Supply Chain Operation (SCOR-8)

Supply Chain Operations
Reference Model
®
SCOR
Version 8.0
© Supply-Chain Council, 2006. All rights reserved. The Supply-Chain Council has made every effort to
assure the accuracy and usefulness of the information and metrics contained herein and is provided on
an "AS IS" basis. The Supply-Chain Council makes no warranty, express or implied, of merchantability,
fitness for a particular purpose, or accuracy. The Supply-Chain Council makes no representation as to the
results obtained or obtainable and disclaims all liability for direct, indirect, special or consequential
damage, including lost profits, lost business or the like, whether based in contract, tort (including
negligence), product liability or otherwise.
®
SCOR is a registered trademark in the United States and Canada.
© Copyright 2006 Supply-Chain Council, Inc.

Acknowledgements
The following members (alphabetical by company) of the Supply-Chain Council Technical Development
Steering Committee and Project Teams devoted extensive time and/or effort to the development of this
Model – SCOR Version 8.0.
Name Company
Kevin Mansfield Air Products & Chemicals, Inc
Cheryl Harrity APQC
Joe Faccenda Aspentech
Steve Hensley Blue Sky Logistics
Bill Garrison Boeing
Jörg Nienhaus Bosch,
Paul Schiller BP Chemicals
Paul Tilsley BP
Sergio Vacca Bulgari
Steven Vanne Caterpillar Logistics
Eric Cosman The Dow Chemical Company
Russ Dickinson The Dow Chemical Company
Stephen Graham The Dow Chemical Company
Ray Walker DuPont
Lars Magnusson Ericsson
Charles-Eric Roussel Essilor France
Alex Van Breedam Flanders Institute for Logistics
Charlie Gifford GE/Fanuc
Georgeann Fears IBM Benchmarking
Chang-rui Ren IBM China
Jin Dong IBM China
Luc Kremers iCognitive
Rob Hagan International Paper
Jürgen Richert J&M Management Consulting AG
Taylor H. Wilkerson LMI
Shruti Mandana The Performance Measurement Group
Dan Swartwood Pragmatek
Monty Boyle PriceWaterhouseCoopers
Gary Cokins SAS
Keith Unger Stone Technologies, Inc.
Melinda Spring Supply-Chain Council
Scott Stephens Supply-Chain Council
Arne Ziegenbein ETH Zurich
Scott Sealing United Space Alliance
John Nyere United States Department of Defense
Peter Baker UTi
Nancy Craft Volvo
Nishioka-san Accenture
© Copyright 2006 Supply-Chain Council, Inc.

Supply Chain Operations
Reference-model (SCOR) 8.0
Contents
• Introduction 1
• PLAN 12
• SOURCE 68
• MAKE 115
• DELIVER 168
• RETURN 252
• Workflow Graphics 306
• Glossary
Process Terms 354
Metrics 368
Best Practices 386
Inputs and Outputs 419
• Appendices
Appendix A: Metrics
Background Development Information 434
Appendix B: Best Practices
Background Development Information 511
© Copyright 2006 Supply-Chain Council, Inc. June 2006

Supply Chain Operations Reference-model (SCOR) 8.0
Introduction
The Supply Chain Operations Reference-model (SCOR) is the product of the Supply-Chain
Council (SCC), an independent, not-for-profit, global corporation with membership open to all companies
and organizations interested in applying and advancing the state-of-the-art in supply-chain management
systems and practices. The SCOR-model captures the Council’s consensus view of supply chain
management. While much of the underlying content of the Model has been used by practitioners for
many years, the SCOR-model provides a unique framework that links business process, metrics, best
practices and technology features into a unified structure to support communication among supply chain
partners and to improve the effectiveness of supply chain management and related supply chain
improvement activities.
The SCC was organized in 1996 and initially included 69 practitioner companies meeting in an
informal consortium. Subsequently, the companies of the Council elected to form an independent not for
profit trade association. The majority of the SCC’s members are practitioners and represent a broad
cross-section of industries, including manufacturers, distributors, and retailers. Equally important to the
Council and the advancement of the SCOR-model are the technology suppliers and implementers, the
academicians, and the government organizations that participate in Council activities and the
development and maintenance of the Model. At the time of this release, the Council has approximately
800 members worldwide and has established international chapters in Australia/New Zealand, Brazil,
Greater China, Europe, Japan, Southeast Asia, and Southern Africa with additional requests for regional
chapters pending.
The Supply-Chain Council is interested in providing the widest possible dissemination of the
SCOR-model. The wide-spread use of the Model results in better customer-supplier relationships,
software systems that can better support members through the use of common measurements and terms,
and the ability to rapidly recognize and adopt best practice no matter where it originates. SCC requests
that all who use the SCOR-model provide attribution to the Supply-Chain Council. Additionally, members
are encouraged to monitor the members section of the SCC website (www.supply-chain.org) to ensure
that they are using the latest version of SCOR.
This introduction is provided to assist new users of the SCOR-model to begin analytic and
implementation projects. It is intended to remind experienced users of the framework and structure of the
Model to assist in more complex applications and operationalizing the Model for their businesses. Finally,
it is provided to orient members to the changes between Version 8.0 and Version 7.0.
Version 8.0 of the SCOR-model is the tenth revision since the Model’s introduction in 1996.
Revisions of the Model are made when it is determined by Council members that changes should be
made to facilitate the use of the Model in practice. Specific changes in Version 8.0 are outlined later in
this Introduction.
© Copyright 2006 Supply-Chain Council, Inc. 1 June 2006

Scope
The SCOR-model has been developed to describe the business activities associated with all
phases of satisfying a customer’s demand. The Model itself contains several sections and is organized
around the five primary management processes of Plan, Source, Make, Deliver, and Return (shown in
Figure 1). By describing supply chains using these process building blocks, the Model can be used to
describe supply chains that are very simple or very complex using a common set of definitions. As a
result, disparate industries can be linked to describe the depth and breadth of virtually any supply chain.
The Model has been able to successfully describe and provide a basis for supply chain improvement for
global projects as well as site-specific projects.
Plan
Plan Plan Plan Plan
Deliver Source Make Deliver Source Make Deliver Source

Return Source Make Deliver Return Return Return
Return Return
Supplier Customer Customer’s
Suppliers’ Return Return
Internal or External Internal or External Customer
Supplier Your Company
Figure 1 - SCOR is organized around five major management processes.
It spans: all customer interactions (order entry through paid invoice), all physical material
transactions (supplier’s supplier to customer’s customer, including equipment, supplies, spare parts, bulk
product, software, etc.) and all market interactions (from the understanding of aggregate demand to the
fulfillment of each order). It does not attempt to describe every business process or activity. Specifically,
the Model does not address: sales and marketing (demand generation), product development, research
and development, and some elements of post-delivery customer support.
It should be noted that the scope of the Model has changed and is anticipated to change based
on Council member requirements. With the introduction of Return, the Model has been extended into the
area of post-delivery customer support (although it does not include all activities in that area).
As shown in Figure 2, the Model is designed and maintained to support supply chains of various
complexities and across multiple industries. The Council has focused on three process levels and does
not attempt to prescribe how a particular organization should conduct its business or tailor its systems /
information flow. Every organization that implements supply chain improvements using the SCOR-model
will need to extend the Model, at least to Level 4, using organization-specific processes, systems, and
practice.

The Model is silent in the areas of human resources, training, and quality assurance among
others. Currently, it is the position of the Council that these horizontal activities are implicit in the Model
and there are other highly qualified organizations that are chiefly concerned with how an organization
should train, retain, organize, and conduct their quality programs. Just as the Council recognized the
requirements for marketing and sales in commercial organizations, the Council is not minimizing the
importance of these other activities.
SCOR Contains Three Levels of Process Detail
Level
# Description Schematic Comments
Level 1 defines the scope and content for the

1 Supply chain Operations Reference-model.
Plan
Top Level Here basis of competition performance
(Process Types) Source Make Deliver targets are set.
Supply-Chain Operations Reference-model
Return Return
2 A company’s supply chain can be

“configured-to-order” at Level 2 from core
Configuration
“process categories.” Companies implement
Level (Process
their operations strategy through the
Categories)
configuration they choose for their supply
chain.
3 Level 3 defines a company’s ability to

Process Element compete successfully in its chosen markets,
Level and consists of:
(Decompose • Process element definitions
Processes)
• Process element information inputs,
P1.1
and outputs
Identify, Prioritize, and
Aggregate Supply-Chain • Process performance metrics
• Best practices, where applicable
Requirements
P1.3 P1.4
Balance Production Resources Establish and
P1.2
with Supply-Chain
Requirements
Communicate
Supply-Chain Plans • System capabilities required to
Identify, Assess, and
Aggregate Supply-Chain support best practices
• Systems/tools
Requirements
Companies “fine tune” their Operations

Strategy at Level 3.
4 Implementation Companies implement specific supply-

Level chain management practices at this level.
Not (Decompose Level 4 defines practices to achieve
in Process competitive advantage and to adapt to
Scope Elements) changing business conditions.
Figure 2 - SCOR is a hierarchical model with specific boundaries in regard to scope.

The SCOR-model is a business process reference model as illustrated in Figure 3. That is, it is a
Model that links process elements, metrics, best practice and the features associated with the execution
of a supply chain in a unique format. The uniqueness and power of the Model and its successful
implementation is chiefly derived from using these four elements together.
It is important to note that this Model describes processes not functions. In other words, the Model
focuses on the activity involved, not the person or organizational element that performs the activity.
Business Process Benchmarking Best Practices Process Reference

Reengineering Analysis Model
Capture the “as-is” state

Capture the “as-is” of a process and derive
state of a process the desired “to-be” future
and derive the state
desired “to-be” Quantify the
future state operational Quantify the operational
performance of performance of similar
similar companies companies and establish
and establish internal targets based on
internal targets “best-in-class” results
based on “best-in- Characterize the
class” results management Characterize the
practices and management
software solutions practices and
that result in software solutions
“best-in-class” that result in “best-in-
performance class” performance
Figure 3 - SCOR is a business process reference model.
SCOR-model Structure
Besides the five basic management processes (Plan, Source, Make, Deliver, Return) that provide
the organizational structure of the SCOR-model, it is useful to distinguish between the three process
types in the Model: planning, execution, and enable (formerly infrastructure). A planning element is a
process that aligns expected resources to meet expected demand requirements. Planning processes
balance aggregated demand across a consistent planning horizon. Planning processes generally occur
at regular intervals and can contribute to supply chain response time. Execution processes are triggered
by planned or actual demand that changes the state of products. They include scheduling and
sequencing, transforming materials and services, and moving product. Enable processes prepare,
maintain, and manage information or relationships upon which planning and execution processes rely.
A set of standard notation is used throughout the Model. P depicts Plan elements, S depicts
Source elements, M depicts Make elements, D depicts Deliver elements, and R depicts Return elements.
SR = Source Return and DR = Deliver Return. An E preceding any of the others (e.g., EP) indicates that
the process element is an Enable element associated with the Planning or Execution element (in this
case, EP would be an Enable Planning element).
As indicated in Figure 2, the Model is hierarchical with three levels. P1.1 is a notation that
indicates a third level process element. In this case, it is a Plan (P – Level 1) element that is concerned
with supply chain planning (1 – Level 2) and is specific to identifying, prioritizing, and aggregating supply
chain requirements (.1 – Level 3).

The SCOR-model contains 8 basic sections: Introduction, Plan, Source, Make, Deliver, Return,
Glossary and Appendices. For modeling purposes, Return is documented in two locations – Source and
Deliver. Those Return processes that connect an organization with its supplier (i.e., the return of raw
material) are documented as Source Return activities. Those processes that connect an organization
with its customer (i.e. the receipt of returned finished goods) are documented as Deliver Return activities.
This preserves the concept that Source connects an organization with its suppliers and Deliver connects
an organization with its customers. The Plan and Execution (Source, Make, Deliver, Return) sections are
the heart of the Model while the Glossary provides a listing of the standard process and metrics terms
that are used within the Model. The Appendices provide detailed information on metrics and best
practices.
Plan, Source, Make, Deliver, and Return sections are organized with a standard structure. At the
beginning of each section, there are graphics that provide a visual representation of the process
elements, their relationships to each other, and the inputs and outputs that are germane to each process
element. Following the graphics are text tables that identify: 1) the standard name for the process
element, 2) the notation for the process element, 3) SCC’s “standard” definition for the process element,
4) performance attributes that are associated with the process element, 5) metrics that are associated
with the performance attributes, 6) best practices that are associated with the process (candidates, not
necessarily an exhaustive list), and features (generally technologically related) that can contribute to
heightened performance of the process.
Within the Source, Make and Deliver process elements, a common internal structure has been
agreed upon. The Model focuses on three environments, Make-to-Stock, Make-to-Order, and Engineer-
to-Order. As a result, S1 becomes Source Make-to-Stock Product, S2 becomes Source Make-to-Order
Product and S3 becomes Source Engineer-to-Order Product. This same convention is used for Make,
i.e. M1 – Make-to-Stock, and Deliver, i.e. D2 – Deliver Make-to-Order Product. This convention was
extended to Return in Version 5.0. R1 is the Return of Defective Product, R2 is the Return of
Maintenance, Repair or Overhaul (MRO) Product, and R3 is the Return of Excess Product.
Within each of the planning and execution sections and following the graphic and text
descriptions, the associated Enable elements are described using the same graphic and text formats.
It is important to note, that like the process elements themselves, the metrics are intended to be
hierarchical. Although not explicit in the Model, Level 1 metrics, as shown in Figure 4 are typically
“assigned” to P1 (Plan Supply Chain) and are decomposed (Level 2 and diagnostic metrics) to the
respective planning, execution and enable elements.

Performance Attributes and Level 1 Metrics
Level 1 Metrics are primary, high level measures that may cross multiple SCOR processes. Level 1
Metrics do not necessarily relate to a SCOR Level 1 process (PLAN, SOURCE, MAKE, DELIVER,
RETURN).
Performance Attributes
Level 1 Metrics Customer-Facing Internal-Facing
Reliability Responsiveness Flexibility Costs Assets
Perfect Order Fulfillment x
Order Fulfillment Cycle Time x
Upside Supply Chain x
Flexibility
Upside Supply Chain x
Adaptability
Downside Supply Chain x
Adaptability
Supply Chain Management x
Cost
Cost of Goods Sold x
Cash-To-Cash Cycle Time x
Return on Supply Chain Fixed x
Assets
Return on Working Capital x
Figure 4 - SCOR Performance Attributes and Level 1 Metrics
The metrics are used in conjunction with performance attributes. In Version 4.0 of the
Model, the Performance Attributes were expanded from four (Supply Chain Reliability, Supply Chain
Flexibility and Responsiveness, Supply Chain Costs, and Supply Chain Asset Management) to five
(Supply Chain Reliability, Supply Chain Responsiveness, Supply Chain Flexibility, Supply Chain Costs,
and Supply Chain Asset Management). Generally, the impact of this exercise was to associate cycle time
measures with Responsiveness and to identify needed metrics in the area of Flexibility. The table in
Figure 5 defines the performance attributes and indicates which Level 1 metrics are associated with each
attribute.
The Performance Attributes are characteristics of the supply chain that permit it to be analyzed
and evaluated against other supply chains with competing strategies. Just as you would describe a
physical object like a piece of lumber using standard characteristics (e.g., height, width, depth), a supply
chain requires standard characteristics to be described. Without these characteristics it is extremely
difficult to compare an organization that chooses to be the low-cost provider against an organization that
chooses to compete on reliability and performance.

