Strategic Supply Chain Management - Supply Chain Online

74 Strategic Supply Chain Management
causing customer service to be below desired levels. It had long thought
that the order-management process—where orders were transferred automatically
from the customer into one system and then manually rekeyed
into another system for financial management before communication to
suppliers—was the cause of order delays. The analysis showed that
although rekeying added costs and introduced potential errors, the management
of subcontractors was a much larger problem. The existing
process included communication of planned requirements to key subcontractors
as part of a formal ordering process, where the suppliers also confirmed
quantities and delivery dates. But supplier updates regarding
schedule slippages, as well as communication of changes in order volume
from the prime contractor, were managed in a less formal manner. Some
of the major changes defined by the team included new roles for procurement,
monthly subcontractor planning reviews, a process to adjust previously
agreed-on plans, and business rules to guide manufacturing
schedule changes at the subcontractor. The company’s multimonth effort
delivered dramatic results: Supplier on-time deliveries improved by more
than 20 percent, and order confirmation times were cut sharply. Today, the
company can confirm customer orders in two to three days rather than two
to three weeks, and customer confidence has been restored.
SCOR Level 3
SCOR level 3 is also called the process-element level; this is where you
can complete your supply chain architecture by adding operational detail
to your SCOR level 2 design. Within SCOR level 3 you will find specific
business practices, associated metrics, and guidance about the information
systems needed to support the process—in terms of both functionality and
supporting data. The tools you’ll need to do this work have been assembled
for you already. You will develop “as is” maps illustrating the alignment
between processes, locations, and organizations. These maps
typically will show where inventory is located, the lead times between
process elements, and the alignment between process elements and supply
chain information systems.
By applying basic lean principles, the level 3 “as is” analysis can
reveal a number of improvement opportunities driven by the configuration,
including reducing process and information systems complexity, creating
better linkages between end-customer demand and end production,
eliminating similar activities conducted in multiple locations, and reducing
wait time and the associated inventory and customer lead times.