Transcript SCOR Experience at Intel

SCOR Experience at Intel
Presentation for
Supply Chain Council
April 12, 2000
George W. Brown
Intel Worldwide IT, Strategy & Technology
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Agenda
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Objectives for Presentation
Context for Supply Network Improvement at Intel
SCOR Pilot Project
 Supply Network Task Force
 Supply Network Tools Task Force
 Pilot Scope and Deliverables
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Lessons Learned and Observations
SCOR/Tool Update
Summary of Potential Wins
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Objectives for Presentation
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Highlight Intel’s Emphasis on Supply Network
Management
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Summarize Our SCOR Pilot Experience
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Share Our Learning's and Observations
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Recommend Improvements in SCOR/Tools
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Multiple Views on Supply Chain
Definition ...
Supplier
Manufacturer
Customer
Supply chain = Activities within and between each circle
DISCOVER
DEVELOP
DEPLOY
Supply chain = Entire context of the product life cycle
Multiple Suppliers
Multiple Production
Operations within
a Business
Multiple Customers
Most Supply Chains consist of many “threads”
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Lead to Supply Network Thinking and ...
FUTURE... Integrated Supply Network Performance
is a Driver of Competitiveness.
 Competition is no longer just between individual
firms, but is between the supply networks that
design, develop, produce and deliver products
to the end customer.
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NEW COMPUTER INDUSTRY PARADIGMS
SPEED ..... Internet Time
FLEXIBILITY ..... Quick TPT
COST ..... Highly Competitive Consumer Market
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… a Common Vision
Be the Leader in Supply Network
Management
Operate the right multiple supply networks
driven by business needs
Execute each network as a single, virtual
enterprise enabled by the Internet
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… and Supply Network Goals
Drive Cycle Time Reduction in all our
businesses across the Supply Networks
Design & Implement Agile/Flexible Supply
Networks
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Supply Chain Task Force Formed
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To establish a methodology for how we analyze
different business Supply Networks
To better identify which cycle time CSIs we
should target
To assess the relative impact (and cost) of
improving cycle time through variation of
different portions of our overall supply chain
To improve efficiency and effectiveness of
targeted supply chain
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… and a Supporting
Supply Chain Tools Task Force
 To
evaluate tools and methodologies to support
supply chain improvements
 To support the SCOR Model/Methodology
 Provides structure and common language including definition
of process steps and metrics to model supply chain
 Reference Model provides an archetype to configure supply
chain
 Consistency of definition allows for effective evaluation
 With appropriate Tool, Time invested can yield value added
results
 To
explore integration with other planning and
business process modeling activities
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The SCOR Tool Assessment Process
SCOR Pilot
• SCOR and Tool
Training
• Apply SCOR
methodology
• Plan
tool/methodology
improvements
Preliminary
Assessment
• Analysis of SCOR
• Identify options
• Make tool selection
for pilot
Formalize
the Process
Stakeholder
Briefing
• Factor in new SCOR
requirements
• Identify Stakeholders
• Assimilate all
requirements
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Complete
Selection
• Make recommendation
decision
• Prepare propagation
plan
ARIS EasySCOR utilized for
SCOR Modeling
Level One in EasySCOR Modeler
Plan
Source
Make
Deliver
Deliver
Level Two in
EasySCOR Modeler
D1 Deliver Stocked Products
D2 Deliver Make-to-Order Products
D3 Deliver Engineer-to-Order Products
D0 Deliver Infrastructure
Level Three in
EasySCOR Modeler
D1.7
D1.6
D1.8
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D1.5
D1.9
D1.4
D1.3
D1.10 D1.11
D1.2
D1.12
D1.1
D1.13
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SC Task Force Sets up 1st SCOR Pilot
Pilot Mission:
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Identify areas for improvement in customer service and
internal supply chain efficiency
Pilot use of Supply Chain Methodology and Tool(s) for Intel
Document high level supply chain model guidelines for similar
businesses
Business Area Characteristics:
Global in Source, Make and Deliver; represents a fractional
portion of overall business; only one product type taken under
consideration.
Supply Chain Characteristics:
Less than cost effective and/or customer responsive as is desired.
