Tutorials Supply ChainThe Supply Chain Operations Reference Model, commonly known as SCOR, is a diagnostic tool for the Supply Chain Management. It lets the users know the various processes involved in a business and the important things that lead to customer satisfaction. The Supply Chain Operations reference model has been developed by the SCC, or the Supply Chain Council.
The SCOR Model is based on three very important factors. Another note to the reader here is that there are many theories written about the Supply Chain Management functionality, and the Supply Chain Operations Reference Model. Each theory very convincingly explains the model. Different theories quote different numbers of factors to explain the process to the reader. How ever many steps or pillars there are, when condensed they become these three important factors.
The first factor which is crucial to the Supply Chain Operations Reference model is the Process modeling factor, and the others are the performance measurement and best practices sharing. These could be called the pillars that hold the whole Supply Chain Operations Reference model on them. Why are these three the most important factors? Because the entire process is customer satisfaction centric. Right from the beginning of the process to the delivery, everything is geared towards keeping customer in mind. These factors design a comprehensive model for the business to successfully carry out their Supply Chain Management functions.
A business process and its functionalities are the building blocks for any business. These building blocks are very complex to understand, so the process modeling pillar eases these blocks and uses them to explain the business process. It standardizes the whole process using a familiar set of definitions and explanations.
There are various management processes in the SCOR model. There is a total of five, and they are Plan, Source, Make, Deliver and Return. These five processes further explain the business model and make it easy to understand. The Supply Chain Operations Reference Model however does not attempt to explain each and every functionality of the business model. What it attempts is to make itself a reference guide which standardizes all procedures so that they are easily understood. There is a subtle variation that exists for all businesses to comprehend.
The SCOR Model deals with many important factors of a business. The first one is Customer interaction, right from order entry to invoicing to delivery, and the second is all the products and transactions, from end to end from supplies, suppliers, and equipment. Every tangible form of material is all about market demands, right from understanding demand to the supplying of goods. The three levels for a company and a process reference model is developed to improve a company’s communications and make it work as a better business model.
The performance measurement model in the Supply Chain Operations Reference model acts as a feeder for information, evaluation and feedback. It basically deals with a lot of data which helps in the assessment of the business model. The data is disintegrated at every level of the process, and even the metrics that are used to measure the performance of the Supply Chain Operations Reference model is hierarchical. The metrics at different levels are either lower or superior to each other.
Basically these metrics can be divided into Level 1, level 2... so on and are used along with the attributes of the performance measurement model. Again, these levels cannot be related directly to the levels in the SCOR Model such as Plan, Make, Source, Deliver and Return. These levels of metrics are used only in the performance measurement model. People exploring the SCOR Model and going through the Performance measurement model should be aware that these metrics are hierarchical in nature. An easy example to give would be that the Delivery performance is measured by taking into account the number of products delivered on time and in full to the customer.
After achieving the first two steps and understanding the process and measuring of the performance, it becomes apparent as to where the system lacks and what it is deficient of. Once these gaps are understood, it is time to introduce fillers for those gaps. These fillers have to be tested prior to their inception. They practically have to have a 100% ratio of success. How do we find such fillers? The best way to do that is with Best Practice Sharing. The Best Practice Sharing model accumulates information of what worked best with a business, and this is not limited to one business alone, but several businesses.
Therefore, the Supply Chain Operations Reference model has the whole industry experiences and successes to study and derive solutions from. Though it is not necessary for what has worked for others to work for you, the SCOR Model doesn’t entirely conceptualize on one theory of success. It studies multiple theories and concludes with every individual type of business. The SCOR Model here understands the current model in an ‘as-is ‘state, and using the Best Practice Sharing Model brings about futuristic changes.
Next Page: SCOR Model Different Levels