Performance Attributes and Associated Level 1 Metrics
Performance Performance Attribute Definition Level 1 Metric

Attribute
Supply Chain The performance of the supply chain in Perfect Order Fulfillment
Reliability delivering: the correct product, to the correct
place, at the correct time, in the correct
condition and packaging, in the correct
quantity, with the correct documentation, to
the correct customer.
Supply Chain The speed at which a supply chain provides Order Fulfillment Cycle Time
Responsiveness products to the customer.
Supply Chain The agility of a supply chain in responding Upside Supply Chain Flexibility
Flexibility to marketplace changes to gain or maintain Upside Supply Chain
competitive advantage. Adaptability
Downside Supply Chain
Adaptability
Supply Chain The costs associated with operating the Supply Chain Management Cost
Costs supply chain. Cost of Goods Sold
Supply Chain The effectiveness of an organization in Cash-to-Cash Cycle Time
Asset managing assets to support demand
Management satisfaction. This includes the management Return on Supply Chain Fixed
of all assets: fixed and working capital. Assets
Return on Working Capital
Figure 5 – Definitions for SCOR Performance Attributes and which Level 1 metrics are associated
with each attribute.
Associated with the Performance Attributes are the Level 1 Metrics. These Level 1 Metrics are
the calculations by which an implementing organization can measure how successful they are in
achieving their desired positioning within the competitive market space. While these Performance
Attributes are critical in implementing the Model, formal definitions were not previously included in the
Model. In Version 4.0, standard Performance Attribute definitions were provided. In Version 5.0, the
process tables associated with Level 2 and 3 activities were reconciled to reflect the separation of the
flexibility and responsiveness attributes and to ensure that the metrics measured what they were intended
to measure.
First time users of the Model should be aware that the metrics in the Model are hierarchical – just
as the process elements are hierarchical. Level 1 Metrics are created from lower level calculations.
(Level 1 Metrics are primary, high level measures that may cross multiple SCOR processes. Level 1
Metrics do not necessarily relate to a SCOR Level 1 process (PLAN, SOURCE, MAKE, DELIVER,
RETURN).
Lower level calculations (Level 2 metrics) are generally associated with a narrower subset of
processes. For example, Delivery Performance is calculated as the total number of products delivered on
time and in full based on a commit date. Additionally, even lower level metrics (diagnostics) are used to
diagnose variations in performance against plan. For example, an organization may wish to examine the
correlation between the request date and commit date.

SCOR Version 8.0 Changes
No Process Changes
In Version 8.0, there are no changes to the Level 1, 2, or 3 Processes.
Metrics
There is an additional Level 1 metric – Return on Working Capital – in the Assets Attribute
category. The definition and other detailed information regarding this metric are included in the Metrics
Appendix A in this publication. It is also listed in the appropriate processes under “Metrics.”
The Metrics in SCOR 8.0 have been significantly streamlined. Level 2 processes now only
include Level 1 metrics and a Cost metric has been added for every single process in the model. Version
7.0 similarly saw the addition of a Cycle Time metric for every process. This allows the easy “roll up” of
cost and cycle time metrics to the Level 1 metrics. Metrics that are considered to be “diagnostic” are not
included in the Appendix A Metrics Hierarchy. These measures are important measures, but do not “roll
up” to Level 1 Metrics. There are a few new hierarchical Level 3 metrics that are not yet defined and
listed in the tables – this will be included in the next SCOR update – likely to be a minor update 8.1.
SCOR 7.0 Metrics that were categorized as lower level or no longer relevant have been archived. An
archived list of SCOR metrics is available upon request.
Best Practices
The Best Practices Appendix has also been reworked to make it a more clean and consistent
reference. Changes to some of the definitions throughout the Model have been updated and some
process affiliations are changed. Best Practices no longer contain the “Feature” column, as this was a
“hangover” from when the Model used to list affiliated software features, now not maintained by the
Council. This column has been replaced by a definition where it has been identified. The team surveyed
SCC members on Best Practices that they want to see included in the future and this work is ongoing.
Changed definitions in Version 8.0 include:
Barcoding add RFID

Design/upgrade production equipment old: None Identified
to maximize flexibility and avoid line new: Machine productivity and downtime monitoring. (consistent to
stoppages the other occurrences of the best practice process characteristic)
Assessing export/import requirements old: None Identified
during time of product new: Multi-country Export/Import documentation compliance
development/manufacture
Bar coding is used to minimize old: Product serial number used as identifier
handling time and maximize data new: Bar code interface for data collection devices
accuracy Generate bar coded receiving documents
Cellular manufacturing old: None Identified
new: Manufacturing is broken into work cells
Collaboration among Supply Chain old: None Identified
partners extends outwards to new: Supply Chain Advanced Planning Systems
customers, spanning the supply chain. Supply Chain Integration Systems
Planning Integration between supply chain Advanced Planning and ERP
Replanning execution systems
Business Rules Supply Chain Capacity Planning Systems
Plan Changes
Design/upgrade production equipment old: None Identified
to maximize flexibility and avoid line new: Machine productivity and downtime monitoring
stoppages
Electronic material move transactions old: Bar code data collection
new: Automated process control and/or barcode data collection
ATP and Product Reservation old: ATP and Product Reservation, Integration with scheduling and
inventory management
new: Available-to-Promise (ATP), See Glossary

Supplier (Carrier) Agreements old: Supplier (Carrier) Agreements
new: Carrier Agreements
CPFR®, Collaborative Planning, old: CPFR®, Collaborative Planning, Forecasting, Replenishment
Forecasting, Replenishment new: Collaborative Planning, Forecasting, Replenishment (CPFR)
Postponement New: Postponement (delayed differentiation) is a supply chain concept
where a product is kept as long as possible in a generic state.
Differentiation of the generic product into a specific end-product is
shifted closer to the consumer by postponing identify changes, such as
assembly or packaging, to the last possible supply chain location.
S&OP, Sales and Operations Planning old: S&OP, Sales and Operations Planning
new: Sales and Operations Planning (S&OP)
Inventory Cycle Counting old: Inventory Cycle Counting
new: Statistical Test Count
Assess Supplier Performance old: Assess Supplier Performance
new: Supplier Performance Assessment System
Inputs and Outputs
New in the Glossary are the Inputs/Outputs and their definitions. These were not defined or listed
for reference in any previous versions of SCOR. This piece of the SCOR 8.0 development was facilitated
by a team working to use the ISA 95 standard in conjunction with SCOR. The definitions they added
were included to also satisfy their use of both SCOR and ISA 95.
Workflow Graphics
Prompted by the first time re-hosting of the SCOR model into a BPM native format, the workflow
diagrams are very different than the previously published Microsoft Word graphics. They now also
include “deliverables” – what is moving from one process to another, or into and out of the process. As a
result of these complex workflows and the rehosting in software rather than maintenance in Microsoft
Word, the type is very small in the workflow graphics. The TDSC has agreed to post them ‘as is” for this
printing until a more legible print version can be developed. They are included behind the process tables.
They are also available as HTML files on the www.supply-chain.org members’ website with a zoom
feature so that they can be enlarged for easy reading.
SCOR database
For the next version of SCOR (most likely 8.1), the database output from this BPM will be
released as a vendor-neutral format. The suppliers working with SCC on this project will help determine
how this will be released and made available. A software licensing program is also being developed for
future releases of SCOR in electronic format.

SCOR Toolkit

The Technical Change Process
The SCOR-model is developed and maintained by the voluntary efforts of the Supply Chain Council members.
Unlike other organizations with large technical staffs, the Council depends on the contributions of its members to
actively advance the state of knowledge in supply chain by identifying required Model changes, researching and
validating those changes, and developing the consensus regarding the proposed changes. SCOR-model versions
prior to Version 6.0 were developed in a Committee structure that was focused on developing a stable, usable Model
that could be used by experienced Council members as well as organizations newly introduced to the SCOR concept.
In 2002, confident that the Model’s stability had been demonstrated with over 5 years of application experience by
Council members, the Supply Chain Council shifted its technical development focus to specific implementation issues.
The current technical development process relies on project teams composed of volunteers from Supply
Chain Council member organizations. These project teams are short-lived groups that focus on specific Model
challenges. It is expected that the normal term of a project team will be between 3-6 months. The change process
and the coordination of the project team activities is led by the Technical Development Steering Committee (TDSC), a
standing body elected by their peers in the Council. Changes to the Model are normally initiated by a Council member
or members (but may be initiated by a Special Industry Group, an implementation project team, or the Chief Technical
Officer). The primary mechanism for changing the Model is the Project Team. These self-organizing and self-directed
teams propose areas of investigation, pursue and develop proposals for Model development and publish research
results on the Council website. These activities are coordinated by the Supply Chain Council’s Technical
Development Steering Committee, which is comprised of elected representatives from the Council’s membership.
The Model change process is documented on the SCC’s website. Essentially, the process consists of: 1) The
Council issues a call for volunteers to work on an identified need for revision or change, 2) volunteers submit a
Charter Proposal to the TDSC outlining the concept, scope of work, schedules and milestones, and identifying the
volunteer resources, 3) the TDSC reviews the proposed Charter and provides feedback on the proposed changes to
the initiating group, 4) upon approval, the Project Team crafts the details of their scope of work and determines
whether it is likely their efforts will lead to a Model change (which generally includes the modification of SCOR
processes, metrics, best practice, features and inputs and outputs) or a research report (white paper), 5) the Project
Team proposes how to integrate proposed changes into the overall Model, 6) after final technical review the TDSC
forwards the technical community recommendations for proposed changes/additions to the SCC Board of Directors,
and 7) following the approval of the Board, the new Model is published for the SCC membership.

P1 Plan Supply Chain
The development and establishment of courses of action over specified time periods that
represent a projected appropriation of supply chain resources to meet supply chain requirements
for the longest time fence constraints of supply resources.
The Category P1 includes four Level 3 Elements:

P1.1 Identify, Prioritize, and Aggregate The process of identifying, aggregating, and prioritizing, all sources of
Supply Chain Requirements demand for the integrated supply chain of a product or service at the
appropriate level, horizon and interval.
The sales forecast is comprised of the following concepts: sales

forecasting level, time horizon, and time interval. The sales forecasting level
is the focal point in the corporate hierarchy where the forecast is needed at
the most generic level. i.e. Corporate forecast, Divisional forecast, Product
Line forecast, SKU, SKU by Location. The sales forecasting time horizon
generally coincides with the time frame of the plan for which it was
developed i.e. Annual, 1-5 years, 1- 6 months, Daily, Weekly, Monthly. The
sales forecasting time interval generally coincides with how often the plan is
updated, i.e. Daily, Weekly, Monthly, and Quarterly.
P1.2 Identify, Assess, and Aggregate Supply The process of identifying, prioritizing, and aggregating, as a whole with
Chain Resources constituent parts, all sources of supply that are required and add value in
the supply chain of a product or service at the appropriate level, horizon and
interval.
P1.3 Balance Supply Chain Resources with The process of identifying and measuring the gaps and imbalances between
Supply Chain Requirements demand and resources in order to determine how to best resolve the
variances through marketing, pricing, packaging, warehousing, outsource
plans or some other action that will optimize service, flexibility, costs, assets,
(or other supply chain inconsistencies) in an iterative and collaborative
environment.
The process of developing a time-phased course of action that commits

supply-chain resources to meet supply-chain requirements.
P1.4 Establish Supply Chain Plans The establishment and communication of courses of action over the
appropriate time-defined (long-term, annual, monthly, weekly) planning
horizon and interval, representing a projected appropriation of supply-chain
resources to meet supply-chain requirements.
Metrics (see Appendix A for metrics attributes):

Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding - Days Payable
Outstanding]
The time it takes for an investment made to flow back into a company after it
has been spent for raw materials. For services, this represents the time
from the point where a company pays for the resources consumed in the
performance of a service to the time that the company received payment
from the customer for those services.
Cost to Plan Supply Chain The sum of the costs associated with planning supply chain activities.
Order Fulfillment Cycle Time The average actual cycle time consistently achieved to fulfill customer
orders.
Plan Cycle Time The average time associated with planning source activities
Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets measures the return an organization
receives on its invested capital in supply chain fixed assets. This includes
the fixed assets used in Plan, Source, Make, Deliver, and Return. The
levels of aggregation can be at any element associated with a supply chain
asset.

Return on Working Capital Return on working capital is a measurement which assesses the magnitude
of investment relative to a company’s working capital position verses the
revenue generated from a supply chain. Components include accounts
receivable, accounts payable, inventory, supply chain revenue, cost of
goods sold and supply chain management costs.
Best Practices:
All Functions and Organizations Understand None identified
Their Impact on Supply/Demand Balancing,
Including Sales, Marketing, Product
Management, Manufacturing, Customer,
Suppliers, Materials Management, and
Product Development
Capability to Run “Simulated“ Full-Stream Supply chain modeling and visualization system
Supply/Demand Balancing for “What-If“
Scenarios
Change in the Demand Signal Event-driven supply chain re-planning
Instantaneously “Reconfigures“ the
Production and Supply Plans
Collaborative Planning, Forecasting, Collaborative Planning, Forecasting and Replenishment is a concept that
Replenishment (CPFR) allows collaborative processes across the supply chain, using a set of
process and technology models.... (From www.cpfr.org/intro.html)
On-Line Visibility of All Supply-Chain Enterprise resource planning system Customer relationship management
Demand Requirements and Resources, both system
Currently Available and Committed (Pegged)
Re-Balancing of Full-Stream Enterprise-wide planning system customer Relationship Systems
Supply/Demand on a Daily Basis, Including
Source-Make-Deliver Resources and
Requirements from “Customers’ Customer to
Suppliers’ Supplier“
Responsiveness and Flexibility Are Integrated process modeling and software reconfiguration tools
Emphasized By Developing Expertise in
Making Business Processes Re-
Programmable, Re-Configurable and
Continuously Changeable
Sales and Operations Planning (S&OP) A process to develop tactical plans that provide management the ability to
strategically direct its businesses to achieve competitive advantage on a
continuous basis by integrating customer-focused marketing plans for new
and existing products with the management of the supply chain. The
process brings together all the plans for the business (sales, marketing,
development, manufacturing, sourcing, and financial) into one integrated set
of plans. It is performed at least once a month and is reviewed by
management at an aggregate (product family) level. The process must
reconcile all supply, demand, and new-product plans at both the detail and
aggregate levels and tie to the business plan. It is the definitive statement of
the company’s plans for the near to intermediate term, covering a horizon
sufficient to plan for resources and to support the annual business planning
process. Executed properly, the sales and operation planning process links
the strategic plans for the business with its execution and reviews
performance measurements for continuous improvement. (From APICS
online dictionary.)
Supply Chain is Designed to Have Supply None identified
Flexibility Equal to Demand Volatility
Supply/Demand Process is Highly Integrated Integrated supply chain planning system with interfaces to all
from Customer Data Gathering to Order supply/demand data sources through public and private digitally enabled
Receipt, through Production to Supplier supply networks.
Request
Tools Support Balanced Decision Making Supply chain planning optimization system
(e.g., Trade-Off between Service Level and
Inventory Investment)

Vendor Managed Inventory VMI is a concept for planning and control of inventory, in which the supplier
has access to the customer’s inventory data and is responsible for
maintaining the inventory level required by the customer. Re-supply is
performed by the vendor through regularly scheduled reviews of the on-site
inventory. The on-site inventory is counted, damaged or outdated goods
are removed, and the inventory is restocked to predefined levels.

P1.1 Identify, Prioritize, and Aggregate Supply Chain Requirements
The process of identifying, aggregating, and prioritizing, all sources of demand for the integrated
supply chain of a product or service at the appropriate level, horizon and interval.
The sales forecast is comprised of the following concepts: sales forecasting level, time horizon,
and time interval. The sales forecasting level is the focal point in the corporate hierarchy where
the forecast is needed at the most generic level. i.e. Corporate forecast, Divisional forecast,
Product Line forecast, SKU, SKU by Location. The sales forecasting time horizon generally
coincides with the time frame of the plan for which it was developed i.e. Annual, 1-5 years, 1- 6
months, Daily, Weekly, Monthly. The sales forecasting time interval generally coincides with how
often the plan is updated, i.e. Daily, Weekly, Monthly, and Quarterly.

