Supply chain management (SCM) is a critical focus for companies that sell products, services, hardware, and software. The supply chain includes everything involved in the flow of goods from a business to its customers, clients, or other businesses. It’s not something that can be set up and left alone — your supply chain needs to be regularly evaluated so it stays efficient and productive. That’s where the SCOR model comes in.
SCOR model definition
The supply chain operations reference (SCOR) model is designed to evaluate your supply chain for effectiveness and efficiency of sales and operational planning (S&OP). SCM is complex, and S&OP implementation can be difficult, but the SCOR model is intended to help standardize the process and create a measurable way to track results. It works across industries using common definitions that apply to any supply chain process. Using the SCOR model, businesses can judge how advanced or mature a supply chain process is and how well it aligns with business goals.
Originally developed in 1996 by management consulting firm PRTM, SCOR is endorsed by the Supply-Chain Council, which is now part of the Association for Supply Chain Management (ASCM), formerly known as APICS. The original SCOR framework was developed by AMR Research and consulting firm Pitiglio, Rabin, Todd and McGrath (PRTM); and it was vetted by companies such as Intel, IBM, Rockwell Semiconductor, and Proctor and Gamble. The SCOR framework was designed to help streamline the language used to describe supply chain management, categorizing it into four processes: plan, source, make, and deliver — the return and enable steps were added later. The most recent version of the framework, SCOR 12.0, was released in 2017 by ASCM.
The updated version includes more “emerging drivers of supply chain success,” covering topics such as omnichannel, metadata, and blockchain, according to the ACSM. The framework was modernized so that best practices better align with digital strategies, including new training information and integrated sustainability standards using the Global Reporting Initiative (GRI). The Digital Capabilities Model (DCM) and the SCOR digital standard (SCOR DS) were also released in 2019 to address the growing need for digitization in the SCOR model.
SCOR’s six primary processes
As a framework, SCOR focuses on all customer interactions from the moment an order is placed until the invoice is paid. That includes all material and services needed to complete transactions, including supplies, parts, software, and equipment. Market interactions are also considered a part of the model because they help establish demand.
The processes defined in the SCOR framework are examples of what commonly takes place in SCM. Your business priorities might differ, and some steps may be redundant or irrelevant to your goals. But most businesses should find SCOR useful in organizing their supply chain — the framework uses standardized, common definitions so it can be adapted for simple or complex supply chains across any industry.
The SCOR model is based on six management processes:
Plan: Planning processes include determining resources, requirements, and the chain of communication for a process to ensure it aligns with business goals. This includes developing best practices for supply chain efficiency while considering compliance, transportation, assets, inventory, and other required elements of SCM.
Source: Source processes involve obtaining goods and services to meet planned or actual market demand. This includes purchasing, receipt, assay, and the supply of incoming material and supplier agreements.
Make: This includes processes that take finished products and make them market-ready to meet planned or actual demand. It defines when orders need to be made to order, made to stock, or engineered to order and includes production management and bill of materials, as well as all necessary equipment and facilities.
Deliver: Any processes involved in delivering finished products and services to meet either planned or actual demand fall under this heading, including order, transportation, and distribution management.
Return: Return processes are involved with returning or receiving returned products, either from customers or suppliers. This includes post-delivery customer support processes.
Enable: This includes processes associated with SCM such as business rules, facilities performance, data resources, contracts, compliance, and risk management.
SCOR model metrics and performance measurements
There are three levels used to measure supply chain performance. These levels help standardize supply chain performance metrics so that companies can be evaluated against other businesses, even if they’re operating differently. A smaller organization can be compared to a bigger organization, or businesses can judge supply chain performance against companies in other industries.
There are over 250 SCOR metrics in the framework, categorized against five performance attributes: reliability, responsiveness, agility, costs, and asset management efficiency. Businesses use these to establish requirements for the supply chain by figuring out which performance attributes to prioritize and which areas the business can perform at an average pace.
The three levels include:
- Level 1: Defining scope, including geographies, segments, and context. At this level, the focus is on the six main process configurations: plan, source, make, deliver, return, and enable.
