How does SCOR measure up?

A u s e r s p e r s p e c t i v e o n SCOR me t r i c s
by Peter Bols torff
What is SCOR?
The SupplyChainOperations
Ref erenc e model , devel oped by t he
Supply-Chain Counci l, provi des a
standard met hodology f or managi ng
supply chain projects centered on Pl an,
Source, M ake, Deli ver and Return.
To keep on schedule, I told a
design team at the kickoff of a SCOR project,
weve got four weeks to identify and define
the number of S C O R c a r d s and appropriate
supply chain metrics, collect data, identify
sources and collect appropriate benchmark data,
define competitive requirements for
performance, calculate performance gaps, and
determine financial opportunity. For those of
you who have not been down the project
roadmap, this h i t - t h e - g r o u n d - r u n n i n g w o r k
effort represents the key tasks to produce a
SCORcard gap analysis in four weeks.
As anxiety set in, the team members turned
to the SCOR model documentation, which
contains more than 200 alphabetically arranged
definitions in the v. 5.0 metrics glossary.
Which ones do we use? one team member
asked. They remembered from previous
education that SCOR suggests 13 metrics to
represent Level 1 supply chain performance. A
more serious question came from the
companys controller, who asked, What do we
do with the rest?
The SCOR model does a good job defining
Level 1 metrics and there are good, easy
access benchmark sources for most of these
but the model does not address many shareholder
metrics, and the breakdown of Level 1 metrics to
their Level 2 and 3 components is not
standardized. So my objective in this article is to
discuss a more comprehensive SCORcard
template based on my experiences working with
many project teams.
The SCORcard templ at e
The SCORcard template (see table, opposite
p a g e) summarizes the important dimensions of
the supply chain performance metrics needed to
build a SCORcard. The Level 1 metrics are
organized by three broad categories and seven
performance attributes:
C u s t o m e r - f a c i n g metrics measure supply
chain delivery reliability, responsiveness and
flexibility with respect to customers and
suppliers.
I n t e r n a l - f a c i n g metrics measure supply
chain cost and asset management efficiency.
S h a r e h o l d e r - f a c i n g metrics measure
profitability, effectiveness of return and share
performance.
For each Level 1 performance metric, the
template includes a working definition,
benchmark sources, main Level 2 components,
main Level 3 components, and a simple data
keeping SCOR
Updat i ng t he Suppl y-Chai n Counci l s i mpl ement at i on model
2 2 M AR 2002 w w w. t o t a l s u p p l y c h a i n . c o m
S U P P L Y C H A I N T E C H N O L O G Y N E W S
query used to calculate the actual performance.
Not Hardwired Yet indicates that in over 30
projects, no standard consistent metric has
surfaced to support multiple companies and
industries. It does not mean that there arent
useful Level 3 metrics; Ive tried to point to
good sources of potential Level 3 metrics.
It is important to note that while the
SCORcard gap analysis only focuses on the
Level 1 metrics results, Level 2 metrics are
required for many of the calculations. The
remaining sections will provide lessons learned
on the decomposition logic for Level 2
(material flow) and Level 3 (work and
information flow).
C u s t o m e r-faci ng met ri c s
Delivery performance is an example of a
SCOR Level 1 metric that does not decompose
to Level 2 by simple calculation. Rather it
decomposes to the relative on time and
complete delivery measures for suppliers,
factories, warehouses and transportation
providers. Level 3 decomposition is varied by
the locations of Level 2 roles and the service
goals of the departments in the location. F i l l
r a t e is another customer facing metric with a
relative Level 2 decomposition; f o r e c a s t
a c c u r a c y is defined as the fill rate cascade.
The logic for many design teams is that for a
stock item to be on the shelf at the time of order
receipt, good planning needs to have taken
place. Good planning is measured by forecast
accuracy attained through a solid sales and
operations planning process and/or leading
practices like collaborative planning,
forecasting and replenishment (CPFR).
In some projects, steering teams have
elevated forecast accuracy to Level 1 status. In
other projects, the design team defined it as a
Level 2 decomposition subordinate to inventory
days of supply. Level 3 decomposition is varied
by the departments role in the forecast process
and the goals for improvement.
