In the relentless search for ever improving returns on investment and market competitiveness, some of the world’s biggest corporations are applying a model that is known as SCOR — the Supply Chain Operations Reference model — to maximise supply chain efficiency.
Siemens, Hewlett Packard, Intel, BASF, and Coca-Cola all use the SCOR model, because they know survival in today’s fierce markets demands detailed scrutiny and re-engineering of every link in the supply chain — from the supplier’s supplier to the customer’s customer.
Recognising the strength of the model, many supply chain software companies are developing stand alone software products to manage and analyse supply chain performance based on SCOR. For the record, IBS was the first company to achieve formal acknowledgement by the Supply Chain Council for its solutions being compliant with the SCOR model
The SCOR model is the supply chain industry de facto standard model for providing business process modelling data, metrics for evaluating performance management and best practices information derived from practitioners’ experience. It is entirely vendor and technology independent and is the only real independent in-depth reference model for the complete supply chain of all companies.
SCOR makes it possible to make supply chain performance comparisons between companies by industry. It also provides mapping processes to make more effective relationships between partners, suppliers and customers: it is a tool for revitalising the supply chain internally and externally.
Companies deploying SCOR have dramatically cut costs and boosted returns. Using the SCOR-model, Siemens Medical, for example, has been able to cut costs by 30 per cent, reduce inventory by 60 per cent, and cut order lead-times from 22 weeks to just two.
The SCOR model is organised around five key management processes: Plan, Source, Make, Deliver and Return. Each of these processes is examined on three levels of detail. The first level is strategic, what the company wants from each process area. The second level maps out exactly what is currently happening within each process area. The third level examines the operational level of the process areas, the area where execution can be altered.
SCOR doesn’t tell you what changes to make but it maps out where the weak links are. It is then necessary to apply appropriate execution adjustments specific to the particular chain. Successful supply chain management is about consistent scrutiny, getting real time information so you can react to less than optimal performance. It also means getting quality business intelligence.
Companies that will be successful in the long run are those that realise the answer lies in maximising supply chain efficiency.