What defines recommends and six flexible supply chain strategy is based on an organizations operations and resources?
The supply chain operations reference model (SCOR) is a management tool used to address, improve, and communicate supply chain management decisions within a company and with suppliers and customers of a company (1). The model describes the business processes required to satisfy a customer’s demands. It also helps to explain the processes along the entire supply chain and provides a basis for how to improve those processes. Show
The SCOR model was developed by the supply chain council (http://www.supply-chain.org) with the assistance of 70 of the world’s leading manufacturing companies. It has been described as the “most promising model for supply chain strategic decision making (2).” The model integrates business concepts of process re-engineering, benchmarking, and measurement into its framework (2). This framework focuses on five areas of the supply chain: plan, source, make, deliver, and return. These areas repeat again and again along the supply chain. The supply chain council says this process spans from “the supplier’s supplier to the customer’s customer (3).” PlanDemand and supply planning and management are included in this first step. Elements include balancing resources with requirements and determining communication along the entire chain. The plan also includes determining business rules to improve and measure supply chain efficiency. These business rules span inventory, transportation, assets, and regulatory compliance, among others. The plan also aligns the supply chain plan with the financial plan of the company (3). SourceThis step describes sourcing infrastructure and material acquisition. It describes how to manage inventory, the supplier network, supplier agreements, and supplier performance. It discusses how to handle supplier payments and when to receive, verify, and transfer product (3). MakeManufacturing and production are the emphasis of this step. Is the manufacturing process make-to-order, make-to-stock, or engineer-to-order? The make step includes, production activities, packaging, staging product, and releasing. It also includes managing the production network, equipment and facilities, and transportation (3). DeliverDelivery includes order management, warehousing, and transportation. It also includes receiving orders from customers and invoicing them once product has been received. This step involves management of finished inventories, assets, transportation, product life cycles, and importing and exporting requirements (3). ReturnCompanies must be prepared to handle the return of containers, packaging, or defective product. The return involves the management of business rules, return inventory, assets, transportation, and regulatory requirements (3). Benefits of Using the SCOR ModelThe SCOR process can go into many levels of process detail to help a company analyze its supply chain. It gives companies an idea of how advanced its supply chain is. The process helps companies understand how the 5 steps repeat over and over again between suppliers, the company, and customers. Each step is a link in the supply chain that is critical in getting a product successfully along each level. The SCOR model has proven to benefit companies that use it to identify supply chain problems. The model enables full leverage of capital investment, creation of a supply chain road map, alignment of business functions, and an average of two to six times return on investment (4). This is just a brief overview of the SCOR model. It contains many more details and levels that can be analyzed within a company. For more information, visit the Supply Chain Council website at www.supply-chain.org. A link to the SCOR model can be found on this page. A PowerPoint presentation that describes the entire SCOR process can also be downloaded. References:(1) SCOR Model, Supply Chain Council, October 7, 2004. (2) Huan, Samuel. Sheoran, Sunil. Wang, Ge. A research and analysis of supply chain operations reference (SCOR) model. Supply Chain Management: An International Journal, Vol. 9, Num. 1, 2004. (3) Supply Chain Operations Reference Model. Supply Chain Council. October 7, 2004. (4) Bauhof, Ned. SCOR Model: Supply Chain Operations Reference Model. Beverage Industry. August 2004. Sign up for The SCM Professional NewsletterValuable supply chain research and the latest industry news, delivered free to your inbox. Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so an organization can use its consolidated purchasing power to find the best possible values in the marketplace and align its purchasing strategy to business goals. Strategic sourcing is growing in popularity, as digital transformation is causing procurement and supply chain processes to evolve. It requires analysis of what an organization buys, from whom, at what price and at what volume. Strategic sourcing differs from conventional purchasing because it places emphasis beyond initial purchase price to focus on total cost of ownership and optimizing the sourcing process through ongoing market analysis and building relationships with suppliers. How it worksBusinesses can use strategic sourcing to make their procurement processes less shortsighted and focused on price. A sourcing plan can instead allow them to develop an adaptable system that contributes to the