Perfect order decomposes to Level 2
identical to delivery performance with the
added component of payable match. From the
customers perspective, a perfect order is
delivered on time and complete with a perfect
item number, quantity and price match of their
receipt and purchase order with your invoice.
This works in a similar manner when grading
suppliers on their ability to fulfill perfect orders.
Level 3 decomposition is varied by the
departments role in the match process and the
copyright 2002, Penton Media, Inc.
Performance
Attribute or Category
Supply Chain
Delivery
Reliability
The performance of the
supply chain in
delivering: the correct
product, to the correct
place, at the correct
time, in the correct
condition and
packaging, in the
correct quantity, with
the correct
documentation.
Supply Chain
Responsiveness
The velocity at which a
supply chain provides
products to the
customer.
Supply Chain
Flexibility
The agility of a supply
chain in responding to
marketplace changes
to gain or maintain
competitive advantage.
Supply Chain Cost
The costs associated
with operating the
supply chain.
Supply Chain Asset
Management
Efficiency
The effectiveness of an
organization in
managing
assets to support
demand
satisfaction. This
includes the
management of all
assets: fixed and
working capital.
Profitability
Income after cost.
Effectiveness of
Return
Share
Typical Query Customer
Customer Orders Delivered On
Timeand In Full/Total Number
of Customer Orders; usethe
PMGsurvey as aguide.
Customer Lines Delivered On
Timeand In Full Quantities.
Customer Orders Delivered On
Timeand In Full with 100%
match of price, item, and
quantity on theinvoice, packing
slip, and customer PO/Total
Number of Customer Orders.
AbsoluteValue[Actual Delivery
Date- Order Entry Date] for
each lineitemand/or each
Customer Order; usethePMG
survey as aguide.
SourceLeadtimefor Contraint
Item+Manufacturing Cycle
Timefor Make-to-Order +Order
Fulfillment Leadtimefor
Stock Items.
Anecdotal Query based
Utilization, Staffing Model, and
Supplier Contracts; usethe
PMGsurvey as aguide.
Cost Centers for Material +Cost
Centers for Direct
Manufacturing Labor +Cost
Centers for Indirect
Manufacturing Labor.
Map thecost centers that
support thesupply chain
activities listed at Level 3,
then add themup; usethePMG
survey as aguide.
[Revenue$ - Direct Material
Cost $] / Total Number of
Employeein FTEs.
Map thecost centers that
support thesupply chain
activities listed at Level 2,
then add themup.
[$ Inventory / (COGS / 365)] +
[$ Receivables / (Revenue/
365)] - [$ Payables / (Material
Cost / 365)] UsePMGSurvey
as aguide
$ Inventory by classification/
(COGS by classification/365)
Revenue$/Total Net Asset $
* SCOR Level 1 Metric;
Definition of SCOR Level 1
Metrics found in theGlossary of
themodel document.
(Revenue$ - Cost of Goods $) /
Revenue$
(Revenue$ - Cost of Goods $ -
SG&A Costs) / Revenue$
(Revenue$ - Cost of Goods $ -
SG&A
Costs - Tax $) / Revenue$
(Revenue$ - Cost of Goods $ -
SG&A Costs - Tax $ - [Working
Capital $ * Cost of Money]) /
Revenue$
Net Operating Income$ / Total
Net Asset $
Net Operating Income$ / Total
Revenue$
Usecompany formula.
Usecompany formula.
Usecompany formula.
Level 1 Performance
Metrics
Delivery Performance
(see SCOR Glossary for
definitions of all metrics)
Fill Rates
Perfect Order
Fulfillment
Order Fulfillment
Lead Time
Supply Chain
ResponseTime
Production Flexibility
Cost of Goods
Total Supply Chain
Management Cost
ValueAdded
Productivity
Warranty/Returns
Processing Cost
Cash-to-Cash Cycle
Time
Inventory Days of
Supply
Asset Turns
Gross Margin
Operating Income
Net Operating
Income
Economic Profit
Return on Assets
Return on Sales
Return on
Investment
Earnings Per Share
EPS Percent Change
TTM
Stock PricePercent
ChangeTTM
Working Definition
Delivery Performancemeasures thepercentage
of orders delivered on timeand in full to
customer request dateand/or to customer
commit date.
Fill Rates measures thepercentageof ship from
stock orders shipped within 24 hours of order
receipt.
Many companies useLineItem Fill Rateas an
alternativemetric measured by thepercentageof
lines filled within committed to hours of order
receipt.
Perfect Order Fulfillment measures the
percentageof orders delivered on timeand in
full to customers request dateANDflawless
match of purchaseorder, invoice, and receipt.
Order Fulfillment Lead Timemeasures the
number of days fromorder receipt in customer
serviceto thedelivery receipt of at the
customers dock.
Supply Chain ResponseTimemeasures the
number of days it takes asupply chain to
respond to (plan, source, make, and deliver
orders) an unplanned significant increaseor
decreasein demand without cost penalty.
Production Flexibility measures thenumber of
days to achievean unplanned 20% increaseor
decreasein orders without cost penalty.
Cost of Goods measures thedirect cost of
material and labor to produceaproduct or
service.
Total Supply Chain Management Cost measures
thedirect and indirect costs to plan, sourceand
deliver products and services. Makecosts are
often captured in COGS whileReturn costs are
calculated in Warranty/Returns Processing
Costs.
ValueAdded Productivity is calculated by
subtracting direct material cost fromtherevenue
and dividing theresult by thenumber of
employees. This is similar to sales per employee.
Warranty/Returns Processing
Cost measures thedirect and indirect costs
associated with returns including defective,
planned maintenance, and excess inventory. This
includes theentirereverselogistics process.
Cash-to-Cash Cycle Time
Cash-to-Cash Cycle Time measures the number of
days that cash is tied up as working capital.
Inventory Days of Supply measures thenumber
of days that cash is tied up as inventory.
Asset Turns is calculated by dividing revenueby
total assets including both working capital and
fixed assets.
Gross Margin is calculated by
subtracting Cost of Goods from
Revenueand is most often
expressed as a% of the
remaining dollars to sales.
Operating Income(or Margin) is calculated by
subtracting Cost of Goods ANDSales, General
and Administration (SG&A) fromRevenueand is
most often expressed as a% of theremaining
dollars to sales.
Net Operating Income(or Margin) is calculated
by subtracting Cost of Goods ANDSales, General
and Administration (SG&A) ANDTaxes from
Revenueand is most often expressed as a% of
theremaining dollars to sales.
Operating Income(or Margin) is calculated by
subtracting Cost of Goods ANDSales, General
and Administration (SG&A) ANDTaxes ANDCost
of Capital fromRevenueand is most often
expressed as a% of theremaining dollars to
sales.
Return on Assets is calculated by dividing Net
Operating Incomeby Total Net Assets
Return on Sales is calculated by dividing Net
Operating Incomeby Total Revenue.
Return on Investment (or invested capital) is
calculated by dividing Net Operating Incomeby
Total Invested Capital.
Earning Per Shareis theadjusted income
availableto Common divided by thediluted
weighted averageshares outstanding.
This is thepercent changein thetrailing twelve
month (TTM) EPS as compared to thesameTTM
period oneyear ago.
This is thepercent changein thetrailing twelve
month (TTM) Stock Priceas compared to the
sameTTM period oneyear ago.
Benchmark Sources
PMG
On timeand in full delivery to customer request
and customer commit.
No SourceIdentified
Most companies havetheir own internal gaugeas
to their competitiverank for lineitemfill rate.
No SourceIdentified
This metric is important but difficult to get good
statistical benchmark comparisons.
PMG
Order Receipt to Order Entry, Order Entry to
Order Shipment, Order Shipment to Order
Receipt, and overall Order Fulfillment Lead Time.
No SourceIdentified
This metric is important but difficult to get good
statistical benchmark comparisons.
PMG
UpsideProduction Flexibility.
PMGand www.marketguide.com
SeeCOGS under IncomeStatement and calculate
median (middle), superior (averageof top 20%),
and advantage(midpoint of median and
superior) based on theindustry or other
designated competitors.
PMG
Order Management Cost, Material Acquisition
Cost, SCRelated IT Cost, Inventory Carrying
Cost, Financeand Planning Related Cost.
No SourceIdentified
This metric provides an overall comparison but is
difficult to managesupply chain performance.
No SourceIdentified
This metric is important but difficult to get good
statistical benchmark comparisons.
PMGandwww.marketguide.com
Days Payables Outstanding,
Days of Inventory, and Days
Sales (Receivables) Outstanding.
PMGand www.marketguide.comDays RM
Inventory, Days WIP Inventory, and Days FG
Inventory; for marketguide, calculatemedian
(middle), superior (averageof top 20%),
and advantage(midpoint of median and superior)
based on theindustry or other designated
competitors.
PMGand www.marketguide.com
Revenue, Total Net Assets; for marketguide,
calculatemedian (middle), superior (averageof
top 20%), and advantage(midpoint of median
and superior) based on theindustry or other
designated competitors.
www.marketguide.com
Revenue, Cost of Goods; for marketguide,
calculatemedian (middle), superior (averageof
top 20%), and advantage(midpoint of median
and superior) based on theindustry or other
designated competitors.
PMGand www.marketguide.com
Revenue, Cost of Goods, and SG&A; for
marketguide, calculatemedian (middle), superior
(averageof top 20%), and advantage(midpoint of
median and superior) based on theindustry or
other designated competitors.
www.marketguide.com
Revenue, Cost of Goods, SG&A, Taxes, AND
Interest Expense; for marketguide, calculate
median (middle), superior (averageof top 20%),
and advantage(midpoint of median and superior)
based on theindustry or other designated
competitors.
www.marketguide.com
Revenue, Cost of Goods, SG&A, and Taxes; for
marketguide, calculatemedian (middle), superior
(averageof top 20%), and advantage
(midpoint of median and superior) based on the
industry or other designated competitors.
www.marketguide.com
Net Operating Income, Total Net Assets.
www.marketguide.com
Net Operating Income, Total Revenue.
www.marketguide.com
Net Operating Income, Total Invested Capital.
www.marketguide.com
Adjusted income, Diluted weighted average
shares outstanding.
www.marketguide.com
www.marketguide.com
Main Level 2 Components
Supplier on timeand in full
delivery, Manufacturing scheduleattainment,
Warehouseon timeand in full shipment, and
Transportation provider on timedelivery.
Forecast Accuracy has been assigned level 2
relationship to fill rateor Inventory Days of
Supply.
In addition to Delivery
Performancecomponents,
Supplier Match % and Customer Match %.
For Stock Items Order Receipt to Order Entry,
Order Entry to Order Shipment, Order
Shipment to Order Receipt.
For To Order Items Order Receipt to Order
Entry, Order Entry to CompleteManufacturing
to Order Shipment, Order Shipment to Order
Receipt.
Backorder Duration Another frequently used
level 2 decomposition is that of Back Order
Duration.
SourceLeadtime(often contractual), Order
Fulfillment Lead Timefor To Order items.
Days to Increaseor Decrease
Production Labor, Material, and/or Capacity.
Material Cost, Direct Cost of
production, and Indirect Cost of
Production.
Order Management Cost, Material Acquisition
Cost, Financeand Planning Related Costs, MIS
Costs, and Inventory Carrying Costs.
Revenue, Direct Material Cost,
Number of Employees in FTEs.
Returns WarehouseCost, Returns
Authorization Processing Cost, Return
MaintenanceCost, Returns Transportation Cost
(inbound fromcustomer, intercompany, and
outbound to supplier).
Days Payables Outstanding, Days of Inventory,
and Days Sales (Receivables) Outstanding.
Days RM Inventory, Days WIP
Inventory, and Days FGInventory.
Revenue, Working Capital, and
Fixed Assets.
Revenue, Cost of Goods.
Revenue, Cost of Goods, SG&A.
Revenue, Cost of Goods, SG&A, and Corporate
Taxes.
Revenue, Cost of Goods, SG&A, Corporate
Taxes, and Interest Expense.
Revenue, Cost of Goods, SG&A, Corporate
Taxes, Interest Expense, and Total Net Assets.
Revenue, Cost of Goods, SG&A, Corporate
Taxes, Interest Expense, and Total Revenue.
Revenue, Cost of Goods, SG&A, Corporate
Taxes, Interest Expense, and Total Invested
Capital.
Not Hardwired Yet
NoneIdentified.
Not Hardwired Yet
NoneIdentified.
Not Hardwired Yet
NoneIdentified.
Main Level 3 Components
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
delivery performancegoals.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
theforecast and planning
process performancegoals.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
perfect order fulfillment
performancegoals.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
cycletimewithin theorder
fulfillment processes.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
cycletimeor leadtimeimprovement
in Purchasing, Manufacturing, and
Order Management.
Not Hardwired Yet
Noneidentified.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
unit cost goals.
Customer ServiceCost, Outbound
Transportation Cost, FGWarehouse
Cost, Purchasing Cost, Inbound
Transportation Cost, RM
WarehouseCost, Demand
Planning, and Supply Planning.
Transactional Productivity is an
alternativelevel 3 measure; i.e.,
divideMaterial Acquisition Costs
(peoplehours) divided by Purchase
Orders.
Not Hardwired Yet
UseLevel 2 metrics as source
for Level 3 components.
Not Hardwired Yet
Thesearedepartmental and/or
diagnostic measures supporting
warranty and return cost goals.
$ Payables, Cost of Materials,
Accounts Payables Terms,
Inventory $, Cost of Goods, $
Receivables, Revenue, Accounts
Receivables Terms.
Within each level 2 inventory type,
inventory classifications differ by
organization but often arebased
on volumeand/or turns;
classification languageoften is
noted by A items, B items, C
items, and Ditems as well as non-
working inventory.
UseLevel 2 metrics as sourcefor
Level 3 components.
UseLevel 2 metrics as sourcefor
Level 3 components.
UseLevel 2 metrics as sourcefor
Level 3 components.
UseLevel 2 metrics as sourcefor
Level 3 components.
Interest Expenseis partically
calculated by cost of money and
working capital.
UseLevel 2 metrics as sourcefor
Level 3 components.
UseLevel 2 metrics as sourcefor
Level 3 components.
UseLevel 2 metrics as sourcefor
Level 3 components.
Not Hardwired Yet
NoneIdentified.
Not Hardwired Yet
NoneIdentified.
Not Hardwired Yet
NoneIdentified.
w w w. t o t a l s u p p l y c h a i n . c o m 2 3 M AR 2002
S U P P L Y C H A I N T E C H N O L O G Y N E W S
T H E S C O R C A R D T E M P L A T E
goals for improvement. O r d e r
fulfillment lead time decomposes to
Level 2 by calculation. It calculates for
each order, the number of days to
deliver on time and complete.
Perfomance Measurement Group
(PMG) (w w w . p m g b e n c h m a r k i n g . c o m)
breaks it into three basic process steps
and by item type (e.g. stock versus to-
o r d e r ) .
Another frequently used Level 2
decomposition is back order duration.
A subset of all orders, it calculates the
number of days it takes missed or
partially delivered orders to deliver
complete. Level 3 decomposition is
varied by the departments role in the
order fulfillment process and the goals
for improvement.
Supply chain response time
decomposes to Level 2 by calculation. It
calculates the number of days by adding
plan (or re-plan) days to contracted
source lead time, manufacturing cycle
2 4 M AR 2002 w w w. t o t a l s u p p l y c h a i n . c o m
S U P P L Y C H A I N T E C H N O L O G Y N E W S
time and order fulfillment lead time of
stocked items. Level 3 decomposition is
varied by the departments role in the
managing lead time or cycle time
processes and the goals for
improvement.
Production flexibility decomposes to
Level 2 by a mix of estimation and
calculation. For material, labor and
capacity, determine the number of days
it would take to sustain unplanned
requirements of plus/minus 20%.
Estimate the principal constraint. No
Level 3 metrics are identified.