Cost to Identify, Prioritize, and Aggregate The sum of the costs associated with identifying, assessing and
Supply Chain Requirements aggregating supply chain requirements.
Forecast accuracy is calculated for products and/or families for
markets/distribution channels, in unit measurement. Common
calculation is Forecast Sum - Sum of Variance/Sum of Actuals to
determine percentage error.
*monitoring the delta of Forecast Accuracy over measured time periods
Forecast Accuracy can determine success rates.
Identify, Prioritize, and Aggregate Supply The average time associated with the identifying, prioritizing, and
Chain Requirements Cycle Time aggregating supply chain requirements
Best Practices:
Collaboration among Operations Strategy Supply Chain Advanced Planning Systems
Team Supply Chain Integration Systems
Integration between supply chain advanced planning and ERP execution
systems
Supply Chain Capacity Planning Systems
Digital Links (XML Based, EDI. Etc.) Among Real-time exchange of supply chain information between supply chain
Supply Chain Members members collaborative planning systems, Internet Trading Exchanges,
B2B Integration and Application Server Systems
Joint Service Agreements (JSA) Collaborative Planning Systems
Push-Based Forecasts Are Replaced with Standards Based (RosettaNet, eBXML, OAGI, etc) B2B integration tools
Customer Replenishment “Pull-Based“ and systems
Signals
Supply Chain Advance Planning System Collaboration among Supply Chain partners extends outwards to
customers, spanning the supply chain.
Planning
Re-planning
Business Rules
Plan Changes
Systems Support Accurate On-Line Visibility Advance Planning and Scheduling System
of Full-Stream Demand Requirements and Supply Chain Event Management Software
Priorities
Inputs:
Customer Requirements from Source: The part of the supply chain requirements related to the customer’s
Customer needs, including sales forecasts and actual orders and backorders
Order Backlog from D1.3 Reserve Inventory Orders that have been received and entered into the order processing
& Determine Delivery Date system and are in a queue waiting to be processed and shipped.
Order Backlog from D1.11 Load Vehicle & Orders that have been received and entered into the order processing
Generate Shipping Documentation system and are in a queue waiting to be processed and shipped.

Planning Data from EP.3 Manage PLAN Execution information necessary to plan the balance of supply chain
Data Collection resources to demand requirements at both the highest aggregate and
lowest SKU planning levels.
Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by
from EP.9 Align Supply Chain Unit Plan with Product Family supporting the Market/Channel Plans. Corresponding
Financial Plan Projections, supporting Make, Source, Deliver, Inventory and Response
Time Plans through the Supply-Chain are produced from these Forecasts
Together, they represent balanced Supply and Demand.
Revised Business Assumptions from EP.5 An update to the expected cause and effect statements that are the base
Manage Integrated Supply Chain Capital for the Revised Aggregate Forecast and Projections. These are reviewed
Assets periodically with actual results to verify the linkage of actual cause and
effect.
Align Supply Chain Unit Plan with Financial for the Revised Aggregate Forecast and Projections. These are reviewed
Plan periodically with actual results to verify the linkage of actual cause and
effect.
Shipments from D1.11 Load Vehicle & Transactions related to sending the product to the customer.
Generate Shipping Documentation
Shipments from D1.3 Reserve Inventory & Transactions related to sending the product to the customer.
Determine Delivery Date
Outputs:
Supply Chain Requirements to P1.3 Balance Sources of demand for the integrated supply chain of a product or service
Supply Chain Resources with Supply Chain at the appropriate level, horizon and interval.
Requirements

P1.2 Identify, Assess, and Aggregate Supply Chain Resources
The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all
sources of supply that are required and add value in the supply chain of a product or service at the
appropriate level, horizon and interval.

Cost to Identify, Assess, and Aggregate The sum of the costs associated with identifying, assessing and
Supply Chain Resources aggregating supply chain resources.
Identify, Assess, and Aggregate Supply The average time associated with the identifying, assessing, and
Chain Resources Cycle Time aggregating supply chain resource availability
Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw
materials & WIP, plant FG, field FG, field samples, other) ÷ (COGS ÷
365). Total gross value of inventory at standard cost before reserves for
excess and obsolescence. Only includes inventory on company books,
future liabilities should not be included
Best Practices:
Lead Times Updated Monthly None identified
Review Product Profitability ABC and cost modeling.
Inputs:
Delivery Plans from P4.4 Establish Delivery A plan for a course of action over specified time periods that involves a
Plans projected appropriation of supply resources to meet delivery
requirements.
Inventory from Source: Customer In business management, inventory consists of a list of goods and
materials held available in stock. Also, those stocks or items used to
support production (raw materials and work-in-process items), supporting
activities (maintenance, repair, and operating supplies), and customer
service (finished goods and spare parts)
Make/Buy Decision from EP.5 Manage The output of the process used to determine whether a demand will be
Integrated Supply Chain Capital Assets supplied with internal capacity or purchased through contract
manufacturing and/or contracted services externally.
Outsource Plan from EP.5 Manage A plan that describes how a company will utilize third party business
Integrated Supply Chain Capital Assets partners to provide products and services which the company chooses not
to provide with internal capacity. Outsource Plans can vary in detail from
simple policy statements to highly detailed plans with specifics about the
third party business partners, specifications for products and services,
performance expectations, and contract considerations.
Integrated Supply Chain Transportation partners to provide products and services which the company chooses not
Production Plans from P3.4 Establish A master production plan used to allocate capacity among manufacturing
Production Plans resources and schedule finite manufacturing activities or executing the
performance of a service.
Production Plan includes production capability.

Regulatory Requirements from EP.8 Manage Requirements dictated by process standards set by external entities (i.e.
PLAN Regulatory Requirements and government, trade officials, etc.).
Compliance
Revised Capital Plan from EP.6 Manage A revision to plan for capital expenditures necessitated by either changes
Integrated Supply Chain Transportation in specific business plans or factors and assumptions affecting a business
plan.
Integrated Supply Chain Capital Assets in specific business plans or factors and assumptions affecting a business
plan.
Sourcing Plans from P2.4 Establish Sourcing An aggregate material requirements plan used to schedule material
Plans deliveries to meet production plan.
Outputs:
Supply Chain Resources to P1.3 Balance As a whole with constituent parts, all sources of supply that are required
Supply Chain Resources with Supply Chain to add value in the supply chain of a product or service at the appropriate
Requirements level, horizon and interval.

P1.3 Balance Supply Chain Resources with Supply Chain Requirements
The process of identifying and measuring the gaps and imbalances between demand and
resources in order to determine how to best resolve the variances through marketing, pricing,
packaging, warehousing, outsource plans or some other action that will optimize service, flexibility,
costs, assets, (or other supply chain inconsistencies) in an iterative and collaborative environment.
The process of developing a time-phased course of action that commits supply-chain resources to
meet supply-chain requirements.

Balance Supply Chain Resources with The average time associated with balancing supply chain resources with
Supply Chain Requirements Cycle Time supply chain requirements.
Cost to Balance Supply Chain Resources The sum of the costs associated with balance of supply chain resources
with Supply Chain Requirements with supply chain requirements.
Fill Rate The percentage of ship-from-stock orders shipped within 24 hours of order
receipt. For services, this metric is the proportion for services that are
filled so that the service is completed within 24 hours
Best Practices:
Business Intelligence (BI) A data warehouse / data mart is the source of all planning (master) data,
business rules and transaction data. Analytical tools enable the ongoing
maintenance and improvement of the business rules based on actual
data.
Customer Relationship Management (CRM) Software that provides customer input and keeps the customer informed
about the planning of the production and delivery process by managing all
contacts and communication with the customer thorough all channels
including internet and traditional sales and customer service channels.
Demand Planning, Demand Flow Software that provides multiple data models including the business rules
Leadership and metrics for the entire supply chain planning process. Algorithms use
the business rules and metrics as the drivers for the planning engine.
Inputs:
Supply Chain Resources from P1.2 Identify, As a whole with constituent parts, all sources of supply that are required
Assess, and Aggregate Supply Chain to add value in the supply chain of a product or service at the appropriate
Resources level, horizon and interval.
Supply Chain Requirements from P1.1 Sources of demand for the integrated supply chain of a product or service
Identify, Prioritize, and Aggregate Supply at the appropriate level, horizon and interval.
Chain Requirements
Inventory Strategy from EP.4 Manage The total supply chain inventory strategy. Contains the plan for total
Integrated Supply Chain Inventory inventory limits or levels (including Raw Material, Work In Process,
Finished and Purchased Finished Goods) including replenishment
models, ownership, product mix, and stocking locations, both inter and
intra company.
Planning Decision Policies from EP.1 Any company policies that affect how a planning process is defined,
Manage Business Rules for PLAN Processes approved, and performed.
Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the
Plan from EP.2 Manage Performance of steps that will be taken to reach those goals and objectives from the
Supply Chain current performance levels.
Outputs:
Workflow to P1.4 Establish Supply Chain Plans

P1.4 Establish Supply Chain Plans
The establishment and communication of courses of action over the appropriate time-defined
(long-term, annual, monthly, weekly) planning horizon and interval, representing a projected
appropriation of supply-chain resources to meet supply-chain requirements.

Cost to Establish and Communicate Supply The sum of the costs associated with establishing and communicating
Chain Plans supply chain plans.
Establish Supply Chain Plans Cycle Time The average time associated with establishing and communicating supply
chain plans
Best Practices:
Collaboration among Operations Strategy Supply Chain Advanced Planning Systems
Team Supply Chain Integration Systems
Integration between supply chain advanced planning and ERP execution
systems
Supply Chain Advance Planning System Collaboration among Supply Chain partners extends outwards to
customers, spanning the supply chain.
Planning
Replanning
Business Rules
Plan Changes
Systems Support Accurate On-Line Visibility Advance Planning and Scheduling System
of Full-Stream Demand Requirements and
Priorities as Well as Resource Utilization and
Availability
Inputs:
Workflow from P1.3 Balance Supply Chain Resources with Supply Chain Requirements
Outputs:
Supply Chain Plans to P5.1 Assess, and Courses of action over specified time periods that represent a projected
Aggregate Return Requirements appropriation of total supply-chain resources to meet total supply-chain
demand requirements.
Supply Chain Plans to P4.1 Identify, Courses of action over specified time periods that represent a projected
Prioritize, and Aggregate Delivery appropriation of total supply-chain resources to meet total supply-chain
Requirements demand requirements.
Supply Chain Plans to Customer Courses of action over specified time periods that represent a projected
appropriation of total supply-chain resources to meet total supply-chain
Prioritize, and Aggregate Product appropriation of total supply-chain resources to meet total supply-chain

Prioritize, and Aggregate Production appropriation of total supply-chain resources to meet total supply-chain

P2 Plan Source
represent a projected appropriation of material resources to meet supply chain requirements.

P2.1 Identify, Prioritize, and Aggregate The process of identifying, prioritizing, and considering, as a whole with
Product Requirements constituent parts, all sources of demand for a product or service in the
supply chain.
P2.2 Identify, Assess, And Aggregate The process of identifying, evaluating, and considering, as a whole with
Product Resources constituent parts, all material and other resources used to add value in the
supply chain for a product or services.
P2.3 Balance Product Resources with The process of developing a time-phased course of action that commits
Product Requirements resources to meet requirements.
P2.4 Establish Sourcing Plans The establishment of courses of action over specified time periods that
represent a projected appropriation of supply resources to meet sourcing
plan requirements.

Outstanding]
The time it takes for an investment made to flow back into a company
after it has been spent for raw materials. For services, this represents the
time from the point where a company pays for the resources consumed in
the performance of a service to the time that the company received
payment from the customer for those services.
Cost to Plan Source The sum of the costs associated with planning source activities.
orders.
Plan Source Cycle Time The average time associated with planning source activities
Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets measures the return an
organization receives on its invested capital in supply chain fixed assets.
This includes the fixed assets used in Plan, Source, Make, Deliver, and
Return. The levels of aggregation can be at any element associated with
a supply chain asset.
Return on Working Capital Return on working capital is a measurement which assesses the
magnitude of investment relative to a company’s working capital position
verses the revenue generated from a supply chain. Components include
accounts receivable, accounts payable, inventory, supply chain revenue,
cost of goods sold and supply chain management costs.
Best Practices:
All Key Participants in the Supply Chain, Supply Chain Event Management Systems
Including Strategic Partners, Have Full
Visibility of the Demand/Supply Plan
Distinct and Consistent Linkages Exist to Bi-directional Digital Links (XML, EDI, etc) or Internet procurement
Ensure Disruptions and Opportunities in networks to customer service linkage
Material Resources Are Quickly and
Accurately Communicated and Acted Upon
EDI Links Integrate Supplier Resource Inter-company resource planning with EDI/Internet communication
Information (Inventory, Capacity Availability,
Etc.) with Own Resources
Joint Service Agreements with Suppliers None identified
Define the Levels of “Flexibility“ or Resource
Upside Available Within Stated Lead Times
and Agreed Upon Conditions

P2.1 Identify, Prioritize, and Aggregate Product Requirements
The process of identifying, prioritizing, and considering, as a whole with constituent parts, all
sources of demand for a product or service in the supply chain.

Product Requirements aggregating deliver requirements.
Forecast Accuracy Forecast accuracy is calculated for products and/or families for
markets/distribution channels, in unit measurement. Common calculation
is Forecast Sum - Sum of Variance/Sum of Actuals to determine
percentage error.

can determine success rates.
Identify, Prioritize, and Aggregate Product The average time associated with the identifying, prioritizing, and
Requirements Cycle Time aggregating product requirements
Best Practices:
Capacity and Supply Constraints Are None identified
Balanced Against Demand during the
Planning Cycle
Categorize 100% of Total Inventory (Active, None identified
Usable, Excess, Obsolete) for Appropriate
Action
Master Production Scheduling Reflects None identified
Management of Capacity and/or Supply
Constraints
Sales and Operations Agree to Limits of None identified
Short Term Flexibility
The Demand Plan is Updated Frequently to None identified
Reflect Actual Consumption or Customer
Forecast Information
Inputs:
Bill of Materials from EP.7 Manage Planning The Bill of Materials is a structured list of all the materials or parts needed
Configuration to produce a particular finished product, assembly, subassembly,
manufactured part, whether purchased or not.
requirements.
Item Master from EP.7 Manage Planning A record of specific information for each product, which defines the
Configuration system parameters with which to effectively plan and execute using ERP
(MRP, etc) systems.
Order Signal from D3.3 Enter Order, Commit Reserved inventory and/or planned capacity and delivery date for a
Resources & Launch Program specific order.
Order Signal from D2.3 Reserve Resources Reserved inventory and/or planned capacity and delivery date for a
& Determine Delivery Date specific order.
Product Routings from EP.7 Manage Product routings represent the way products are made and are integrated
Planning Configuration with the Bill of Materials. Key elements of proper Routings include proper
sequence of operations, work center identification, relevant tolerances,
run times, lot size and setups. The equivalent concepts for services are
the workflow processes and rules.


Source Return Requirements from P5.4 All sources of demand in the Source Return of a product or service.
Establish and Communicate Return Plans
Supply Chain Plans from P1.4 Establish Courses of action over specified time periods that represent a projected
Supply Chain Plans appropriation of total supply-chain resources to meet total supply-chain
Outputs:
Product Requirements to P2.3 Balance As a whole with constituent parts, all sources of demand for a product or
Product Resources with Product service in the supply chain.
Requirements

P2.2 Identify, Assess, And Aggregate Product Resources
The process of identifying, evaluating, and considering, as a whole with constituent parts, all
material and other resources used to add value in the supply chain for a product or services.

