I recently attended the Sales & Operations Planning Innovation Summit organized by the IE Group. One of the first speakers and moderator for the first day’s sessions was Rich Sherman, Director North America of the Supply Chain Council. Rich’s presentation made me realize that it’s been a long time since I last wrote about the Supply Chain Council and that I was not up to date on some of the new enhancements made to its “Supply Chain Operations Reference” (SCOR) model.
So, my goal for today is to quickly explain the Supply Chain Council, the SCOR model, and its recent enhancements. I’d like to thank Rich for sending me his presentation from the IE event. The figures below come from his presentation.
The Supply Chain Council is a not-for-profit association comprised of more than 800 member companies throughout the world. The council develops and maintains a supply chain framework. This framework allows companies to model their supply chain, associate key metrics with particular parts of the process, understand the human resource requirements associated with a process, understand the best practices and enabling technologies associated with a process, and perhaps most importantly, benchmark themselves on key metrics against their peers.
At the highest level, the model is organized around five primary supply chain processes: Plan, Source, Make, Deliver and Return.
But the model gets quite detailed. The top level model blows out into more granular sub-models, with each level linked to the level above it.
The top three levels of the SCOR model contain over 200 process elements, 550 metrics, and 500 best practices. An example of a best practice is sales and operations planning. Below you see a sample metric that would be quite useful in assessing a company’s S&OP process.
In recent years the model has been enhanced by the addition of risk and environmental management and human resource (HR) skills requirements for each process. Of course, “Green” has become a major focus in SCM. But I’m even more excited about the HR enhancements to the model. SCOR now provides a framework that defines “skills, experience, aptitude and training” (SEAT) requirements that are associated with executing each process efficiently and effectively.
Another recent enhancement is SCORmark. SCORmark is an online tool that enables members to assess how their supply chain performance compares with that of selected peer groups. In doing so, they can set more reasonable performance goals for their organization, calculate performance gaps against a global database, and develop company-specific roadmaps for closing those gaps.
In conclusion, I’m a big supporter of the Supply Chain Council and the SCOR model. I think there is tremendous value in participating. I can’t imagine why any company would not want access to the metrics and benchmarking information that come with membership. And there is evidence that participation brings value. SCOR members have outperformed the Dow Jones Industrial Average Index and Standard & Poor’s 500 Index for many years.