Supply-chain Operations Reference - An Example of How To Use SCOR

An Example of How To Use SCOR

The example is of a simple supply chain.

The picture alone cannot adequately describe what production strategy the manufacturing company has decided to adopt. It is no easier to figure out how the material is supplied from the two suppliers. For example, is the material delivered against a forecast or is it pulled based on real consumption?

Even in its apparent simplicity this picture does not represent a standard. Without a more extensive description the picture does not help interpret what is actually happening in this supply chain. Descriptive text could be added to the images to help explain the whole process.

SCOR improves on this by offering a "standard" solution. The first step is to recover the Level 1 and Level 2 process descriptions.

In order to keep the example simple and direct, it focuses only on the central processes: Source, Make, and Deliver. This reflects the general practice of members who focus first of all on these three process scopes. Only in a second step do they apply Plan and Return to map all their supply chain processes.

The description of the manufacturing company reads “Manufacturing company That Produces against a 15-day forecast”. The key word here is “forecast”. What is the SCOR scenario that resembles a production based on forecast? The answer is, M1 (Make build to stock).

How does the company supply materials from the Far East? The box reads “Supplies raw materials in bulks from the Far East against a monthly forecast”. “Forecast” is again the keyword. How a process of supply based on a forecast be represented? The process is “Source”. The picture from the SCOR manual shows that the process S1 “Source Stocked Product” exactly corresponds to the needs of this example.

With the French supplier, the company “Pulls components from France based on production volumes”. The key word here is “pulls”, as it describes a "just-in-time" strategy adopted with this supplier. What is the syntax used by SCOR to represent a pull-mode supply? The Source process descriptions in SCOR 8.0 offers a description that resonates well with the needs of the example: S2 “Source Make-to-Order Product”.

Lastly, the distribution strategy chosen by the manufacturing company is “Ship weekly finished goods to a Distribution Warehouse based in Central Europe”. The description suggests that a weekly shipment is closer to a forecast-based rather than a just-in-time policy. A shipment is a delivery process, so we must look under the “Deliver” tree. By browsing the Level 2 processes in the model we must look for a process configuration that corresponds to the forecast-based policy. We find that in D1 “Deliver Stocked Product”.

The SCOR paradigm demands that whenever a unit of the chain supplies, there must be some other unit that delivers. Similarly, any delivery process requires a correspondent supply process at the other end of the link. So the mapping of the processes of the supply chain is completed, and can be depicted as in the following illustration.

We see now that we don’t need any more the descriptions in the boxes. By just reading the SCOR syntax we immediately capture the salient processes that occur in this chain.

The syntax of the model allows “to speak the same language”. As a matter of fact, if we were to use the “orthodox” representation of a SCOR mapping, we would build a “thread diagram” like the one in the below picture. This is perfectly correspondent to the initial geographical picture, but it contains much more embedded information (we can call it a meta-model) in a more structured and elegant way. The arrows themselves represent the direction of the material flow.