Systemic Assessment of SCOR For Modeling Supply Chains.: January 2005
Systemic Assessment of SCOR For Modeling Supply Chains.: January 2005
Systemic Assessment of SCOR For Modeling Supply Chains.: January 2005
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Fourth, the preceding problem compounds itself when perceived, but does not limit the modeler in how he/she
looking across a multi-company supply chain – a more goes about mapping these concepts to the domain of
holistic (or systemic) approach would improve the supply investigation In short, the descriptive modeler can freely
chains due to various dependencies within the across the choose and name the objects perceived, their relationships
supply chain partners. Finally, the knowledge required to (and names) and which properties to capture. As such,
improve the supply chains increases exponentially with descriptive models offer a great deal of freedom and
the scope (i.e. number of tiers) of the supply chain. flexibility to the modeler.
1.2. Models and modeling approaches Normative models restrict how the system being
investigated can be represented. It forces the modeler to
A model is an abstract representation of the real world select from a pre-specified set of object and relationship
that reduces complexity and represents only the details instances and essentially map the perceived system into
necessary for a specific purpose [15, 27]. Modeling is this pre-specified set. This substantially reduces the
widely used to represent supply chains to improve the freedom (and variety) of models produced. However, it
efficiency and effectiveness of supply chains [2, 13, 19]. produces models that can, at a minimum, be compared.
People have developed models using various approaches And since everyone is working from the same set, it
and methods to understand, analyze and improve supply makes possible the notions of common metrics,
chains [3, 7, 11, 22, 25]. Various approaches to model prescriptions of “better” models (e.g. best-practice models
supply chains have strengths and weaknesses as widely or sub-models). It also substantially reduces
discussed in the literature [2, 11, 27]. Some of the popular representational complexity. However, normative models
classifications of models in the literature include: analytic are difficult to develop as they require agreement across a
and simulation models and descriptive and normative relatively broad set of modelers of such systems.
models. Normative models are also referred to as Process
reference models in some business process literature [24].
1.2.1. Analytic and simulation models: Analytical
models typically represent supply chains in the form of 1.3 Modeling assessments
symbolic/logical (mathematical) formulations (equations).
This treatment allows usage of optimization techniques With the proliferation of models and modeling
such as linear programming to design solutions that approaches, problem arises with the confidence on the
improve the supply chains. Although analytical modeling effectiveness of all models and approaches. Thus
approaches are useful for parts of supply chains, researchers have come up with meta models to specify
increasing the scope of the supply chain increases the how a modeling approach ought to be. Thus a modeling
complexity of the model. The application of this approach approach can be assessed based on a relevant meta model.
to supply chain modeling can be found in [1, 5, 18]. In addition to identifying the strengths and limitations of a
particular modeling approach, meta models also help to
Simulation models are dynamic representations of identify the critical elements and missing elements in a
supply chains executed step-wise within a computer model or a modeling approach. These modeling
program. Transactions, events and time can be readily assessments are helpful to choose a right modeling
included in the simulation model to assess how the approach depending on the purpose of modeling.
performance changes over time. A simulation model can
easily capture the dynamic nature of supply chains. A When choosing a modeling approach, Davis lays
simulations can also better handle the complexity importance on matching the modeling approaches and the
involved in supply chains. Broadly speaking, two kinds of situations, precisely the uncertainty of the situation and
simulation models exist: discrete-event simulation models the extent of uncertainty the modeling approach can
and continuous simulation models. Simulation approaches handle [9]. Checkland considers the ability of the
have been very successful in modeling and improving modeling approach to address the unstructured or ill
supply chains in industry even though such approaches structured situation to be an important factor for choosing
have been out of favor with the general academic a modeling approach [6]. Nielsen in his work focuses on
community for some time. Examples where simulation modeling approach’s answer to domain of use, conditions
has been successfully used for simulating supply chains of use and consequences of use before choosing a
are [16, 21, 25, 26, 28]. modeling approach [20].
