Supply chains require savvy operators, supervisors and leaders with knowledge about the global standards and practices to move the needle on supply chain performance. Using the supply chain operations reference (SCOR) model can help organizations improve the effectiveness of supply chain management and make dramatic and rapid improvements in processes.
The supply chain operations reference (SCOR) model is a tool used by supply chain professionals to analyze, evaluate and optimize various processes that work to keep supply chains running efficiently.
Originally developed in 1996 as a tool for improving strategy, processes and performance, the SCOR model focuses on six major processes: plan, source, make, deliver, return and enable. By using common definitions that carry through to all facets of the supply chain world, SCOR creates a standard by which supply chain professionals can gauge the maturity and effectiveness of a particular network and how it supports the goals of the organization.
Customer interactions from order entry through paid invoice.
Physical material transactions that occur from the supplier's supplier to the customer's customer, including transactions for equipment, supplies, spare parts, bulk products and software
Market interactions from the understanding of aggregate demand to the fulfillment of each order.
Taking the legacy SCOR 12.0 model to the next level, SCOR DS introduces 19 emerging practices to address the growing need for digitization of supply chains. The SCOR DS is a platform-agnostic framework linking business processes, metrics, best practices and technology into a unified structure.
There are six major processes that the SCOR model recognizes:
Planning includes key activities such as compiling information about resources, outlining requirements, managing the balance between requirements and resources, as well as identifying and correcting gaps or other issues pertaining to demand.
Sourcing includes ordering and delivering materials, products or services, as well as creating and issuing purchase orders, receiving invoices from suppliers and coordinating the physical storage of products and other inventory.
Making refers to any practice of material conversion and includes assembly, maintenance, recycling and more. Determining whether to repair, recycle or refurbish items also falls under this category.
Delivery describes activities pertaining to incoming orders from customers. Receiving and validating orders, maintaining orders, scheduling deliveries and arranging shipping, as well as issuing invoices to customers, all fall under this umbrella.
Return includes everything involved in item returns, such as identifying and making decisions about what should be returned, managing the scheduling of returned items, and identifying how they will be shipped and received.
Enable describes activities that directly influence holistic supply chain management. Everything from managing facilities, data, resources, risk, performance, procurement, contracts, compliance and more is recognized as part of this process.
The six major processes above represent the first level of SCOR metrics and are then followed in hierarchical order by three further levels. The differentiation of these levels provides supply chain professionals with an implementable framework along with high-level metrics to track performance.
The goal at Level 1 is to define the scope with a focus on each of the six major processes; plan, source, make, deliver, return and enable.
Level 2 represents the configuration of the supply chain. This deals with the evaluation of high-level metrics across the six major processes.
Level 3 focuses on process element details and works to identify essential activities within the supply chain.
For a deeper dive into SCOR model processes and metrics, download the SCOR introduction and front matter.
By combining elements of business process engineering, leading practices, benchmarking, people skills and a variety of key metrics into a succinct framework, SCOR helps supply chain organizations pinpoint areas within their core processes that require optimization and enhancement to further organizational goals.
Results are consistent. When you implement SCOR, you’re maximizing process efficiency and eliminating dysfunction. Typical results include:
Interested in learning how to apply SCOR to your supply chain operations?
Telecommunications giant Ericsson AB originally implemented the SCOR model back in 1997 — one of the first organizations to do so. As a result of this early move, Ericsson AB has been able to improve its supply chain performance substantially, increase operational control, enhance the quality of its data, develop more efficient methods for measuring progress and identify powerful technology solutions.
ASCM’s SCOR Professional (SCOR-P) program enables individuals to develop a standard within their organization using SCOR metrics to manage, measure and enhance the performance of their supply chains. From establishing benchmark data and measuring the effectiveness of supply chain processes to presenting practical methods for resolving issues, these trained individuals are able to significantly advance their global supply chains.
