Selecting a Supply Chain Framework
A Supply Chain Framework is a management tool to help identify and map the activities associated with all phases of a supply chain. It helps identify important components that can enable users to address, improve and communicate supply chain issues and practices, both within and between all parties involved.
Strategic Issues in Selecting a Supply Chain Framework
It is important to select a framework for analysis that matches the structure of the supply chain as well as the goals for analysis. Frameworks help provide structure to the project, guiding analyses and informing the development of recommendations and performance metrics. They can also help establish a common vocabulary for the project stakeholders.
The two broadly available supply chain frameworks for implementing supply chain management are the Global Supply Chain Framework (GSCF) and The Supply Chain Operations Reference (SCOR) Model.
GCSF defines supply chain management as the “integration of key business processes from end user through original suppliers that provide products, services and information that add value for customers and other stakeholders.” (1)Implementation is carried out through three elements: supply chain network structure, supply chain business processes and supply chain management components. The supply chain management processes highlighted in the GSCF model are all cross-functional and can be broken down into sequences of strategic and operational sub-processes. Each sub-process is described by a set of activities. Cross functional teams define the structure of managing the process at the strategic level and implement it at the operational level.
The Supply Chain Operations Reference (SCOR):
SCOR was developed by the Supply Chain Council and includes four business processes:
- Deliver: provides finished goods and services to meet planned or actual demand, typically including order management, transportation management and distribution management. For a supply chain with an important reverse logistics component, “Return” is also included as a fifth business process. It deals with returning or receiving returned products for a season and extends into post delivery customer support.
- SCOR focuses on transactional efficiency while GSCF focuses on relationship management. SCOR is used when there is a need to identify areas of improvement to provide rapid cost reductions and improved efficiencies.
- Each GSCF process is aligned with organizational and functional strategies through customer and supplier relationship management, whereas SCOR processes are developed from operations strategy. Positioning SCOR within this overall strategy and prioritizing implementation initiatives that result from the framework will help maximize impact by aligning resources and goals.
- The GSCF framework is very broad in its scope, including activities such as product development, demand generation, relationship management and returns avoidance. In contrast, the scope of the SCOR framework is limited: it focuses only on the forward and backward movement of products as well as those planning components required to efficiently manage these flows.
- Both frameworks emphasize cross-functional involvement, but the limited scope of the SCOR model means that an analysis using this framework would focus only on engaging partners from the logistics, production and purchasing functions of the supply chain. The GSCF framework on the other hand touches all aspects of the business, so would also add stakeholders from, for example, marketing and finance. The relatively narrow focus of SCOR may therefore make it somewhat easier to implement, since the activities of logistics, production and purchasing may already be somewhat naturally integrated within an organizational structure.
- Additionally, SCOR includes a set of benchmarking tools for performance and process evaluation. Performance benchmarking allows an organization to assess their results on key operational metrics such as inventory turns or fill rates. Process benchmarking helps identify and duplicate supply chain best practices.
RUTF Case Study: Supply Chain Framework
(1) “Supply Chain Management: Processes, Partnerships, Performance” by Douglas Lambert, Second Edition 2006