Use a process framework

- The human body is a complex system, so in order to understand how it works, we break it down into subsystems, like the skeletal system, the nervous system, and the cardiovascular system. Supply chains are complex systems, too, so I'll show you how to dissect a supply chain by separating it into processes. One of the most popular ways to do this is with a framework called the Supply Chain Operations Reference model, or the SCOR model, which is maintained by the APICS Supply Chain Council.

The SCOR model breaks supply chain processes into six main groups. Plan, the processes where you map out how everything in the supply chain is supposed to work. Source, where you build relationships with your suppliers and buy your materials. Make, which includes all of the processes for manufacturing or assembly. Deliver, the processes for getting your products or services into the hands of your customers. Return, those often overlooked processes for taking back products that your customers don't need or want.

And, finally, enable, which includes all of the other processes that you need to keep a supply chain working smoothly. Within each of these high-level process groups, there are subprocesses and key performance indicators. The subprocesses define how a company executes its supply chain. And the KPIs allow you to compare the performance of a supply chain to your peers through benchmarking. When we talk about a supply chain, we also have to remember that it extends beyond our own company.

So the deliver process for my company needs to integrate with the source process for my customers. And plan, return, and enable processes should be linked the whole way from my customer's customers to my supplier's suppliers. Using a framework like the SCOR model can make it easier to see how processes interact and to clarify who's responsible for each step. By seeing what's happening more clearly, we can measure the results more accurately.

Doctors monitor KPIs all the time to diagnose their patients. Having accurate data about the patient's temperature, blood pressure, and cholesterol can provide important clues about how healthy their patient is. Using a process framework allows us to do the same thing with a supply chain. A good framework is an essential part of aligning an organization around a common set of goals and successfully implementing supply chain management.