Scor Model

SCOR MODEL

AGENDA

• Process Reference Model

• SCOR Model

• What?

• Span it operates

• Limitations & Assumptions

• AT&T Wireless Services

• Learnings

SCOR MODEL

SCOR – MANAGEMENT PROCESSES

“Supplier’s suppliers to Customer’s customer”

SCOR – LIMITATIONS & ASSUMPTIONS

Limitations• Sales and Marketing

• Research and technology development

• Product Development

• Some elements of post delivery customer support

Assumptions• Training

• Quality

• Information Technology

• Administration

AT&T WIRELESS SERVICES

McCaw Cellular Communications: AT&T WirelessServices in 1994

• 70% manufacturing was outsourced.

• Global presence was wide but not deep as only 10% ofthis revenue came from the global sales.

• Transition from B2B business model to a consumer-product model.

• Problem getting the right product at the right place at the righttime

• Huge amount of inventory in pipeline. About 3 to 4 months.Plus the product life cycle was reducing in this segment.

• Wireless Services division: Financial losses to 20% ofthe revenue

• Cash-to-cash cycle was 10 weeks.

AT&T SERVICES – LEVEL-1 METRICS

AT&T SERVICES – LEVEL 2

• Pre-Implementation

• Complex supply chain network• Sourcing lead times was over 200 days for some products

• High conformance to forecast production requirements

• High forecast errors ranging from 40 – 80%

• Change in supply chain

• Demand driven supply chain

• Usage of common components

• To Combine manufacturing and distribution operations located in Mexico

• Reduction of supplier base and strengthen the partnership with chosen few suppliers

AT&T SERVICES – LEVEL 3

Specific elements improvement.

• Real time information on available to promise

quantity: integration with scheduling and

inventory management system

• Electronic order handling

• Ship complete orders

• Handle 90% order on FIFO basis

AT&T SERVICES – LEVEL 4

BENEFITS - POST IMPLEMENTATION

• Immediate financial improvements just by closing down and consolidating the SC into a make-to-order environment

• By the second year of implementation

• Gross margin was improved by 10% of revenues –resulted in $200 million worth of savings

• Significant reduction in inventory – 55% reduction in inventory

• Improvement in cash flow – cash-to-cash cycles were reduced by about 70%

• Improvement in delivery performance – cycle times were reduced by 80% (12 weeks to 2 weeks)

LEARNING

• Need for fact-based analysis

• Identification of strategic performance

advantages

• Top management involvement

• Need for continuous updation of

• Value proposition

• Benchmarks

• Refining supply chain

REFERENCES

• SCOR Overview 9.0- Supply Chain Council.

• www.supply-chain.org

• Handbook on Supply Chain Management

• Evolving Enterprise: Volume 1-Lionheart

Publishing.

• www.ism.ws

Thank You