overall value of the business long term. The process begins with analyzing business needs and historical spending, followed by outlining a strategic plan, and then conducting data collection and market analysis that guides selection of a roster of suppliers. Once selection and negotiations have taken place, strategic sourcing also involves measuring performance and improving the process on a continual basis. Strategic sourcing is generally practiced by large organizations with many suppliers. Outsourcing providers for strategic sourcing exist for organizations that wish to delegate the function to a specialist. Strategic sourcing process stepsThe strategic sourcing process has many variations, but is most commonly broken into seven steps popularized by consulting firm A.T. Kearney. These include the following:
BenefitsThe most obvious advantage of strategic sourcing is reduced total cost, but the benefits of rethinking the sourcing process can be far-reaching. As businesses take advantage of the vast amounts of available data and digitization of business processes, procurement is an area ripe for transformation. According to Gartner's Magic Quadrant for Strategic Sourcing Application Suites, the top reason for investing in a strategic sourcing suite is to transform sourcing within the organization, at 74%. Businesses also reported increased productivity through automation (65%) and increased savings (61%) as top drivers for pursuing strategic sourcing. The increased understanding of supplier markets can help identify potential risk factors and help businesses develop sourcing plans that mitigate them. In addition, the emphasis on continuous improvement and sustainability of the supply chain provides increased flexibility and the ability to adapt to external factors. Longer term, implementing strategic sourcing can facilitate strong relationships with suppliers and outsourcers, identify potential improvements and provide justification for changes to improve efficiency throughout supply chain processes. ExamplesA strategic sourcing plan can help businesses achieve a number of goals that contribute to success. Examples include the following:
Strategic sourcing vs. procurementProcurement refers to the range of activities and procedures necessary for businesses to acquire products and services. While this technically involves both strategic and administrative responsibilities, procurement departments often focus on the day-to-day transactions and processes involved in e-procurement, such as purchase orders, invoicing and payments. In contrast, strategic sourcing emphasizes the activities leading up to an actual purchase, including analyzing business needs and the marketplace at large. While procurement generally looks for the lowest-priced option, strategic sourcing keeps the big picture in mind, employing large sets of data to evaluate the value of other factors, such as optimal vendor relationships and reduced risk to the business. Software productsStrategic sourcing software can facilitate the approach by standardizing sourcing requirements and providing a platform for collecting information about suppliers, products, markets and business needs. This software is sometimes part of larger procurement systems, procure-to-pay platforms, ERP systems or supply chain management systems. Products that are labeled "strategic sourcing application suites" are growing in popularity, however. These typically include functionality -- and often have separate software modules -- for e-sourcing, spend analysis, contract management and supplier relationship management. Major players according to Gartner include Coupa, GEP, Ivalua, JAGGAER, SAP, Synertrade and Zycus. Their products are delivered primarily via multitenant SaaS, but some offer on-premises or private cloud versions, as well. Vendors are working on integrating advanced analytics and AI to make the sourcing process more effective. These capabilities can make recommendations based on past performance and current metrics and offer predictive models based on factors like market conditions, time of year and geopolitical factors. The integration of blockchain into the supply chain is also increasing visibility and accuracy in some cases. This was last updated in October 2019 Continue Reading About strategic sourcing
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What defines recommends and sets flexible supply chain strategies based on an organization's operations and resources?Supply chain optimization- Defines, recommends, and sets flexible supply chain strategies based on an organization's operations and resources.
What are the 6 supply chain strategies?6 Strategies for a More Resilient Supply Chain. Overview.. CSCO: Chief Supply Chain Officer.. Supply Chain Customer Fulfillment & Collaboration.. Digital Supply Chain Operations and Technology Solutions.. Supply Chain Logistics Management and Leadership Strategy.. Supply Chain Manufacturing Operations & Strategy.. What is flexibility strategy in supply chain management?Flexibility in supply chains is the possibility to respond to short term changes in demand or supply situations. of other external disruptions together with the adjustment to strategic and structural shifts in the environment. of the supply chain. Flexibility thus combines agility and adaptability (Lee, 2004)
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