SCOR – Supply Chain Operations Reference
Supply Chain Operations Reference, or simply SCOR, is an English expression that means Supply Chain Operations Reference. It is a management system created in 1996 by the Supply Chain Council (SCC), a global non-profit organization based in the United States, created to establish high operational standards in the most different supply chains. The SCOR model was launched in 1997 after being tested in 70 companies from different segments. In 2005, the seventh version was released.
According to the website revistaempresarios.net, “the reference model of operations in the supply chain is used to evaluate and compare SCM (Supply Chain Management) activities and their performance by providing a framework that connects business processes, metrics , best practices and technology in a unified framework, allowing communication between partners in the supply chain, greater efficiency of the SCM itself and activities related to the improvement of all links in the supply chain”.
The SCOR model is based on 3 pillars:
- BUSINESS PROCESS REENGINEERING (current state x desired future state);
- BENCHMARKING (best practices);
- AND IMPROVEMENT OF PROCESSES (adoption of good management practices that lead to an advance in performance).
Based on these pillars, the Supply Chain Operations Reference works with four elements:
- Processes – which aims to describe the management processes in the supply chain and the interactions between them. It is divided into 3 levels:
- level 1 (types of process),
- level 2 (categories of processes),
- and level 3 (process decomposition);
- Practices – or, more specifically, GOOD practices, which contribute to the significant improvement of processes. Here the model breaks down into:
- module 1 (general chain improvement),
- module 2 (best environmental practices),
- and module 3 (best practices in risk management);
- Performance – where the result of the KPIs (Key Performance Indicator or Key Performance Indicators) is observed, as the proposed model consists of the set of metrics used to develop the organizational strategy. as well as its competitiveness within the market. In this element the focus is on performance attributes, each with diagnostic levels 1, 2 and 3:
- and assets;
- And People – fundamental element, where the necessary competences for the execution of the processes are identified. Here they are analyzed:
- and training.
According to the professorluizroberto.com website, SCOR was designed to work with metrics, such as production deadlines, inventories, product cost, quality level, supplier delivery times and customer delivery times. All this with the aim of improving the supply chain, in an analysis that necessarily goes through a few levels:
- “Level I: definitions of processes and analysis of performance indicators through METRICS in order to establish the content and breadth of the MODEL’s performance;
- Level II: this level will define the categories of processes that belong to the CHAIN. It presents the characteristics (CONFIGURATION) of all operations and surveys aspects that show failures and the consequences of eventual changes;
- Level III: surveys all elements belonging to Level II, defines performance indicators, monitors tasks and chooses best practices;
- Level IV: establishes adjustments to the changes and how to obtain COMPETITIVE ADVANTAGES. The concern is directed towards improvement”.
Having, then, knowledge of all the elements, it is time to implement the SCOR. A work divided into 5 phases, as reported by the neuralmind.ai website:
- “Planning: the first stage includes activities related to determining the resources needed to meet that demand, collecting information on available inputs, identifying supply gaps and developing actions to correct such gaps. This process also includes the development of best practices for supply chain efficiency, considering variables such as: transportation, assets, inventory, etc.
- Supply or Collection: activities associated with the acquisition and contracting of goods and services to meet planned or actual market demand. This involves issuing purchase orders, scheduling deliveries, receiving orders, validating orders, storing goods, and accepting vendor invoices.
- Execution, Production or Fabrication: After obtaining stock and tools, the time has come to actually manufacture the products or provide the contracted services. Here, the SCOR methodology supports production management and other needs, such as transport between sectors and equipment maintenance.
- Delivery or Distribution: this step goes far beyond logistics procedures. It encompasses inventory management, monitoring the delivery of the finished product or service (order, transport and distribution management).
- Return or Return: this phase is associated with the reverse flow of goods. This includes identifying items that need to be returned, deciding on the proper method of disposal, scheduling the return, and shipping and receiving the returned goods, for example.”
In order to involve areas that were not initially included in the SCOR, the SCC developed some specific frameworks, based on the original model, such as the DCOR (Design Chain Operations Reference – Design of Products and Processes) and the CCOR (Customer Chain). Operations Reference – aimed at sales). With this advance, it can be said that the Supply Chain Operations Reference aims to propose a common metric to evaluate the performance of different departments of an organization, in order to seek better market opportunities for businesses around the world.
This model doesn’t just apply to your business, it extends to your suppliers and customers, as well as your suppliers’ suppliers and your customers’ customers, strengthening business health throughout the supply chain.
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