Measuring SCM Performance with SCOR DS

Friday, March 8, 2024
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There is an old saying that you cannot manage what you don’t measure. This statement can be applied to almost anything, including Supply Chain Management. Given the tools available in today’s SCM systems, there is no excuse for not proactively measuring your supply chain performance. An issue for many organizations is choosing the correct metrics for measuring performance and understanding how to interpret them.

The Supply Chain Operations Digital Standard (SCOR DS) is a model developed by The Association of Supply Chain Management (ASCM) to evaluate supply chain activities and performance. The standard is organized around the seven primary management processes: Orchestrate, Plan, Order, Source, Transform, Fulfill, and Return. Performance attributes are organized into three categories, with specific attributes measured in each category. The categories and attributes for each are as follows:

  • Resilience
    • Reliability
    • Responsiveness
    • Agility
  • Economic
    • Costs
    • Profit
    • Assets
  • Sustainability
    • Environmental
    • Social

Each attribute has one or more strategic metrics that allow an organization to measure its success in achieving its goals. As an example, the Reliability Attribute has three key metrics:

  • Perfect Order Fulfillment
  • Perfect Supplier Order
  • Perfect Return Order Fulfillment

To go further into the details, the Perfect Order Fulfillment metrics include four distinct measurements required for an organization to be at the basic level of the SCOR DS standard.

  1. Percentage of Orders Delivered In Full to the Customer. An order is considered complete if it meets the following requirements: the items provided are the actual items ordered, no extra items are provided, and all quantities received by the customer match the ordered quantities within agreed-upon tolerances.
  2. Delivery Performance to Original Customer Commit Date. An order is considered to have met this criterion if it is received on time per the customer’s definition and made to the correct customer and customer location.
  3. Customer Order Documentation Accuracy. An order is considered to have accurate documentation if it includes the following: shipping documents, including packing lists, Bills of Lading, and any needed government or customs documentation; correct payment documentation, such as an invoice; any required compliance documentation, such as material data safety sheets; and any other documentation specified by the customer, such as quality documentation or certificates of compliance.
  4. Customer Order Perfect Condition. An order is considered in perfect condition if the items are undamaged, meet specifications, have correct configurations, are correctly installed, are accepted by the customer and are not returned for replacement or repair during the warranty period.

The SCOR DS standard had many more measurements for organizations that wish to achieve deeper levels of performance. For example, the Delivery Item Accuracy to the customer has 35 distinct measurements. However, not all apply to every type of organization or product type. 

It has been found that there is a robust correlation between improved performance metrics and the effectiveness of supply chain processes. Organizations that adopt a standard, such as SCOR DS, will be in a much better position to analyze and improve their supply chain effectiveness than those that simply use ad hoc methods. More information on the SCOR DS methodology, including a free online course, is available from ASCM at https://scor.ascm.org/processes/introduction.

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