Linking Strategy and Operations - Supply Chain Council

Linking Strategy and Operations 

Define, Align, and Perform with SCOR 

and SCORmark 

Supply Chain Council 

Sean Culey 

Glasgow 

February 2011 

© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | SCW Europe SCOR & SCC Overview | 1 | 17 February 2011

The Supply Chain Council 

Sean Culey 

• Member of Supply Chain Council’s European Leadership Team 

• Extensive end-to-end supply chain experience in four continents, including 10 full 

ERP implementations and numerous improvement projects 

• Global Supply Chain troubleshooter for multi-national FMCG 

• Experienced implementer of S&OP, Integrated Business Planning (IBP) and 

Demand Control (Sense and Respond) process and SAP solutions 

• CEO & founder of Seven Collaborative Solutions Ltd (‘SEVEN’) – creators of 

sustained business value from ERP driven supply chains via alignment of people, 

processes, data and systems 


Supply Chain on the Boardroom Agenda 


The ‘Performance Improvement Framework’ 

Leadership 

Strategy 

Products / Services 

Markets 

Goal 

Vision 

Mission 

Plan & Enable 

processes 

Execution 

processes 

Report and Manage 

Performance & Conformance 

Reports / KPI‟s 

Organisation & behaviours 


Continuous Improvement and High Trust Culture 

Ability to execute the most important goals with urgency 

Aligned to and measuring the success of 

Driving the behaviours of 

Clearly defined 

Goals, Business 

Strategy and 

Roadmap 

Educated, Trained, 

Empowered, ‘T’ 

Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 

Superior Processes 

Delivered by Executing Measured by 

Aligned Metrics and 

Integrated Reporting 

Dashboards 

Responsibility for 

integrity owned and 

accountable by 

Enabled by 

Integrated Planning, 

execution and 

reporting tool(s) 

That supports and 

drives 

„The Seven Essential Elements of 

Organisational Greatness‟ 

Sean Culey 

2010 

© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | SCW Europe SCOR & SCC Overview | 5 | 17 February 2011 

Driven by 

Accurate, Realistic, 

Owned Master and 

Transactional Data 

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5

Strategic alignment 

Identifying the Opportunities 

Level 1 

Start 

Level 2 

Low 

Level 3 

Medium 

Level 4 

High 

1 Strategy 

2 Execution processes 

5 

3 Plan / Enable 

1 

3 

4 Report & Manage 

5 Behaviour / Org 

2 

6 

6 Leadership 

4 


Performance alignment








Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




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7

Strategic operations 


Competitive Strategies – 

Begin with the End in Mind 

Customer 

intimacy 

Relation 

Product 

leadership 

Innovation 

(Cost)price 

Operational 

excellence 

Flexibility 

Quality 

Time 


Good is the enemy of Great 

Relation 

Strategy = making choices 

to contrast with the competition 

(realizing vision and mission) 

Innovation 

(Cost) price 

and 

Flexibility 

Quality 

Executing these choices in 

• Functional activities 

• Marketing 

• Performance metrics 

• Technology 

• Organization 

• Control 

• IT 

• Knowledge building 

Time 


Supply Chain Strategy 

• SCOR uses a tool called the Supply Chain Strategy Matrix to 

identify priority strategic features or attributes of supplychains. 

• Each supply chain strategy is indicated by a collection of 

ranked features: 

Reliability On time Complete Undamaged 

Responsiveness From Customer Request to final acceptance 

Flexibility How long to scale up How expensive to scale down 

Cost 

Cost of Processes Cost of Goods Sold 

Assets Working Capital Return on Investments 


Customer 

Internal 

SCOR KPI Selection: 

Where is YOUR competitive differentiator 

Performance 

Attribute 

Reliability 

Responsiveness 

Performance 

Attribute Definition 

The performance of the Supply Chain in delivering: the 

correct product, to the correct place, at the correct time, in 

the correct condition and packaging, in the correct quantity, 

with the correct documentation, to the correct customer 

The speed at which a supply chain provides products to the 

customer 

SCOR L1 

Metric 

Perfect Order Fulfillment 

Order Fulfillment Cycle Time 

Agility 

(Flexibility) 

