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Part Three
Planning and control
Figure 13.8 Typical supply chain dynamics
child says out loud what the message is, and the children are amused by the distortion of the
original message. Figure 13.8 shows the bullwhip effect in a typical supply chain, with relatively
small fluctuations in the market cause increasing volatility further back in the chain.
Supply chain improvement
Increasingly important in supply chain practice are attempts to improve supply chain performance.
These are usually attempts to understand the complexity of supply chain processes;
others focus on coordinating activities throughout the chain.
The SCOR model
The Supply Chain Operations Reference model (SCOR) is a broad, but highly structured and
systematic, framework to supply chain improvement that has been developed by the Supply
Chain Council (SCC), a global non-profit consortium. The framework uses a methodology,
diagnostic and benchmarking tools that are increasingly widely accepted for evaluating and
comparing supply chain activities and their performance. Just as important, the SCOR model
allows its users to improve, and communicate supply chain management practices within
and between all interested parties in their supply chain by using a standard language and
a set of structured definitions. The SCC also provides a benchmarking database by which
companies can compare their supply chain performance to others in their industries and
training classes. Companies that have used the model include BP, AstraZeneca, Shell, SAP
AG, Siemens AG and Bayer. The model uses three well-known individual techniques turned
into an integrated approach. These are:
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Business process modelling
Benchmarking performance
Best practice analysis.
Business process modelling
SCOR does not represent organizations or functions, but rather processes. Each basic ‘link’
in the supply chain is made up of five types of process, each process being a ‘supplier–
customer’ relationship, see Figure 13.9.
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‘Source’ is the procurement, delivery, receipt and transfer of raw material items, subassemblies,
products and/or services.