The Supply Chain Operations Reference (SCOR) model is a process reference model originally developed and endorsed by the Supply Chain Council, now a part of ASCM, as the cross-industry, standard diagnostic tool for supply chain management. The SCOR model describes the business activities associated with satisfying a customer's demand, which include plan, source, make, deliver, return, and enable. Use of the model includes analyzing the current state of a company's processes and goals, quantifying operational performance, and comparing company performance to benchmark data. SCOR has developed a set of metrics for supply chain performance, and ASCM members have formed industry groups to collect best practices information that companies can use to elevate their supply chain models.
This reference model enables users to address, improve, and communicate supply chain management practices within and between all interested parties in the extended enterprise.Poluha, Rolf G. Application of the SCOR model in supply chain management. Cambria Press, 2007.
SCOR was developed in 1996Douglas M. Lambert. Supply Chain Management: Processes, Partnerships, Performance. 2008, p. 305.Peter Bolstorff, Robert G. Rosenbaum (2012). Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR. p. 9 by the management consulting firm PRTM, now part of PricewaterhouseCoopers LLP (PwC), and AMR Research, now part of Gartner, and endorsed by the Supply Chain Council, now part of ASCM, as the cross-industry de facto standard strategy, performance management, and process improvement diagnostic tool for supply chain management.
SCOR DS The SCOR Digital Standard (DS) was released in 2019 and updated in 2022 to digitize the model to make it more accessible and then to better describe dynamic, asynchronous digital supply chains, rather than the linear system presented by previous versions of the model. The 2022 update restructured the six major processes into the following processes: Plan. Source. Transform — essentially an expanded version of Make that applies to more types of manufacturers and service providers. Order — the first part of the previously-combined Deliver process. Fulfill — the second part of the previously-combined Deliver process. Return. Orchestrate — a new focus on strategy, business rules, technology and human resources and their roles in supporting efficient supply chains.
This new version of the model is illustrated as a type of infinity loop which reflects the modern reality of supply chain networks, rather than linear supply chains, and with "no artificial starts or stops from process to process".ASCM press release quoted by Supply Chain Digest in Supply Chain News: SCOR Model Undergoes Major Revamp, published on 27 September 2022, accessed on 7 October 2024 SCOR DS puts greater emphasis on collaboration, visibility and the effects of market drivers. The SCOR DS model is currently available free of charge.
SCOR 1.0 - 12.0 Pillars The original version of the SCOR model was based on four major pillars: Process modeling and re-engineering. Performance measurements. Best practices. Skills.
Process modeling By describing supply chains using process modeling building blocks, the model can be used to describe supply chains that are very simple or very complex using a common set of definitions. As a result, disparate industries can be linked to describe the depth and breadth of virtually any supply chain.
SCOR model 12.0 was based on six distinct management processes: Plan, Source, Make, Deliver, Return, and Enable.L. Puigjaner, A. Espuña (2005). European Symposium on Computer-Aided Process Engineering-15. p. 1234.James B. Ayers (2006). Handbook of Supply Chain Management, Second Edition. p. 263
Plan – Processes that balance aggregate demand and supply to develop a course of action that best meets sourcing, production, and delivery requirements. Source – Processes that procure goods and services to meet planned or actual demand. Make – Processes that transform product to a finished state to meet planned or actual demand. Deliver – Processes that provide finished goods and services to meet planned or actual demand, typically including order management, transportation management, and distribution management. Return – Processes associated with returning or receiving returned products for any reason. These processes extend into post-delivery customer support. Enable – Processes being associated with the management of the supply chain. These processes include management of business rules, performance, data, resources, facilities, contracts, supply chain network management, managing regulatory compliance, and risk management. The process is implemented in Version 11.0, released in December 2012.
With all reference models, there is a specific scope that the model addresses. SCOR is no different, and the model focuses on the following:
All customer interactions, from order entry through paid invoice. All product (physical material and service) 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.
SCOR does not attempt to describe every business process or activity. Relationships between these processes can be made to the SCOR model and some have been noted within the model. Other key assumptions addressed by SCOR include training, quality, information technology, and administration (not supply chain management). These areas are not explicitly addressed in the model but rather assumed to be a fundamental supporting process throughout the model.