Cost 

The agility of a supply chain in responding to marketplace 

changes to gain or maintain competitive advantage 

The costs associated with operating the supply chain 

Upside Supply Chain Flexibility 

Supply Chain Adaptability * (Upside 

or Downside) 

Supply Chain Management Cost 

Cost of Goods Sold (COGS) 

Assets 

The effectiveness of an organisation in managing assets to 

support demand satisfaction. This includes the management 

of all assets: fixed and working capital 

Cash-to-Cash Cycle Time 

Return on Supply Chain fixed 

Assets 

Return on Working Capital 


7 Steps of a SCOR Benchmarking Program 

• Supply Chain Definition 

• Supply Chain Prioritization 

• Supply Chain Strategy 

• Selecting Metrics 

• Sourcing Data 

• Creating a Balanced SCORcard TM 

• Performing Benchmark 


Supply Chain Definition 

• Columns are UK /Other, and sub-segmented 

• Rows are the Major Product Lines 

Geography – Customer or Market Channel 

Supply-Chain 

Definition Matrix 

Retail Distributor Direct OEM Gover’t 

UK 

Home 

Delivery 

Other 

Inter’l 

Food 

Products X X X X X 

Product 

Tech 

Products X X 

Durable 

Products X X 


Supply Chain Definition 

• Continuing Information on our example company, what are the 

distinct supply-chains 

Geography – Customer or Market Channel 


Definition Matrix 

Retail Distributor Direct OEM Gover’t 

UK 

Home 

Delivery 

Other 

Inter’l 

Food 

Products X X X X X 

Product 

Tech 

Products X X 

Durable 

Products X X 


Developing Solutions for your Current and 

Future Supply Chains 

Current 

Future 


Identify Competitive Requirements 

Performance 

Attribute or 

Category 

Reliability 


Flexibility 

Cost 

Asset 

Management 

Competitive Requirements 

Supply 

Chain 1 

S 

A 

P 

P 

Procedure 

• Prioritize supply chain 

performance requirements for 

each relevant customer/market 

channel 

Within a channel : 

• One Superior (S) 

• Two Advantage (A) 

• Two Parity (P) 

