SCM

Models and Framework

 Learning Objectives
Importance of Business Models
SCM Models
SCOR Model
Stevens Model
Logistics Framework
 Key issues to check the effectiveness
of a supply chain
Movement of a product or service
Movement of information
Timeliness of delivery
Quality of product or service
Cost
Value as perceived by the customer
Integration internal and external; people
and processes
 Business Model

A business model is a framework for creating

economic, social or other forms of value. It is used to
describe a broad range of formal and informal aspects
of a business such as purpose of the business,
strategies to achieve the purpose, organizational
structure, operational processes and policies
 Business Process

A collection of related activities to produce and offer

a product or service to customers. Business processes
may be categorized as Management processes,
Operational processes and Supporting processes
 Two Popular
Models of SCM

SCOR Model Stevens Model

 SCOR Model
Supply Chain Operations Reference (SCOR)
It is a simple Model that helps to analyze an a
supply chains Efficiency and Responsiveness
It is a cross-industry model and a standard
diagnostic tool for checking the processes,
problems and the weak links in the entire
supply chain from the suppliers supplier and
the customers customer
 SCOR Model

Customers
Suppliers

PLAN SOURCE MAKE DELIVER

 SCOR MODEL: PLANNING
Planning refers to all the activities needed to plan and
organize the operations in the three main functional
areas of Source, Make and Deliver. It includes the
following functions:-
Demand Forecasting: What, How much and When.
Inputs from this stage will form the basis of all future
operations
Inventory Management: Inventory levels, Selective
inventory control, Ordering systems, Inventory
carrying costs, VMI
Supply Planning: Deals with production (MRP), JIT
and distribution (DRP)
 SCOR MODEL: SOURCE

Purchase: What, When, How

Consumption Management: Number of categories of material
for purchase; Monitor inventory levels in each category; Who
are the consumers of each category of inventory? Is there any
abnormal consumption or waste or deterioration in stock? Is
there any idle inventory?
Vendor Selection: Create a Vendor Data Base; Vendor
capabilities; Vendor reputation

Contract Negotiation: Negotiate for items, price and service

levels; Need for good negotiation skills
Contract Management: Post Contract management for timely
delivery, payments and penalty for delay; Vendor rating
 SCOR MODEL: MAKE
Product Design: From SCM point of view, the aim is to develop
products with simple design, fewer parts and modular
construction for ease of handling by customers
Production Scheduling: Capacity planning; Resources planning;
High capacity utilization, low inventory levels

Facility Management: Analyze role of each facility; Capacity

allocation to each facility; Allocation of suppliers and markets to
each facility
 SCOR MODEL: DELIVER

Information Flow: System for passing information about Orders

from customers backward up to the manufacturing facility;
Information of finished goods from the manufacturing facility to
the customer

Delivery Scheduling: Transportation management; Direct

deliveries; Milk Run deliveries
 Stevens Model
Traditional Division of Departments

Material
Purchasing Control
Production Sales Distribution

Functional Integration
Materials Manufacturing Distribution
Management Management Management

External Integration

Internal
Suppliers Customers
Supply Chain
Discussion & Questions