Product Resources aggregating product resources.
Identify, Assess, and Aggregate Product The average time associated with the identifying, assessing, and
Resources Cycle Time aggregating product resource availability
Best Practices:
Capacity and Supply Constraints Identified None identified
During MPS Schedule Process Are Balanced
Against Demand during the Planning Cycle
Categorize 100% of Total Inventory (Active, None identified
Usable, Excess, Obsolete) for Appropriate
Action
Inventory is Planned at the Part Level, None identified
Based on Supply and Demand Variability
Inventory Performance is Measured at the None identified
Dollar and Unit Levels
Inventory Targets Are Reviewed and Digital Linkages using XML standards (RosettaNet, eBXML, OAGI) to
Adjusted Frequently automatically query inventory levels.
Obsolete Inventory is Reviewed at the Part None identified
Number Level
Inputs:
Inventory Availability from S3.6 Transfer Those stocks or items on hand used to support production (raw materials
Product and work in process items), supporting activities (maintenance, repairs and
operating supplies), and customer service (finished goods and spare
parts).
parts).
parts).
Product Availability from Source: Availability of a product by location that is reserved, scheduled or available
for sale, or the number of products ready to be or planned to be shipped to
the specific customer or market at the specific time.
Product Inventory Target Levels from ES.4 The target for the total product inventory, including e.g. raw material, work
Manage Product Inventory in progress and finished goods.
Product On Order from S1.1 Schedule Product on order with a selected source.
Product Deliveries
Product Deliveries
Product Deliveries

Outputs:
Product Sources to P2.3 Balance Product As a whole with constituent parts, all material and other resources used to
Resources with Product Requirements add value in the supply chain for a product or services.

P2.3 Balance Product Resources with Product Requirements
The process of developing a time-phased course of action that commits resources to meet
requirements.

Balance Product Resources with Product The average time associated with balancing product resources and product
Requirements Cycle Time requirements.
Cost to Balance Product Resources with The sum of the costs associated with balance of product resources with
Product Requirements product requirements.
Best Practices:
Suppliers Share Responsibility for Balancing None identified
Supply and Demand through Joint Service
Agreements
Inputs:
Product Sources from P2.2 Identify, Assess, As a whole with constituent parts, all material and other resources used to
And Aggregate Product Resources add value in the supply chain for a product or services.
Product Requirements from P2.1 Identify, As a whole with constituent parts, all sources of demand for a product or
Prioritize, and Aggregate Product service in the supply chain.
Requirements
Outputs:
Workflow to P2.4 Establish Sourcing Plans

P2.4 Establish Sourcing Plans
The establishment of courses of action over specified time periods that represent a projected
appropriation of supply resources to meet sourcing plan requirements.

Cost to Establish Sourcing Plans The sum of the costs associated with establishing and communicating
source plans.
Establish Sourcing Plans Cycle Time The average time associated with establishing and communicating source
plans
Best Practices:
Blanket Purchase Orders Cover Period None identified
Requirements
Digital Linkage (EDI, XML, Etc.) is Used to None identified
Provide Real-Time Demand Information and
Handle Routine Transactions
Inputs:
Workflow from P2.3 Balance Product Resources with Product Requirements
Outputs:
Sourcing Plans to DR1.4 Transfer Defective An aggregate material requirements plan used to schedule material
Product deliveries to meet production plan.
Sourcing Plans to P4.2 Identify, Assess, and An aggregate material requirements plan used to schedule material
Aggregate Delivery Resources and deliveries to meet production plan.
Capabilities
Sourcing Plans to D1.3 Reserve Inventory & An aggregate material requirements plan used to schedule material
Determine Delivery Date deliveries to meet production plan.
Sourcing Plans to ES.4 Manage Product An aggregate material requirements plan used to schedule material
Inventory deliveries to meet production plan.
Sourcing Plans to D2.3 Reserve Resources An aggregate material requirements plan used to schedule material
& Determine Delivery Date deliveries to meet production plan.
Sourcing Plans to ES.3 Maintain Source An aggregate material requirements plan used to schedule material
Data deliveries to meet production plan.
Sourcing Plans to S1.1 Schedule Product An aggregate material requirements plan used to schedule material
Deliveries deliveries to meet production plan.
Aggregate Supply Chain Resources deliveries to meet production plan.
Aggregate Production Resources deliveries to meet production plan.
Aggregate Return Resources deliveries to meet production plan.
Sourcing Plans to S3.1 Identify Sources of An aggregate material requirements plan used to schedule material
Supply deliveries to meet production plan.
Sourcing Plans to P5.1 Assess, and An aggregate material requirements plan used to schedule material
Aggregate Return Requirements deliveries to meet production plan.
Sourcing Plans to DR2.4 Transfer MRO An aggregate material requirements plan used to schedule material
Sourcing Plans to DR3.4 Transfer Excess An aggregate material requirements plan used to schedule material
Sourcing Plans to D3.3 Enter Order, Commit An aggregate material requirements plan used to schedule material
Resources & Launch Program deliveries to meet production plan.

P3 Plan Make
represent a projected appropriation of production resources to meet production requirements.

P3.1 Identify, Prioritize, and Aggregate The process of identifying, prioritizing, and considering as a whole with
Production Requirements constituent parts, all sources of demand in the creation of a product or
service.
P3.2 Identify, Assess, and Aggregate The process of identifying, evaluating, and considering, as a whole with
Production Resources constituent parts, all things that add value in the creation of a product or
P3.3 Balance Production Resources with The process of developing a time-phased course of action that commits
Production Requirements creation and operation resources to meet creation and operation
requirements.
P3.4 Establish Production Plans The establishment of courses of action over specified time periods that
represent a projected appropriation of supply resources to meet production
and operating plan requirements.

Outstanding]
The time it takes for an investment made to flow back into a company after
it has been spent for raw materials. For services, this represents the time
orders.
asset.
Best Practices:
Distinct and Consistent Linkages Exist to Multi-plant supply/demand planning and execution
Ensure that Disruptions and Opportunities in
Production Are Quickly and Accurately
Communicated and Responses Made

P3.1 Identify, Prioritize, and Aggregate Production Requirements
The process of identifying, prioritizing, and considering as a whole with constituent parts, all
sources of demand in the creation of a product or service.

Production Requirements aggregating production requirements
percentage error.

Identify, Prioritize, and Aggregate The average time associated with the identifying, prioritizing, and
Production Requirements Cycle Time aggregating production requirements
Best Practices:
Consideration of Supplier’s Material Digital linkage to supplier quoting, planning, configuration and customer
Availability in Company’s Supply Resources service applications
(Including Supplier’s Production Plans &
Capability, Inventory, and Delivery Plans)
Inputs:
Bill of Materials from EP.7 Manage Planning The Bill of Materials is a structured list of all the materials or parts needed
Configuration to produce a particular finished product, assembly, subassembly,
Plans projected appropriation of supply resources to meet delivery requirements.
Item Master from EP.7 Manage Planning A record of specific information for each product, which defines the system
Configuration parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.
Order Signal from D3.3 Enter Order, Commit Reserved inventory and/or planned capacity and delivery date for a specific
Resources & Launch Program order.
Order Signal from D2.3 Reserve Resources Reserved inventory and/or planned capacity and delivery date for a specific
& Determine Delivery Date order.
sequence of operations, work center identification, relevant tolerances, run
times, lot size and setups. The equivalent concepts for services are the
workflow processes and rules.
Return Production Requirements from P5.4 As a whole with constituent parts, all sources of demand in the creation of
Establish and Communicate Return Plans a product or service.
Outputs:
Return Production Requirements to P3.3 As a whole with constituent parts, all sources of demand in the creation of
Balance Production Resources with a product or service.
Production Requirements

P3.2 Identify, Assess, and Aggregate Production Resources
things that add value in the creation of a product or performance of a service.

Production Resources aggregating production resources.
Identify, Assess, and Aggregate Production The average time associated with the identifying, assessing, and
Resources Cycle Time aggregating production resource availability
Best Practices:
Obsolete Inventory is Reviewed at the Part None identified
Number Level
Inputs:
Equipment and Facilities Replacement and Actions relating to the planning, financing and disposition of capital
Disposition Plans from EM.5 Manage outlays for such purposes as the purchase of new equipment, the
Equipment and Facilities introduction of new product lines, and the modernization of plant facilities
Inventory Availability from M3.3 Issue Those stocks or items on hand used to support production (raw materials
Sourced/In-Process Product and work in process items), supporting activities (maintenance, repairs
and operating supplies), and customer service (finished goods and spare
parts).
Material and work in process items), supporting activities (maintenance, repairs
parts).
Sourced/In-Process Product and work in process items), supporting activities (maintenance, repairs
parts).
Production Schedule from M3.2 Schedule A plan that authorizes the factory to manufacture or repair a certain
Production Activities quantity of a specific item.
Outputs:
Production Resources to P3.3 Balance As a whole with constituent parts, all things that add value in the creation
Production Resources with Production of a product or performance of a service.
Requirements

P3.3 Balance Production Resources with Production Requirements
The process of developing a time-phased course of action that commits creation and operation
resources to meet creation and operation requirements.

Balance Production Resources with Product The average time associated with balancing production resources with
Creation Requirements Cycle Time production creation requirements.
Cost to Balance Production Resources with The sum of the costs associated with balance of production resources with
Product Creation Requirements product creation requirements.
Best Practices:
Inputs:
Return Production Requirements from P3.1 As a whole with constituent parts, all sources of demand in the creation of
Identify, Prioritize, and Aggregate Production a product or service.
Requirements
Production Resources from P3.2 Identify, As a whole with constituent parts, all things that add value in the creation
Assess, and Aggregate Production of a product or performance of a service.
Resources
Outputs:
Workflow to P3.4 Establish Production Plans

P3.4 Establish Production Plans
appropriation of supply resources to meet production and operating plan requirements.

Cost to Establish Production Plans The sum of the costs associated with establishing and communicating
production plans.
Establish Production Plans Cycle Time The average time associated with establishing and communicating
production plans
Best Practices:
Unplanned Orders Are Accepted and Digital Linkages using XML standards (RosettaNet, eBXML, OAGI) to
Scheduled Only When There is No automatically query production capacity and ATP and schedule unplanned
Detrimental Impact on Overall Product orders.
Delivery Plan
Inputs:
Workflow from P3.3 Balance Production Resources with Production Requirements
Outputs:
Production Plans to EM.5 Manage A master production plan used to allocate capacity among manufacturing
Equipment and Facilities resources and schedule finite manufacturing activities or executing the

Production Rules resources and schedule finite manufacturing activities or executing the

Production Plans to M3.2 Schedule A master production plan used to allocate capacity among manufacturing
Production Activities resources and schedule finite manufacturing activities or executing the

Production Plans to P2.1 Identify, Prioritize, A master production plan used to allocate capacity among manufacturing
and Aggregate Product Requirements resources and schedule finite manufacturing activities or executing the

Production Plans to D2.3 Reserve A master production plan used to allocate capacity among manufacturing
Resources & Determine Delivery Date resources and schedule finite manufacturing activities or executing the

Production Plans to D3.3 Enter Order, A master production plan used to allocate capacity among manufacturing
Commit Resources & Launch Program resources and schedule finite manufacturing activities or executing the

Production Plans to P4.2 Identify, Assess, A master production plan used to allocate capacity among manufacturing
and Aggregate Delivery Resources and resources and schedule finite manufacturing activities or executing the
Capabilities performance of a service.

Production Plans to D1.3 Reserve Inventory A master production plan used to allocate capacity among manufacturing
& Determine Delivery Date resources and schedule finite manufacturing activities or executing the

Production Performance resources and schedule finite manufacturing activities or executing the


and Aggregate Return Resources resources and schedule finite manufacturing activities or executing the

Production Plans to M2.5 Stage Finished A master production plan used to allocate capacity among manufacturing
Product resources and schedule finite manufacturing activities or executing the

and Aggregate Supply Chain Resources resources and schedule finite manufacturing activities or executing the

Production Plans to M3.6 Stage Finished A master production plan used to allocate capacity among manufacturing
Product resources and schedule finite manufacturing activities or executing the

Production Plans to P5.1 Assess, and A master production plan used to allocate capacity among manufacturing
Aggregate Return Requirements resources and schedule finite manufacturing activities or executing the


Production Plans to M1.5 Stage Product A master production plan used to allocate capacity among manufacturing
resources and schedule finite manufacturing activities or executing the

P4 Plan Deliver
represent a projected appropriation of delivery resources to meet delivery requirements.

P4.1 Identify, Prioritize, and Aggregate The process of identifying, prioritizing, and considering, as a whole with
Delivery Requirements constituent parts, all sources of demand in the delivery of a product or
service.
P4.2 Identify, Assess, and Aggregate The process of identifying, evaluating, and considering, as a whole with
Delivery Resources and Capabilities constituent parts, all things that add value in the delivery of a product or
service.
P4.3 Balance Delivery Resources and The process of developing a time-phased course of action that commits
Capabilities with Delivery Requirements delivery resources to meet delivery requirements.
P4.4 Establish Delivery Plans The establishment of courses of action over specified time periods that
represent a projected appropriation of delivery resources to meet delivery
requirements.

Outstanding]
Cost to Plan Deliver The sum of the costs associated with planning the delivery of product.
orders.
asset.
Total Deliver Costs The sum of the costs associated with the Deliver processes.
Best Practices:
Distinct and Consistent Linkages Exist to Bi-directional Digital Links (XML, EDI, etc) or Internet procurement
Ensure Disruptions and Opportunities in networks to customer service linkage
Material Resources Are Quickly and
Accurately Communicated and Acted Upon
Proactive Education of Customers to Set None identified
Expectations and Encourage Close Working
Relationships (Knowledge of Long-Lead
Items, Visibility to Supply Resources,
Agreement on Levels of Flexibility)

P4.1 Identify, Prioritize, and Aggregate Delivery Requirements
The process of identifying, prioritizing, and considering, as a whole with constituent parts, all
sources of demand in the delivery of a product or service.

Delivery Requirements aggregating deliver requirements
percentage error.

Identify, Prioritize, and Aggregate Delivery The average time associated with the identifying, prioritizing, and
Requirements Cycle Time aggregating delivery requirements
Best Practices:
Customer Relationship and Digital Linkages Tightly integrated supply chain or demand planning with point of sale and
(XML, EDI, Etc.) Provide Accurate Visibility customer inventory systems
into Actual Demand via Customer Forecasts,
Product Plans, Production Plans, and
Inventory Positions
Electronic Matching Between POS Data and Integrated Software Systems
Store Inventory (Shelves and Back Room)
Eliminate “Special Deals“ Sales to Reduce None identified
Returns and Improve Forecast Accuracy
(Reduces Uncertainty, Lowers Safety Stock
Requirements, Cheaper to Administer)
Forecasts Are Replaced with Actual B2B Integration and Application Server Systems
Customer Replenishment Signals and
Orders Where Possible
Ideal Stock Position Based on Days/Weeks Pilot by Wal-Mart. MIT
of Supply
Matching Shelf Stock to Expectations A software based system that corrects shelf inventory levels based on
actual product present (possible RFID solution). Identifies stock-outs from
shrinkage or item misplacement.
Planogram Flexibility for None identified
Seasonal/Promotional changes
RFID and Other Tagging POG software/field force
Unplanned Orders Are Accepted and Digital Linkages using XML standards (Rosettanet, eBXML, OAGI) to
Scheduled Only When There is No automatically query production capacity and ATP and schedule unplanned
Detrimental Impact on Overall Product orders.
Delivery Plan
Inputs:
Actual Shrink from Source: Company Reductions of actual quantities of items in stock, in process, or in transit.
The loss may be caused by scrap, theft, deterioration, evaporation, etc.