• Each unique combination of 

ratings defines Your Supply 

Chain Strategy for the channel 

• Think of the rating as a 

desired state, NOT where you 

want to improve the most 


SCORcards in 5 Minutes 

Philosophy 

• You need to have the most data where performance is most critical 

• You need to have least data where performance is least critical 

For Every Superior Advantage Parity 

Select Level 1 Metric Level 1 Metric Level 1 Metric 

and Level 2 Metric Level 2 Metric 

and 

Level 3 Metric 


SCORCard 


SCORcard 

S/A/P Level-1 Metric Level-2 Metric Level-3 Metric Summary 

Reliability 

S 

Perfect Order 

Fulfilment 

Perfect Order Fulfilment 

Reliability 

% Orders Delivered in 

Full 

% Orders Delivered in Full 

Reliability 

Deliver Item Accuracy 

Deliver Item Accuracy 

Reliability 

Delivery Quantity 

Accuracy 

Delivery Quantity Accuracy 

Reliability 

Delivery Performance to 

Commit Date 

External 

Reliability 

Reliability 

Date Achievement 

Location Achievement 

Date Achievement 

Location Achievement 

Reliability 

Accurate Document 

Reliability 

Shipping Document 

Accuracy 

Shipping Document 

Accuracy 

Reliability 

Billing Document 

Accuracy 

Billing Document Accuracy 

Reliability 

Perfect Condition 

Reliability 

%Orders Received 

Damage-Free 

% Orders Received 

Damage-Free 


Metrics Selection 


SCORcard 

S/A/P Level-1 Metric Level-2 Metric Level-3 Metric Summary 


A Order Fulfilment Cycle 

Time 

Order Fulfilment Cycle Time 


SOURCE Cycle Time 

SOURCE Cycle Time 

External 



MAKE Cycle Time 

DELIVER Cycle Time 

MAKE Cycle Time 

DELIVER Cycle Time 

Flexibility 

P Upside Supply-Chain 

Flexibility 

Upside Supply-Chain Flexibility 

Cost 

P 

Total Supply Chain 

Management Cost 

Assets 

A Cash to Cash Cycle 

Time 

Internal 

Assets 

Assets 

Days Sales Outstanding 

Days Payable 

Outstanding 

Days Sales Outstanding 

Days Payable Outstanding 

Assets 

Inventory Days of 

Supply 

Inventory Days of Supply 


Supply-Chain Council 

Comprehensive Benchmarks Report 


Create the SCORcard 

Selected Metrics 

Collect Metrics Data 

Industry Comparison 

Attribute Metric (level 1) 

Company 

Parity Adv Superior 

Reliability 

Perfect Order Fulfillment 

75% 

92% 96% 98% 


Order Fulfillment Cycle Time 

7 days 

8 days 6 days 4 days 

Flexibility 

Ups. Supply Chain Flexibility 

62 days 


Cost 

Supply Chain Mgmt Cost 

10.1% 

10.8% 10.4% 10.2% 

Assets 

Cash-to-Cash Cycle Time 

22 days 



Parity, Advantage, Superior: 

Determining the Size of the Prize 

Close the gaps 

Attribute Metric (level 1) Company Parity Adv Superior 

Parity 

Gap 

Req 

Gap 

Reliability Perfect Order Fulfillment 75% 92% 96% 98% 17% 23% 

minus 

minus 

equals 

equals 

Responsiveness Order Fulfillment Cycle Time 7 days 8 days 6 days 4 days -1 day 1 day 

Flexibility Ups. Supply Chain Flexibility 62 days 80 days 62 days 40 days -18 days 

Cost Supply Chain Mgmt Cost 10.1% 10.8% 10.4% 10.2% -0.7% 

Assets Cash-to-Cash Cycle Time 22 days 45 days 30 days 20 days -23 days 

We can now link strategy, 

performance, and benchmark to 

identify required performance 

Parity 

Advantage 

Superior 

Median of Statistical 

Sample 

Midpoint of Parity and 

Superior 

90 th percentile of 

population 









Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




24 

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Software – Supply Chain’s silver bullet 

“We have all of the technology that we want and need 

for today – and tomorrows – supply chain” 

Alan Waller OBE 

Professor of International Supply Chain Management, Cranfield School of Management & President of the 

Chartered Institute of Logistics 

“The real question is: - have we got the people we 

need to manage this technology” 

European Council on Global Supply Chain 


25

Barriers to Success 


What Causes Cultural and Organisational 

Barriers 

Underutilised 

Talent and 

Potential 

Low 

Trust 

No Clear 

Purpose or 

Vision 

Bureaucratic, 

Misaligned Systems 

Source: 

‘Leadership – Great Leaders, Great 

Teams, Great Results’ – Franklin Covey 


27

Paradigm Shifting to Superior Performance 

ACHIEVE 

MEASURE 

COMMUNICATE 

MANAGE 

“Buy 

the 

lowest 

cost” 

“Long run 

time, 

Maxefficiency” 

EDUCATE 

CHALLENGE 









Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




29 


Discovery: 

To know where to improve, you first 

need to know what you do and how you 

do it 


SCOR: A Process Framework 

• Process frameworks deliver the well-known concepts 

of business process reengineering, benchmarking, 

and best practices into a cross-functional framework 

› Standard processes: 

Plan, Source, Make, Deliver, Return, Enable 

› Standard metrics: 

Perfect Delivery, Cash Cycle Time, Supply-Chain Cost etc. 

› Standard practices 

EDI, CPFR, Cross-Training, etc. 

