SCOR 8.0 Overview The Next Generation in SCC Models DCOR, SCOR and CCOR

1. SCOR 8.0 OverviewThe Next Generation in SCC ModelsDCOR, SCOR and CCOR

2. SCORModel Use and Deliverables

3. The SCC is an independent, not-for-profit, global corporation with membership open to all companies and organizations interested in applying and advancing state-of-the-art supply chain management systems and practices. • Over 800 Company Members • Cross-industry representation • Chapters in Australia/New Zealand, Brazil, Greater China, Europe, Japan, North America, and South East Asia with petitions for additional chapters pending. • The Supply-Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference-model (SCOR) as the cross-industry standard for supply chain management

4. What is a process reference model? • Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross-functional framework Business Process Reengineering Best Practices Analysis Process Reference Model Benchmarking Capture the “as-is” state of a process and derive the desired “to-be” future state Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Characterize the management practices and software solutions that result in “best-in-class” performance Capture the “as-is” state of a process and derive the desired “to-be” future state Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Characterize the management practices and software solutions that result in “best-in-class” performance

5. SCOR Boundaries • SCOR Spans: • All supplier / customer interactions • Order entry through paid invoice • All physical material transactions • From your supplier’s supplier to your customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc. • All market interactions • From the understanding of aggregate demand to the fulfillment of each order • Returns

6. SCOR Boundaries (cont’d) • SCOR does not include: • Sales administration processes • Technology development processes • Product and process design and development processes • Some post-delivery technical support processes • SCOR assumes but does not explicitly address • Training • Quality • Information Technology (IT) administration (non-SCM)

7. Plan Return Return Source Deliver Return Return Return Return Return Return SCOR is structured around five distinct management processes Make Deliver Source Make Deliver Source Deliver Make Source Customer’sCustomer Your Company Supplier Customer Suppliers’Supplier Internal or External Internal or External SCOR Model Building Block Approach Processes Metrics Best Practice Technology

8. SCOR 8.0 – Processes Level 2 Plan P1 Plan Supply Chain P4 Plan Deliver P5 Plan Returns P3 Plan Make P2 Plan Source Source Make Deliver M1 Make-to-Stock S1 Source Stocked Products D1 Deliver Stocked Products Suppliers S2 Source MTO Products M2 Make-to-Order D2 Deliver MTO Products Customers M3 Engineer-to-Order S3 Source ETO Products D3 Deliver ETO Products D4 Deliver Retail Products Return Deliver Return Source Enable

9. SCOR Contains 3 Levels Level # Description Schematic Comments Plan 1 Level 1 defines the scope and content for the Supply Chain Operations Reference model Source Deliver Make Top Level Return Return (Process Types) Here basis of competition performance targets are set 2 A company’s supply chain can be “configured-to- order” at Level 2 from approximately30 core “process categories.” Configuration Level Companies implement their operations strategy through their unique supply chain configuration. (Process Categories) Supply Chain Operations Reference model Process 3 • Level 3 defines a company’s ability to compete successfully in its chosen markets and consists of: • Process element definitions • Process element information inputs and outputs • Process performance metrics • Best practices, where applicable • System capabilities required to support best • practices Element Level (Decompose Processes) • P3.1 Identify, Prioritize, and Aggregate Production Requirements P3.4 P3.3 Balance Production Resources with Establish Detailed Production Requirements Production Plans P3.2 • Identify, Assess, and Aggregate Production Resources Companies “fine tune” their Operations Strategy at Level 3 Companies implement specific supply chain management practices at this level Implementation 4 Not Level Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions in (Decompose Process Scope Elements)

10. Using Version 8.0 • Structure • Introduction • Plan • Source • Make • Deliver • Return • Glossary • Process Definitions • Metrics • Metrics Appendix • Best Practice Appendix • Notation • Plan (P), Source (S), Make (M), Deliver (D) • Enable is associated with a corresponding element (e.g. EP) • Levels are denoted by numbers and decimal points • P1.2 = P (Plan) 1 (Supply Chain) .2 (Identify, assess and aggregate supply chain resources)

