Supply Chain Management - Supply-Chain.Org - Supply Chain ...

Business Process Analysis and Modelling 

based on the SCOR-model 

“Modelling logistics processes using SCOR” 

© 2001 Kühne & Nagel Management AG / Sebastian Arndgen Supply Chain Management Solutions 1

AGENDA 

Kühne & Nagel Overview 

Development of KN Standard Processes 

Applying SCOR at Kühne & Nagel 


Corporate Profile 

One of the world’s leading global logistics 

solutions provider 

Established since 1890 

600 owned and operated offices in 90 countries 

17,000 transportation and logistics professionals 

ISO 9001 certified since 1994 


Service Portfolio 

International 

Forwarding Services 

Contract Logistics 

Special Products 

Ocean Freight 

* Project Forwarding 

* River Shipping 

Air Freight 

Overland 

Customs Clearance 

Rail 

Distribution 

Dedicated 

Warehousing 

Multi-user 

user 

Warehousing 

Value-added 

added 

Services 

Hotel Logistics 

Oil Field Services 

Aid / Relief / 

Emergency Services 

Fairs / Exhibitions / Events 

Defense Logistics 

Airport Logistics 


Service Portfolio 

Other 

Group Activities 

Supply Chain Management 

Solutions 

Insurance Brokerage 

E-Commerce Solutions 

Financial Services 

Seaworthy Packing 

Supply Chain Visibility & Monitoring 

Network Consulting 

Integrative Transportation 

Management 

Network Implementation 

Network Performance Management 


The Logistics Market 

Freight Forward 

Transport 

Warehousing 

Contract 

Logistics 

• Specific services 

• Limited coverage 

Supply Chain 


• Order 

management 

• Sourcing & 

Distribution 

Planning 

• Merge in 

Transit 

• Inventory 

management 

Integrated 

Supply Chain 

Mgmt 

• Integrated into 

suppliers & 

customers systems 

• Integrate services 

and information 

• Supply Chain 


• Supply Chain 

Planning & available 

to promise 

Customer Demand & Value 

Technology and Process Expertise 


Kühne & Nagel Strategy 

“The future success of KN’s 

SCM and E-Business 

Solutions will be based on IT 

and Process Excellence, a 

strong position in the Contract 

Logistics Market and the global 

KN Forwarding Network” 

SCM 

Solutions 

Contract Logistics 

Solutions 

Forwarding-Solutions 

E 

- 

B 

u 

s 

i 

n 

e 

s 

s 

Traditional Services 

Point-to-Point-Forwarding & Simple Storage 


Strong Partnership of leaders in their business 

areas 

Industry leader in supply chain management software 

Industry leader in business management consulting 

and scientific cooperation with 

Bereich 

Logistik 


AGENDA 





AGENDA 


Target of the SPS Development 

Consolidate KN Processes 

Process mapping based on SCOR 

KN Standard Process Steps 

KN Standard Groups 

Summary and Documentation 



Development of a world-wide wide valid 

KN Standard Process Step (KN SPS) 

definition which enables KN to model customer supply chains in an a 

efficient way. 

… to make Supply Chains comparable in case of quality, time and 

cost 

… to improve transparency and increase efficiency 


AGENDA 




Process Mapping based on SCOR 






Procurement Production Distribution 

KN Processes 

Inquiry and analysis of all current operational processes in 

the KN world 

Definition to assure a common understanding to put future 

requirements into the correct context 

First step for unique naming of general processes 


AGENDA 









SCOR Model 

Supply Chain Operations Reference (SCOR) Model 

was developed by the Supply-Chain Council (SCC) 

which is an independent, non-for 

for-profit, global 

corporation: 

With over 700 company members (Practitioners, Enabling Technology 

Providers, Consultants, Universities, Associations, Government 

Organizations) 

From a wide range of industries (Manufacturers, Distributors, Retailers) 

With an open membership to all companies and organizations (e.g. HP, 

IBM, BASF, PWC, Arthur Andersen ...) interested in applying and 

advancing state of the art supply chain management systems and 

practices. 


