The Impact, Measures and Data Relating to the Exploitation of SCOR within Supply Chain Systems

Source: Long (2014), Lambert et al (2005), Huang et al (2005), Huan et al (2004)

Table 3.8 - SWOT Analysis of SCOR

3.8 The Impact, Measures and Data Relating to the Exploitation of SCOR within Supply Chain Systems

Originating from the manufacturing sector, SCOR has successfully migrated into the service sector, government and NGO’s (Malin 2006, Siegl, 2008, Georgise et al, 2012).

Improvements reported by organisations implementing SCOR include:

• “An average of 3% as a percentage to total sales operating portfolio derived from cost reduction and service improvement”. In the context of Aid and Development spend globally, 3% would amount to USD$4.2bn

External

Strengths Industry and competitive

benchmark data sources Internal

Strengths Macro approach to identify improvement opportunities Best in class supply chain

management practice Communication - common

language

Seller connected to the buyer

through return process Standardised model and

performance metrics Connects to other members of the

Supply Chain by transactional activities

Provides detailed Return on Investment analysis

Benchmarking tools or best

practice analysis IT capabilities to optimise

Supply Chain External

Weaknesses Limited focus on other areas such as marketing, finance and Research and Development

Internal

Weaknesses Cannot focus on specific modelling such as optimisation or simulation

Static tool that cannot analyse dynamic analysis. Unable to manage projects

• “Two to six times return on investment (ROI) within twelve months, often with cost-neutral quick hit projects underway on a six month time frame”

• “Full leverage of capital investment in systems improving return on assets (ROA) for fixed-asset technology investments”. The case studies from the work did not have a list of capital investments (i.e. spend on IT for example) as a percentage of program costs. SCOR would trigger this kind of reporting

• “Reduced information technology (IT) operating expenses through minimised customisation and better use of standard system functions”

• “Ongoing updates to a project portfolio, using continuous supply chain improvements to drive profit improvement to 1% to 1-3% per year” (Bolstorff and Rosenbaum, 2003, Wong and Wong, 2008, Maestrini, 2017). In the area of Aid and Development projects a 1-3% improvement (say 2%) on spend globally would amount to USD$2.85bn

Table 3.8 provides a data set pertaining to a specific literature search on industry benefits of SCOR.

Table 3.9 - Literature Search of Industry Benefits of SCOR

On reviewing the literature generated by the search noted above, Table 3.10 provides a data set of specific published benefits of implementing SCOR on an industry/author basis.

Keyword 1 Keyword 2 Keyword 3 Limit Database search

Search 1 SCOR performance industry Review

Case study ProQuest 17 3

Search 2 SCOR performance industry All

documents Scopus 80 17

Search 3 SCOR performance industry Review

Case study Web of

Science 51 7

Search 4 SCOR performance industry Case study Abi/

Inform 13 1

Search 4 SCOR performance industry All date range

Industry Sector and Benefit Key Findings Reference

Automotive Measuring inter company

supply chains Simulation studies were conducted. The data showed that there were reductions in the volatility of forecast information by approximately 60% and an increase in the consistent forecast and demand information by as much as 50%. Production and inventory capacities reduced by as much as 15%. Safety stocks reduced by 22% and order points and order up to levels reduced by as much as 17%

Roder &

Tibken (2006)

3rd Part Logistics Supply chain performance

measurements SCOR was able to provide a base to measure Supply Chain performance, to evaluate strategy and the development of a common Supply Chain framework

benchmarking SCOR Preliminary and exploratory study to compare 9 key planning practices was conducted to determine the direct or indirect effect by using SCOR. Supply chain performance was strongest in

Coconut Oil Supply chain management

performance 12 KPI variables were

performance measured by using SCOR. The results provided areas for

performance The use of SCOR metrics

assisted in creating a better decision making process to mapping and measuring of the Supply Chain and define what areas needed improving

Thunberg &

Persson (2014)

Crude palm oil Analyse business processes SCOR results show areas for improvement in business

Egg industry Supply chain measurement

model The integration of SCOR was

not just for the visibility of local or functional

Fashion retail Supply chain optimisation The study provided “As is”

and “To be” results. Using SCOR the “To be” scenario was able to determine that increases in profits were possible. It also revealed that there was the ability to follow demand variations and adjust

assessment SCOR measured the extent of

which portion of the strategy was achieved. It provided information as to which areas of the supply chain needed to be addressed and improved

Sellito et al (2015)

Hospital Inventory tracking, Patient

flow The results from using SCOR

saw:

• 2% reduction in drug inventory

• 8-10% reduction in excess and obsolete inventory

• Improved visibility provided a 21% increase in capacity

• 8% increase in demand

• Reduction in preparation time for key procedures by 40% processes saw one area, the import procurement cycle improve by 10%

Salman et al (2013)

Pharmaceutical Developing an agile supply

chain model SCOR was used to define the factors that affected agility within the Supply Chain.

Specific areas such as sales feedback, customer

requirements and forecasting were modified to create agility within the supply chain

Mehralian (2015)

Steel production Supply Chain analysis using

SCOR Applying SCOR to analyse the

supply chain of the steel plant indicated 9 areas for

improvement. The metrics showed that improvements in these areas would provide cost, reliability and flexibility improvements

Seifbarghy et al (2010)

Sugar cane Supply chain performance By using SCOR to measure the performance of the supply chain it provided visibility of areas where the performance

Table 3.10 - Published Benefits of Implementing SCOR