Jury Still Out on Supply-Chain Benchmarks

ROSEMONT, ILL. (04/12/2000) - Three years after the Supply Chain Council was formed by a group of users, consulting firms and technology vendors, the jury is still out as to whether a set of supply-chain benchmarking and modeling guidelines developed by the group will gain widespread acceptance.

Major companies such as General Motors Corp., BP Amoco, Dow Corning Corp. and DaimlerChrysler AG's auto parts division are making use of the guidelines as part of their own respective supply-chain makeover projects. The initiatives are aimed at reducing costs and improving the delivery of products to customers.

But at a Supply Chain Council conference here this week, officials from the nonprofit organization said the number of companies that have done full implementations of the guidelines and had positive business results remains relatively small.

Things are "still in the embryonic stage in that sense," said Bill Hakanson, executive director of the Pittsburgh-based council.

"A lot of companies are just studying (the guidelines) and will decide later whether they want to implement them," he added. "These are massive companies that are looking at this, and massive companies don't make decisions very quickly."

The council has more than 650 corporate members, and 150 companies have sent employees to workshops on how to implement the supply-chain guidelines. But Hakanson said it's hard to quantify how many of those companies are actually using them.

The guidelines, which are known as the Supply-Chain Operations Reference (SCOR) model, provide a set of benchmarks and business-process descriptions that companies can use to evaluate their current supply chain operations and then model new ways of doing business.

The guidelines are technology-neutral, but most of the users who spoke at the conference about their experiences with SCOR said they're making big investments in new back-office applications and supply chain-planning software as part of their projects.

Timothy Troup, a supply chain specialist at Dow Corning in Midland, Michigan, said the benchmarks built into the SCOR guidelines helped him show his company's business executives a tangible picture of supply-chain shortcomings in areas such as delivering products to customers on time.

"We're a company of engineers, and we like numbers," Troup said. "When you can put those numbers up and show (business managers) that we're down here (on a chart) and the industry average is up there, they can relate to that pretty quickly."

At BP Amoco's petrochemical division, the SCOR guidelines helped "point us in the direction we should be going" in order to improve supply-chain performance, said Ken Evans, who led a supply-chain assessment team at the unit and is now managing an installation of SAP AG's enterprise resource planning software.

But the guidelines still have some weaknesses, Evans added. For example, he said, a collection of suggested business processes appears to have been written mainly by vendors. "There's a lot more depth that could be put into (that section)," Evans said.

Curtis Songer, general director of the supply-chain management team at GM in Detroit, is the chairman of a new automotive special industry group within the Supply Chain Council.

But SCOR is just one of many guidelines that GM is using to design a planned revision of its supply chain. The changes are due to be implemented during the next three years, Songer said. The company is also seeking out help from consulting firms and vendors, he added.

Many of the attendees at this week's conference were just trying to get their arms around the SCOR guidelines.

"I'm trying to understand what it's all about," said Robert Miller, manager of logistics information systems at Growmark Inc., an agricultural cooperative in Bloomington, Illinois. "Hopefully, it can help us determine where we come up short and could improve things. But first we have to learn how to use it."

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