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  1. SCOR Experience at Intel Presentation for Supply Chain Council April 12, 2000 George W. Brown Intel Worldwide IT, Strategy & Technology

  2. Agenda • Objectives for Presentation • Context for Supply Network Improvement at Intel • SCOR Pilot Project • Supply Network Task Force • Supply Network Tools Task Force • Pilot Scope and Deliverables • Lessons Learned and Observations • SCOR/Tool Update • Summary of Potential Wins

  3. Objectives for Presentation • Highlight Intel’s Emphasis on Supply Network Management • Summarize Our SCOR Pilot Experience • Share Our Learning's and Observations • Recommend Improvements in SCOR/Tools

  4. Multiple Views on Supply Chain Definition ... DISCOVER DEVELOP DEPLOY Supplier Manufacturer Customer Supply chain = Activities within and between each circle Supply chain = Entire context of the product life cycle Multiple Suppliers Multiple Production Operations within a Business Multiple Customers Most Supply Chains consist of many “threads”

  5. Lead to Supply Network Thinking and ... • FUTURE...Integrated Supply Network Performance is a Driver of Competitiveness. • Competition is no longer just between individual firms, but is between the supply networks that design, develop, produce and deliver products to the end customer. • NEW COMPUTER INDUSTRY PARADIGMS • SPEED .....Internet Time • FLEXIBILITY .....Quick TPT • COST ..... Highly Competitive Consumer Market

  6. … a Common Vision • Be the Leader in Supply Network Management • Operate the right multiple supply networks driven by business needs • Execute each network as a single, virtual enterprise enabled by the Internet

  7. … and Supply Network Goals • Drive Cycle Time Reduction in all our businesses across the Supply Networks • Design & Implement Agile/Flexible Supply Networks

  8. Supply Chain Task Force Formed • To establish a methodology for how we analyze different business Supply Networks • To better identify which cycle time CSIs we should target • To assess the relative impact (and cost) of improving cycle time through variation of different portions of our overall supply chain • To improve efficiency and effectiveness of targeted supply chain

  9. … and a Supporting Supply Chain Tools Task Force • To evaluate tools and methodologies to support supply chain improvements • To support the SCOR Model/Methodology • Provides structure and common language including definition of process steps and metrics to model supply chain • Reference Model provides an archetype to configure supply chain • Consistency of definition allows for effective evaluation • With appropriate Tool, Time invested can yield value added results • To explore integration with other planning and business process modeling activities

  10. Stakeholder Briefing The SCOR Tool Assessment Process SCOR Pilot • SCOR and Tool Training • Apply SCOR methodology • Plan tool/methodology improvements Preliminary Assessment • Analysis of SCOR • Identify options • Make tool selection for pilot Formalize the Process Complete Selection • Factor in new SCOR requirements • Identify Stakeholders • Assimilate all requirements • Make recommendation decision • Prepare propagation plan

  11. Plan Source Make Deliver Deliver D1 Deliver Stocked Products D2 Deliver Make-to-Order Products D3 Deliver Engineer-to-Order Products D0 Deliver Infrastructure ARIS EasySCOR utilized for SCOR Modeling Level One in EasySCOR Modeler Level Two in EasySCOR Modeler Level Three in EasySCOR Modeler D1.7 D1.6 D1.5 D1.4 D1.3 D1.2 D1.1 D1.8 D1.9 D1.10 D1.11 D1.13 D1.12

  12. SC Task Force Sets up 1st SCOR Pilot Pilot Mission: • Identify areas for improvement in customer service and internal supply chain efficiency • Pilot use of Supply Chain Methodology and Tool(s) for Intel • Document high level supply chain model guidelines for similar businesses Business Area Characteristics: Global in Source, Make and Deliver; represents a fractional portion of overall business; only one product type taken under consideration. Supply Chain Characteristics: Less than cost effective and/or customer responsive as is desired. Traditional business model does not always support the business area needs. Some of the current ‘work around’ processes are not sufficiently efficient and/or robust.

  13. Identify team , charter, mission and scope SCOR Pilot Process Develop Enterprise Supply Chain Scorecard Identify Business Improvement Targets Baseline Existing Baseline Processes Identify Performance Improvements Define Scorecard SCOR and Tool Training Develop AS IS model Cross- Functional Team: Core Team:Transportation, Finance, Assembly and Test Manufacturing, Warehouses, Materials, Strategic Logistics, Biz Operations Tool/Methodology Support Team:IT Strategy &Technology (ARIS EasySCOR), ATM Business Process, Corp Logistics (Manugistics Navigator) Extended Team/Consultants:Geography, Sys. Mfg., IDS Scheer Identify metrics and gaps Refine AS IS Model Gather Data for AS IS /TO BE Review models for supply chain optimization Develop TO BE models and identify gaps Plan supply chain optimization strategies

