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TheUltimateGuidetoSCORModel
ThegoalofthisguideistoexplainabouttheSCORmodelcovering6topicsasbelow,

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1)Background
SCORModelorSupplyChainOperationReferenceModelwascreatedbySupplyChain
CouncilInc.ItisanonprofitorganizationfoundedbytwoBostonbasedconsultingfirms:
PittiglioRabinToddandMcGrath(PRTM)andAMRResearch(AMR)andmanyoftheir
Fortune100clients.
SCORModelhasmanyrobustcharacteristicswhicharehighqualifiedasamethodologyfor
supplychainimprovementsuchas,
Standardlanguage:inthepast,supplychainmanagementisfullofterminologieswhich
areveryhardtocomprehend.Plan,Source,Make,DeliveryandReturnarethestandard
languagethatalmostallofthepeoplecanunderstand.Withitssimplicity,itcangathermore
attentionandhelppeoplefromvariousdisciplinestoworkonanimplementation.
Standardroadmap:SCORModelprovidesaframeworkforsupplychainimprovement,
fromthedevelopmentofoperationstrategytotheimplementationofnewmanagement
practices.
Standardprocess:everysupplychainimprovementmanyinvolvetheredesignof
businessprocess.Ittakesalongertimetolearnotherprocessredesignmethodologies.
SCORprocessmappingusuallytakeslessthanhalfadaytoconstruct.
SCORhas3levelsofprocess.ThehighestlevelofprocessisLevel1orthecoreprocess.
SCORhas6easytoremembercoreprocesses
PLAN(P),SOURCE(S),MAKE(M),DELIVER(D),
RETURN(R)
ThelowerlevelprocessiscalledLevel2orsubprocess.Level2processisclassifiedby
eachtypeofproductsasfollows,
1=Maketostock,2=Maketoorder,3=Engineeringtoorder,4=Retailproduct
SourcingofmaketostockproductisS1
ManufacturingofengineeringtoorderproductisM3
Level3ortheprocessdecompositionisprovidedforreference.Thisiswhereyoufindit
veryeasybecauseyoudonthavetomaptheprocessbyyourself.Youjustpickanylevel2
processandyoucangetassociatedlevel3process.
Level4maybedrilleddownfromalevel3process.Sinceeachindustrymayhavetheir
specificprocesseswhichcannotbestandardized,theimplementationoftheseprocessesis
optional,notprovided.
Exampleofthevisualpresentationofeachlevelofprocessisasfollow,

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Standardmetrics:agoodperformancemeasurementshouldberealisticand
understandable.Moreover,ameasurementshouldbecollectedeasilyandrepresentsthe
concernoftheentireorganization.Standardsupplychainmetricscanensurethatevery
functionandeveryplayerinthesupplychaincaninterprettheresultinthesameway.
Performanceattributesareusuallylinkedtoacorporatestrategy.Eachofthemconsistsof
oneormoremeasurements,alsoknownasLevel1metrics.Level1metricsmaybe
branchedoutintothelowerlevelorlevel2metricsformorecontrolofparticularprocesses.
Theexampleofthemetricsdecompositionwillbeshownasfollows,

Bestpracticesprovided:Afterthecurrentperformanceismeasuredandprocessesare
redesign,thebiggestthingweshouldcontemplateishowtofindthewaytocreatean
improvement.Inmanyoccasion,animprovementplanbecomesunsuccessful.Causeof
failureismainlyfromthelackofunderstandingofrootcausesandbestpracticesitself.

Fortunately,SCORModelisequippedwithplentyofbestpracticesthatassociatewitheach
process.Oncepoorprocesscanbeidentified,bestpracticeswillbeathandsandreadyto
helpfixproblems.

Crossindustrystandard:manysupplychaininitiativesrelyonSCORModel.Then,the
processintegrationbetweentradingpartnersinattheglobalscaleisfeasible.
ImplementationofSCORModelinvolves4mainactivitieswhichwillbecoveredinsection2
5.
2)AnalyzeBasisofCompetition
Inordertosucceedinanimplementationproject,thethoroughunderstandingaboutthe
currentsituationofthecompanyneedstobeinvestigated.Thisfirstmilestonewillleadusto
appropriatesupplychainimprovementplan.Themostconvenientmethodistousethe
SWOTanalysis.Ittypicallyrevealsproblemfromhumanperspective.Anyway,company
shouldexaminehowsupplychainisperformingbycapturingtheperformancedatabased
onSCORmetrics.
Afterperformanceiscaptured,atargetperformanceshouldbesetforeachmetric.The
valuefromperformanceimprovementshouldbecalculatedasshownbelowinsimplified
SCORCARD.

