Leveraging The Supply Chain Operations Reference Model
In recent articles, we covered value stream concepts and characterized the value stream in the context of supply chain major sub-processes. We summarized the manufacturing value stream according to the following process blocks:
This article will dive deeper into the Supply Chain Operations Reference Model (SCOR) which can be found here.
The Supply Chain Operations Reference (SCOR) model describes the business activities associated with all phases involved with satisfying a customer’s demand. SCOR is the only comprehensive, universally accepted and open-access supply chain standard. It has been used by thousands of public and private organizations around the world.
The SCOR model can be leveraged to assess and improve supply chains / value streams, directly leading to improved operational performance.
A value stream map is useful to illustrate the critical functions of this model as follows:
Now, let’s go into the SCOR model and see what it reveals about the “Fulfill” subprocess:
Many of these process steps may be performed by the 3PL in a make-to-stock, 3PL warehouse model. In this case, the company would typically monitor product shipments (F2.10: Ship Product) information flow from the 3PL.
However, let’s look at the Level 1 Key Performance Indicators. Here we’ll examine supply chain_value chain reliability with respect to order fulfillment:
Although it’s common to measure product shipped, the fulfillment process ends with the customer. The corresponding fulfillment process KPI is perfect order fulfillment expressed as a percentage (with the goal 100%).\
Some other takeaways include:
- Any level 2 metric can be stratified and reported individually. For example, “‘deliver performance to customer commit date”. How often is the company late to the customer, and by how many days?
- An advantage of the reference model, in addition to a source of KPIs, and advantage of the reference model is speaking the same language of an industry standare
- Some language is not used…notably backlog to represent pending orders, for example
This article provides one small example. There are many important key performance indicators in the reference model, the list is quite extensive and granular but useful. The SCOR digital standard is open to all professionals online. Learn more and interact with the full model at scor.ascm.org.