In the field of business management, supply chain efficiency and optimization are essential for operational success and customer satisfaction. Now, how to achieve better performance and integration between the different components of the chain? The answer is the SCOR model.
In this post, we explain in detail what the SCOR model is, the factors that make it up and the process levels. Shall we give a boost to your business management? Let us begin…
The SCOR model: what you should know?
The SCOR model takes its name from the Supply Chain Operations Reference and is a reference framework that provides a comprehensive view of the supply chain. The objective of this model is to improve the operational performance of organizations and establish a common language that facilitates internal communication and collaboration between the different links in the chain.
To achieve this goal, the SCOR model is made up of five key factors that highlight the importance of effective management: planning, sourcing, manufacturing, delivery and return.
SCOR model factors
Planning
The planning stage focuses on anticipation and strategy, seeking to balance supply and demand, align production with market requirements and optimize the company’s resources. In planning, activities such as:
- Forecast future customer needs based on historical data, market trends, and other indicators.
- Determine how and when the necessary materials will be acquired, suppliers are evaluated and logistics are planned.
- Define how, when and where products will be manufactured, including the allocation of resources such as labour and machinery.
- Ensure that all necessary resources, including human, financial and material, are available and used efficiently.
- Establish distribution methods and routes to deliver finished products to customers in the most efficient and profitable manner possible.
Provisioning
The objective of procurement is to ensure that all necessary materials are available when needed, at the correct cost and with the expected quality. This allows the supply chain to be agile and able to respond quickly to market demands while maintaining effective cost control. For it:
- Suppliers who can meet the required quality and delivery standards are carefully chosen.
- It includes the activities of negotiating prices, delivery terms and payment conditions, as well as the issuance of purchase orders.
- Once the materials arrive, their quality and quantity are verified.
- Rigorous control is maintained over inventory levels to avoid excesses or shortages.
- We seek to continually improve communication and collaboration with suppliers to optimize material flows and the quality of inputs.
Manufacturing
Manufacturing is a vital process for the supply chain, as this is where value is added to the product. In this stage, raw materials and components are transformed through operations such as assembly, machining, packaging or any other process necessary to obtain the final product.
In addition, inspections and tests are carried out to ensure that products meet the required quality standards before being shipped to customers. Likewise, preventive and corrective maintenance of the machinery is essential to guarantee its optimal functioning and avoid unplanned stops.
Distribution
Distribution is the penultimate step of the SCOR model and is essential to achieving a good customer experience. Effective distribution translates into on-time deliveries, reduced costs and happy customers, which is essential in a competitive market. In this sense, correct distribution includes the receipt and processing of orders, as well as the maintenance and packaging of products for transportation.
This phase ends with the delivery of the product to the customer, which also has to be taken care of in detail with good customer service and trained personnel to resolve possible doubts or complaints.
Return
The last step is return, which deals with the management of the reverse flow of products, from the customer back to the manufacturer or distributor. Therefore, it not only involves the logistics of receiving returned products but also the ability to extract value from these goods efficiently and sustainably. In this way, during this phase, you must:
- Establish procedures to facilitate the return of products.
- Inspect returned products to determine their condition and classify them according to whether they can be reused, repaired, recycled or discarded.
- Repair products that can be saved to reintroduce them to the market.
- Handle warranty claims for returned products, which may include repair, replacement or refund.
- Seek an appropriate final disposal for products that cannot be repaired.
- Analyze returns data to identify trends, quality issues, or areas for improvement in the supply chain.
SCOR model process levels
At this point, it is important that you know that, in addition to the phases mentioned above, the SCOR model also includes three levels of processes that give a specific vision of what happens within the supply chain.
The Higher Level is the one in charge of the types of processes. At this level, the overall vision and strategic goals of the supply chain are established. In addition, the scope and structure of the SCOR model in the company is defined.
Meanwhile, the Configuration Level is where processes are categorized into more specific groups. In this sense, the processes are organized into 26 categories based on their nature and function within the supply chain.
Finally, at the Process Element Level, each process is decomposed into detailed activities. In this sense, it is proposed how the specific tasks will be executed within each category of processes.
Advantages and disadvantages of the SCOR model
Are you still not sure about applying the SCOR model in your company? Now we tell you some advantages and disadvantages that can help you make an informed decision. Go for it!
- Analysis of the competitive bases of the business: allows companies to analyze and understand their competitive bases in the supply chain. In addition, it serves to identify areas of improvement and opportunities to obtain a competitive advantage.
- Determining appropriate performance levels: Helps establish the most appropriate performance levels for each supply chain process. Likewise, it allows you to set clear and measurable goals.
- Performance Visibility – Provides clear, detailed process performance data.
- International Standard: Internationally recognized and used by many leading companies around the world.
Regarding the disadvantages of the model, we can mention, for example, that it has a complex implementation and does not consider aspects of the supply chain such as finances or human resources. Additionally, it does not provide specific solutions to errors or problems and requires a long-term commitment to be successful in the company.
Did you find this post about the SCOR model interesting? Subscribe to Educa.Pro for more current business content!