you want to improve the most
External
Cost
Internal
Assets
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The SCORcard
We use a tool called the Supply Chain SCORcard to Identify performance characteristics of supplychains. Each SCORcard is built from a subset of hundreds of SCOR metrics. For supply-chain benchmarking we generally use only Level 1, 2 and 3 metrics The SCOR Manual provides all necessary definitions
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Performance Metrics
SCOR metrics: Standard Strategic (Level 1) Metrics
Attribute Customer Reliability Responsiveness Agility Cost Internal Assets Metric (Strategic) Perfect Order Fulfillment Order Fulfillment Cycle Time Supply Chain Flexibility Supply Chain Adaptability Supply Chain Management Cost Cost of Goods Sold Cash-to-Cash Cycle Time Return on Supply Chain Fixed Assets Return on Working Capital
upside and downside adaptability metrics
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SCORcards in 5 Minutes
Philosophy You need to have the most data where performance is most critical You need to have least data where performance is least critical
For Every Select Superior Level 1 Metric and Level 2 Metric and Level 3 Metric Advantage Level 1 Metric Level 2 Metric Parity Level 1 Metric
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A Metrics Architecture
Supply-Chain SCORcard Reliability Reliability Reliability Reliability Reliability External Reliability Reliability Reliability Reliability Reliability Reliability Reliability
Perfect Condition Accurate Documentation Shipping Documentation Accuracy Billing Documentation Accuracy Delivery Performance to Commit Date
S/A/P
S
Level-1 Metric
Perfect Order Fulfillment
Level-2 Metric
Level-3 Metric
Summary
Perfect Order Fulfilment
Date Achievement
Location Achievement
Date Achievement
Location Achievement Accurate Documentation Shipping Documentation Accuracy Billing Documentation Accuracy Perfect Condition
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Metrics Selection
Supply-Chain SCORcard Responsiveness Responsiveness External Responsiveness Responsiveness Flexibility Cost Assets Internal Assets Assets Assets
P
S/A/P
A
Level-1 Metric
Order Fulfilment Cycle Time
Level-2 Metric
Level-3 Metric
Summary
Order Fulfillment Cycle Time
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Non-Financial Data
Customers
Delivery Performance Total Cycle-Time Performance
IT Systems
Process-to-Process Transactions Planning System Parameters (Lead Times)
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SAP
S A P P A
Metric (level 1)
Perfect Order Fulfillment Order Fulfillment Cycle Time Ups. Supply Chain Flexibility Supply Chain Mgmt Cost Cash-to-Cash Cycle Time
Parity
Adv
Superior
Gap
Flexibility
Cost Assets
62 days
12.2% 35 days
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SCORmark
Once the SCORcard is defined, and data for most metrics are gathered Data are submitted electronically to the SCORmark system With days or weeks, an electronic report is returned with the results of comparison against selected demographic groups The principal function of the Benchmark is to determine the gap between actual performance and performance corresponding to desired strategic positioning. The Benchmark is a component of Phase I and II of the SCOR Implementation Roadmap
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Metric (level 1)
Perfect Order Fulfillment Order Fulfillment Cycle Time Ups. Supply Chain Flexibility Supply Chain Mgmt Cost Cash-to-Cash Cycle Time
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Planning
Supply-Chain Definition 1-2 Day workshop Supply-Chain Prioritization 1 Day Data Gathering Supply-Chain Strategy 1 Day workshop Supply-Chain Performance 1 Day workshop Data and Benchmarking Days/Weeks
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Bank Robber Slick Willie Sutton When asked why he robbed banks, Sutton simply replied "Because that's where the money is."
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1 Exclusive of Financial Services companies 2 Source: Hoovers 2006 Financial Data, Supply-Chain Council 2006 SCM Benchmark data on SCM cost for discrete & process industries
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North America
Member Affiliation
Europe
Consultant Non-Profit/Academic
0% 10% 20% 30% 40% 50%
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Benefits of SCOR
Improvement in stock market value Increase of profits and margins Increase of available financial means through improved investment selection (portfolio management of initiatives) Reduction of overall costs Optimization of Enterprise Resource Planning
(2007) Application of the SCOR Model in Supply Chain Management, New York, USA
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supply-chain.org scorlabs.org
For additional questions on Supply Chain Council benchmarking or SCORmark, please contact: [email protected]