SCOR combines elements of business process engineering, benchmarking, and leading practices into a single framework. Under SCOR, supply chain management is defined as these integrated processes: PLAN, SOURCE, MAKE, DELIVER, and RETURN—from the suppliers' supplier to the customers' customer, and all aligned with a company's operational strategy, material, work, and information flows. (See Figure 1-1.)
Figure 1-1: SCOR framework.
Here's what's included in each of these process elements:
PLAN. Assess supply resources; aggregate and prioritize demand requirements; plan inventory for distribution, production, and material requirements; and plan rough-cut capacity for all products and all channels.
SOURCE. Obtain, receive, inspect, hold, issue, and authorize payment for raw materials and purchased finished goods.
MAKE. Request and receive material; manufacture and test product; package, hold, and/or release product.
DELIVER. Execute order management processes; generate quotations; configure product; create and maintain customer database; maintain product/price database; manage accounts receivable, credits, collections, and invoicing; execute warehouse processes including pick, pack, and configure; create customer-specific packaging/labeling; consolidate orders; ship products; manage transportation processes and import/ export; and verify performance.
RETURN. Defective, warranty, and excess return processing, including authorization, scheduling, inspection, transfer, warranty administration, receiving and verifying defective products, disposition, and replacement.
In addition, SCOR version 5.0 includes a series of enable elements for each of the processes. Enable elements focus on information policy and relationships to enable the planning and execution of supply chain activities.
SCOR spans all customer, product, and market interactions surrounding sales orders, purchase orders, work orders, return authorizations, forecasts, and replenishment orders. It also encompasses material movements of raw material, work-in-process, finished goods, and return goods. In version 5.0, SCOR specifically does not address sales processes, product development, and customer relationship management processes.
The SCOR model includes three levels of process detail. In practice, Level One defines the number of supply chains and how their performance is measured. Level Two defines the configuration of planning and execution processes in material flow, using standard categories like stock, to-order, and engineer-to-order. Level Three defines the business process used to transact sales orders, purchase orders, work orders, return authorizations, replenishment orders, and forecasts.