1.2.2. Descriptive and normative models: Descriptive Jayaratna proposed NIMSAD framework (Normative
models are models where the real world is simply Information Model based Systems Analysis and Design)
“described”. A descriptive modeling technique limits the for evaluation of modeling approaches. He identifies three
types of objects, relationships and properties to be elements that modeling approach need to address:
Problem domain, Methodology user and methodology o A framework of relationships among the standard
process* [15]. This framework has been adapted and processes
extended in this paper as can be found in section three of o Standard metrics to measure process performance
the paper. o Management practices that produce best in class
performance
2. Supply chain operations reference (SCOR) o Standard alignment to features and functionality.
model
Business process reengineering concepts capture the
Supply Chain operations reference (SCOR) is a “as-is” state of the process and derive the desired “to-be”
modeling approach that provides standard guidelines for future state. Benchmarking concepts quantify the
companies. These standard guidelines help to examine the operational performance of similar companies and
configuration of their supply chains, identify and measure establish internal targets based on “best in class” results.
metrics in the supply chain. In addition SCOR helps to Best practices analysis characterizes the management
adopt best practices where deemed appropriate [23] and practices and software solutions that result in “best in
thus SCOR can be classified as a Normative modeling class” performance. Thus SCOR combines all these three
approach based on previously discussed classification. concepts into a cross functional framework. SCOR has
SCOR has been continually evolving through work by the been warmly greeted by the industry. This success of
Supply Chain Council (SCC) since Version 1.0 was SCOR has led to the development of various tools for
published, and the latest to their additions is Version 6.0. building models using SCOR.
P2: Plan Source P3: Plan Make P4: Plan Deliver P5: Plan Returns
are measured in four different categories namely delivery framework, except part of it accounted in modeling
reliability, responsiveness and flexibility, assets and costs. process element.
As the global competition increased, the customers TimeWise realized that it needed to improve its
started to bargain for price concessions. The competition processes but remained unsure about how and where to
forced TimeWise to reduce their prices. The customers improve. TimeWise decided to use a normative model for
also demanded personalized products from TimeWise. modeling its supply chains and to see what improvements
Responding to these requests, TimeWise added two more to make to its supply chain to increase efficiency, and
products to their product line. TimeWise could acquire effectiveness of the supply chain. TimeWise decided to
two new customers because the company increased the use SCOR approach for modeling its supply chain to
number of products. Now, they have four customers and improve it. TimeWise followed the SCOR model as
nine products in their product lines. The company prescribed in SCC's SCOR Version 6.0 and followed the
expecting an increase in sales volume doubled its steps specified in [4, 12].
employees apart from acquiring two new suppliers. The
be” model, identified the following changes: cycle time developing the model. SCOR does not have explicit steps
reduction, smaller batch size, reduction of number of parts to understand the problems situation. Bolstroff and
to build product (using modular products) and reduction Rosenbaum suggest preparing Business context summary
of production cycle time. to understand the problem situation [4]. A business
context summary may include Strategic background,
Table 2: Competition Model financial performance and SWOT analysis of the
Competition Model company. This helps in the SCOR team to understand the
Performance Vs Competition companies needs and the corporate strategy [4].
Performance Attributes AS-IS TO-BE Davenport, in his book on “Process Innovation” stresses
Supply Chain Reliability Advantage Advantage the importance on creating process vision and defining
Responsiveness Advantage Superior business strategy before reengineering the process [8].
This suggests that SCOR needs some explicit steps to
Flexibility Parity Parity
understand the problem situation.
