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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Some of these decisions have far-reaching influences upon the Supply Chain and are of a complex nature because with increasing market dynamics, a constantly higher level of uncertainty exists regarding the effects, and a multitude of variables must be taken into account. The Supply Chain resulting from this can be described as a market-driven Supply Chain.⁴⁷

The inclusion of the respective company’s functional areas and the main activities connected therewith lead to a functional description of the Supply Chain. The following five main activities can be identified with regards to a company’s functional areas:⁴⁸

Purchasing: includes the tasks of purchasing raw materials, components, resources and services.

Manufacturing: refers to the manufacture of products or services in addition to resource maintenance and repair, as well as the training of co-workers. It may be summarized therefore as the implementation of all tasks necessary for production.

Movement: consists of the transportation of materials and personnel inside and outside the Supply Chain.

Storage: refers to those products which find themselves being processed (work in process, WIP) in addition to raw materials, whilst these await transportation or reformation, and the finished goods before these are sent to the customer.

Sale: comprises all market-orientated activities, including marketing and sales.

The step from a static to a dynamic view of the Supply Chain is achieved by including activities pertinent to the functional area. Up to now, the previously mentioned flows of material, payments and information have been regarded as linear and coupled. Due to the introduction of the internet⁴⁹ and the acceleration of information flows associated with it, these flows have (to a certain degree) become uncoupled from one another. Information now flows in a predominantly independent manner from the respective flows of material and payments.

As a result of this, Supply Chains in the traditional sense have further developed themselves into networked Supply Chains, which network the SC partners together with the best suited components, technologies and customer services. SC networks are additionally dynamic in nature and make it possible for SC partners to be included or excluded according to certain criteria; for example, technological advantages, product life cycles and customer preferences.⁵⁰