- Level 2: Configuration of the supply chain, including geographies, segments, and products. At Level 2, metrics are high level and evaluated across multiple SCOR processes. This level includes subtype categories that fall under the “parent” categories found in Level 1.
- Level 3: Process element details, identifying key business activities within the chain. At this level, you can associate any Level 2 process or subcategory with a Level 3 process.
SCOR Digital Capabilities Model and Digital Standard
In 2019, the ASCM, along with Deloitte Consulting, released Version 1 of the Digital Capabilities Model (DCM), the objective of which is to help supply chain professionals develop digital supply networks using a reference model. The DCM helps organizations build and design the digitally enabled capabilities they need in order to “transform their linear supply chains into a set of dynamic networks.”
Each digital DCM capability is mapped to elements in the SCOR Digital Standard (SCOR DS), a platform-agnostic framework that links business processes, metrics, best practices, and technology into one streamlined format. The SCOR DS introduced 19 emerging practices to the SCOR 12.0 model to further address the “growing need for digitization of supply chains.” Digital capabilities have complicated supply chain networks, requiring a shift from focusing on “sequential chains” to “concurrent networks.” With the DCM, linear supply chains can be transformed into sets of dynamic networks using digitally enabled solutions.
The DCM’s six main capabilities:
- Connected customer: This capability enables companies to improve customer engagement throughout customer, product, and service life cycles. It includes customer experience, connected field services, monitoring and insights, intelligent product tracking, customer issue management, and product as a service.
- Product development: This capability includes developing and managing products and services that adapt to the customer experience and can be transformed based on real-time data. It also includes product and portfolio management, product platform architecture and systems engineering, digital development, product development collaboration, and configuration management.
- Synchronized planning: This capability integrates strategic business goals, financial objectives, and tactical supply network plans to “create a connected, concurrent, and synchronized business plan.” It’s aimed at creating faster cross-functional decision-making, enhanced customer service, and real-time collaboration. It includes enterprise plan reconciliation, supply network design, portfolio life cycle planning, intelligent demand management, responsive demand-supply matching (RDSM), and dynamic flow optimization.
- Intelligent supply: Intelligent supply focuses on driving better efficiency in procurement operations by improving supplier relations and mitigating any potential risks. It includes capabilities such as intelligent supply analytics, category management, source execution, digital contract management, invoice and payments processing, supplier collaboration and procurement, and compliance.
- Smart operations: This capability focuses on performance and safety improvements in production and synchronizes all steps of production and operations. It includes capabilities such as augmented workforce, total operations synchronization, agile operations execution, efficient operations support, operations command center, and operations strategy.
- Dynamic fulfillment: This network of interconnected cross-enterprise systems is aimed at enhancing customer experience by delivering quality products and services on time and in good condition. It includes capabilities such as automated fulfillment signals, chain of custody and integrity, omnichannel order fulfillment, efficient warehouse operations, optimal path selection, adaptive network response, and efficient transportation operations.
SCOR best practices
There are four types of SCOR best practices:
- Emerging practice: a process that involves new technology, knowledge or new approaches to organizing processes
- Best practices: up-to-date practices that produce consistent and reliable results with supply chain performance
- Standard: typical practices used throughout the years by multiple businesses across different industries that have produced consistent results
- Declining: out-of-date practices that have been used consistently but are now redundant or obsolete and act as roadblocks to supply chain performance
Once the performance of your supply chain operations has been measured, you’ll be able to find any inefficiencies or gaps. A good SCOR process needs to be current, structured, proven, and repeatable. That means it’s not cutting-edge but it’s not obsolete; the process has clear goals, scope, and procedure; and it’s proven to be successful in multiple environments repeatedly.
SCOR certification and training
The ASCM offers a Supply Chain Operations Reference Professional (SCOR-P) certification that validates your skills and abilities with using the SCOR model. You can take the SCOR Professional Program to prepare for the exam — it’s designed for “supply chain professionals seeking to understand how to apply the SCOR model, how to use and interpret SCOR metrics, and how to organize a typical SCOR project.” The three-day program will prepare you for the SCOR-P exam and you can attend public training sessions, or your organization can opt for the in-house corporate training option.
You can search for a SCOR professional training course in your area. Pricing varies depending on location.
More on supply chain management: