Operational Business Intelligence and Performance Management of the Supply Chain – The SCOR Model
With enterprise application integration driving so much change within organizations, there is a need to augment traditional methods of measuring business performance.
Organizations must not only perform well: they must be able to identify how they perform, well or poorly, and why. Internal information is not enough: companies need to look at and analyze information from trading partners throughout the supply chain.
Operational business intelligence and performance management are processes that give your business the ability to retrieve and act on timely, critical business information from across your operations. Businesses today need real-time business intelligence software that captures, processes, and analyzes information on all events and transactions, across all functions, departments, and organizations. This data must be integrated for feedback to operations systems.
As companies increasingly look for the best ways to maximize supply chain performance, important answers may lie in a unique model called SCOR. In the relentless pursuit of ever-improving returns on investment and market competitiveness, some of the world’s largest corporations are applying a model known as SCOR, the Supply Chain Operations Reference Model, to maximize the efficiency.
Siemens, Hewlett Packard, Intel, BASF and Coca-Cola use the SCOR model because they know that survival in today’s cut-throat markets requires close scrutiny and re-engineering of every link in the supply chain, from supplier to supplier to customer. the client’s. Recognizing the strength of the model, many integrated supply chain management software companies are developing stand-alone software products to manage and analyze performance against SCOR.
The SCOR model is the de facto industry standard for providing business process modeling data, metrics to assess performance management, and best practice insights derived from practitioner experience. It is completely vendor and technology agnostic and is the only truly independent in-depth reference model for the entire supply chain of all companies.
SCOR enables comparisons of supply chain performance between companies by industry. It also provides mapping processes to make relationships between partners, suppliers and customers more effective: it is a tool to revitalize your ERP solution internally and externally. Companies that implement SCOR have dramatically reduced costs and increased returns. Using the SCOR model, Siemens Medical, for example, has been able to reduce costs by 30 percent, reduce inventory by 60 percent, and reduce order lead times from 22 weeks to just two. The SCOR model is organized around five key management processes: Plan, Supply, Make, Deliver and Return.
Each of these processes is examined at three levels of detail. The first level is strategic, what the company wants from each process area. The second level maps out exactly what is currently happening within each process area. The third level examines the operational level of the process areas, the area where execution can be altered.
SCOR doesn’t tell you what changes to make, but it tells you where the weak links are. Then it is necessary to apply the appropriate execution settings specific to the particular chain. Successful supply chain management is about constant scrutiny, getting real-time insights so you can react to less than optimal performance. It also means getting quality operational business intelligence. The companies that will be successful in the long term are those that realize that the answer lies in maximizing supply chain efficiency.