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SCM Process Assessmentand Evaluation
Al BukeyP. Eng., CFPIM, CIRM
ABCAN CONSULTING Inc.www.abcanconsulting.com
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INTRODUCTION
Started from a need to have standard business practices for all facilities ofa large corporation
Turn into a SCM Assessment and Evaluation program for manufacturing
The program assesses SCM capability of each location (site), thenevaluates as is against the desire to be while comparing it with best
of class practices creating the gap.
The summary evaluation provides a degree of SCM capability that exist ineach facility.
The evaluation provides guidelines and action plans to the company toshow how to close the gap.
This presentation explains how the evaluation and assessment has beenapplied at various companies.
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SCM Alignment Requirements
Processes
PeoplePrograms
Aligns the elementsto maximize benefits
Business Processes
Organization and Skills Technology and Tools
/
Business Processes: Shift from As Is to To be
Technology and Tools: Competitive necessity
COO CFO CTO
CEO
Organization : Competitive advantage, peopleappreciates over time
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Business Processes
Organization and Skills Technology and Tools
End goals of the program:
World Class Business process alignment across the companyA learning culture with continuous improvement
Application of appropriate technology, programs and tools
Maximized benefits of company resources
Desired Corporate Results
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Result
The result of the evaluation is the gap and agreed upon roadmapto improve SCM operations. Results are shared with managementand presented to company at different levels as required.
Deployment of the roadmap is the next step.
Deployment includes re-engineered process mapping and processflow.
Processes
Roadmap to SCM
Processes Alignment
Best Practices Deployment
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Process Challenges HOW?
What do we know about SCM processes?
Current business practices and known issues aroundthose practices should provide opportunities (yes, thereare plenty of them!)
Performance of these practices can improve
Best practices of the processes are known (not a rocketscience anymore)
Gap between current and best practice exist, it must be
identified correctly Roadmap from current as-is to the best to be is to be
determined, agreed, and deployed
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SCM process alignment happens across the corporate
Building consistency and synergy creates great momentum
Establishing a reference platform, best practices makes
untapped resources available
Each site:
Identify the needs, weaknesses, strengths, risks and exposure
Analyze the gap and gap closing requirements
Establish an achievable road map with each site
Facilitate resources needed to achieve desired improvement
Deploy and establish standardization
Closing the gap has its advantage
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Executive View - 1
Methodology at corporate level
Finalize SCM categories and processes from a pre-defined template
Develop the assessment program and time table forindividual sites
Establish best practices and reference platform acrossthe organization
Compare SCM capabilities of individual sites across theorganization as well as world class applications
Determine a roadmap for deployment of action plans
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Executive View 2
Assessment Process at Site Develop, test and fine tune to conduct the assessment
Kick-off meeting with management
Evaluate the site and conduct as is vs. to be analysis for
each assessment question
Establish the action plan to close the gap for each
Generate color coded gap analysis
Establish a road map of SCM improvement with management
Summarize, review and share findings with site management
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Executive View - 3
Narrowed down scope
The program applies to any corporate with single/multiplesites
The processes are identifies as internal SCM practices
Integration across the company is one of the key
assessments Some engineering, development, sourcing and life-cycle
activities may be managed at corporate level. They are leftout of scope at this time
Assessed ratings with roadmap is the deliverable
Summary is presented to top management
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Manufacturing Enterprise Model
Corporate HQ
Product Line A Product Line B Product Line C Product Line D
Business
Division W
Business Division X Business
Division Y
FacilityFacilityFacilityFacility
FacilityFacility
FacilityFacility
SCM Process 1
SCM Process 2
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Automotive OEM Satellite Model
1st
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
1st
Tier
2nd
Tier
2ndTier
2nd
Tier
2nd
Tier
1st
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
Tier0.5
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Enterprise Model- SCM Focus
Supplier 2
Supplier 1
Corporate
Consumer
Distribution Centre
ABCO
Customer
Mfg. Facility
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SCM Processes - Company Drivers
Strategic Objectives KPI target performance
New or existing initiatives
Known shortfalls
Customer and Supplier requirements
Assessor must have a real good understanding ofcompany objectives, drivers, programs, andstrategies exist. It will provide a better position tofacilitate the SCM Assessment and Evaluation.
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SCM Processes - Plan
PlanSource DeliverMake
Customer interface, corporate planning
Orders, forecast management
SOP, MPS, inventory management
Capacity planning,
Transportation & Logistics planning
SCM metrics, performance, staffing
Tools and documents
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ProcessesSource
PlanSource DeliverMake
Supplier setup, supplier contracts Supplier delivery schedules, EDI capability
Sourcing, purchasing, etc.
Global acquisition, local procurement
NCM and RMA process
Receiving, inspection, warehousing
Supplier delivery performance, staffing
Tools and documents
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ProcessesMake
PlanSource DeliverMake
Item Master, BOM, work centers, routings
Shop orders, line scheduling, capacity calc.
Material pull and manufacturing processes
QA, MRB and ECO management
WIP management
Volume change flexibility
Production performance
Tools and documents
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ProcessesDeliver
PlanSource DeliverMake
Packaging, Delivery
Warehouses & Distribution
Carriers & Logistics
Invoicing and A/R
Returns management
Order fulfillment performance,staffing
Tools and documents
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Assessment Questions
Each SCM Process is a summary of multiple
individual assessments
Each individual assessment has multiple questionsasked to qualify/verify/evaluate the subject.
For example:
MRP Process of Make has 21 Assessments withmore than 60 individual questions to evaluate
Each one of the 21 Assessments gets a gradeMRP process is then graded out of possible points
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Evaluation & Grading Levels
Red Less than 20% of possible outcome
Yellow Less than 50% of possible outcome
Blue Less than 80% of possible outcome
Green More than 80% of possible outcome
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Assessment Summary: Value is provided bythe experienced assessor
A sample evaluation form goes here!
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Milestones
4 - 8 weeks
1 3 months
3 months 2 years
2+ years
Assessment &
Gap Analysis
Comprehensive
RoadmapPlan for Gaps
SCM Process
Deployment &
Alignment
Continuous
Progress &
Performance
Phase 1
Phase 3
2 weeks
Process
Development
& Kick-off
Phase 2
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SummaryLessons learned:
This is not a pass or fail grading nor a race between sites, rather
an improvement opportunity
Self assessment did not yield desired results
Some processes require strict procedures attached to it
Some process are very straight forward but still applied
incorrectly go figure! Some very unique processes exist in each organization or site
Experienced professional (consultant) provide great value forassessment and roadmap
Deployment requires resources but benefits may be dramatic.
many more