Traditional business model does not always support the business
area needs. Some of the current ‘work around’ processes are not
sufficiently efficient and/or robust.
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SCOR Pilot Process
Develop Enterprise
Supply Chain
Scorecard
Identify Business
Improvement
Targets
Cross-
SCOR and Tool
Training
Identify team ,
Baseline
Existing Baseline charter, mission
and scope
Processes
Define
Scorecard
Functional Team:
Devel
op AS
IS
model
Identify
Performance
Improvements
Core Team: Transportation, Finance,
Assembly and Test Manufacturing,
Identi
fy
metri
cs and
gaps
Warehouses, Materials, Strategic
Logistics, Biz Operations
Tool/Methodology Support Team: IT
Strategy &Technology (ARIS
EasySCOR), ATM Business Process,
Corp Logistics (Manugistics Navigator)
Extended Team/Consultants:
Geography, Sys. Mfg., IDS Scheer
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Revie
w
model
s
for
supply
chain
optimi
Refine
AS IS
Model
Develo
p
TO BE
model
s and
identi
fy
gaps
Gathe
r
Data
for
AS IS
/TO
BE
Plan
supply
chain
optimiz
ation
strateg
ies
SC Task Force Deliverables
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Document Pilot Supply Chain
Document current Supply Chain process
improvement efforts in Pilot business area
Identify & “Go Do” short-term improvements
Identify, get support & identify owners for longterm improvements
Summarize findings and learnings for using Supply
Chain Methodology and Tools
Document guiding Supply Chain principles for
“Pilot-Like” businesses
Document learnings and BKMs on managing a
Supply Chain taskforce
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As-Is Configured in EasySCOR
Suppliers
Supplier
Suppliers
Assemble/ Package
Distribution Centers
Americas--->
Europe--->
Asia--->
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Geo Ports of Entry
SCOR Metrics Assessed at Level I & II
Performance
Attributes
LI
Tie
Metric for P1, Plan Supply
Chain
Metric for P2, Plan Source
Metricfor P3 Plan Make
Metric for P4, Plan Deliver
Cycle Time
PF,
TLC,
CCT,
DP,
AT
Cumulative Source/Make Cycle
Time
Cumulative Source Cycle Time
Cumulative Make Cycle Time
Order Management Cycle Time
Source Flexibility
Make flexibility
Replan Cycle Time
Supplier Cycle Time
Number of End Products/SKU’s
PF,
TLC,
CCT,
DP,
AT
Total Order Management Costs
D/S Planning Costs
Raw Material Inventory Carrying
Costs
Work-In-Process Inventory
Carrying Costs
Finished Goods Inventory
Carrying Costs
Inventory Carrying Costs
Number of Supply Sources
WIP Shrinkage
Finished Goods Shrinkage
Value-Added Productivity
Raw Material Shrinkage
Order management costs
Obsolete Inventory
Commodity Management Profile
Material Overhead Cost Per
Dollar of Material Expenditure
Forecast Accuracy
Supplier Delivery Performance
to Customer Request Date
Production plan adherence
Fill rate
Actual to Theoretical Cycle
Time
Forecast Accuracy
Total WIP Inventory DOS
Total Finished Goods Inventory
DOS
Cost
Service/Quality
PF,
TLC,
CCT,
DP,
AT
Cash-to-cash Cycle Time
Delivery to Customer Request
Date
Supplier Fill Rate
Fill Rate
Total Logistics Costs
Delivery to Customer Request
Date
Product & Process Data
Accuracy (Bills of Material,
Routings, Planning Factors, etc.)
Assets
PF,
TLC,
CCT,
DP,
AT
Return on Assets
Capacity Utilization
Total Raw Material Inventory
DOS
Inventory Obsolescence
Total Inventory DOS
PF = Production Flexibility, TLC = Total Logistics Cost, CCT = Cash-to-Cash Cycle Time, DP = Delivery
Performance; AT = Asset Turns; xx = no tie; xx = tie
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SCOR Elements Considered for Fit
Level III
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Alternatives/Opportunities Evaluated
 We developed our own process for first-pass evaluation of
business improvement opportunities
 Evaluation helped prioritize opportunities for more rigorous
analysis through simulation and optimization studies
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Observations on Our Application of
SCOR Methodology
 Common language and structure enabled quick
assimilation of unfamiliar business process across
supply chains and within supply chain
 SCOR metrics stimulated good thought process
toward development of indicators
 Used SCOR model as a framework to model
business process
 Balanced customization of indicators and
compliance with SCOR metrics
 Matched the level of detail to the project
objective(s)
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Observations on Data Gathering
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Spend time identifying ‘right’ metrics to measure the
business-- very time consuming, don’t underestimate!