• Pre-defined relationships between processes, 

metrics and practices 

• Constantly refined – currently on v10.0, which 

incorporates Green SCOR, Supply Chain Risk and 

Supply Chain Skills processes, practices and metrics 


SCOR® Model 

• Processes cover areas of 

PLAN, SOURCE, MAKE, 

DELIVER and RETURN 

(definitions also exist for 

ENABLE processes such as 

Data, Reporting, Regulatory 

Compliance, etc.) 

• Defined Best Practices for 

each of the processes 

• Defined Performance Metrics 

at each level 


SCOR® Model 

• Accepted Global Standard 

• Enables common agreement 

of process mapping, 

measurement and definition 

• Reduces time spent defining 

what each level should be, 

what nomenclature to use, 

who owns the standard, who 

controls and updates the 

standard etc. 

• Geographic product flow 

stage allows for Physical 

product mapping, as well as 

thread diagram mapping for 

information and financial 

flows 


SCOR Hierarchy 

Level 1 Level 2 Level 3 Level 4 Level 5 

Scope Configuration Activity Workflow Transactions 


Source 

S1 

Source 

Stocked Product 

S1.2 

Receive Product 

EDI 

XML 

Differentiates 

Business 

Defines Scope 


Complexity 


Capabilities 

Names Tasks Sequences Steps Links 

Transactions 

Links, Metrics, 

Tasks and 

Practices 

Job Details 

Details of 

Automation 

Framework 

Language 

Framework 

Language 

Framework 

Language 

Industry or 

Company 

Specific 

Language 

Technology 

Specific 

Language 

Standard SCOR definitions 

Company/Industry definitions 


Align Processes & Systems 

Information Flow 

D1.7 

Select Carrier 

& Rate 

Shipment 

D1.3 

Reserve Inv. & 

Determine 

Delivery Date 

D1.2 

Receive, 

Enter & 

Validate Order 

D1.1 

Process 

Inquiry & 

Quote 

Material Flow 

D1.8 

Receive 

Product from 

Source/Make 

D1.9 

Pick Product 

D1.10 

Pack Product 

D1.11 

Load & 

Generate 

Documents 

D1.12 

Ship Product 

D1.15 

Invoice 

Financial Flow 


Process Model As-Is: SCOR Level 3 & 4 

• SCOR Level 3 

mapping ensures 

common leveling and 

nomenclature 

• Process Wizard 

enables contains 

SCOR processes, 

metrics and best 

practices 

• Supply Chain 

Excellence 

Methodology built in, 

enabling geographic 

and logical mapping 

• Can enable process 

and best practice 

comparisons in 

different locations 


Process Performance Summary 

SOURCE 

Process Efficiency Yield Best Practice Overall SCORE 

S1.1 

Schedule Product 

Deliveries 

S1.2 

Receive Product 

S1.3 

Verify Product 

S1.4 

Transfer Product 

S1.5 

Authorise Supplier 

Payment 

12% 61% 36% R 

5% 100% 45% R 

19% 33% 45% R 

8% 100% 45% R 

58% 40% 55% R 

Process is effective 

Some process elements 

in place (manual) 

Ineffective or 

non-existent 


Ways to Improve a Process (from Lean Six Sigma) 

Variability 

Reduction 

New 

Process 

Design 

Waste 

Reduction 


38

Process Mapping Exercises (To-Be) 

SCOR Level 3 & 4 

• SCOR Level 3&4 

mapping integrates 

business process, 

best practices, 

RACI, metrics, 

reports & 

Governance checks 


Level 4 & 5: Work & Transaction Steps 

OR 

006 

S3.1 

Schedule 

Scope 

Product Deliveries 

Configuration Activity Workflow Transactions 

Level 1 Level 2 Level 3 Level 4 Level 5 

S3.1.1 

Purchase Requisition for 

strip and survey is 

automatically 


generated 

Business 

(from sale quotation) 

Defines Scope 

Framework 

Language 

OR 

014 

Purchase Requisition 

generated in SAP 


Complexity 


Capabilities 

S3.1.2 

Release Purchase Requisition 

For strip and survey material 

(ME54N or ME55) 