11. (S1, D1)(SR1,DR1,DR3) Manufacturing Warehouse Warehouse Warehouse Warehouse European Supplier (S1)(SR1,SR3) (S1)(SR1,SR3) (D2)(DR1) (S1, D1)(SR1,DR1,DR3) (S1, D1)(SR1, DR3) Latin American Suppliers Other Suppliers (D1) (D1) (S1)(SR1,SR3) (S1)(SR1,SR3) (S1, D1)(SR1,DR1,DR3) Mapping material flow (S1, S2, M1, D1)(SR1,,DR1)

12. Mapping the execution processes Americas Distributors S1 SR1 D2 M2 S2 European RM Supplier SR3 S2 D1 M1 S1 D1 S1 DR1 SR1 DR1 SR1 DR1 SR1 DR3 SR3 DR3 SR3 S1 D1 S1 M1 Key Other RM Suppliers Alpha Regional Warehouses RM Suppliers ALPHA Distributors

13. Identifying Plan Activities P1 P1 P1 P3 P2 P4 P3 P2 P4 P4 P2 D2 M2 S2 European RM Supplier S2 D1 M1 S1 D1 S1 S1 M1 Key Other RM Suppliers D1 S1 Alpha Regional Warehouses Consumer RM Suppliers ALPHA Distributors

14. Supply Chain Scorecard & Gap Analysis Supply Chain SCORcard Performance Versus Competitive Population Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements Delivery Performance to 85% 90% 95% 50% Supply Chain Reliability Commit Date 63% 94% 96% 98% Fill Rates 80% 85% 90% Perfect Order Fulfillment 0% $30M Revenue EXTERNAL Order Fulfillment Lead times Responsiveness 35 days $30M Revenue 7 days 5 days 3 days Key enabler to cost and asset improvements Supply Chain Response Time Flexibility 97 days 82 days 55 days 13 days 30 days 25 days 20 days Production Flexibility 45 days Total SCM Management 3% $30M Indirect Cost Cost 19% 13% 8% Cost NA NA NA NA NA Warranty Cost INTERNAL Value Added Employee NA $156K $306K $460K NA Productivity 119 days 55 days 38 days 22 days NA Inventory Days of Supply Cash-to-Cash Cycle Time Assets 196 days 80 days 46 days 28 days $7 M Capital Charge Net Asset Turns (Working 2.2 turns 8 turns 12 turns 19 turns NA Capital)

15. Decomposing Metrics Revenue Accounts Receivable Cash Flow Perfect Order Fulfillment Cycle Time Supplier on time delivery Schedule Achievement Perfect Order Fulfillment On Time On Time Delivery Performance In Full In Full Docs Docs European RM Supplier Damage D2 M2 S2 Damage Supplier on time delivery Perfect Order Fulfillment S2 Key Other RM Suppliers D1 M1 S1 D1 S1 D1 S1 M1 S1 Alpha Regional Warehouses Consumer RM Suppliers ALPHA Consumer

16. Revenue Accounts Receivable Cash Flow Performance Measurement Perfect Order Fulfillment Perfect Order Fulfillment Goal – 95% Cycle Time Inventory Metrics Conflict Supplier on time delivery Schedule Achievement Perfect Order Fulfillment Supplier on time delivery Actual – 85% Schedule Achievement Actual – 95% Perfect Order Fulfillment Actual – 90% Perfect Order Fulfillment Actual - 85% On Time On Time Delivery Performance In Full Delivery Performance Actual – 99% In Full Docs Docs • Under-performance • Process • Systems European RM Supplier Damage D2 M2 S2 Damage Supplier on time delivery Perfect Order Fulfillment S2 • Under-performance • Process • Systems Key Other RM Suppliers D1 M1 S1 D1 S1 D1 S1 M1 S1 Alpha Regional Warehouses Consumer RM Suppliers Consumer RM Suppliers ALPHA Consumer

17. SCOR 8.0 & DCOR 1.0Changes

18. Introduction • Drivers for change • For the last 10 years, Supply Chain Council members have advanced the state of the art in supply chain management through the development and implementation of the SCOR Model. • Use of the SCOR Model in practice has generated requirements for change • The SCOR Model is being translated into multiple languages and is used as a foundation for process modeling projects, software and system solutions, as well as a framework for business decision making. • Adopters have identified opportunities to improve ease of use particularly in the areas of best practice, metrics, and inputs/outputs. • Over two years ago the Supply Chain Council recognized a growing demand by practitioners to replicate their success with SCOR in other process areas. • HP donated intellectual property to the SCC that extended the SCOR methodology to include product design and customer care. This IP provided the impetus for the Council’s work in DCOR.