Why SCOR at KN? 

is a cross industry standard for supply chain management 

KN wants to monitor the entire customer supply chain, no longer 

being concentrated on the forwarding or the KN part. 

provides a language for communication between intra company units 

and inter-company supply chain partners 

KN uses an international agreed standard to communicate with customers, based 

on a common understanding instead of developing another ‚KN Standard‘ 

enables the user to get a common basis for transparency of quality, time and cost 

KN wants to support their customers to optimise their supply chains by comparing 

their own performance with other companies and competitors 

enables the user to realize Best Practice Analysis and Benchmarking 


SCOR Model Overview 

Level No. 

Description 

Schematic 

The SCOR model is based on 3 plus 1 level 

1 

Top Level 

(Process Types) 

Source 

Return 

Plan 

Make 

Deliver 

Return 

Sets up framework and content of the model to 

determine the competitive targets of the company on a 

strategic level. (not KNs core focus) 

2 

Configuration 

Level 

(Process 

Categories) 

Predefined process categories to configure the supply 

chain based on the strategic decisions. 

3 

Process 

Element Level 

(Decompose 

Processes) 

P3.1 

Identify, Prioritize, and Aggregate 

Production Requirements 

P3.3 P3.4 

Balance Production Resources with Establish Detailed 

P3.2 

Production Requirements 

Production Plans 

Identify, Assess, and Aggregate 

Production Resources 

Defined major processes and process flows within the 

categories to further detail the tasks involved. 

4 

Implementation 

Level (e.g. KN) 

(Decompose 

Process 

Elements) 

Freedom to define specific processes as an 

additional level of detail within the SCOR level 3 

= used by KN to combine the KN Processes with 

the frame of SCOR 


Development of the KN Standard Processes 

KN Processes 

SCOR Model 

Top Level 

Configuration 

Level 

Process 

Element Level 

Implementation 

Level (KN) 

Mapping of Models using 

Visibility & Exclusion rules 


AGENDA 










56 KN Standard Process Steps… 

... with a unique name, a clearly defined scope and an 

agreed definition and description 

... has defined predecessor and successor process steps 

that automatically put it into a certain context 

... can be integrated into a standard group that enables easy 

modelling 



56 KN Standard Process Steps… 

... guarantees a common understanding across 

geographical, divisional and customer borders 

... is assigned to status codes of every possible operational 

system for usage in the visibility and monitoring system 

... is documented today in a Access Database, future in 

ARIS with all attributes needed 


AGENDA 










Based on the existing “box of bricks” and the defined 

predecessors and successors per KN standard 

process step, standard process chains (= groups) are 

defined for i.e. 

Order Execution 

Production 

Pre-Carriage 

Main-Run (SF/AF/etc.) 

Warehouse 

On-Carriage 

Services 

Merge in Transit 

Cross Docking 


KN Standard Group 

Pre-Carriage 

Transport – Main Run 

Warehousing 

Warehousing 


AGENDA 









Summary 

Operational Procedure 

Represents one or more operational tasks (daily 

work of employees involved) of which single 

results form the total result of one KN Process 

Step. 


Are identified and used in the supply chain 

modelling for monitoring and visibility tools (based 

on SCOR). 

Warehouse iin prepare & store 

pick pallet 

Re-pack 

record 

from goods 

pallet 

inventory 

entry 

put pallet 

into rack 

KN Standard Group (of SPS) 

Contains several KN Process Steps. 

The group collects all process steps that belong to 

a certain business process or part of a supply 

chain (i.e. ‘Seafreight 

‘ 

Main Run’). Target of using 

groups is to ease and speed up the supply chain 

modelling. 


Documentation 


Future Documentation will be done in ARIS ... 