Framework 

Language 

S3.2.1 

Convert Purchase Requisition 

Into RFQ for strip and survey 

(ME41) 

Names Tasks Sequences Steps Links 

Transactions 

G2 

Links, Metrics, 

Tasks and 

Practices 

Framework 

Language 

Job Details 

Industry or 

Company 

Specific 

Language 

EDI 

Details of 

Automation 

Technology 

Specific 

Language 

XML 

Company/Industry definitions 









Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




41 


ERP & Supply Chains – headline news 


Same software, different results 

Definition of Maturity Class 

Best-in-class 

Top 20% of aggregate performance scorers 

Industry Average 

Middle 50% of aggregate performance scorers 

Laggard 

Bottom 30% of aggregate performance scorers 

Mean Class Performance 

• 22% reduction in inventory levels 

• 19% reduction in operational costs 

• 22% reduction in administrative costs 

• 94% complete and on-time delivery 

• 93% inventory accuracy 


• 6 % reduction in operational costs 

• 8 % reduction in administrative costs 




• 0% reduction in operational costs 

• 1% increase in administrative costs 



* Results from 920 companies that use ERP – source: Aberdeen Group, March 31, 2009 


Technology: 

An enabler of superior processes….. 

…..not a replacement for them 


44








Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




45 


Data – Discipline, ownership, management 

Customer Master Data 

VAT number 

Tax categorisation 

Country of destination 

Shipping Address 

Pricing details 

Account manager 

Listings / Exclusions 

Material Substitution rules 

Sales 

Order - 

Physical 

Demand 

Control 


Requested Delivery Date 

Plant 

Requested Quantity 

Other mandatory info 

Scheduling Data 

Transit time 

Packing time 

Picking Time 

Loading Time 

Transportation Planning Time 

Goods Receipt time 

In house production time 

Material Master Data 

Weights and volume 

Std / MA cost 

MRP strategy 

X-Plant Material status 

Tax classification 

Foreign trade data 

Storage information 

WM / handling info 

Demand Management 

Stock and Purchasing Data 

Accurate... 

Inventory qty information 

Stock location / bin information 

Delivery dates on open PO‟s 

Production schedule completion dates 

Quality information / Inspect notes 

Batch and Shelf life information 

Open Demand situation by date 


Performance Excellence - Dependant on 

Business processes and Data Management! 

Business Processes 

Data Management 

Integrated, efficient 

and effective 

PROCESSES to 

enable Supply Chain 

and business 

performance 

Strategy 

Owned, appropriate, 

accurate and quality 

DATA to enable Supply 

Chain and business 

performance 

Performance Excellence 









Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




48 


Ensuring Alignment through SCOR - Metrics 

RELIABILITY: 

POF by Supply Chain 

PLAN: 

Forecast Error 

SOURCE: 

Supplier OTIF 

MAKE: 

Schedule 

Adherence 

DELIVER: 

Sales Order 

OTIF 

SOURCE: 

Overdue PO’s by 

Vendor 

SOURCE: 

Overdue PO’s by 

Buyer 


49

Aligned and Integrated Training, 

Metrics and Process 

ALIGNMENT 

MBR 

Dashboard 

Management 

Reporting Pack 

Management 

Training 

Managed 

ALIGNED TO STRATEGIC DIRECTION 

STRATEGIC 

S&OP / Weekly 

SC Metrics 

S&OP / Weekly 

Meeting Pack 

S&OP / Weekly 

Meeting 

Training 

INTEGRATED ACROSS PROCESS 

Integrated 

TACTICAL 

INTEGRATION 

Functional 

Metrics Functional 

Metrics Functional 

Metrics 

Functional 

Training Functional Pack 

Training Functional Pack 

Training Pack 

FUNCTIONAL EXCELLENCE 

Stores Training 

Procurement 

Training 

Commercial 

Training 


Functional 

Functional 

Functional 

OPERATIONAL








Roadmap 



Shaped People 

Integrated, 

Governed, 

Compliant, 

Appropriate, 





Dashboards 




Enabled by 





drives 



Sean Culey 

2010 


Driven by 




51 


OBJECTIVE: Strategy, data, ERP, process 

and people alignment 

CUSTOMER 

’ 