19. Technical Project Team Process Task Responsibility Project Formation Concept Developed TDSC, Member, Board, RSC Call for Vounteers SCC Staff Kick-off Meeting Volunteers, Staff Charter Proposed* Volunteers ‡ TDSC Charter Review – Go/No Go TDSC Liaison assigned TDSC, Project Team TDSC Charter Developed Concepts Defined Deliverables Defined Project TeamWork Project Team Monthly Status Report † CTO Review‡ Project Team, CTO TDSC Review* TDSC, Project Team Repeat if above if necessary Deliverable detail development Proposal in SCOR or deliverable format TDSC, Project Team TDSC Review* Repeat if above if necessary SCOR change proposal TDSC Review – Approval/Rejection Present to SCORboard * Required review † Per template ‡ if deemed required by TDSC project liaison or requested by Project Team

20. Technical Development Steering Committee

21. DCOR Principals

22. SCOR Principals

23. SCOR Principals

24. SCOR Release Roadmap Version 1.0 First version of the Model, Plan, Source, Make, Deliver, metrics, best practice, and technology Version 2.0 Model modified to reconcile distinctions between discrete and process industries Version 3.1 Restructured infrastructure / enable elements. Restructuring of metrics begun – definitions of performance attributes developed. Language to support services as well as tangible goods provided Version 3.0 Model modified to enhance inputs and outputs and infrastructure elements. Specific reference to software products removed. Version 4.0 Restructuring of infrastructure enable elements completed. Returns introduced. Version 5.0 Returns processes introduced. E-business practices updated Metrics re-structuring continued Version 6.0 Retail D4, revamped MRO, Make e-biz best practices Version 6.1 Updated Return, Best Practices Version 7.0 New Level 1 Metrics, New Best Practices, Addition of 2 appendices 1997 1998 1999 2000 2001 2002 2003 2004 2005

25. Integrated Business Reference Framework Business Plan Design Plan Supply Chain Plan Customer Plan Research Design Integrate Source Make Deliver Relate Sell Price Amend Return Assist DCOR Version 1.0 Spring 2006 SCOR Version 8.0 Spring 2006 CCOR Version 1.0 Spring 2007

26. Design Philosophy • Tight Bundle • Component Models work together to support analysis, measurement, and improvement of the end-to-end product life cycle • Models used together will better support analysis and measurement of complex activities • Time to Market • Time to Volume • Loose Integration • Component Models are separable so organizations can use individual Models of interest without the others • Component Models can be separately improved based on advances in specific disciplines • Design Requirements • Hierarchical Process Structure • Metrics linked to process and traceable to business objectives • Best Practice linked to Level 3 process • Reference Models linked by metrics and inputs and outputs

27. SCOR / DCOR Process Hierarchy Level DCOR SCOR # Description Schematic Comments Plan Research Design Integrate Amend Plan Source Make Deliver Return Plan 1 Level 1 defines the scope and content for SCOR and DCOR Source Deliver Make Top Level Return Return (Process Types) Here basis of competition performance targets are set Amend Product Fallout Deficient Product Product Specs Source Make to Stock Make to Order Engineer to Order 2 A company’s supply chain or design chain can be “configured-to- order” at Level 2. Configuration Level Companies implement their operations strategy through their unique configuration. (Process Categories) MTS Source (S1) Schedule Receive Verify Transfer Authorize Payment Product Fallout (A1) Receive Issue Decompose Issue Distribute Publish Advisory Process 3 • Level 3 defines a company’s ability to compete successfully in its chosen markets and consists of: • Process element definitions • Process element information inputs and outputs • Process performance metrics • Best practices, where applicable • System capabilities required to support best • practices Element Level (Decompose Processes) • SCP3.1 Identify, Prioritize, and Aggregate Production Requirements SCP3.4 SCP3.3 Balance Production Resources with Establish Detailed Production Requirements Production Plans SCP3.2 • Identify, Assess, and Aggregate Production Resources Companies “fine tune” their Operations Strategy at Level 3 Companies implement specific at this level Implementation 4 Level Level 4 defines practices to achieve competitive advantage and to adapt to changing business conditions (Decompose Process Elements)

