SCOR Model for supply chain excellence
The SCOR model is the supply chain operations reference model. The model helps to analyze and improve the supply chain of a company or organization. The SCOR model was developed in the 1990s by The Supply Chain Council. SCC merged with ASCM in 2014 to further develop and advance the model. Visie Partners is a consulting partner that, in collaboration with ASCM, helps companies move forward by analyzing their supply chain, and guiding supply chain transformation. For us, the supply chain operations reference in improving supply chains plays a big role to be sure of our impact.
A model for improving supply chain management
In this blog you will find the following topics
What does supply chain operations reference do?
Supply Chain Management (SCM) is a crucial role for many companies. The supply chain includes all steps to turn raw material into a product and/or service that is delivered to a customer. The SCOR model offers tools within this chain to measure performance and enable efficient analysis. These performances are summarized as performance indicators. The performance indicators are compared with each other and with other companies to find out where the supply chains can best be improved.
These improvements are based on best practices, more on this later in this blog. The SCOR model measures how efficient specific processes in the supply chain are for participating companies. This measurement is done with standard metrics (KPIs), which ensure that the same measurement is done throughout the supply chain. Once the performance is known, it can be compared to the performance of other companies to provide a clear understanding of supply chain performance.
The model goes beyond supply chain management to look at individual supply chain processes and how they work together. So whether it's warehouse management, equipment, and facilities, or managing production, all these elements are applied in the SCOR model frame of reference.
Orchestrate, Plan, Source, Transform, Order, Fulfill, and Return
The SCOR model identifies six processes of which a supply chain has one or more. These six processes are level 1 processes. Below each level, you will find a further breakdown with more details.On the image you can see the coherence of each of the six parts of the supply chain mentioned. The mentioned five processes centrally are the basis for every company and their internal process. Deliver from a supplier thus aligns with your own company's Source. Not all supply chain processes will include all steps.
Orchestrate coordinates supply chain processes of SCOR DS. Orchestrate focuses on creating business and supply chain strategies based on customer and supplier segmentation and sustainability as input in strategic goal setting. Orchestrate includes managing strategy implementation and using information technology and performance metrics as input in continuous improvement processes. Orchestrate also covers risk management, compliance, and contracts to deal with uncertainty and use containment business rules. Business rules are the guidelines of how the company makes decisions to execute the activities of the company. Human skills are essential enables for improving supply chain performance. Orchestrate is the function of aligning SCOR processes activities related to planning and replanning the flows of goods and information for supply and demand.
Plan & Replan
The Plan process describes the activities to plan for operating the supply chain. Planning is done to execute Order, Source, Transform, Fulfill and Return processes. Activities include determining requirements, gathering information about available resources, balancing requirements and resources to assess planned capabilities and gaps in demand or resources, and identifying actions to bridge these gaps. Together Orchestrate, Plan and Regenerate are elements of one of the two infinity loops.
The order process describes the activities associated with customers purchasing products and services, including attributes such as locations, payment methods, pricing, fulfillment status, and other order data. The order process covers business-to-business, business-to-consumer, and intracompany orders. Processes include planning, directing, monitoring, and controlling customer orders, such as order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. The process tracks the stage in which an order is, what will be following stages and their time requirements.
The Source process describes the activities associated with procuring, ordering, and scheduling the ordering, delivery, receipt, and transfer of products and services. The sourcing is for products and services directly transformed into the product and for items required to support transformation processes like maintenance. The Source process includes strategic sourcing and activities to build partnerships.
The Transform process describes the activities associated with creating products and services. Product transformation processes include raw materials and components using resources like labor, machinery, and process technology. The transform process distinguishes between a tangible product and MRO items.
The Fulfill process describes the activities associated with fulfilling customer orders or services, including scheduling order delivery, picking, packing, shipping, installing, commissioning, and invoicing. The fulfillment processes cover business-to-business, business-to-consumer, and intracompany orders.
The return process deals with returns of tangible products, services, and MRO (Maintenance, Repair, and Overhaul) items. Return of services includes service components from a customer back through the service chain for the condition's diagnoses, evaluation entitlement, disposition back into Transform, or other circular activities.
3 levels of SCOR
For each Level 1 process, there are three or more distinctive Level 2 processes. Each level-2 process contains level-3 process elements. These hierarchical relationships provide process classification.
When conducting a SCOR project, SCOR users may decide to move some lower-level processes, such as those related to sourcing, delivery, and procurement, to other process sections.
SCOR model racetrack
To take advantage of the SCOR model, it is most helpful for companies to create a cycle. Each step of this racetrack helps improve supply chain operations by providing insight into the KPIs and areas of focus.
The main course objectives of a SCOR model course are:
- Discovering the capabilities and goals of the SCOR framework.
- Understanding the structures of the SCOR sourcebook.
- Discovering the 4 parts, performance, processes,
- SCOR Model advice
- Applying the SCOR operating model
Do you want to learn more about the SCOR TRAINING?
Free online access
The new SCOR digital standard model is free to access for everyone. ASCM, the company maintaining the model has chosen to share the knowledge and the model with anyone that is interested in it. To access the mode, you can go to the following URL: SCOR.ASCM.org.
We also offer a free 3-hour micro-learning about SCOR, during this introduction you'll get more familiar with the model and find out whether SCOR is something you can benefit from. To request access please fill in this form