SC Management Costs Parity Advantage
SC Asset Utilizations Parity Advantage
Methodology user element is the most difficult to
Superior, Advantage, Parity evaluate. Most modeling approaches fail to address this
element explicitly and instead try to avoid this problem by
TimeWise, identified the concepts of lean production detailing specific steps that the modeler has to take in the
(pull based model) from the best practice analysis process of developing the model. Soft systems
available in SCOR. SCOR best practices also suggested methodology suggests developing multiple rich pictures
the use of Kanban cards†. Figure 4 shows the SCOR to account for this which may not be a feasible approach
model of TimeWise developed using eSCOR (a every time. A good composition of SCOR team and active
simulation tool to build SCOR model). involvement of all the participants in the process of model
development could be a reasonable guard towards this.
5. Evaluation and discussion of SCOR
modeling approach The modeling process includes: problem formulation,
solution design and implementation. SCOR emphasizes
The evaluation of SCOR modeling approach is based the notion of benchmarking and best practices. By
on existing studies on SCOR and personal experience in defining standard measures and metrics, SCOR allows
modeling TimeWise supply chain using SCOR. The one to benchmark the companies’ performance against
examined studies on SCOR include: (1) Supply chain other companies’ performance. Thus, SCOR assists in
council’s SCOR version 6.0 (2) Bolstroff and problem formulation. The best practices that are built into
Rosenbaum’s book titled “Supply chain excellence” on SCOR are another helpful resource for solution designing
the use of SCOR [4] and (3) Paul Hermon’s paper titled that does not exist in many other modeling approaches.
“Introduction to SCOR methodology” in Business process “To-be” model can identify the areas where company
trends (BPT), a popular domain for practitioners. The needs to improve. SCOR does not deal with
framework of evaluation discussed in section three was implementation of the solution into the supply chain.
used to evaluate SCOR. Framework consists of four SCOR model, being a generic model applicable for all
elements: problem domain, methodology user, modeling supply chains can be part of the reason why SCOR does
process and modeling techniques. not devise any strategies for implementation issues.
modeling process and modeling techniques. It was found and process postponement," Interfaces, vol. 30, no. 4,
that SCOR is strong on modeling process and modeling 2000, pp. 65-80.
techniques. These two represent the technical dimensions
in the discussed socio-technical model. SCOR is [6]P.B. Checkland, System Thinking, New York: Wiley,
relatively weak on addressing the issues in problem 1981.
domain and does not take into account the limitations of
methodology user. These two dimensions represent the [7]M. Christopher, Logistics and Supply Chain
social dimension of Leavitt’s socio-technical model. Thus Management, Logistics and Supply Chain Management,
it can be said that SCOR is strong on the technical ed. 2nd Ed, Great Britain: Prentice Hall, 1998.
dimensions and relatively weak on the social dimensions.
Leavitt’s organizational change model emphasizes the [8]T.H. Davenport, Process Innovation: Reengineering
importance of the social dimension for effective Work Through Information Technology (Hardcover), in
organizational change [17], thus SCOR needs to be Harvard Business School Press Books. 1992, pp. 1.
strengthened on this dimension.
[9]G.B. Davis, "Strategies for Information Requirements
SCOR’s core strengths lies in its ability to define Determination," IBM Systems Journal, vol. 21, no. 1,
standard measures and metrics. These standard measures 1982, pp. 4.
and metrics enable SCOR to identify and apply best
practices to various supply chains. Thus further research [10]T. Davis, "Effective supply chain management,"
should look into strengthening SCOR along the social Sloan Management Review, vol. 34, no. 4, 1993, pp. 35.
dimension. This includes steps involving people within
the company, getting opinion from multiple people within [11]G.M. Giaglis, "A taxonomy of business process
the company etc. modeling and information systems modeling techniques,"
International Journal of Flexible Manufacturing Systems,
One of the main purpose of this article is to introduce vol. 13, no. 2, 2001, pp. 209-228.
SCOR to the research community by providing an
overview of concepts and techniques of the methodology. [12]P. Hermon, An Introduction to the Supply Chain
This article also provides an overall high level evaluation Council's SCOR Methodology, Business Process Trends,
of SCOR to guide further research in this area. 2003,