SCOR provides three-levels of process detail.W. Benton (2013) Supply Chain Focused Manufacturing Planning and Control. p. 291 Each level of detail assists a company in defining scope (Level 1); configuration or type of supply chain (Level 2); and process element details, including performance attributes (Level 3). Beyond level 3, companies decompose process elements and start implementing specific supply chain management practices. It is at this stage that companies define practices to achieve a competitive advantage, and adapt to changing business conditions.
SCOR is a process reference model designed for effective communication among supply chain partners. As an industry standard, it also facilitates inter- and intra- supply chain collaboration and horizontal process integration by explaining the relationships between processes (i.e., Plan-Source, Plan-Make, etc.). It also can be used as a data input to completing an analysis of configuration alternatives (e.g., Level 2) such as: Make-to-Stock or Make-To-Order. SCOR is used to describe, measure, and evaluate supply chains in support of strategic planning and continuous improvement.
The picture shows different levels of the Make process. This means that the focus of the analysis will be concentrated on those processes that relate to the added-value activities that the model categorizes as Make processes.
Level 2 includes 3 sub-processes that are children of the Make parent. These children have a special tag: a letter (M) and a number (1, 2, or 3). This is the syntax of the SCOR model. The letter represents the initial of the process. The numbers identify the scenario, or configuration.
M1 equals a "Make Build to Stock" scenario. Products or services are produced against a forecast. M2 equals a "Make Build to Order" configuration. Products or services are produced against a real customer order in a just-in-time fashion. M3 stands for the "Make Engineer to Order" configuration. In this case a blueprint of the final product is needed before any make activity can be performed.
Level 3 processes, also referred to as the business activities within a configuration, represent the best-practice detailed processes that belong to each of the Level 2 parents.
The example shows the breakdown of the Level 2 process "Make Build to Order" into its Level 3 components identified from M2.01 to M2.06. Once again this is the SCOR syntax: letter, number, dot, and serial number.
The model suggests that to perform a "Make Build to Order" process, there are 6 more detailed tasks that are usually performed. The model is not prescriptive, in the sense that it is not mandatory that all 6 processes are to be executed. It only represents what usually happens in the majority of organizations that compose the membership base of ASCM.
The Level 3 processes reach a level of detail that cannot exceed the boundaries determined by the industry-agnostic and industry-standard nature of the SCOR model. Therefore, all the set of activities and processes that build, for instance the M2.03 "Produce & Test" process, will be company-specific and therefore fall outside the model's scope.
Performance measurements The SCOR model contains more than 150 key performance indicators that measure the performance of supply chain operations.Roland Zimmermann (2006), Agent-based Supply Network Event Management. p. 58. These performance metrics derive from the experience and contribution of the association's members. As with the process modeling system, SCOR metrics are organized in a hierarchical structure: Level 1 metrics are at the most aggregated level and are typically used by top decision-makers to measure the performance of the company's overall supply chain. Level 2 metrics are primary, high-level measures that may cross multiple SCOR processes. Level 3 metrics do not necessarily relate to the SCOR Level 1 processes: Plan, Source, Make, Deliver, Return and Enable.
The metrics are used in conjunction with performance attributes. The performance attributes are characteristics of the supply chain that permit it to be analyzed and evaluated against other supply chains with competing strategies. Just as you would describe a physical object like a piece of lumber using standard characteristics (e.g., height, width, depth), a supply chain requires standard characteristics to be described. Without these characteristics it is extremely difficult to compare an organization that chooses to be the low-cost provider against an organization that chooses to compete on reliability and performance.
One of the key aspects that needs to be considered is that the performance measurement and thus benchmarking is done at supply chain level and not at the organizational level. Supply chains are identified with an organization based on customers and products. An organization that is offering multiple products will have multiple supply chains. In fact the supply chain to deliver the material and then return the material from customers will also be different.
Then the supply chain that needs to be improved is identified. This could be based on multiple parameters, such as most or least profitable. Once the supply chain is identified, then only the performance measurement and benchmarking are done. Please note SCOR might not have the benchmarking data for all kinds of supply chains. For example, SCOR currently doesn't have data for the catering supply chain in the airline industry. The point here is that SCOR is for improving supply chains in an organization, and the premise is that if a single supply chain is improved, it has ripple effects on the whole organization.
Associated with the performance attributes are the Level 1 metrics. These Level 1 metrics are the calculations by which an implementing organization can measure how successful they are in achieving their desired positioning within the competitive market space.
The metrics in the model are hierarchical, just as the process elements are hierarchical. Level 1 metrics are created from lower-level calculations.