S CUSTOMER 

CUSTOMER 

SALES & OPERATIONS PLANNING 

COMMERCIAL 

PLANNING 

Strategic Goals 

Tactical Objectives 

Operational Activities 

People & Culture 

SUPPLY CHAIN 

PLANNING 

SOURCE MAKE DELIVER 

Business Processes 

RETURN 

Systems and supporting technology 

Performance & Conformance Reporting 

ENABLE 

Roles & Responsibilities 

Data Integrity 

VENDOR 

VENDOR 

’ 

S VENDOR 


52

Create foundations for growth 

INTEGRITY & RELIABILITY 

PROCESS INTEGRATION 

and OPTIMISATION 


SUPPLY CHAIN 

ORCHESTRATION

Using SCOR for Continuous Improvement 

SCOR 


17/02/2011 

Standards 

• Models business process using 

accepted global nomenclature 

• Creates process definition standards 

moving forwards 

• Design logical control process 

(governance) 

• Identify common ways of working 

• Incorporate Best Practices 

• Defines Role & Responsibility (RACI) 

Speed 

• Rapidly models the first 3 levels of 

the supply chain 

• Focuses improvement on the task 

and SAP layer 

• Removes discussion around 

nomenclature and level definitions 

Business Improvement 

• Assigns SCOR metrics to each 

process – answering the ‘how should 

we be measured’ question 

• SCOR metrics allow for process 

comparison across IPT’s 

• Avoids wasting time on developing 

company specific measures 

• Allows for rapid benchmarking and 

value identification 

Business Improvement 

• Supply Chain Excellence 

methodology 

• SCOR identifies relevant Best 

Practices 

• Can create multiple TO-BE 

models from existing AS-IS 

Integration and Alignment 

• DCOR (Design Chain – for 

engineering) , CCOR (Customer 

Chain – for customer 

management) and VCOR (Value 

Chain) models 

Continuous Improvement 

• Use of SCOR / Lean / Six 

Sigma convergence 

approaches to identify waste 

in the Supply Chains 

• Can be used to identify 

enabling technological 

capabilities to optimize the 

Supply Chain 

• Opportunity and project 

portfolio with detailed ROI 

analysis 

• SCOR methodology fills a 

major need in a Lean and Six 

Sigma program – 

identification, prioritization 

and strategic alignment of 

project opportunities with the 

capability to execute them 

54

Extended Supply Chain with SCOR® 

Plan 

Source Make 

Return 

Deliver 

Return 

Your Company 

Control 



Plan 

Plan 

Plan 

Source 

Make 

Deliver 

Source Make 

Deliver 

Source 

Make 

Deliver 

Return 

Return 

Return 

Return 

Return 

Return 

Supplier 

Your Company 

Control 

Optimise / Lean 

Customer 



Plan 

Plan 

Plan 

Plan 

Plan 

Deliver 

Source 

Make 

Deliver 

Source Make 

Deliver 

Source 

Make 

Deliver 

Source 

Return 

Return 

Return 

Return 

Return 

Return 

Return 

Return 

Suppliers‟ 

Supplier 

Supplier 

Your Company 

Control 

Customer 

Customer‟s 

Customer 


Orchestrate 


Trust 

Trust 

Trust 

Trust 


Plan 

Plan 

Plan 

Plan 

Plan 

Deliver 

Return 

Source 

Return 

Make 

Deliver 

Return 

Source Make 

Return 

Deliver 

Return 

Source 

Return 

Make 

Deliver 

Return 

Source 

Return 

Suppliers‟ 

Supplier 

Supplier 

Your Company 

Control 

Customer 

Customer‟s 

Customer 


Orchestrate 


Driving SCM improvements to deliver EVA 

RESULT 

BVA 

Business 

Value 

Added 

BALANCE SHEET & INCOME 

STATEMENT IMPACT 

Net Operating 

Profit 

(NOPAT) 