Recognize that the level of detail of information and analysis
should match the objective of the taskforce
Would have been nice to do benchmarking but limited time
and ability to make direct comparisons made it difficult
Need to include inventory/capital costs in model to be
comprehensive
Validating labor and handling costs has value beyond Pilot
Modeling for a complex network requires significant effort
to baseline & up-date-- but there is benefit in optimizing
several factors simultaneously
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Learnings from SC Task Force
 Introduce SCOR Methodology and/or Tools early in team
process
 Begin data population of As-Is early & allow a minimum of 1
month for data population and 1 month for validation
 Mapping of Level II metrics to Level I indicators is highly
subjective and potentially time consuming
 Positioning of Plan elements is difficult to align with
operational experience and is non-intuitive
 Methodology provides the structure to define the current
and optimized business process but not the “how” for
successful implementation-- need more support in this area.
 Need to have capability to customize metrics and not force
fit SCOR metrics
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Intangible Benefits from Pilot
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Big benefit has been raising the knowledge level of
the entire team about the business, supply chain
processes and solidifying relationships… intangible
but real and powerful!
Provides structure and common language including
definition of process steps and metrics to model
supply chain
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SCOR proliferation is gaining support
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Larger SCOR projects under way
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SCOR plus Enterprise Information
Architecture = Biz Process Repository
Biz Process Levels
Template
Supply
Chain
Biz
Drivers
Function
Process
Procedure
Task
Information Architecture
•Provides details about Intel business process relationships
Biz + Technology
Infrastructure
SCOR
R/3 & APO
Ref. Models
Biz Function Scope
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•Process improvement methodology
•Generic, uses archetypes
•Best practices and metrics
SCOR applied to B2B e-Commerce
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Support the Sub-contractor Direct Ship project
 Supply chain improvement project from SCOR Pilot
 B2B scenario linked to EAI
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Leverage SCOR to develop a BKM around e-business
scenario modeling
 Start with supply chain models
 Refine the model representation of B2B scenarios
 Drill down to the interchange process specification level
 Perform SCOR-based simulation
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Explore mapping of SCOR to the Rosettanet
 Work with both the Supply Chain Council and RosettaNet
 Siemens is committed in a joint effort
 Currently developing a Value Proposition statement and pilot plan
 Internal review process will precede SCC/Rosettanet proposal
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Start with Supply Chain Models
Processing in the 3PF Scenario
Planning the SO
Scheduling the Delivery
Executing the Delivery
Planning
Level III
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Scheduling
Execution
Refine the Models for B2B Scenarios
3PF Planning/Scheduling B2B
3PF Shipping B2B
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Drill into Interchange Specification
IDS Scheer
E-Business Scenarios
OEM
Importer
will be used to
visualize the flow of
communication between
business participants
Dealer
Vehicle Specification/
Search Request
via Internet
Vehicle Locating
and Allocation
Reservation
Planning
Order Processing
Seller
Order Tracking
Production
Subcontractor
Shipment
Tracking
Transport Control
Sales
Order
Order
Managerment
Goods Receipt
Processing
Shipping
Export/
Transport
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Perform SCOR-based Simulation
Use eSCOR for tpt/cost analysis
Run
simulation
Define
products
Define
resources
Transfer
ARIS Model
into Gensym
eSCOR
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Potential Big Wins for SCOR BKM
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Make positioning of PLAN elements more intuitive
Provide a “how-to” guidelines for applying SCOR
beyond configuration analysis
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Drag and Drop SCOR modeling
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Cost/TPT analysis through simulation
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SCOR-based BKM for B2B modeling
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Facilitate mapping of Level II & III metrics to
Level I indicators
Visualize SCOR metrics through integrated
performance monitoring
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Questions?
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