DC/Vendor Lead Time from Source: The amount of time that normally elapses between the time an order is
Company received and the time the order is shipped.
DC/Vendor Transit Time from Source: A standard allowance that is assumed on any given order for the
Company movement of items from one operation to the next.
Deliver Return Requirements from P5.4 A determination or projection of the requirements the supply chain must
Establish and Communicate Return Plans meet in the handling and execution of returns. (i.e. quantity, mix, timing)
EOQ/ESQ’s from Source: Company Economic Order Quantity - Result of a calculation that determines the most
cost effective to quantity to order or produce. Economic Shipping Quantity
- Result of a calculation that determines the most cost effective quantity to
ship.
Item Master from EP.7 Manage Planning A record of specific information for each product, which defines the system
Configuration parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.
Markdown Plans from Source: Company Part of the Market Plan, which establishes an allowance or deduction,
granted by the seller to the buyer, usually when the buyer meets certain
stipulated conditions that reduce the price of the products purchased. For
example, based upon paying early, buying in quantity, etc.
Merchandise Category/Classification from The categorization of goods based upon the range of specifications met
Source: Company during the manufacturing process.
Order Backlog from D1.3 Reserve Inventory Orders that have been received and entered into the order processing
& Determine Delivery Date system and are in a queue waiting to be processed and shipped.
Order Backlog from D2.3 Reserve Orders that have been received and entered into the order processing
Resources & Determine Delivery Date system and are in a queue waiting to be processed and shipped.
Order Backlog from D3.3 Enter Order, Orders that have been received and entered into the order processing
Commit Resources & Launch Program system and are in a queue waiting to be processed and shipped.
Point of Sale Data (Daily) from D4.6 The relief of inventory and computation of sales data at the time and place
Checkout of the sales, generally (may be manual) through the use of bar-coding, or
magnetic media and equipment.
Product/Category Lifecycle from Source: The time from initial research and development to the time at which the
Company sales and support of the product to customers are withdrawn.
Promotion/Event Plans from Source: Promotion activities - other than advertising, publicity, and personal selling
Company - that stimulate, interest, trial or purchase by final customers or others in
the marketing channel.
Service Levels from EP.1 Manage Business Performance targets in service related measures (i.e. delivery
Rules for PLAN Processes performance, lead times, etc.) compared to the established service
requirements. Service levels are established by balancing requirements
against operational strategy.
Stock-out History from Source: Company History of a lack of materials, components, or finished goods that are
ordered.
Store Shelf Inventory Counts from D4.4 The determination of inventory quantity by actual count. Physical
Stock Shelf inventories can be taken on a continuous, periodic or annual basis.

Year-to-Year for Like SKU/Subclass from The sales or demand history that is analogous to the present situation for
Source: Company similar products, a SKU / Subclass.
Outputs:
Delivery Requirements to P4.3 Balance As a whole with constituent parts, all sources of demand in
Delivery Resources and Capabilities with the delivery of a product or service.
Delivery Requirements
Item Stocking Requirements to D4.2 Receive The activities and techniques of determining the desired
Product at Store levels of items, whether raw materials, work in process, or
finished products. Demand for inventory maybe dependant
or independent. Inventory functions are anticipation, hedge,
cycle (lot size), fluctuation (safety, buffer or reserve),
transportation (pipeline), an service parts.

P4.2 Identify, Assess, and Aggregate Delivery Resources and Capabilities
things that add value in the delivery of a product or service.

Production Resources aggregating production resources.
percentage error.

Identify, Assess, and Aggregate Delivery The average time associated with the identifying, assessing, and
Resources Cycle Time aggregating delivery resource availability
Inputs:
Deliver Return Requirements from P5.4 A determination or projection of the requirements the supply chain must
Establish and Communicate Return Plans meet in the handling and execution of returns. (i.e. quantity, mix, timing)
Finish Goods Inventory Target Levels from In a min-max inventory system, the equivalent of the maximum. The target
ED.4 Manage Finished Goods Inventories inventory is equal to the order point plus a variable order quantity.
Inventory Availability/Delivery Date from D1.3 Those stocks or items on hand used to support production (raw materials
Reserve Inventory & Determine Delivery and work in process items), supporting activities (maintenance, repairs and
Date operating supplies), and customer service (finished goods and spare
parts). Determination of the time required from the receipt of the order until
the item should be delivered.
Inventory Availability/Delivery Date from D2.3 Those stocks or items on hand used to support production (raw materials
Reserve Resources & Determine Delivery and work in process items), supporting activities (maintenance, repairs and
Date operating supplies), and customer service (finished goods and spare
Load Information from D1.5 Build Loads Information relative to a load that is built and shipped, i.e. customer, items,
destinations, weight, etc

Resource Availability from D3.3 Enter Order, The capability of a system or resource to produce a quantity of output in a
Commit Resources & Launch Program particular time period, or the available resources at a point in time able to
generate an output.

Outputs:
Delivery Resources and Capabilities to P4.3 As a whole with constituent parts, all things that add value in the delivery of
Balance Delivery Resources and Capabilities a product.
with Delivery Requirements

P4.3 Balance Delivery Resources and Capabilities with Delivery Requirements
The process of developing a time-phased course of action that commits delivery resources to
meet delivery requirements.

Balance Delivery Resources with Delivery The average time associated with balancing deliver resources and deliver
Cost to Balance Delivery Resources with The sum of the costs associated with balance of delivery resources with
Delivery Requirements delivery requirements.
Best Practices:
Demand Priorities Reflecting Strategic Rules-based distribution planning system
Customer Relationships as Business Policies Trading partner agreements
Are Automatically Followed in Allocating
Resources; First-In-First-Out (FIFO) is
Utilized as the Default Scheduling Priority
Inputs:
Delivery Resources and Capabilities from As a whole with constituent parts, all things that add value in the delivery of
P4.2 Identify, Assess, and Aggregate a product.
Delivery Resources and Capabilities
Delivery Requirements from P4.1 Identify, As a whole with constituent parts, all sources of demand in the delivery of
Prioritize, and Aggregate Delivery a product or service.
Requirements
Outputs:
Workflow to P4.4 Establish Delivery Plans

P4.4 Establish Delivery Plans
appropriation of delivery resources to meet delivery requirements.

Cost to Establish Delivery Plans The sum of the costs associated with establishing and communicating
deliver plans.
Establish Delivery Plans Cycle Time The average time associated with establishing and communicating deliver
plans
receipt. For services, this metric is the proportion for services that are filled
so that the service is completed within 24 hours
Best Practices:
Plans that Violate Business Rules (e.g. Joint None identified
Service Agreements) Are Addressed Cross-
Functionally, Considering Total Business
Impacts (Revenue, Cost, Quality, Customer
Service, Etc.)
Plans Which Do Not Violate Business Rules None identified
Are Communicated Openly and Cross-
Functionally for Execution
Specific Changes to the Plan Are Agreed to None identified
Cross-Functionally, According to Defined
Business Rules
To Address Conditions which Cannot be None identified
Adequately Satisfied During the Current
Planning Period, Each Functional Area
Develops Prioritized Recommendations for
the Subsequent Planning Period
Inputs:
Workflow from P4.3 Balance Delivery Resources and Capabilities with Delivery Requirements
Outputs:
Delivery Plans to P1.2 Identify, Assess, and A plan for a course of action over specified time periods that involves a
Aggregate Supply Chain Resources projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to D1.3 Reserve Inventory & A plan for a course of action over specified time periods that involves a
Determine Delivery Date projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to P5.1 Assess, and A plan for a course of action over specified time periods that involves a
Aggregate Return Requirements projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to P3.1 Identify, Prioritize, and A plan for a course of action over specified time periods that involves a
Aggregate Production Requirements projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to P2.1 Identify, Prioritize, and A plan for a course of action over specified time periods that involves a
Aggregate Product Requirements projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to D3.3 Enter Order, Commit A plan for a course of action over specified time periods that involves a
Resources & Launch Program projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to P5.2 Identify, Assess, and A plan for a course of action over specified time periods that involves a
Aggregate Return Resources projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to M3.6 Stage Finished A plan for a course of action over specified time periods that involves a
Product projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to D2.3 Reserve Resources & A plan for a course of action over specified time periods that involves a
Determine Delivery Date projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to M1.5 Stage Product A plan for a course of action over specified time periods that involves a
projected appropriation of supply resources to meet delivery requirements.
Delivery Plans to M2.5 Stage Finished A plan for a course of action over specified time periods that involves a
Product projected appropriation of supply resources to meet delivery requirements.

Stocking Requirements to D4.1 Generate The activities and techniques of determining the desired levels of items,
Stocking Schedule whether raw materials, work in process, or finished products. Demand for
inventory may be dependant or independent. Inventory functions are
anticipation, hedge, cycle (lot size), fluctuation (safety, buffer or reserve),
transportation (pipeline), and service parts.

P5 Plan Return
A strategic or tactical process to establish and adjust courses of action or tasks over specified time
periods that represent a projected appropriation of return resources and assets to meet anticipated
as well as unanticipated return requirements. The scope includes unplanned returns of sold
merchandise as well as planned returns of “rotable” products that are refurbished for reissue to
customers.

P5.1 Assess, and Aggregate Return The process of identifying, evaluating, and considering, as a whole with
Requirements constituent parts, all sources of demand for the return of a product.
P5.2 Identify, Assess, and Aggregate Return
The process of identifying, evaluating, and consideration for all resources
Resources that add value to, execute, or constrain the processes for the return of a
product.
P5.3 Balance Return Resources with Return The process of developing courses of action that make feasible the
Requirements commitment the appropriate return resources and or assets to satisfy
return requirements.
P5.4 Establish and Communicate Return The establishment and communication of courses of action over specified
Plans time periods that represent a projected appropriation of required return
resources and or assets to meet return process requirements.

Cost to Plan Return The sum of the costs associated with planning the returning of product.
orders.
Best Practices:
Planning and Forecasting Outsourced Collaborative planning and forecasting with RETURN outsourcing partners
Return process (3PL, reverse drop shippers, etc.)
Use Demand Planning Demand Planning Systems to forecast returns, predict yield rates for
reusable products or components, determine demand in a resale market,
and project a revenue stream.

P5.1 Assess, and Aggregate Return Requirements
sources of demand for the return of a product.

Return Requirements aggregating return requirements.
Identify, Prioritize, and Aggregate Return The average time associated with the identifying, prioritizing, and
Requirements Cycle Time aggregating return requirements
Best Practices:
Real Time Return Anticipation Having real time data on return demand and including it in the plan and
forecast. Requires a connection with customers, call centers or CRM
system, possibly to the store level with retail returns. The return demand
needs to be included in the production plan as soon as possible because
upon repair it may be the next piece of serviceable inventory to satisfy
demand.
Use Historical Based Return Rate Forecasts None identified
Inputs:
Actual Sales History from D2.2 Receive, Amount of past sales spanning any specified period of time (weeks,
Configure, Enter and Validate Order months, years, etc.) and expressed in any specified increments (per day,
week, month, year, etc.)
Actual Sales History from D3.3 Enter Order, Amount of past sales spanning any specified period of time (weeks,
Commit Resources & Launch Program months, years, etc.) and expressed in any specified increments (per day,
Actual Sales History from D1.2 Receive, Amount of past sales spanning any specified period of time (weeks,
Enter & Validate Order months, years, etc.) and expressed in any specified increments (per day,
Business Rules for Return Processes from Rules for conducting business, i.e. developing and maintaining customer
ER.1 Manage Business Rules for Return and channel performance standards of an return processes such as
Processes service levels, given service requirements by supply chain
stakeholders/trading partners. Business rules align Return process
policies with business strategy, goals, and objectives.
Contractual Obligations from Source: Plan A promise in a contract that binds one to a specific course of action.
(Marketing, Sales, Legal) These promises maybe made by either the buyer of seller.
requirements.
Historical Return Rates from SR1.3 Request A judgmental forecasting technique based upon the a return history that is
Defective Return Authorization analogous to a present situation, such as the return history on a similar
product, and using the past pattern to predict future returns.
Historical Return Rates from DR3.1 A judgmental forecasting technique based upon the a return history that is
Authorize Excess Product Return analogous to a present situation, such as the return history on a similar
Excess Return Authorization analogous to a present situation, such as the return history on a similar
Authorize MRO Product Return analogous to a present situation, such as the return history on a similar

MRO Return Authorization analogous to a present situation, such as the return history on a similar
Authorize Defective Product Return analogous to a present situation, such as the return history on a similar
Item Master from EP.7 Manage Planning A record of specific information for each product, which defines the
Configuration system parameters with which to effectively plan and execute using ERP
(MRP, etc) systems.
sequence of operations, work center identification, relevant tolerances,
run times, lot size and setups. The equivalent concepts for services are

Return Regulatory Requirements from ER.8 Return requirements dictated by process standards set by external
Manage Return Regulatory Requirements entities (i.e. government, trade officials, etc.).
from EP.9 Align Supply Chain Unit Plan with Product Family supporting the Market/Channel Plans. Corresponding
Financial Plan Projections, supporting Make, Source, Deliver, Inventory and Response
from Source: Plan (Marketing, Sales, Product Product Family supporting the Market/Channel Plans. Corresponding
Management/Engineering) Projections, supporting Make, Source, Deliver, Inventory and Response
Manage Integrated Supply Chain Capital for the Revised Aggregate Forecast and Projections. These are reviewed
Assets periodically with actual results to verify the linkage of actual cause and
effect.
Align Supply Chain Unit Plan with Financial for the Revised Aggregate Forecast and Projections. These are reviewed
Plan periodically with actual results to verify the linkage of actual cause and
effect.
Outputs:
Return Requirements to P5.3 Balance As a whole with constituent parts, all sources of demand for the return of a
Return Resources with Return Requirements product.

P5.2 Identify, Assess, and Aggregate Return Resources
The process of identifying, evaluating, and consideration for all resources that add value to,
execute, or constrain the processes for the return of a product.

Return Resources aggregating return resources.
Identify, Assess, and Aggregate Return The average time associated with the identifying, assessing, and
Resources Cycle Time aggregating return resource availability
Best Practices:
Allow Source Suppliers Full Visibility into the Shared supply chain forecasting and event management functionality with
Current Return Situations and the Source suppliers
Forecasted Return Activity
Joint Service Agreements with Source Collaborative planning tools with the Source suppliers
Suppliers to Share Responsibilities and
Costs of Returns
Rapid Reconfiguration of Return Capacity Use of RETURN tracking and projection systems and flexible partner
agreements that allow the rapid addition of RETURN capacity to match
unexpected demand.
Inputs:
Budget Constraints from EP.9 Align Supply A plan that includes an estimate of future costs and revenues related to
Chain Unit Plan with Financial Plan expected activities. The budget serves as pattern for and a control over
future operations.
Data About Return Capabilities from ER.3 Information required in the process of integrating and maintaining the
Manage Return Data Collection accuracy of return execution.
Delivery Plans from P4.4 Establish Delivery

A plan for a course of action over specified time periods that involves a
Inventory Strategy from EP.4 Manage The total supply chain inventory strategy. Contains the plan for total
Integrated Supply Chain Inventory inventory limits or levels (including Raw Material, Work In Process,
Finished and Purchased Finished Goods) including replenishment models,
ownership, product mix, and stocking locations, both inter and intra
company.
Make/Buy Decision from EP.5 Manage The output of the process used to determine whether a demand will be
Integrated Supply Chain Capital Assets supplied with internal capacity or purchased through contract
manufacturing and/or contracted services externally.
MRO Product Return Capabilities from ER.2 See “Product Return Capabilities“
Manage Performance of Return Processes
Manage Return Capital Assets
Integrated Supply Chain Transportation partners to provide products and services which the company chooses not


Projected Internal and External Capacity An estimate of the amount of product or service a particular part of the
from EP.6 Manage Integrated Supply Chain business (internal capacity) or a third party business partner (external
Transportation capacity) is capable of producing over a particular period of time when all
factors that control the production processes are working optimally.
Regulatory Requirements from EP.8 Manage Requirements dictated by process standards set by external entities (i.e.
PLAN Regulatory Requirements and government, trade officials, etc.).
Compliance
Return Inventory Targets from ER.4 Manage The goals and approach to the management of return inventories.
Return Inventory
Return Inventory Transfer Data from DR2.3 The process of receipt and verification of the returned item against the
Receive MRO Product return authorization and other documentation and prepares the item for
transfer.
Receive Excess Product return authorization and other documentation and prepares the item for
transfer.
Transfer MRO Product return authorization and other documentation and prepares the item for
transfer.
Receive Defective Product return authorization and other documentation and prepares the item for
transfer.
Transfer Defective Product return authorization and other documentation and prepares the item for
transfer.
Transfer Excess Product return authorization and other documentation and prepares the item for
transfer.
Return Process Capabilities from EP.2 The capability of a system or resources to produce a quantity output in a
Manage Performance of Supply Chain particular time period
Return Process Workflow Definition and Definition and maintenance of the information flow about the Returns
Policies from ER.7 Manage Return Network supply chain network for a group of similar or complimentary items through
Configuration out their life cycle
Return Regulatory Requirements from ER.8 Return requirements dictated by process standards set by external entities
Manage Return Regulatory Requirements (i.e. government, trade officials, etc.).
Return Transportation Guidelines, Policies, & Guidelines, policies and agreements for the transportation activities around
Agreements from ER.6 Manage Return return process.
Transportation
Integrated Supply Chain Capital Assets in specific business plans or factors and assumptions affecting a business
plan.
Outputs:
Return Resources to P5.3 Balance Return All resources that add value to, execute, or constrain the processes for the
Resources with Return Requirements return of a product.