28. Linking Performance Attributes and Level 1 Metrics

29. Integrated Business Reference Framework - Linkages Business Plan Customer Requirements Producability, Supportability, Transportability Design Plan Supply Chain Plan Customer Plan Research Design Integrate Source Make Deliver Relate Sell Price Amend Return Assist BOM, Recipe, Specification Product

30. Appendices Technical Roadmap Glossaries Process Tables Word Cut and Paste 1 Change reflected in multiple documents Minimal Change Documentation Inconsistencies Model Hardcopy PDF PowerPoint Non-English Language Company Contributions March 2006 2 BPM Tools Used SCOR Rehost from flat files complete Short Term DCOR merge to common dB Format and Publish in Harcopy Configuration Control SW Providers Model Database BPM Tool BPM Tool Education Material Web Browsers

31. SCOR Process Tables Process Tables will remain as the core of the Model content BUT The look and feel will change

32. D1.15 D1.14 Invoice Install Product SCOR Graphics • (P2) Supply Plans • (P3) Production Plans • (P4) Deliver Plans • (S) (M) (D) Inventory • (M) Scheduled Output • (Customer) Customer Order • (Customer) Deliver Contract Terms • (Customer) Customer Replenish Signal • Routing Guide (carrier) • Rated Carrier Data (Carrier) • (Customer) Inquiry Activity graphics will remain as part of the core Model content BUT The look and feel will change D1.3 D1.7 D1.6 D1.5 D1.4 D1.2 D1.1 Reserve Inventory and Determine Delivery Date Select Carriers and Rate Shipments Receive, Enter & Validate Order Plan and Build Loads Process Inquiry & Quote Route Shipments Consolidate Orders • Scheduled Deliveries (P) • Daily Shipment Volume • Delivery Commit Date • Validated Order • (D) Consolidated Product • (D) Advanced Ship Notice • (S) (M) Scheduled Receipts • (D) Inventory D1.8 D1.9 D1.11 D1.10 D1.13 D1.12 Load Vehicle Generate Ship Docs From Make or Source Receive & Verify at Customer Site Ship Product Receive Product Pick Product Pack Product • (D) Inventory • Shipping Documents (carrier, cust, gov.) • Delivered End Items (cust) • Payment

33. Integrated Business Reference Framework Release Plan 2001 DCOR Strawman (Version 0) Posted CCOR Strawman (Version 0) Posted SCOR Version 4.1 2006 SCOR Version 8.0 Best Practice Update Metrics Update Restructure – dB Host DCOR Version 1.0 Best Practice Update Metrics Update Input/Output Update Business Validation CCOR Strawman (Version 0) Validation SCOR Version 9.0 Best Practice Update Metrics Update Input/Output Update Risk Management Integration DCOR Version 2.0 Best Practice Update Metrics Update Input/Output Update Integration CCOR Version 1.0 Best Practice Update Metrics Update Input/Output Update Business Validation Integration 2007 Integrated Business Framework Version 1.0 Metrics Best Practice Inputs / Outputs 2008 SCOR Version 10.0 Best Practice Update Metrics Update DCOR Version 3.0 Best Practice Update Metrics Update Input/Output Update Business Validation CCOR Version 2.0 Best Practice Update Metrics Update Input/Output Update Business Validation

34. SCOR Version 8.0 Changes

35. DCOR Version 1.0

36. Rehost and Model Integration

37. Training • SCOR Framework 8.0 – Rewrite • SCOR Implementation • SCOR Convergence – Six Sigma/Lean • SCOR Performance Based Logistics (PBL) • SCOR for Teams • DCOR

38. www.supply-chain.org info@supply-chain.org