3)ConfigureSupplyChain
Followingthefirststage,thematerialflowwillbecapturedandredesignedbyshowingthe
locationofsupplychainmembersonamapincludinglevel2process,theresultisthe"AS
IS"Geographicmap.

consideredinthematerialflowredesignincluderemovalofnonvalueaddedfacilities,
relocationofdistributionwarehouses.Inthisexample,valueaddedactivities(M1)is
includedintoitswarehouseoperationssuchaskitting.

Convert"TOBE"GeographicMapinto"ASIS"ThreadDiagramwhichfocusesontheinter
organizationprocesses.Eachlevel2processwillbetransformedintoanarrow.Bold
verticallinedistinguishescompanyentity.Dashedverticallinesindicatesadifferent
departmentinthesamecompany.

Redesigninterorganizationprocessbyconsideringtheissuessuchasinconsistencyof
performancemeasurementbetweenthetradingpartners.

Fromtheabovediagram,adeliveryperformanceofVendorBwhosellsmaketostock
productis80%.Inordertomeetwiththeendcustomersrequirement,warehousemayhas
toholdmoreinventorytoprotectanmanufactureragainstuncertainty.Thistypeofmetrics
conflictshouldberesolvedalongthewholesupplychain.Tofinalize"TOBE"Thread

Diagram,theplanningprocessesshouldbeadded.

4)AlignPerformance,PracticesandSystems
Itstimetodoaprocessmapping,level3processesshouldbedrawnfromtheSCOR
manualandtranslatedinto"ASIS"swimlanediagram.Thisdiagramindicateseachprocess
underthefunctionname.TheexamplebelowillustratesS2processatVendorA.

Redesignoforganizationsprocessshouldbedoneviacrossfunctionalteam.Then,its
recommendedtogathertheknowledgeablepersonrepresentingeachdepartment.
Brainstormingsessionfromadesignteamindicatesthatrootcauseofsourcingprocesses
isfromthelackofcoordinationandinformationsharing.Thenprocessesredesignwill
create"TOBE"swimlanediagram.

Toidentifytheproductrequirementsappropriately,aproductionplanningteamwork
closelywithamarketingteamindemandplanningphase.Moreover,aprocurementteam
joinstogetherwithamarketingteamandaproductionplanningteamtoensurethat
productswillbescheduledinrighttimeandrightquantityinsideaplanningtimefence.
Theteamshouldalsoconsiderthefollowingissues,
Missingprocessessuchasinputandoutput
Enableprocessesshouldbeinplace
Peopleresponsibleforaparticularprocessshouldbeassignedanddocumented
Companyshouldcomparewhattheyareperformingineachprocesswithbestpractices
Level2metricsortheindustryspecificmetricscanbeadded
5)ImplementProcessesandSystems
Aftertheprocessesareredesigned,companyshouldconsultSCORmanualtocreatea
listofbestpracticesasbelow,

Manyfirmsconsideraimprovementplanthatrequiresnoorminimuminvestment.Incase
itsnecessarytoimplementtechnologyrelatedbestpractices,thevaluefromgapanalysis
willserveasaguidelineforaninvestmentdecision.

6)ImplementationIssues
Fairhumanresourcemanagementsystemisaprerequisiteforanimplementation.The
reasonisthatSCORModelneedsalotofinputinformationfromemployeesinorderto
analyzethebusinessprocessproperly.Troubledemployeewithproblemabout
compensation,careeropportunity,jobsatisfactionandstufflikethattendstobenon
productiveduringabrainstorm/processredesignsession.
Togetmoreinformationfromtheendusersquickly,youmaydevelopachecksheetora
questionnairebasedontheprocessofSCORModel.Thiswillallowyoutoobtaindata

easier.
ExistenceofERPsystemisnotmandatory.However,youwillfinditdifficulttoretrievethe
customer/supplierprofileandcostdata,ifacceptablelevelofaccountingstandardand
recordmaintenanceisnotinplace.
IftheperformancedatabasedonSCORmetricsisnotreadilyavailable,youmany
considerusingasamplingmethod.Sayrandomlyselect30ordersfromthehighprofit
customers.Then,youcancapturethedeliveryperformance,perfectorderfulfillmentand
orderfulfillmentleadtime.Costofgoodssold,assetturns,cashtocashcycletimeis
availablefromafinancialstatement.
Youdonthavetocompareyourperformanceagainstpeerifyourcompanyissmalland
mediumbusinessenterprise.Comparingaworldclasscompanyagainstasmall
companydoesn'tyieldsomethingactionable.
Valuefromimprovementisquitesubjectiveeventhoughitscalculatedbyaconsulting
firm.Itshouldbeseenasindicationifitsworthittopaytheefforttoimproveperformancein
certainarea.
Mostbigcompaniesuseasimulationsoftwareinaprojecttomaketheimprovementto
materialflow(configuresupplychain).Ifbudgetdoesn'tallow,youcanjustfollowmy
guideline.
Metricsrelatedtoqualityisnotincluded.Youmayincludeit(oranyotherKPI)inasupply
chainscorcard.

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