- 

Capital Charge 

Revenue 

- 

Expenses 

Cost of Capital 

(efficiency) 

BUSINESS IMPACT 

Revenue Lift 

• Improved Service 

• Product Availability 

• Improved responsiveness 

• Greater visibility of supply 

capabilities 

Reduction of Supply 

Chain Costs 

• Margin Improvement 

• Reduction in inventory costs 

• Lot size and ordering cost 

reductions 

• Improvement on ROI from 

IT 

• Reduced warehouse & 

transport costs 

Reduction of Working 

Capital Requirements 

• Inventory reduction in 


• Improved Accounts 

Receivable 

• Duty payment deferment 

Supply Chain related 

Capital Reductions 

• Enhanced Fixed Asset 

Utilisation 

ATTRIBUTE 

Reliability 


• Future CAPEX Spend 

© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | SCW Europe Avoidance 

Return on 

SCOR & SCC Overview | 59 | 17 February 2011 

• Returns processing costs 

Working Capital 

+ 

Agility 

Cost 

Assets 

SCOR L1 

METRIC 

Perfect Order 

Fulfilment 

Order Fulfilment 

Cycle Time 


Agility 


Adaptability 


Management 

Cost 

Cost of 

Goods Sold 

Cash to Cash 

Cycle Time 

Return on Supply 

Chain 

Fixed Assets 

BUSINESS VALUE FROM „CONTROL‟ 

PHASE 

Service Improvements: 

• Improved master and transactional data integrity 

• Increased stock availability / ATP failure 

reductions 

• Improved ability to react to service issues 

• Customer service bottleneck identification 

Reduction in Lead Times: 

• Inbound lead time reductions 

• Improved master and transactional data integrity 

• Improved ability to react to service issues 

• Lead time bottleneck identification 

Increase in Supply Chain Agility: 

• Correct utilisation of MRP and ATP tools 

• Improved ability to identify service issues early 

• Accurate supply chain bottleneck identification 

Reduction in Supply Chain Cost: 

• Better ROI from existing SAP investment 

• Correct utilisation of MRP and ATP tools 

• Reduction in ‘fire-fighting’ activities through more 

accurate demand & supply balancing 

• Alignment of process activities / adherence to 

plan 

• Better visibility of plan deviations through 

reporting improvements 

• Use of existing SAP technology to identify 

capacity waste 

Improvement in Asset Utilization: 

• Outbound sales order pipeline reporting 

• Inbound pipeline reporting 

• Accurate and timely processing of goods receipt 

and issue 

• Identification and reduction in inventory ‘dead 

stock’ 

• Transactional data integrity improvements 

• Clarity in aged debt reporting 

• AP and AR process improvements

7 Take-home Points 

1. Supply Chain is moving up the corporate agenda, and is now recognised as a 

vehicle for value, not just an generator of costs 

2. The SCC’s SCOR® model comprises industry standards in Performance metrics 

and Best Practices with a standardised process model that covers the Extended 


3. SCOR® is constantly revised and updated, and helps ensure alignment of IT with 

business processes, best practices, strategic goals and measures 

4. Drive the required behaviours through aligned metrics that support the strategic 

goals of the organisation 

5. ‘Supply Chain Excellence’ is a proven approach to implementing SCOR® that 

significantly increases the success of any Supply Chain improvement project 

6. Using SCOR® and an SCE approach to define the competitive drivers and 

disconnects that exist in your business will ensure that focus is on adding value 

and will increase ROI from IT investments 

7. SCOR / SCE for ERP has been used PRE-implementation of ERP, and also in 

order to drive better value and benefits realisation POST-implementation 


Supply-chain.org 

scorlabs.org 

For additional questions on Supply Chain Council 

Benchmarking or SCORmark, 

Please contact: info@supply-chain.org 

sean.culey@sevencs.co.uk

Linking Strategy and Operations - Supply Chain Council

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