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The Supply Chain Council, a not-for-profit trade association, developed and currently maintains the SCOR model for supply chain excellence. SCOR stands for Supply Chain Operations Reference, and is a methodology for rapidly improving operations efficiency and productivity.

SCOR is called a process reference model because it integrates the concepts of business process reengineering, benchmarking and process measurement into a cross-industry framework. The model defines the supply chain as a network of basic flow processes common to all industries and all companies, develops standard performance metrics and benchmarks, and establishes management practices and technology solutions that result in “best-in-class” performance.

The basic structure of the SCOR model is shown below:

The basic processes under the SCOR model are PLAN, SOURCE, MAKE, DELIVER and RETURN spanning interactions from the suppliers’ supplier to the customers’ customer. The model allows complex processes be described in these standard terms, their operational performance measured and compared to “best-in-class” benchmarks. Gap analysis between the “as-is” and “desired”, or “to-be” states leads to the development of a strategic plan for continuous improvement. The basic structure of a process refernce model which enables strategy development is as follows:

The basic steps in developing a supply chain strategy for excellence using the SCOR model follows the series of steps outlined below:

1. DEFINE SUPPLY CHAIN(S)
2. DEVELOP METRICS AND BENCHMARKS
3. ESTABLISH COMPETITIVE REQUIREMENTS
4. PERFORM GAP ANALYSIS
5. DEVELOP GAP CLOSURE INITIATIVES
6. ESTABLISH PROJECT POTFOLIO
7. IMPLEMENTATION PLANNING

In upcoming posts details on these steps including how SCOR links supply chain performance with a company’s overall financial performance will be discussed.

This entry was posted by Ryan Armasu on Sunday, May 28th, 2006 at 10:40 pm and is filed under SCOR, Supply Chain.