What is the SCOR model?
In the evolution of the supply chain, there must be elements of best practice execution to provide the necessary incentives and platform for improvements. The SCOR model, or the Supply Chain Operations Reference, was developed by the Supply Chain Council to provide a unique framework to connect metrics, business practices, technology features and best practices into a unified structure. In taking this approach, you can extend communication support to all your supply chain partners, improving supply chain management effectiveness, while also driving value-added activities. The SCOR model is truly a collaborative, ongoing project.
SCOR Model Addresses Business Management Challenges
The SCOR model was developed to help you manage specific business problems with the application of a standardized approach to language and metrics. With common business practices in place, you can accelerate change and improve performance. Bottom-line improvements should be measurable with the application of the SCOR model, when applied to certain business management challenges. These challenges include strategy development; merger, acquisition or divestiture; supply optimization and re-engineering; the alignment of management; new business startup to create and deploy supply chains; benchmarking; and process outsourcing.
Technology Applications Within the SCOR Model
The SCOR model is also used to streamline your application of specific technologies within the supply chain. When this standard is applied in software implementation, including PLM, ERP and QC, pre-implementation definitions are established with a clear focus on the optimization of the supply chain. The SCOR model is also used to optimize your IT service provisioning through the design and execution of the workflow and service oriented architecture. With these initiatives and innovations in place, the SCOR model then lends to the internal focus on skills development, including the standardization of sourcing, skills definition and performance criteria across the management of the supply chain.
Executing the SCOR Model
The SCOR model, in a nutshell, improves supply processes. It is specifically used to identify, reorganize, measure and improve these processes so your organization can drive measurable bottom line improvements in relation to the activities taking place within your supply chain. This is done through a cyclical process of capturing information regarding the configuration of the supply chain; measuring the overall performance of the supply chain and comparing it against industry goals that are both internal and external; and realigning your processes and best practices to meet changing or unfulfilled business goals.
SCOR Model – Capturing Information
To capture this information for measure according to the SCOR model, the configuration of your supply chain must be driven by planned levels of information and aggregation sources; you must source your products and locations; production sites and methods must be identified; inventory deployment, channels and products must be defined to execute delivery; and return locations and methods must be identified.
SCOR Model – Measuring Performance
Performance within the supply chain is measured with the SCOR model through reliability, responsiveness, agility, cost and assets. Customer demand must be fulfilled on-time and according to expectations. The time to meet these expectations must be minimized, and your supply chain must be able to make the necessary changes to increase or decrease demand on the fly. Cost is always a key focus to maintain a healthy bottom line and the assets used to fulfill customer demand must be continually assessed to ensure optimal performance and maximum value derived from that asset.
SCOR Model – Re-Alignment
Your company has specific business objectives that must be met with the execution of the supply chain. When these objectives are not met and expectations fall short, change is necessary through re-alignment according to the SCOR model. A combination of different elements is used to drive this re-alignment, including the process re-engineering, an analysis and process change within lean manufacturing, an analysis of Six Sigma processes that may be defective, and analysis of systems to identify root-cause issues that are restricting the supply chain, ISO-9000 process capture and control, benchmarking and balanced SCORcards, and the execution of a combination of industrial engineering-based techniques to drive best practices within your environment.
The SCOR model recognizes the consistent improvement requirements within the supply chain, providing your organization a roadmap for capturing information, measuring performance and re-aligning practices to drive improvements and address key business challenges that may be limiting your profitability.