P5.3 Balance Return Resources with Return Requirements
The process of developing courses of action that make feasible the commitment the appropriate
return resources and or assets to satisfy return requirements.

Balance Return Resources with Return The average time associated with balancing return resources and return
Cost to Balance Return Resources with The sum of the costs associated with balance of return resources with
Return Requirements return requirements.
Best Practices:
Advance Planning Engines Applied to Advanced math model “solvers“ that optimize / minimize constraints,
Returns routing, restocking priorities and costs.
Cost Accounting System to Determine the ABC costing system
Best Return Process to Follow from a Cost of
Business Perspective
Dynamic Return Restocking Management Dynamic prioritization of restocking plans in order to rapidly re-sell products
that are in demand thus reducing new inventory demand.
Inputs:
Return Resources from P5.2 Identify, All resources that add value to, execute, or constrain the processes for the
Assess, and Aggregate Return Resources return of a product.
Return Requirements from P5.1 Assess, and As a whole with constituent parts, all sources of demand for the return of a
Aggregate Return Requirements product.
Supply Chain Performance Improvement A plan that describes goals and objectives for a supply chain and the steps
Plan from EP.2 Manage Performance of that will be taken to reach those goals and objectives from the current
Supply Chain performance levels.
Outputs:
Workflow to P5.4 Establish and Communicate Return Plans

P5.4 Establish and Communicate Return Plans
The establishment and communication of courses of action over specified time periods that
represent a projected appropriation of required return resources and or assets to meet return
process requirements.

Cost to Establish and Communicate Return The sum of the costs associated with establishing and communicating
Plans return plans.
Establish and Communicate Return Plans The average time associated with establishing and communicating return
Cycle Time plans
Best Practices:
Full Internal (And External If Source Intranet and Extranet communications tools
Suppliers Share in the Return Process
Responsibilities) Visibility to Return Plans
Rapid, Dynamic Reconfiguration of Return The ability to reset and reconfigure the RETURN process capacity,
Process to Meet Demand routings, etc. by transmitting new requirements and directives using
mathematical models, the Internet, outsourcing and flexible partnership
agreements. Also requires integration with the CRM system for real time
redirection of customer returns based upon cost and capacity.
Inputs:
Workflow from P5.3 Balance Return Resources with Return Requirements
Outputs:
Deliver Return Requirements to P4.1 A determination or projection of the requirements the supply chain must
Identify, Prioritize, and Aggregate Delivery meet in the handling and execution of returns. (i.e. quantity, mix, timing)
Requirements
Deliver Return Requirements to P4.2 A determination or projection of the requirements the supply chain must
Identify, Assess, and Aggregate Delivery meet in the handling and execution of returns. (i.e. quantity, mix, timing)
Resources and Capabilities
Process Procedures to ER.2 Manage A planned series of actions or operations that advances returns from one
Performance of Return Processes stage to another, or established procedures to manage and execute all
activities in the process.
Process Procedures to ER.8 Manage Return A planned series of actions or operations that advances returns from one
Regulatory Requirements stage to another, or established procedures to manage and execute all
Process Procedures to ER.1 Manage A planned series of actions or operations that advances returns from one
Business Rules for Return Processes stage to another, or established procedures to manage and execute all
Product Return Capabilities to DR1.1 The capability of a system or resources to produce a quantity output in a
Authorize Defective Product Return particular time period; and, any element or factor that constrains the
system or resources from achieving a higher level of performance in
respect to its goal. The ability the supply chain has to return products in a
valid and accurate way.
Authorize MRO Product Return particular time period; and, any element or factor that constrains the

Authorize Excess Product Return particular time period; and, any element or factor that constrains the
Return Plans to ER.4 Manage Return Courses of action over specified time periods that represent the projected
Inventory appropriation of required return resources and or assets to meet the return
Return Plans to SR2.2 Disposition MRO Courses of action over specified time periods that represent the projected
Product appropriation of required return resources and or assets to meet the return
Return Plans to ER.5 Manage Return Capital Courses of action over specified time periods that represent the projected
Assets appropriation of required return resources and or assets to meet the return
Transportation appropriation of required return resources and or assets to meet the return
Return Plans to SR3.2 Disposition Excess Courses of action over specified time periods that represent the projected
Return Plans to DR1.1 Authorize Defective Courses of action over specified time periods that represent the projected
Product Return appropriation of required return resources and or assets to meet the return
Network Configuration appropriation of required return resources and or assets to meet the return
Return Plans to DR3.1 Authorize Excess Courses of action over specified time periods that represent the projected
Return Plans to SR1.2 Disposition Defective Courses of action over specified time periods that represent the projected
Return Plans to DR2.1 Authorize MRO Courses of action over specified time periods that represent the projected
Return Production Requirements to P3.1 As a whole with constituent parts, all sources of demand in the creation of
Identify, Prioritize, and Aggregate Production a product or service.
Requirements
Return Rules and Policies to ER.1 Manage Rules and Policies for conducting business, i.e. developing and
Business Rules for Return Processes maintaining customer and channel performance standards of return
processes such as service levels, given service requirements by supply
chain stakeholders/trading partners. Rules and policies align the Return
process with the organization’s business strategy, goals and objectives.
Source Return Requirements to P2.1 All sources of demand in the Source Return of a product or service.
Identify, Prioritize, and Aggregate Product
Requirements

EP Enable PLAN
A plan for the development and establishment of courses of action over specified time periods to
appropriate delivery resources to meet projected delivery requirements. The plan contains
necessary business requirements for information and relationships to effectively and efficiently
PLAN the Supply Chain.
The Category EP includes nine Level 3 Elements:

EP.1 Manage Business Rules for PLAN The process of establishing, maintaining, and enforcing decision support
Processes criteria for Supply Chain Planning which translate to rules for conducting
business, i.e. developing and maintaining customer and channel
performance standards of an entire supply chain such as service levels,
given service requirements by supply chain stakeholders/trading partners.
Business rules align PLAN process policies with business strategy, goals,
and objectives.
EP.2 Manage Performance of Supply Chain The process of measuring actual integrated Supply Chain performance
against internal and/or external standards to develop and implement a
course of action to achieve targeted performance levels. Performance
targets established for the execution of supply chain processes are
reflected in the process elements for PLAN, i.e. cost, delivery reliability,
cycle time, responsiveness, and assets.
EP.3 Manage PLAN Data Collection The process of collecting, integrating and maintaining the accuracy of
supply chain execution information necessary to plan the balance of supply
chain resources to demand requirements at both the highest aggregate
and lowest SKU planning levels.
EP.4 Manage Integrated Supply Chain The process of establishing total supply chain inventory strategy and
Inventory planning the total inventory limits or levels (including Raw Material, Work In
Process, Finished and Purchased Finished Goods) including
replenishment models, ownership, product mix, and stocking locations,
both inter and intra company.
EP.5 Manage Integrated Supply Chain The process of defining capacity strategy (i.e. internal versus contract
Capital Assets manufacturing or internal versus 3rd Party Logistics) and then acquiring,
maintaining and dispositioning an organization’s capital assets to operate
the integrated supply chain.
EP.6 Manage Integrated Supply Chain The process of defining an integrated supply chain transportation strategy
Transportation and maintaining the information which characterizes total supply chain
transportation requirements, and the management of transporters both
inter and intra company.
EP.7 Manage Planning Configuration The process of defining and maintaining the information about a unique
supply chain network for a group of similar or complimentary products
through their full life cycle, including the evaluation of market need, product
realization (development, introduction and production), product
discontinuation, and after-market support. This element also includes the
management of critical sub processes needed to manage the life cycle of
individual item numbers including item masters, routings, event planning
(promotions, etc.), ABC classification, rationalization, and bill of materials.
EP.8 Manage PLAN Regulatory The process of identifying and complying with regulatory documentation
Requirements and Compliance and process standards set by external entities (i.e. government, trade
officials, etc.) when planning for the integrated supply chain network.
EP.9 Align Supply Chain Unit Plan with The process of revising the long-term supply chain capacity and resource
Financial Plan plans, given the inputs from the strategic and business plans. This
includes revision of not only aggregate forecast and projections related to
supply chain, source, make, and delivery plans, but also business
assumptions.

EP.1 Manage Business Rules for PLAN Processes
The process of establishing, maintaining, and enforcing decision support criteria for Supply Chain
Planning which translate to rules for conducting business, i.e. developing and maintaining
customer and channel performance standards of an entire supply chain such as service levels,
given service requirements by supply chain stakeholders/trading partners. Business rules align
PLAN process policies with business strategy, goals, and objectives.

Cost to Manage Business Rules for PLAN The sum of the .Costs to Manage Business Rules for PLAN Processes
Processes
Manage Business Rules for PLAN The average time associated with managing plan business rules
Processes Cycle Time
Best Practices:
Integrated Business and Supply-Chain Supply Chain performance dashboard capability.
Planning Processes Where Cross-Functional
Input is Leveraged to Set Business Rules
Inputs:
Business Plan from Source: Company A document resulting from a process of linking the long-range strategy with
projections of revenue, activity, cost and profit. This process develops
objectives usually accompanied by budgets, projected balance sheet, and
a cash flow statement.
Service Requirements from Source: A set of minimum acceptable values that describe service requirements of
Company a particular industry, channel, and/or customer segment.
Strategic Plan from Source: Company A longer range, high-level plan that describes how a company intends to
conduct business. Improve its market and competitive position, and
increase its earnings performance.
Outputs:
Planning Decision Policies to P4.3 Balance Any company policies that affect how a planning process is defined,
Delivery Resources and Capabilities with approved, and performed.
Delivery Requirements
Production Resources with Production approved, and performed.
Requirements
Supply Chain Resources with Supply Chain approved, and performed.
Requirements
Return Resources with Return Requirements approved, and performed.
Product Resources with Product approved, and performed.
Requirements
Service Levels to P4.1 Identify, Prioritize, Performance targets in service related measures (i.e. delivery
and Aggregate Delivery Requirements performance, lead times, etc.) compared to the established service
requirements. Service levels are established by balancing requirements
against operational strategy.

EP.2 Manage Performance of Supply Chain
The process of measuring actual integrated Supply Chain performance against internal and/or
external standards to develop and implement a course of action to achieve targeted performance
levels. Performance targets established for the execution of supply chain processes are reflected
in the process elements for PLAN, i.e. cost, delivery reliability, cycle time, responsiveness, and
assets.

Cost to Manage Performance of Supply The sum of the costs associated with assessing supplier performance.
Chain
Manage Performance of Supply Chain Cycle The average time associated with managing the performance of return
Time activities
Best Practices:
Efficient and Effective Benchmarking None identified
Process Leveraging Cross Industry Metrics
and Definitions
Reliable Continuous Improvement Process None identified
and Methodology.
Sound Project Management Process and None identified
Methodology
Inputs:
Continuous Improvement Process from A process that identifies opportunities for performance improvement and
Source: Company facilitates their realization through the use of metrics, process development
methodologies/approaches, project management principles, and reporting
tools that support strategic and business plans.
Supply-Chain Performance Metrics from Standard measures that indicate how well a supply chain performs within
ED.2 Assess Delivery Performance certain categories of performance known as Performance Attributes, e.g.
delivery reliability, flexibility and responsiveness, cost, and asset
management.
ES.4 Manage Product Inventory certain categories of performance known as Performance Attributes, e.g.
management.
ER.2 Manage Performance of Return certain categories of performance known as Performance Attributes, e.g.
Processes delivery reliability, flexibility and responsiveness, cost, and asset
management.
EM.2 Manage Production Performance certain categories of performance known as Performance Attributes, e.g.
management.
Outputs:
Return Process Capabilities to P5.2 Identify, The capability of a system or resources to produce a quantity output in a
Assess, and Aggregate Return Resources particular time period
Plan to P1.3 Balance Supply Chain that will be taken to reach those goals and objectives from the current
Resources with Supply Chain Requirements performance levels.
Plan to P5.3 Balance Return Resources with that will be taken to reach those goals and objectives from the current
Return Requirements performance levels.

EP.3 Manage PLAN Data Collection
The process of collecting, integrating and maintaining the accuracy of supply chain execution
information necessary to plan the balance of supply chain resources to demand requirements at
both the highest aggregate and lowest SKU planning levels.
Each occurrence consumes time:

Cost to Manage PLAN Data Collection The sum of the costs to Manage PLAN Data Collection.
Manage PLAN Data Collection Cycle Time The average time associated with collecting plan data
Best Practices:
Integrated Demand and Supply Planning - Memory based planning systems provide one single data model and data
Demand Planning, Supply Planning and mart (including the business rules) for the entire supply chain planning and
especially the Supply Plan Execution Are no execution process. Algorithms use the business rules as the driver for the
longer disconnected. All required planning planning engine.
and execution data is integrated and shared
in between all functional areas within an
organization.
Single Data Source for Decision Support A data warehouse/data mart is the source of all planning (master) data,
and Business Rules business rules and transaction data. Analyzing tools enable the ongoing
maintenance and improvement of the business rules based on actual data.
Inputs:
Supply Chain Execution Data from Source: Information necessary to plan the balance of supply chain resources to
Company demand requirements at both the highest aggregate and lowest SKU
planning levels.
Outputs:
Planning Data to P4.2 Identify, Assess, and Execution information necessary to plan the balance of supply chain
Aggregate Delivery Resources and resources to demand requirements at both the highest aggregate and
Capabilities lowest SKU planning levels.
Planning Data to P5.1 Assess, and Execution information necessary to plan the balance of supply chain
Aggregate Return Requirements resources to demand requirements at both the highest aggregate and
Aggregate Supply Chain Resources resources to demand requirements at both the highest aggregate and
Planning Data to P1.1 Identify, Prioritize, and Execution information necessary to plan the balance of supply chain
Aggregate Supply Chain Requirements resources to demand requirements at both the highest aggregate and
Planning Data to P2.2 Identify, Assess, And Execution information necessary to plan the balance of supply chain
Aggregate Product Resources resources to demand requirements at both the highest aggregate and
Aggregate Production Requirements resources to demand requirements at both the highest aggregate and
Aggregate Return Resources resources to demand requirements at both the highest aggregate and
Aggregate Delivery Requirements resources to demand requirements at both the highest aggregate and
Aggregate Product Requirements resources to demand requirements at both the highest aggregate and

Aggregate Production Resources resources to demand requirements at both the highest aggregate and

EP.4 Manage Integrated Supply Chain Inventory
The process of establishing total supply chain inventory strategy and planning the total inventory
limits or levels (including Raw Material, Work In Process, Finished and Purchased Finished
Goods) including replenishment models, ownership, product mix, and stocking locations, both inter
and intra company.

