Strategic Supply Chain Management - Supply Chain Online

CHAPTER 2 Core Discipline 2: Develop an End-to-End Process Architecture 75
In addition to analyzing the overall configuration, you also will consider
best practices, applications, metrics, and organizational models as
part of your level 3 “to be” design. By analyzing your current capabilities
versus your “to be” design, you’ll understand the implications for the
existing processes and information systems. Typical information systems
implications include system gaps, missing data, and insufficient integration
between information systems. Then you can evaluate each “to be”
option based on the business criteria set at SCOR level 1 and choose
which to develop at the operable level (level 4) of detail needed for a real
working solution.
Case in point: We worked with a large retailer that needed to
reduce inventory levels without sacrificing service. The company has
hundreds of retail locations, ranging from megastores to neighborhood
grocery outlets. It had grown through acquisition, and as new acquisitions
were made, the acquired businesses were established as independent
business units. Some functions were shared, including purchasing,
warehouse management, and accounting. For the most part, however,
each business unit was allowed to operate independently, maintaining its
own processes and information systems. This practice led to very high
information-systems costs due to different applications, each requiring
dedicated, ongoing support.
The company had been frustrated by several failed efforts to improve
its overall performance; it had spent months mapping its key processes
and analyzing the resulting improvement opportunities. Still, the project
team was not able to reach agreement on the “to be” supply chain. The
major roadblock was the lack of an overall architecture. Team members
were not even able to agree on which processes were part of the supply
chain and which were not! Moreover, processes within specific functions
were well defined, but those which cut across functions, such as supply
chain planning, were not.
To break the deadlock, the team used SCOR level 3 to map its current
processes. An analysis of the deliver process elements showed that the
physical supply chain was highly optimized in terms of warehousing operations
and that highly developed processes were in place to ensure the best
handling of its products from suppliers to retail locations. Examination of
warehouse practices revealed the adoption of many leading-edge warehouse
management practices, such as picking and order preparation using
voice-recognition technology.
An analysis of the plan and source process elements revealed that
the supply chain had been optimized to move high volumes of consumer