Operational Business Intelligence and Supply Chain Performance Management – ​​The SCOR Model

With enterprise application integration driving so many changes in organizations, traditional methods of measuring business performance need to be expanded.

Organizations don’t just need to perform well: They need to be able to see how well or poorly they’re doing—and why. Internal information is not enough: companies need to view and analyze information from business partners along the entire supply chain.

Operational business intelligence and performance management are processes that give your organization the ability to access and act on business-critical, timely information from across your operations. Today’s businesses require real-time business intelligence software that collects, processes, and analyzes information from all events and transactions across functions, departments, and organizations. This data must be integrated for reporting back to operating systems.

As companies increasingly seek the best ways to maximize their supply chain performance, important answers may lie in a unique model called SCOR. In the relentless quest for ever better return on investment and market competitiveness, some of the world’s largest companies apply a model known as SCOR – the supply chain operations reference model – to maximize efficiency.

Siemens, Hewlett Packard, Intel, BASF and Coca-Cola all use the SCOR model because they know that surviving in today’s tough markets requires detailed examination and revision of every link in the supply chain – from the supplier’s supplier to the customers of the customer. Many integrated supply chain management software companies have recognized the power of the model and are developing standalone software products to manage and analyze performance based on SCOR.

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The SCOR model is the de facto industry standard for providing business process modeling data, metrics to assess performance management, and best practices information derived from the experience of practitioners. It is completely vendor and technology agnostic and the only truly independent, in-depth reference model for the entire supply chain of any enterprise.

SCOR enables comparisons of supply chain performance between companies by industry. It also offers mapping processes to make the relationships between partners, suppliers and customers more effective: it is a tool to revitalize your ERP solution internally and externally. Companies using SCOR have drastically reduced their costs and increased their ROI. For example, using the SCOR model, Siemens Medical has reduced costs by 30 percent, reduced inventory by 60 percent, and cut order lead times from 22 weeks to just two. The SCOR model is organized around five key management processes: Plan, Source, Make, Deliver and Return.

Each of these processes is examined at three levels of detail. The first level is strategic, what the company wants from each process area. The second level maps exactly what is currently happening in each process area. The third level examines the operational level of process areas, the area where execution can be changed.

SCOR does not tell you what changes to make, but shows where the weak points are. It is then necessary to apply appropriate execution adjustments specific to the particular chain. Successful supply chain management is about rigorously reviewing and getting real-time information so you can respond to sub-optimal performance. It also means getting quality operational business intelligence. Businesses that will be successful over the long term are the ones that recognize that the answer lies in maximizing supply chain efficiencies.