To enable graphical process modelling based on a 

consistent data base 

To use the ARIS Web Designer to get global access 

to the KN Standard Process Steps 

To enable the KN Network to model Supply Chains 

based on “one” standard 


AGENDA 





AGENDA 


Modelling Customers Supply Chains 

Using model for SCM Solutions 

Outlook 


Applying SCOR at Kuhne & Nagel 

Modeled generic supply chains for KN‘s airfreight and 

seafreight network 

Combined SCOR standard with forwarding accounting 

standard (COMBITERMS) by modeling standard seafreight 

supply chains 

Integration Approach of 

SCOR Based Modelling Method Aproach from the „Deutsche 

Aussenhandels- und Verkehrs-Akademie“ and 

the KN Standard Process Steps 

Modeled supply chains of customers like Otto Versand, 

Argos, Apple, etc. 


How to model with KN Standard Steps and 

Groups 

On a high level groups can be used for the initial 

modelling of a certain customer requirement by: 

Placing of pre-defined groups for the planned chain 

Pre-Carriage 

Transport – Mainrun 

Warehousing 

On-Carriage 


High Level Modelling within Groups 

Selecting process steps to be executed 

Customizing a standard chain according to the needs 

Pre-Carriage 

Transport – Mainrun 

Warehousing 

On-Carriage 

Any process step 

within a group can be 

skipped or transferred 

to another place in the 

group 


Customer Specific Process Steps 

Customer specific steps can enhance the 

KN Standard flow of process steps. 

Customized 

process step 

Customized 

process step 


AGENDA 




Outlook 


Using Model for KN SCM Solutions 


One to one transfer of the KN 

Standard Process Steps to the 

KN iLog’s “Supply Chain 

Visibility and Monitoring” 

solution 


Using Model for KN SCM Solutions 


… monitors the performance (e.g. time, quality) 

of each step in the supply chain 

… proactively notifies performance exceptions 

via intelligent messaging (automatic negative 

reporting) 

… ensures Supply Chain Quality Management 


AGENDA 




Future Outlook 


Future Outlook: 

Using the process model as a integration platform for 

improvement of 

Process related KPI-systems and Controlling 

Process related IT structures 

Process related organisational structures 


Future Outlook 

Using activity based costing on SCOR Level 4 

Kostenstelle: KN Hong-Kong Personalkosten Sachkosten IT Kosten GK 

Maßgröße 

Kosten MAK Kosten MAK Kosten CPU-Zeit Kostenstelle 

Bezeichner Anzahl 

[in Tausend GE] 200 4,5 125 4,5 95 4.640 420 

LMI Kosten in 

GE 

Teilprozesskosten 

Zuschlag LMN 

in GE 

GK pro 

Maßeinheit 

Teilprozesse der Kostenstelle 

D1.05-100 Consolidate Shipments 31 0,7 19 0,7 44 2.156 95 # Fahrten 125 757,58 48,76 806,34 

D1.06-100 Book Shipments 36 0,8 22 0,8 15 756 73 # Fahrten 125 586,05 55,73 641,78 

D1.09-300 Container Stuffing 67 1,5 42 1,5 4 178 112 # Container 2100 53,32 6,22 59,54 

D1.10-400 Document Preparation 22 0,5 14 0,5 25 1.224 61 # Fahrten 125 489,37 34,83 524,20 

D1.10-500 Issuing B/L 22 0,5 14 0,5 4 176 40 # Fahrten 125 317,72 34,83 352,55 

LMN Abteilungsleitung 22 0,5 14 0,5 3 150 39 Umlage nach MAK 8.707,16 

Kostenstelle: KN Hamburg 

Personalkosten Sachkosten IT Kosten GK 

Maßgröße 

Kosten MAK Kosten MAK Kosten CPU-Zeit Kostenstelle 

Bezeichner Anzahl 

650 14,0 14,0 250 0 

LMI Kosten in 

GE 

Teilprozesskosten 

Zuschlag LMN 

in GE 

GK pro 

Maßeinheit 


Conclusion 

Modelling of integrated Supply Chains is a 

prerequisite for successful SCM initiatives 

SCOR is the basis for collaboration, benchmarking 

and best practise development 

KN offers their customers the integrated services of 

supply chain process modelling and application 

based management 


Thank you!

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