  14. SC Task Force Deliverables • Document Pilot Supply Chain • Document current Supply Chain process improvement efforts in Pilot business area • Identify & “Go Do” short-term improvements • Identify, get support & identify owners for long-term improvements • Summarize findings and learnings for using Supply Chain Methodology and Tools • Document guiding Supply Chain principles for “Pilot-Like” businesses • Document learnings and BKMs on managing a Supply Chain taskforce

  15. As-Is Configured in EasySCOR Suppliers Supplier Suppliers Assemble/ Package Distribution Centers Geo Ports of Entry Americas---> Europe---> Asia--->

  16. SCOR Metrics Assessed at Level I & II PF = Production Flexibility, TLC = Total Logistics Cost, CCT = Cash-to-Cash Cycle Time, DP = Delivery Performance; AT = Asset Turns; xx = no tie; xx = tie

  17. SCOR Elements Considered for Fit Level III

  18. Alternatives/Opportunities Evaluated • We developed our own process for first-pass evaluation of business improvement opportunities • Evaluation helped prioritize opportunities for more rigorous analysis through simulation and optimization studies

  19. Observations on Our Application of SCOR Methodology • Common language and structure enabled quick assimilation of unfamiliar business process across supply chains and within supply chain • SCOR metrics stimulated good thought process toward development of indicators • Used SCOR model as a framework to model business process • Balanced customization of indicators and compliance with SCOR metrics • Matched the level of detail to the project objective(s)

  20. Observations on Data Gathering • Spend time identifying ‘right’ metrics to measure the business-- very time consuming, don’t underestimate! • Recognize that the level of detail of information and analysis should match the objective of the taskforce • Would have been nice to do benchmarking but limited time and ability to make direct comparisons made it difficult • Need to include inventory/capital costs in model to be comprehensive • Validating labor and handling costs has value beyond Pilot • Modeling for a complex network requires significant effort to baseline & up-date-- but there is benefit in optimizing several factors simultaneously

  21. Learnings from SC Task Force • Introduce SCOR Methodology and/or Tools early in team process • Begin data population of As-Is early & allow a minimum of 1 month for data population and 1 month for validation • Mapping of Level II metrics to Level I indicators is highly subjective and potentially time consuming • Positioning of Plan elements is difficult to align with operational experience and is non-intuitive • Methodology provides the structure to define the current and optimized business process but not the “how” for successful implementation-- need more support in this area. • Need to have capability to customize metrics and not force fit SCOR metrics

  22. Intangible Benefits from Pilot • Big benefit has been raising the knowledge level of the entire team about the business, supply chain processes and solidifying relationships… intangible but real and powerful! • Provides structure and common language including definition of process steps and metrics to model supply chain • SCOR proliferation is gaining support • Larger SCOR projects under way

  23. SCOR plus Enterprise Information Architecture = Biz Process Repository Biz Process Levels Template Supply Chain SCOR Biz Drivers Function Process Procedure Task Information Architecture • Provides details about Intel business process relationships Biz + Tech-nology Infra-structure R/3 & APO Ref. Models • Process improvement methodology • Generic, uses archetypes • Best practices and metrics Biz Function Scope

  24. SCOR applied to B2B e-Commerce • Support the Sub-contractor Direct Ship project • Supply chain improvement project from SCOR Pilot • B2B scenario linked to EAI • Leverage SCOR to develop a BKM around e-business scenario modeling • Start with supply chain models • Refine the model representation of B2B scenarios • Drill down to the interchange process specification level • Perform SCOR-based simulation • Explore mapping of SCOR to the Rosettanet • Work with both the Supply Chain Council and RosettaNet • Siemens is committed in a joint effort • Currently developing a Value Proposition statement and pilot plan • Internal review process will precede SCC/Rosettanet proposal

  25. Start with Supply Chain Models Processing in the 3PF Scenario Planning the SO Scheduling the Delivery Executing the Delivery Planning Scheduling Level III Execution

  26. Refine the Models for B2B Scenarios 3PF Planning/Scheduling B2B 3PF Shipping B2B

  27. OEM Importer Dealer Vehicle Specification/ Search Requestvia Internet Seller Subcontractor Vehicle Locating and Allocation ReservationPlanning OrderManagerment Order Processing Sales Order Shipping Production Order Tracking Export/ Transport Shipment Tracking Transport Control Goods ReceiptProcessing Drill into Interchange Specification IDS Scheer E-Business Scenarios will be used to visualize the flow of communication between business participants

  28. Run simulation Define products Define resources Perform SCOR-based Simulation Use eSCOR for tpt/cost analysis Transfer ARIS Model into Gensym eSCOR

  29. Potential Big Wins for SCOR BKM • Facilitate mapping of Level II & III metrics to Level I indicators • Make positioning of PLAN elements more intuitive • Provide a “how-to” guidelines for applying SCOR beyond configuration analysis • Drag and Drop SCOR modeling • Cost/TPT analysis through simulation • SCOR-based BKM for B2B modeling • Visualize SCOR metrics through integrated performance monitoring

  30. Questions?