--SCOR Model

50£¥ Inventory, 100% Customer Satisfaction
¡ª¡ªthe Magic of Scor Model


A Shanghai based multinational company¡¯s manufacturing body, reduced its inventory more than 80% within 18 months, from RMB 4 hundred million to RMB 48 million. Such unbelievable inventory decrease, not only greatly cuts down the capital occupation and loan interest burdan, but also helps enterprise get rid from the high risk of short product life cycle for both final products as well as raw materials. Taking all these factors into account, the total yearly cost saving amounts higher than RMB 30 million. Meanwhile, the performance of delivering is also improved. These remarkable achievements are obtained by the implementation of SCOR model, then how can SCOR model work so effectively and so successfully?
Each enterprise is facing same customers requirement and challenge-- the higher the order realizing rate and the shorter the lead-time, the more satisfied the customers are. The traditional way to meet such requirement is to keep high inventories for both raw materials and final products. Unfortunately, higher inventories, not only results in higher capital occupation but also the higher managing risk. As the pace of technology innovation getting faster than ever before, the managing risk of high inventory becomes unacceptable. The traditional way is simply a passive response to quick response demand. How to decrease inventory efficiently without lowering service level such as order meeting rate, lead-time etc. becomes a difficult problem many enterprises urged to solve.
In 1996, the SCC was organized by Pittiglio Rabin Todd & McGrath (PRTM) and AMR Research in order to execute SC management effectively and promote the transition from function-oriented management to process¡ªoriented management. SCC successfully developed the Supply Chain Operations Reference-model (SCOR) and endorsed it at the end of that year. Now, It is well recognized that SCOR model is the first standard SC operations reference model which can be widely used in many industries
SCOR model integrate the well-know concepts of business process reengineering, benchmarking, and process measurement into a cross-functional framework. The experiences of many companies¡¯ successful practice shows that the adoption of SCOR can reduce inventory by 50% while maintain good delivery service performance. Some of them even have cut down inventory by 90%. How can SCOR work so wonderfully? In general, we can try to get to know it through two angles. SCOR deems that all corporation ¡®s business operation activities, based on its process, to be divided into five distinct management process, namely, plan, source, make, delivery and return. Then all the final products order and raw material source also are classified according to its standard level and its volume. For example, standardized products enjoy short-term delivery, while special designed or reengineering products will be listed at relatively longer delivered products. Special catalog being worked out, in which different type products with different level of standardization and different volume of order will be clearly given different delivered time. Whole supply chain operation, including plan, source, make, delivery, return will be ¡°pulled¡± by customer¡¯s requirement and delivery demand accordingly. All the buffer inventory will be well calculated and managed, Information system and well planned management system will make sure the inventory are at the necessary level and not higher.
SCOR is a completely new tool based on process management, which has drawn great attention from many companies abroad. They have started studying and implementing SCOR. It will certainly have a promising future in China too. Our company¡ª¡ªPilot Logistics Management Consulting Co., Ltd., as an pioneer consulting company, is devoted to promote the utilization and localization of SCOR among Chinese corporations and ultimately improve their logistics management skill, cut down their inventory and cost, improving their performance of delivery
The competitive edge of our company at this field roots at our long-term study and practice of SCOR. Our consultants have joined field practice of SCOR and work successfully. Aside from that, our talented professional team has gained rich experience at the fields of benchmarking, BPR and logistics information system in their past working years.
Let¡¯s work together to cut down inventory, reduce cost, raise profit and improving delivery performance, make your customer more satisfied. Lets work together to play win-win-win game.
Looking forward to cooperating with you.