Application of the SCOR Model in Supply Chain Management By Rolf G. Poluha

Application of the SCOR Model in Supply Chain Management By Rolf ...

Chapter 1:

Objectives, methodology, approach and definition of terms

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The combination of the process and organization-orientated points of view can be summarized as follows:

“The supply chain includes the organizations and processes for the acquisition, storage, and sale of raw materials, intermediate products, and finished products. Supply chain product flow is linked by physical, monetary, and information flows.”⁴⁴

The present view of a Supply Chain is largely one-dimensional, but a further differentiation can take place with the aid of its layered arrangement of various levels. In accordance with this view, a Supply Chain is an alignment of suppliers and customers, beginning at one end with raw material and ending at the other with the delivery of a completed product to an end customer. The Supply Chain can be dissected into several layers.

A single-level Supply Chain purely illustrates the direct customer and supplier, whereas a multi-level Supply Chain can reach as far as the raw materials on the one hand and the disposal of worn-out finished goods on the other. The complexity increases proportionately with the increase in the number of levels. Most companies, therefore, have neither the means nor the resources to monitor the Supply Chain network and because of this restrict themselves to one or two levels.

In addition to the levels, the components flowing through the Supply Chain must be considered and illustrated: Goods and services in one direction, payments in the other, and information in both directions.⁴⁵ The interpretation of a bidirectional information flow advocated here represents the reality far better than the multi-directional flow of information described above. Actual concepts, like that of Collaborative Planning, Forecasting and Replenishment (CPFR), for example, build upon a flow of information in both directions.⁴⁶

A further criterion that can be included into the Supply Chain’s description is the decision aspect. A multitude of decisions must be reached within a Supply Chain showing a large number of SC partners. These decisions refer, for example, to investments, strategies for coordination and cooperation with partners, customer service, and profit-maximizing strategies.