Operational Business Intelligence and Supply Chain Performance Management – The SCOR Model

With enterprise application integration driving so many changes within organizations, traditional methods of measuring business performance need to be augmented.

Organizations must not only perform well: they must be able to identify how they perform, well or poorly – and why. Internal information isn’t enough: companies need to look at and analyze information from business partners all along the supply chain.

Operational business intelligence and performance management are processes that provide your company with the ability to retrieve and act upon business critical, timely information from throughout your operations. Today’s companies need real time business intelligence software that captures, processes and analyses information from all events and transactions, across functions, departments and organizations. This data must be integrated for feedback to operations systems.

As businesses increasingly search for the best ways to maximize supply chain performance, important answers may lie in a unique model called SCOR. In the relentless search for ever improving returns on investment and market competitiveness, some of the world’s biggest corporations are applying a model that is known as SCOR – the Supply-Chain Operations Reference model – to maximize efficiency.

Siemens, Hewlett Packard, Intel, BASF, and Coca-Cola all use the SCOR model because they know survival in today’s fierce markets demands detailed scrutiny and reengineering of every link in the supply chain – from the supplier’s supplier to the customer’s customer. Recognizing the strength of the model, many integrated supply chain management software companies are developing stand alone software products to manage and analyze performance based on SCOR.

The SCOR model is the industry de facto standard for providing Business Process Modeling data, metrics for evaluating Performance Management and Best Practices information derived from practitioners’ experience. It is entirely vendor and technology independent and is the only real independent in-depth reference model for the complete supply chain of all companies.

SCOR makes it possible to make supply chain performance comparisons between companies by industry. It also provides mapping processes to make more effective relationships between partners, suppliers and customers: it is a tool for revitalizing your ERP solution internally and externally. Companies deploying SCOR have dramatically cut costs and boosted returns. Using the SCOR-model, Siemens Medical, for example, has been able to cut costs by 30 percent, reduce inventory by 60 percent, and cut order lead-times from 22 weeks to just two. The SCOR model is organized around five key management processes: Plan, Source, Make, Deliver and Return.

Each of these processes is examined on 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 maps out where the weak links are. It is then necessary to apply appropriate execution adjustments specific to the particular chain. Successful supply chain management is about consistent scrutiny, getting real time information so you can react to less than optimal performance. It also means getting quality operational business intelligence. Companies that will be successful in the long run are those that realize the answer lies in maximizing supply chain efficiency.