Cost to Manage Integrated Supply Chain The sum of the costs associated with managing the integrated supply chain
Inventory inventory.
percentage error.

Manage Integrated Supply Chain Inventory The average time associated with managing integrated supply chain
Cycle Time inventory
Best Practices:
Capability to Run Multiple “Simulated“ Full- Supply Chain modeling capabilities, i.e. Advanced Planning Systems.
Stream Supply/Demand Balancing Against
Long-Term Capacity Plans and Scenarios
Inputs:
Capacity Constraints from Source: Company A capacity constraint is said to exist when the available capacity at a
resource may be insufficient to meet the workload necessary to support the
desired throughput. A capacity constraint is often a bottleneck.
Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain based
Information from DR3.1 Authorize Excess on uncertain demand for the finished products
Product Return
Information from DR1.1 Authorize Defective on uncertain demand for the finished products
Product Return
Information from DR2.1 Authorize MRO on uncertain demand for the finished products
Product Return
Planning Decision Policies from Source: Any company policies that affect how a planning process is defined,
Company approved, and performed.
Product Routings from Source: Company Product routings represent the way products are made and are integrated
with the Bill of Materials. Key elements of proper Routings include proper
Outputs:
Inventory Capacity to EM.1 Manage Maximum rate of output for the inventory management and warehouse
Production Rules process
Inventory Capacity to EM.2 Manage Maximum rate of output for the inventory management and warehouse
Production Performance process

Inventory Strategy to P5.2 Identify, Assess, The total supply chain inventory strategy. Contains the plan for total
and Aggregate Return Resources inventory limits or levels (including Raw Material, Work In Process,
Finished and Purchased Finished Goods) including replenishment models,
company.
Inventory Strategy to P1.3 Balance Supply The total supply chain inventory strategy. Contains the plan for total
Chain Resources with Supply Chain inventory limits or levels (including Raw Material, Work In Process,
Requirements Finished and Purchased Finished Goods) including replenishment models,
company.
Information to DR1.1 Authorize Defective on uncertain demand for the finished products
Product Return
Information to DR3.1 Authorize Excess on uncertain demand for the finished products
Product Return
Information to DR2.1 Authorize MRO Product on uncertain demand for the finished products
Return

EP.5 Manage Integrated Supply Chain Capital Assets
The process of defining capacity strategy (i.e. internal versus contract manufacturing or internal
versus 3rd Party Logistics) and then acquiring, maintaining and dispositioning an organization’s
capital assets to operate the integrated supply chain.

Cost to Manage Integrated Supply Chain The sum of the costs associated with managing integrated
Capital Assets supply chain assets.
Forecast Accuracy Forecast accuracy is calculated for products and/or families
for markets/distribution channels, in unit measurement.
Common calculation is Forecast Sum - Sum of
Variance/Sum of Actuals to determine percentage error.
*monitoring the delta of Forecast Accuracy over measured

time periods can determine success rates.
Manage Integrated Supply Chain Capital The average time associated with managing integrated
Assets Cycle Time supply chain capital assets
Best Practices:
Alignment of Strategic and Business Plans None identified
with Long-Term Capacity and Resource
Planning
Capability to Run Multiple “Simulated“ Full- Supply Chain modeling capabilities, i.e. Advanced Planning
Stream Supply/Demand Balancing Against Systems.
Long-Term Capacity Plans and Scenarios
Use of Cross Functional Teams to Execute None identified
the Process of Developing Long-Term
Capacity and Resource Plans
Inputs:
Capacity Constraints from Source: Company A capacity constraint is said to exist when the available
capacity at a resource may be insufficient to meet the
workload necessary to support the desired throughput. A
capacity constraint is often a bottleneck.
Planning Decision Policies from Source: Any company policies that affect how a planning process is
Company defined, approved, and performed.
Product Routings from Source: Company Product routings represent the way products are made and
are integrated with the Bill of Materials. Key elements of
proper Routings include proper sequence of operations,
work center identification, relevant tolerances, run times, lot
size and setups. The equivalent concepts for services are
Outputs:
Make/Buy Decision to P5.2 Identify, Assess, The output of the process used to determine whether a
and Aggregate Return Resources demand will be supplied with internal capacity or purchased
through contract manufacturing and/or contracted services
externally.
Make/Buy Decision to P1.2 Identify, Assess, The output of the process used to determine whether a
and Aggregate Supply Chain Resources demand will be supplied with internal capacity or purchased
through contract manufacturing and/or contracted services
externally.

Outsource Plan to P1.2 Identify, Assess, and A plan that describes how a company will utilize third party
Aggregate Supply Chain Resources business partners to provide products and services which
the company chooses not to provide with internal capacity.
Outsource Plans can vary in detail from simple policy
statements to highly detailed plans with specifics about the
third party business partners, specifications for products and
services, performance expectations, and contract
considerations.
Production Capacity to EM.2 Manage The highest, sustainable output rate which can be achieved
Production Performance with the current product specifications, product mix, worker
effort, plant, and equipment.
Production Capacity to EM.1 Manage The highest, sustainable output rate which can be achieved
Production Rules with the current product specifications, product mix, worker
effort, plant, and equipment.
Projected Internal and External Capacity An estimate of the amount of product or service a particular
part of the business (internal capacity) or a third party
business partner (external capacity) is capable of producing
over a particular period of time when all factors that control
the production processes are working optimally.
Revised Business Assumptions to P5.1 An update to the expected cause and effect statements that
Assess, and Aggregate Return are the base for the Revised Aggregate Forecast and
Requirements Projections. These are reviewed periodically with actual
results to verify the linkage of actual cause and effect.
Revised Business Assumptions to P1.1 An update to the expected cause and effect statements that
Identify, Prioritize, and Aggregate Supply are the base for the Revised Aggregate Forecast and
Chain Requirements Projections. These are reviewed periodically with actual
results to verify the linkage of actual cause and effect.
Revised Capital Plan to P5.2 Identify, A revision to plan for capital expenditures necessitated by
Assess, and Aggregate Return Resources either changes in specific business plans or factors and
assumptions affecting a business plan.
Assess, and Aggregate Supply Chain either changes in specific business plans or factors and
Resources assumptions affecting a business plan.

EP.6 Manage Integrated Supply Chain Transportation
The process of defining an integrated supply chain transportation strategy and maintaining the
information which characterizes total supply chain transportation requirements, and the
management of transporters both inter and intra company.

Cost to Manage Integrated Supply Chain The sum of the costs associated with managing integrated
Transportation supply chain transportation.
Forecast Accuracy Forecast accuracy is calculated for products and/or families
for markets/distribution channels, in unit measurement.
Common calculation is Forecast Sum - Sum of
Variance/Sum of Actuals to determine percentage error.
*monitoring the delta of Forecast Accuracy over measured

time periods can determine success rates.
Manage Integrated Supply Chain The average time associated with managing integrated
Transportation Cycle Time supply chain transportation
Best Practices:
Alignment of Strategic and Business Plans None identified
with Long-Term Capacity and Resource
Planning
Capability to Run “Simulated“ Full-Stream Supply chain modeling and visualization system
Supply/Demand Balancing for “What-If“
Scenarios
Use of Cross Functional Teams to Execute None identified
the Process of Developing Long-Term
Capacity and Resource Plans
Inputs:
Capacity Constraints from Source: Company A capacity constraint is said to exist when the available
capacity at a resource may be insufficient to meet the
workload necessary to support the desired throughput. A
capacity constraint is often a bottleneck.
Planning Decision Policies from Source: Any company policies that affect how a planning process is
Company defined, approved, and performed.
Product Routings from Source: Company Product routings represent the way products are made and
are integrated with the Bill of Materials. Key elements of
proper Routings include proper sequence of operations,
work center identification, relevant tolerances, run times, lot
size and setups. The equivalent concepts for services are
Outputs:
Aggregate Supply Chain Resources business partners to provide products and services which
considerations.

Aggregate Return Resources business partners to provide products and services which
considerations.
Projected Internal and External Capacity An estimate of the amount of product or service a particular
part of the business (internal capacity) or a third party
business partner (external capacity) is capable of producing
Projected Internal and External Capacity to An estimate of the amount of product or service a particular
P5.2 Identify, Assess, and Aggregate Return part of the business (internal capacity) or a third party
Resources business partner (external capacity) is capable of producing
Assess, and Aggregate Supply Chain either changes in specific business plans or factors and
Resources assumptions affecting a business plan.
Transportation Capacity to EM.2 Manage The capability of a transportation system to perform it’s
Production Performance function.
Transportation Capacity to EM.1 Manage The capability of a transportation system to perform it’s
Production Rules function.

EP.7 Manage Planning Configuration
The process of defining and maintaining the information about a unique supply chain network for a
group of similar or complimentary products through their full life cycle, including the evaluation of
market need, product realization (development, introduction and production), product
discontinuation, and after-market support. This element also includes the management of critical
sub processes needed to manage the life cycle of individual item numbers including item masters,
routings, event planning (promotions, etc.), ABC classification, rationalization, and bill of materials.

Cost to Manage Planning Configuration The sum of the Cost to Manage Planning Configuration
percentage error.

Manage Planning Configuration Cycle Time The average time associated with managing the planning of the supply
chain configuration
Best Practices:
ABC Classification None identified
Incorporates leading practices such as None identified
Efficient Consumer Response, Collaborative
Planning, Forecasting, and Replenishment,
Vendor Managed Inventory, and real time
point of consumption reporting.
New Items Introductions Are part of the None identified
Sales and Operations Planning Process at
the General Management Business Team
Level
SKU Rationalization None identified
Use of Platform Teams in the New Product None identified
Development Process
Outputs:
Bill of Materials to P3.1 Identify, Prioritize, The Bill of Materials is a structured list of all the materials or parts needed
and Aggregate Production Requirements to produce a particular finished product, assembly, subassembly,
Bill of Materials to P2.1 Identify, Prioritize, The Bill of Materials is a structured list of all the materials or parts needed
and Aggregate Product Requirements to produce a particular finished product, assembly, subassembly,
Item Master to P5.1 Assess, and Aggregate A record of specific information for each product, which defines the system
Return Requirements parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.
Item Master to P2.1 Identify, Prioritize, and A record of specific information for each product, which defines the system
Aggregate Product Requirements parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.
Aggregate Delivery Requirements parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.
Aggregate Production Requirements parameters with which to effectively plan and execute using ERP (MRP,
etc) systems.

Product Routings to P2.1 Identify, Prioritize, Product routings represent the way products are made and are integrated
and Aggregate Product Requirements with the Bill of Materials. Key elements of proper Routings include proper
and Aggregate Production Requirements with the Bill of Materials. Key elements of proper Routings include proper
Product Routings to P5.1 Assess, and Product routings represent the way products are made and are integrated
Aggregate Return Requirements with the Bill of Materials. Key elements of proper Routings include proper
and Aggregate Delivery Requirements with the Bill of Materials. Key elements of proper Routings include proper

EP.8 Manage PLAN Regulatory Requirements and Compliance
The process of identifying and complying with regulatory documentation and process standards
set by external entities (i.e. government, trade officials, etc.) when planning for the integrated
supply chain network.

Cost to Manage Plan Regulatory The sum of the costs to Manage Plan Regulatory
Requirements and Compliance Requirements and Compliance.
Manage Plan Regulatory Requirements and The average time associated with managing the planning of
Compliance Cycle Time regulatory requirements and compliance
Outputs:
Regulatory Requirements to P5.2 Identify, Requirements dictated by process standards set by external
Assess, and Aggregate Return Resources entities (i.e. government, trade officials, etc.).
Regulatory Requirements to P1.2 Identify, Requirements dictated by process standards set by external
Assess, and Aggregate Supply Chain entities (i.e. government, trade officials, etc.).
Resources

EP.9 Align Supply Chain Unit Plan with Financial Plan
The process of revising the long-term supply chain capacity and resource plans, given the inputs
from the strategic and business plans. This includes revision of not only aggregate forecast and
projections related to supply chain, source, make, and delivery plans, but also business
assumptions.

Align Supply Chain Unit Plan with Financial The average time associated with aligning the supply chain unit plan with
Plan Cycle Time the financial plan
Cost to Align Supply Chain Unit Plan with The sum of the costs associated with aligning supply chain performance
Financial Plan plans with financial plans.
Best Practices:
Re-Planning Process Exists in Multi-Levels Business to business Internet capability to share common data.
of the Supply-Chain between Business
Enterprises
Re-Planning Process Links the Supply None identified
Chain Operation with the Business Strategy
and the Marketing Strategy
Strategic Sales and Operations Planning None identified
Process in Place and Managed at the
Executive Level
Inputs:
Strategic Plan from Source: Company A longer range, high-level plan that describes how a company intends to
conduct business. Improve its market and competitive position, and
increase its earnings performance.
Outputs:
Budget Constraints to P5.2 Identify, Assess, A plan that includes an estimate of future costs and revenues related to
and Aggregate Return Resources expected activities. The budget serves as pattern for and a control over
future operations.
Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product
to P5.1 Assess, and Aggregate Return Family supporting the Market/Channel Plans. Corresponding Projections,
Requirements supporting Make, Source, Deliver, Inventory and Response Time Plans
through the Supply-Chain are produced from these Forecasts Together,
they represent balanced Supply and Demand.
Revised Aggregate Forecast and Projections An update to the aggregate Supply-Chain Forecasts of Demand by Product
to P1.1 Identify, Prioritize, and Aggregate Family supporting the Market/Channel Plans. Corresponding Projections,
Supply Chain Requirements supporting Make, Source, Deliver, Inventory and Response Time Plans
through the Supply-Chain are produced from these Forecasts Together,
they represent balanced Supply and Demand.
Revised Business Assumptions to P5.1 An update to the expected cause and effect statements that are the base
Assess, and Aggregate Return for the Revised Aggregate Forecast and Projections. These are reviewed
Requirements periodically with actual results to verify the linkage of actual cause and
effect.
Revised Business Assumptions to P1.1 An update to the expected cause and effect statements that are the base
Identify, Prioritize, and Aggregate Supply for the Revised Aggregate Forecast and Projections. These are reviewed
Chain Requirements periodically with actual results to verify the linkage of actual cause and
effect.

S1 Source Stocked Product
The procurement, delivery, receipt and transfer of raw material items, subassemblies, product and
or services.
The Category S1 includes five Level 3 Elements:

S1.1 Schedule Product Deliveries Scheduling and managing the execution of the individual deliveries of
product against an existing contract or purchase order. The requirements
for product releases are determined based on the detailed sourcing plan or
other types of product pull signals.
S1.2 Receive Product The process and associated activities of receiving product to contract
requirements.
S1.3 Verify Product The process and actions required determining product conformance to
requirements and criteria.
S1.4 Transfer Product The transfer of accepted product to the appropriate stocking location within
the supply chain. This includes all of the activities associated with
repackaging, staging, transferring and stocking product. For service this is
the transfer or application of service to the final customer or end user.
S1.5 Authorize Supplier Payment The process of authorizing payments and paying suppliers for product or
services. This process includes invoice collection, invoice matching and
the issuance of checks.

Cost to Source The sum of the costs associated with Source.
Inventory Days of Supply (Raw Material ) Value of raw materials ÷ (COGS ÷ 365).
orders.
Product Acquisition Costs Product acquisition costs include costs incurred for the production of
product: sum of product management and planning, supplier quality
engineering, inbound freight and duties, receiving and product storage,
incoming inspection, product process engineering and tooling costs.
asset.
Source Cycle Time The average time associated with Source Processes
Best Practices:
Alliance and Leverage Agreements None identified
Postponement Postponement (delayed differentiation) is a supply chain concept where a
product is kept as long as possible in a generic state. Differentiation of the
generic product into a specific end-product is shifted closer to the
consumer by postponing identify changes, such as assembly or packaging,
to the last possible supply chain location.

