Supply Chain Excellence [Electronic resources] : A Handbook for Dramatic Improvement Using the SCOR Model نسخه متنی

The Baseline Business Blueprint Education

The blueprint is not a simple document, no matter how you try to describe or deconstruct it. Its purpose is to picture a more effective way to work than the tangle of evolutionary procedures that holds most businesses together (or tears them apart).

So the main objective for Day Two is to educate the design team on how integrated supply chain processes should work together. Some people find this to be an energizing part of the project. Executive reaction to the blueprint is—to use G-rated language—arm's length. And design teams, after coming this far, don't usually stop at G-rated language.

That was the case for the Fowlers design team. It was the coach who kept Day Two focused and effective. He did so by first explaining the strategic intent of the process and then tracing the flow on the blueprint diagram. It was conducted like a tour. The whole process took about three hours, and with team members contributing true examples of poor practices at Fowlers, the group's humor quickly improved.

The tour took the team from PLAN P1 to P4 to P3 to P2 to the SOURCE execution processes S1.1 through S1.5. Then it went on to the MAKE execution process M1.1 through M1.6 and finally to DELIVER execution processes D1.1 through D1.13. Finally, the tour ended with the RETURN execution processes DR1.1 through SR1.6 and DR3.1 through SR3.7. The epilogue covered one of the most frequently asked SCOR questions, "What do the enable processes do?"

The Fowlers SCOR Blueprint Tour

The following elements comprised the tour:

PLAN Supply Chain—P1. This is the process of taking actual demand data and generating a supply plan for a given supply chain (defined in this case by customer, market channel, product, geography, or business entity). This process step is most closely associated with the discipline of sales and operations planning. The basic steps require a unit forecast that's adjusted for marketing and sales events; a supply plan that constrains the forecast based on resource availability (resources could be inventory, manufacturing capacity, or transportation); and a balance step where demand/supply exceptions are resolved and updated on the system. The output between this process step and the next—PLAN DELIVER (P4)—is a "constrained unit plan."

PLAN DELIVER—P4. This is the process of comparing actual committed orders with the constrained forecast generated above and generating a distribution resource plan to satisfy service, cost, and inventory goals. It is carried out for each warehouse stocking location and may be aggregated to region or another geography type. This process step is most closely associated with the discipline of distribution requirements planning. The relationship between this process step and PLAN MAKE (P3) are "replenishment requirements," which tell the plant manager how much product to plan for. Reserve inventory and promise date (D1.3) is a "distribution requirements plan," which lets customer service know how much inventory will be available to promise.

PLAN MAKE—P3. This is the process of comparing actual production orders plus replenishment orders with the constrained forecast generated above and then generating a master production schedule resource plan to satisfy service, cost, and inventory goals. It is carried out for each plant location and may be aggregated to region or another geography type. This process step is most closely associated with the discipline of master production scheduling. The relationship between this process step and PLAN SOURCE (P2) are "replenishment requirements," which tell the purchasing manager how much product to plan for. It's all rolled up into schedule manufacturing activities (M1.1), which is the master production schedule that lets the plant scheduler know how much total product must be made by the ship date.

PLAN SOURCE—P2. This is the process of comparing total material requirements with the constrained forecast generated above and generating a material requirements resource plan to satisfy landed cost and inventory goals by commodity type. It is carried out for items on the bill of materials and may be aggregated by supplier or commodity type. This process step is most closely associated with the discipline of material requirements planning. The relationship between this process step and schedule product deliveries is the "material requirements plan," which lets the buyer know how much product must be purchased based on current orders, inventory, and future requirements.

SOURCE—S1. This set of execution processes involves the material acquisition process—initiating and scheduling the purchase order, receiving and verifying product, transferring the product to available raw material, and authorizing supplier payment through. In the case of sourcing engineer-to-order products, there are accommodations to identify and select appropriate suppliers.

MAKE—M1. This set of execution processes encompasses the conversion process of raw materials to finished goods—scheduling production activities, issuing and staging the product, producing and testing, packaging, and release of finished goods to customers or warehouses. In the case of making engineer-to-order products there are accommodations to finalize engineering specifications prior to initiating a manufacturing work order.

DELIVER—D1. This set of execution processes involves the order fulfillment process—processing inquiries and quotes, entering orders, promising inventory, consolidating orders, planning and building loads, routing shipments, selecting carriers and rating shipments, receiving, picking, shipping, customer receipt, necessary installation, and final invoicing. In the case of delivering engineer-to-order products there are accommodations to include the request for proposal or quote and negotiating contracts prior to order entry.

RETURN—R1 and R3. This set of execution processes involves the return authorization process, return shipment and receipt, verification and disposition of product, and replacement or credit process for defective and excess inventory. In the case of R2, a more detailed scheduling, determination of product condition, and transfer of maintenance, repair, and overhaul items is modeled.

ENABLE Processes. Enable processes prepare, maintain, and manage information or relationships on which planning and execution processes rely. There is no decomposition of enable elements. Think of them as necessary processes. There are eight management categories of enable that are applied appropriately to PLAN, SOURCE, MAKE, DELIVER, and RETURN. They are business rules, performance improvement, data collection, inventory, capital assets, transportation, physical network configuration, and regulatory compliance. Another enable process, unique to PLAN, manages alignment of the financial and unit plans; another enable process—this one unique to SOURCE—manages supplier agreements. Supply chains can have well-integrated planning and execution processes and still underperform if enable processes are poorly managed. For example, a good sales and operations planning process cannot overcome a poor EP.9—align unit and financial plans.

With this education, the design team was ready to begin building their own blueprint for Fowlers' work and information flow.