I n t e rnal -faci ng met ri c s
Internal measures are more deliberate in
the decomposition because as they
involve costs and inventory numbers, they
have to add up.
C o st of goods sold decomposes to
material cost, direct cost of
p r o d u c t i o n, and indirect cost of
p r o d u c t i o n at Level 2. Level 3 is N o t
Hardwired Yet as these are
departmental and/or diagnostic measures
supporting unit cost goals.
Supply chain management cost
decomposes to order management
c o s t, material acquisition cost, f i n a n c e
and planning related, supply chain
related management information
system (MIS) cost, and i n v e n t o r y
carrying cost. Level 2 metrics
decompose to Level 3 measures for
customer service cost, o u t b o u n d
transportation cost, finished goods
(FG) warehouse cost, purchasing cost,
inbound transportation cost, r a w
material (RM) warehouse cost,
demand planning, and s u p p l y
planning cost, MIS fixed assets, and
MIS operational costs.
Inventory carrying cost is the only
hitch. This is not a pure operational cost;
it combines costs for taxes, insurance
and write-offs for non-working
inventory. It then borrows from other
metrics like cost of capital for inventory
and space costs from o r d e r
m a n a g e m e n t.
Transactional productivity is an
alternative Level 3 way to measure
some aspects of supply chain cost.
Purchase order productivity d i v i d e s
material acquisition cost (or people
hours) by the number of purchase
o r d e r s; sales order productivity
divides order management cost
(people hours) by the number of sales
o r d e r s. Work orders, r e t u r n
a u t h o r i z a t i o n s and planning events a r e
other transactions that can be calculated
in a similar manner.
Value-added productivity
decomposes at Level 2 to r e v e n u e,
direct material cost, number of
employees in full-time equivalent
(FTE) jobs. Level 3 is Not Hardwired
w w w. t o t a l s u p p l y c h a i n . c o m 2 5 M AR 2002
S U P P L Y C H A I N T E C H N O L O G Y N E W S
Y e t; many design teams use the
calculations for Level 2 metrics as the
source for Level 3 components.
Warranty/returns processing cost
decomposes to returns warehouse cost,
returns authorization processing cost,
returns maintenance cost, r e t u r n s
transportation cost (inbound from
customer, intercompany, and outbound
to supplier). Level 3 is Not Hardwired
Y e t.
C a s h - t o - c a s h decomposes to Level 2
components of days payables
o u t s t a n d i n g, days of inventory a n d
days sales (receivables) outstanding.
Level 3 elements include the data
elements of $ payables, cost of
m a t e r i a l s, accounts payables terms,
inventory $, cost of goods, $
r e c e i v a b l e s, r e v e n u e, and a c c o u n t s
receivables terms. Inventory days of
s u p p l y decomposes to Level 2 metrics
of days RM inventory, days of work-
in-process (WIP) inventory, and d a y s
of FG inventory. Level 3 inventory
classifications differ by organization but
often are based on volume and/or turns;
classification language often is noted by
A items, B items, C items and D items
as well as non-working inventory.
Asset turns decomposes to Level 2
elements of r e v e n u e, working capital
and fixed assets. The Level 3
components for working capital f o l l o w
the same decomposition path as cash-to-
c a s h .
S h a r e h o l d e r-f aci ng met ri c s
Gross margin decomposes to Level 2
components of r e v e n u e and cost of
g o o d s. Use cost of goods as the source
for Level 3 components.
Operating income or margin
decomposes to r e v e n u e, cost of goods,
sales, general & administrative
(SG&A) expense. Use cost of goods
and S G & Aexpense categories as
metrics for Level 3 components.
Net operating income or margin
decomposes to r e v e n u e, cost of goods,
S G & Aand corporate taxes. Use c o s t
of goods, S G & A and corporate tax
rate expense categories as a metrics for
Level 3 components.
Economic profit decomposes to
r e v e n u e, cost of goods, S G & A,
corporate taxes and interest expense.
In addition to the expense categories in
net operating income, Level 3
decomposition also includes i n t e r e s t
e x p e n s e calculated, in part, by cost of
money and working capital.
