What Is the SCOR Model?

What is the SCOR model?

SCOR stands for supply chain operations reference. The SCOR model improves supply chain management by supporting communication, decision-making, and problem-solving between suppliers, businesses, and consumers. The goal of the SCOR model is to ensure companies can sufficiently meet the market's demand by measuring the supply chain’s overall performance throughout the process, showing whether or not you reach key performance indicators (KPIs). You can use the SCOR model to highlight areas for improvement and assist you in overcoming challenges.

Overall, the SCOR model helps keep things moving appropriately. Discover how it helps optimize this flow of goods and why it’s an effective tool for making better supply chain management decisions.

The origin of the SCOR model

The SCOR model debuted in 1996 and has since grown to become a staple worldwide for companies large and small looking to optimize their supply chain operations. Since its introduction, however, SCOR has shown the ability to evolve, going through several updates to keep pace with changes in supply chain practices and technological advancements.

Elements of a SCOR model

SCOR models aim to define frameworks and align them with business objectives. They focus on four key areas: performance, processes, practice, and people. 

• Performance refers to defining strategic goals and the metrics that measure process performance. 

• Processes describe the various processes and the relationships between them.

• Practices illustrate the different practices that lead to performance improvements.

• People highlight the skills for success in supply chain management. 

The inner workings of the SCOR model

SCOR focuses on six primary processes:

• Plan

• Source

• Make

• Deliver

• Return

• Enable

Each process needs to function correctly to maintain the proper flow of goods. The following list examines each of those processes in more detail. 

1. Plan

Establishing a plan is the first process for SCOR supply chain management. During this phase, you'll plan your actions to help you work toward your goals, including inventory and asset management, how you will communicate plans, and how you will effectively meet all regulatory requirements.

2. Source

An important consideration when working with the supply chain is the potential for unexpected changes in the availability of materials, as well as changes in demand. To prepare for this, you need a sourcing strategy with suppliers that works financially and allows you to prepare to withstand unforeseen circumstances.

3. Make 

Materials must undergo a manufacturing process to transform into an end product. This includes managing facilities and machinery and equipment, the engineering involved in manufacturing products, and packaging and quality control before release.

4. Deliver

This process involves delivering goods to the customer, including managing distribution and transportation. It also encompasses invoicing customers after they receive their products and receiving orders. 

5. Return

Processes must be in place to receive returned orders from suppliers and customers. Since returns can happen unexpectedly, challenges may present themselves, such as losing products and tracking items. Having a plan in place helps make this process more efficient and accurate.

6. Enable

The enable element refers to several areas and processes in supply chain management that play critical roles in operational support. These processes include regulatory compliance, contracts, data resources, and risk management.

Performance metrics

The SCOR model classifies metrics into three levels to measure how well the supply chain operates. They also enable you to compare your company’s performance against similar businesses. 

• Level one covers metrics relating to the six primary processes: plan, source, make, deliver, return, and enable, which comprise the model. The metrics offered in level one help provide context for where you stand in your market.

• Level two metrics encompass higher-level metrics, where multiple supply chain management processes are evaluated, including subcategories of the primary SCOR processes, such as products and geographies.

• Level three metrics associate levels two and three processes together. Level three processes highlight key business activities and process element details.

Read more: Supply Chain Analytics: What It Is, Why It Matters, and More

What is GreenSCOR?

Expanding on the original SCOR model, GreenSCOR considers the social and environmental impacts of the supply chain. Implementing GreenSCOR for supply chain management helps:

• Minimize environmental risks

• Encourage the use of sustainable and ethical resources

• Reduce the amount of waste

• Integrates sustainable packaging

What is SCOR DS?

SCOR DS, where the DS stands for “digital standard,” updates the SCOR model’s six phases. Rather than six phases, SCOR DS has seven: orchestrate, plan, order, source, transform, fulfill, and return. This new model is fully digital and addresses sustainability standards. 

Pros and cons of using the SCOR model

The SCOR model provides standards for defining processes and measuring performance, which is one of the advantages it offers. However, it's also important to consider the few disadvantages of using the SCOR model.

Pros

• Since SCOR is used across the supply chain by companies of all types and sizes, people are familiar with the terminology, making it easier to communicate with other organizations.

• You can compare your performance against competitors and identify industry benchmarks to strive towards.

• Implementing the SCOR model improves efficiency and cost savings in your supply chain operations.

Cons

• Challenges sometimes exist when implementing the SCOR model, as learning and integrating the different processes takes time.

• The SCOR model depends on data, requiring you to have accessible, high-quality data.

• Although the flexibility for use across industries is an advantage of SCOR, it also causes the SCOR model to have limitations when solving unique problems.

Who uses the SCOR model?

This model helps companies of all sizes optimize their involvement with the supply chain, support their goals and objectives, and ultimately improve performance. You can find several different roles within supply chain management that use this model. To qualify for a career in supply chain management, consider earning a bachelor’s degree in supply chain management, operations management, or business administration. 

The following offers a look at some job titles you can pursue in supply chain management:

• Logistics analyst

• Purchasing manager

• Logistician

• Supply chain manager

• Purchasing agent

• Operations manager

• Distribution manager

Do I need to earn certifications?

Certifications are also a great way to supplement your resume and acquire relevant skills and supply chain knowledge. For example, you might consider one of the Association for Supply Chain Management (ASCM) certifications, such as Certified Supply Chain Professional (CSCP) and Certified in Transformation for Supply Chain (CTSC). 

Read more: What Is CSCP Certification and Do You Need It?

Getting started with Coursera

The SCOR model and its variations offer valuable insights to keep the supply chain and your business running smoothly. To expand your knowledge of supply chain management, consider exploring online courses like the Supply Chain Management Specialization from Rutgers University. This five-course program covers supply chain logistics, operations, planning, and more.

Supply Chain Principles from Georgia Institute of Technology is another great option for learning about supply chain trends, transportation operations, and potential career paths. Upon completing either program, gain a shareable Professional Certificate to include in your resume, CV, or LinkedIn profile.