Return on assets decomposes to n e t
operating income and total net assets;
in some cases companies prefer to use
operating income instead. Level 3
decomposition is based on the n e t
operating income and total net assets
decompositions discussed previously.
Return on sales decomposes to
r e v e n u e and net operating income.
Level 3 decomposition is based on the
net operating income d e c o m p o s i t i o n s
discussed previously.
Return on investment d e c o m p o s e s
to net operating income and t o t a l
invested capital. Level 3 decomposition
is based on the net operating income
decompositions discussed previously.
Share data is calculated and defined at
Level 1; there has been no need to
decompose any further in a SCOR
p r o j e c t .
How many SCORcar d s ?
A critical task of the business is to
determine how many SCORcards need
to be assembled. Ideally, there is a
SCORcard for each supply chain
identified in the project scope a n d a n
enterprise consolidated SCORcard (see
Scale the Heights in the Dec. 2001
S C T N for supply chain definition
techniques).
The level of difficulty of completing
this task is mostly dependent on
accounting practices for the internal-
facing and shareholder-facing metrics.
The most complicated case occurs in
companies that define supply chains by
customer channel yet consolidate
financial reporting by product group or
location.
In this case, the design team might
decide to combine onto one SCORcard
the customer-facing data for each supply
chain and with the consolidated internal-
facing and shareholder-facing data; it is
wise to match the costs with the revenue
and inventory. Almost always,
companies change their reporting
capability to be able to SCORcard each
supply chain independently.
This template is n o t perfect. It is n o t
intended to become a standard; rather, it
is intended to share lessons learned since
it has been used.
The more user discussions we initiate
on the trials and tribulations of using the
SCOR metrics, the closer we will get to
establishing standard ways of measuring
performance. In addition, the more
benchmark sources we can establish at
Level 1 and Level 2, the more
effectively we can compare and contrast
companies and industries.
By the way, the design team
mentioned earlier completed its gap
analysis on time and on budget. It
provided the basic framework for supply
chain key performance indicators
(KPIs) and cascading organizational
performance goals.
keeping SCOR
Updat i ng t he Suppl y-Chai n Counci l s i mpl ement at i on model
a c r o n y m s s o l v e d
C O G S cost of goods sold
C P F R col l aborat ive pl anning, f orecasti ng and replenishment
F G f ini shed goods
F T E f ul l -t i me equivalent
K P I key performance indicator
M I S management i nformat ion syst em
R M raw mat eri al
S G & A sal es, general & admi nist rat ive
PeterBolstorff is execut i ve di rect or, suppl y chai n f or Mi nneapol is-based
PRAGMATEKConsultingGroupLtd. , a business systems consul t ing f i rm
off eri ng supply chain performance servi ces. He is the f ormer chai r of t he SCOR
Int egrati on Commit t ee and t he Supply-Chain Counci l s Technical Commi tt ee,
and designed the Suppl y-Chai n Counci l s execut ive educati on seri es to ai d i n
t he successf ul i mpl ement ati on of SCOR. He i s servi ng a t wo-year t erm on t he
SCORboard, t he board of direct ors for t he Supply-Chai n Counci l .
To reach Pet er Bol storff : p e t e r . b o l s t o r f f @ p r a g m a t e k . c o m
For more about PRAGMATEK: w w w . P R A G M A T E K . c o m
To comment on t his art icl e: s c t n e d i t o r @ p e n t o n . c o m
About SCOR
The Suppl y Chai n Operati ons Ref erence (SCOR) model has been developed by the
Supply-Chain Counci l and is SCTN s recommended implement at i on model for SCM
i ni t iat ives. Whi le the author of t hi s arti cle is af f i li ated wi th the Suppl y-Chai n Counci l ,
t hi s arti cle was prepared under t he direct i on of SCTNand was not subj ect to pri or
revi ew or approval by the Suppl y-Chai n Counci l or any of i ts members/ af fi l iat es.
To l earn more about t he Supply-Chain Counci l, including a whi te paper gui de
t o Level 1 metri cs: w w w . s u p p l y - c h a i n . o r g