S1.1 Schedule Product Deliveries
Scheduling and managing the execution of the individual deliveries of product against an existing
contract or purchase order. The requirements for product releases are determined based on the
detailed sourcing plan or other types of product pull signals.

% Schedules Changed within Supplier’s The number of schedules that are changed within the suppliers lead-time
Lead Time divided by the total number of schedules generated within the
measurement period
Average Days per Engineering Change # of days each engineering change impacts the delivery date divided by
the total # of changes.
Average Days per Schedule Change # of days each schedule change impacts the delivery date divided by the
total # of changes.
Average Release Cycle of Changes Cycle time for implementing change notices divided by total number of
changes.
Cost to Schedule Product Deliveries The sum of the costs associated with scheduling product deliveries.
Schedule Product Deliveries Cycle Time The average time associated with scheduling the shipment of the return of
MRO product
Best Practices:
Advanced Ship Notices Allow for Tight Blanket order support with scheduling interfaces to external supplier
Synchronization between Source and Make systems
Processes
Consignment Agreements Are Used to Consignment inventory management
Reduce Assets and Cycle Time While
Increasing the Availability of Critical Items
Mechanical (Kanban) Pull Signals Are Used Electronic Kanban support
to Notify Suppliers of the Need to Deliver
Product
Utilize EDI Transactions to Reduce Cycle EDI interface for 830, 850, 856 & 862 transactions
Time and Costs
Inputs:
Logistics Selection from ES.6 Manage Carrier selection and management for inbound or outbound shipments
Incoming Product (linked to terms of delivery)
Replenishment Signal from M3.3 Issue Any signal that indicates when to produce or transport Items in a pull
Sourced/In-Process Product replenishment system.
Replenishment Signal from D1.3 Reserve Any signal that indicates when to produce or transport Items in a pull
Inventory & Determine Delivery Date replenishment system.
Material replenishment system.

transfer.
transfer.
transfer.
Supplier Performance from ES.2 Assess The results of measuring the actual supplier performance on cost, quality,
Supplier Performance engineering, purchasing, and so on, based on an agreed set of
measurements.
Outputs:
Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull
replenishment system, or the signal that sends the estimated need of parts
or services to the supplier.
Product On Order to P2.2 Identify, Assess, Product on order with a selected source.
And Aggregate Product Resources
Product On Order to ES.9 Manage Supplier Product on order with a selected source.
Agreements
Scheduled Receipts to D1.8 Receive Product Product due to arrive.
from Source or Make
Scheduled Receipts to M1.1 Schedule Product due to arrive.
Production Activities
Scheduled Receipts to S1.2 Receive Product Product due to arrive.
Scheduled Receipts to D4.2 Receive Product Product due to arrive.
at Store

S1.2 Receive Product
The process and associated activities of receiving product to contract requirements.

% Orders/ Lines Processed Complete The number of orders / lines that are processed complete divided by the
total orders / lines processed within the measurement period
% Orders/ Lines Received On-Time To The number of orders / lines that are received on-time to the demand
Demand Requirement requirements divided by the total orders / lines for the demand
requirements in the measurement period
% Orders/ Lines Received with Correct The number of orders / lines that are received on-time with correct shipping
Shipping Documents documents divided by the total orders / lines processed in the
measurement period
Cost to Receive Product The sum of the costs associated with receiving product.
Receiving Product Cycle Time Total elapsed time from time product is received to time it is passed to next
process
Best Practices:
Bar Coding is Used to Minimize Handling - Bar code interface for data collection devices
Time and Maximize Data Accuracy - Generate bar coded receiving documents
- Product serial number used as identifier
- RFID
Carrier Agreement Carrier agreements are agreements between a company and its domestic
and global carriers (for both, inbound raw materials and outbound finished
goods) specifying service levels, payment terms, and other conditions.
Deliveries Are Balanced Throughout Each None identified
Working Day and Throughout the Week
Supplier Certification Programs Are Used to Skip lot/sampling inspection logic
Reduce (Skip Lot) or Eliminate Receiving
Inspection
Supplier Delivers Directly to Point of Use - Electronic Tag tracking to Point of Use (POU) destination
(Dock to Line or End Destination)
Inputs:
Defective Products from DR1.4 Transfer Maintenance, Repair and Overhaul spare parts used to support of
Defective Product operations and maintenance.
Excess Products from DR3.4 Transfer Material in excess of the current requirements.
Excess Product
MRO Products from DR2.4 Transfer MRO Maintenance, Repair and Overhaul spare parts used to support of
Product operations and maintenance.
Product from Source: Supplier The end object of a transformation process that includes physical objects,
information or services.
Scheduled Receipts from S1.1 Schedule Product due to arrive.

Product Deliveries
Outputs:

Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified
Performance requirements and criteria.
Receipt Verification to ES.8 Manage Acknowledgement that the product received conforms to specified
Import/Export Requirements requirements and criteria.
Sourcing Business Rules requirements and criteria.
Receipt Verification to S1.3 Verify Product Acknowledgement that the product received conforms to specified
Receipt Verification to ED.8 Manage Acknowledgement that the product received conforms to specified
Incoming Product requirements and criteria.

S1.3 Verify Product
The process and actions required determining product conformance to requirements and criteria.

% Orders/ Lines Received Defect Free The number of orders / lines that are received defect free divided by the
total orders / lines processed in the measurement period.
Cost to Verify Product The sum of the costs associated with raw material verification.
Verify Product Cycle Time The average time associated with verifying raw material product
Best Practices:
- RFID
Inspection
Supplier Delivers Directly to Point of Use Electronic Tag tracking to Point of Use (POU) destination
Supplier Replaces Defective Material at Electronic Tag tracking to Point of Use (POU) destination
Customer’s Facility with Good Product as
Required
Inputs:
Receipt Verification from S1.2 Receive Acknowledgement that the product received conforms to specified
Product requirements and criteria.
Outputs:
Receipt Verification to S1.4 Transfer Product Acknowledgement that the product received conforms to specified

S1.4 Transfer Product
The transfer of accepted product to the appropriate stocking location within the supply chain. This
includes all of the activities associated with repackaging, staging, transferring and stocking
product. For service this is the transfer or application of service to the final customer or end user.

% Product Transferred On-Time to Demand The number of product orders / lines that are transferred on-time to
Requirement demand requirements divided by the total orders / lines transferred in the
measurement period
% Product Transferred without Transaction The number of transactions processed without error divided by the total
Errors transactions processed in the measurement period
Cost to Transfer Product The sum of the costs associated with transferring product to Make or
Deliver processes
Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw materials
& WIP, plant FG, field FG, field samples, other) ÷ (COGS ÷ 365). Total
gross value of inventory at standard cost before reserves for excess and
obsolescence. Only includes inventory on company books, future liabilities
should not be included
Transfer Product Cycle Time The average time associated transfer until product is moved to the next
process.
Best Practices:
Capability Transfer to Organization None identified
Drive Deliveries Directly to Stock or Point- Pay on receipt
Of-Use in Manufacturing to Reduce Costs Specify delivery location and time (to the minute)
and Cycle Time Specify delivery sequence
Inputs:
Finished Goods Inventory Location from The physical storage location where Finished Product inventory is held in
ED.4 Manage Finished Goods Inventories stock prior to use or shipment.
Product Inventory Location from ES.4 The physical storage location where product inventory is held in stock prior
Manage Product Inventory to use or shipment.
Receipt Verification from S1.3 Verify Product Acknowledgement that the product received conforms to specified
WIP Inventory Location from EM.6 Manage Location of inventory that is specified as “work in progress“. This can be
Transportation intermediate storage in a manufacturing facility prior to final packaging or
can be a class of materials waiting final transformation to finished products.
Outputs:
Daily Replenishment Requirements to D4.1 Resources needed to meet Item stocking schedule requirement.
Generate Stocking Schedule

Existing Inventory Data to ES.4 Manage Available data that characterizes and quantifies raw material, work in
Product Inventory process, and finished goods inventories
Inventory Availability to P2.2 Identify, Those stocks or items on hand used to support production (raw materials
Assess, And Aggregate Product Resources and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to ES.4 Manage Those stocks or items on hand used to support production (raw materials
Product Inventory and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to D4.2 Receive Those stocks or items on hand used to support production (raw materials
Product at Store and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to D1.8 Receive Those stocks or items on hand used to support production (raw materials
Product from Source or Make and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to D1.3 Reserve Those stocks or items on hand used to support production (raw materials
Inventory & Determine Delivery Date and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to M3.3 Issue Those stocks or items on hand used to support production (raw materials
Sourced/In-Process Product and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to M1.2 Issue Material Those stocks or items on hand used to support production (raw materials
and work in process items), supporting activities (maintenance, repairs and
parts).
parts).
Loaded Retail Cart or Pallet to D4.4 Stock Customer selected retail finished goods transferred to the point of sale.
Shelf
Transferred Product to S1.5 Authorize Product being transferred to the appropriate stocking location within the
Supplier Payment supply chain.

S1.5 Authorize Supplier Payment
The process of authorizing payments and paying suppliers for product or services. This process
includes invoice collection, invoice matching and the issuance of checks.

Authorize Supplier Payment Cycle Time The average time associated with authorizing payment to suppliers.
Cost to Authorize Supplier Payment The sum of the costs associated with authorizing supplier payment.
Best Practices:
Pay on Receipt Electronic Invoice Processing
Inputs:
Payment Terms from ES.9 Manage Supplier The process of authorizing payments and paying suppliers for product or
Agreements services. This process includes invoice collection, invoice matching and
Transferred Product from S1.4 Transfer Product being transferred to the appropriate stocking location within the
Product supply chain.

S2 Source Make-to-Order Product
The procurement and delivery of product that is built to a specific design or configured based on
the requirements of a particular customer order.
The Category S2 includes five Level 3 Elements:

product against the contract. The requirements for product deliveries are
determined based on the detailed sourcing plan. This includes all aspects
of managing the contract schedule including prototypes, qualifications or
service deployment.
requirements.
repackaging, staging, transferring, and stocking product and or application
of service.

orders.
Perfect Order Fulfillment The percentage of orders meeting delivery performance with complete and
accurate documentation and no delivery damage. Components include all
items and quantities on-time using the customer’s definition of on-time, and
documentation - packing slips, bills of lading, invoices, etc.
asset.
Best Practices:
Automated Statistical Process Control (SPC)None identified
consumer by postponing identify changes, such as assembly or
packaging, to the last possible supply chain location.

Scheduling and managing the execution of the individual deliveries of product against the contract.
The requirements for product deliveries are determined based on the detailed sourcing plan. This
includes all aspects of managing the contract schedule including prototypes, qualifications or
service deployment.

% Schedules Changed within Supplier’s The number of schedules that are changed within the suppliers lead-time
Lead Time divided by the total number of schedules generated within the
measurement period
Average Days per Engineering Change # of days each engineering change impacts the delivery date divided by
the total # of changes.
Average Days per Schedule Change # of days each schedule change impacts the delivery date divided by the
total # of changes.
Average Release Cycle of Changes Cycle time for implementing change notices divided by total number of
changes.
Cost to Schedule Product Deliveries The sum of the costs associated with scheduling product deliveries.
Schedule Product Deliveries Cycle Time The average time associated with scheduling the shipment of the return of
MRO product
Best Practices:
Advanced Ship Notices Allow for Tight Blanket order support with scheduling interfaces to external supplier
Processes
Consignment Agreements Are Used to Consignment inventory management
Mechanical (Kanban) Pull Signals Are Used Electronic Kanban support
Product
Utilize EDI Transactions to Reduce Cycle EDI interface for 830, 850, 856 & 862 transactions
Time and Costs
Inputs:
Logistics Selection from ES.6 Manage Carrier selection and management for inbound or outbound shipments
Incoming Product (linked to terms of delivery)
Resources & Determine Delivery Date replenishment system.

transfer.
transfer.
transfer.
Source Execution Data from M2.2 Issue Data which will provide measurement of actual supplier performance
Sourced/In-Process Product against internal and or external standards to provide feedback to achieve
and maintain the performance required to meet the customer’s needs.
measurements.
Outputs:
Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a pull
Product On Order to P2.2 Identify, Assess, Product on order with a selected source.
Product On Order to ES.9 Manage Supplier Product on order with a selected source.
Agreements
Scheduled Receipts to S2.2 Receive Product Product due to arrive.


% Orders/ Lines Processed Complete The number of orders / lines that are processed complete divided by the
total orders / lines processed within the measurement period
% Orders/ Lines Received On-Time To The number of orders / lines that are received on-time to the demand
Demand Requirement requirements divided by the total orders / lines for the demand
requirements in the measurement period
% Orders/ Lines Received with Correct The number of orders / lines that are received on-time with correct shipping
Shipping Documents documents divided by the total orders / lines processed in the
measurement period
Cost to Receive Product The sum of the costs associated with receiving product.
Receiving Product Cycle Time Total elapsed time from time product is received to time it is passed to next
process
Best Practices:
- RFID
Inspection
Supplier Delivers Directly to Point of Use - Electronic Tag tracking to Point of Use (POU) destination
Inputs:
Defective Products from DR1.4 Transfer Maintenance, Repair and Overhaul spare parts used to support of
Defective Product operations and maintenance.
Excess Products from DR3.4 Transfer Material in excess of the current requirements.
Excess Product
MRO Products from DR2.4 Transfer MRO Maintenance, Repair and Overhaul spare parts used to support of
Product operations and maintenance.
Product from Source: Supplier The end object of a transformation process that includes physical objects,

Product Deliveries
Outputs:

Receipt Verification to ED.8 Manage Acknowledgement that the product received conforms to specified
Receipt Verification to S2.3 Verify Product Acknowledgement that the product received conforms to specified

S2.3 Verify Product

% Orders/ Lines Received Defect Free The number of orders / lines that are received defect free divided by the
total orders / lines processed in the measurement period.
Cost to Verify Product The sum of the costs associated with raw material verification.
Verify Product Cycle Time The average time associated with verifying raw material product
Best Practices:
- RFID
Inspection
Supplier Delivers Directly to Point of Use Electronic Tag tracking to Point of Use (POU) destination
Supplier Replaces Defective Material at Electronic Tag tracking to Point of Use (POU) destination
Required
Inputs:
Receipt Verification from S2.2 Receive Acknowledgement that the product received conforms to specified
Outputs:
Receipt Verification to S2.4 Transfer Product Acknowledgement that the product received conforms to specified

includes all of the activities associated with repackaging, staging, transferring, and stocking
product and or application of service.

% Product Transferred On-Time to Demand The number of product orders / lines that are transferred on-time to
Requirement demand requirements divided by the total orders / lines transferred in the
measurement period
% Product Transferred without Transaction The number of transactions processed without error divided by the total
Errors transactions processed in the measurement period
Cost to Transfer Product The sum of the costs associated with transferring product to Make or
Deliver processes
Transfer Product Cycle Time The average time associated transfer until product is moved to the next
process.
Best Practices:
Capability Transfer to Customer None identified
Drive Deliveries Directly to Stock or Point- Pay on receipt
Inputs:
Finished Goods Inventory Location from The physical storage location where Finished Product inventory is held in
ED.4 Manage Finished Goods Inventories stock prior to use or shipment.
Product Inventory Location from ES.4 The physical storage location where product inventory is held in stock prior
Manage Product Inventory to use or shipment.
Receipt Verification from S2.3 Verify Product Acknowledgement that the product received conforms to specified
WIP Inventory Location from EM.6 Manage Location of inventory that is specified as “work in progress“. This can be
Transportation intermediate storage in a manufacturing facility prior to final packaging or

Outputs:
Existing Inventory Data to ES.4 Manage Available data that characterizes and quantifies raw material, work in
Product Inventory process, and finished goods inventories
parts).
Inventory Availability to D2.3 Reserve Those stocks or items on hand used to support production (raw materials
Resources & Determine Delivery Date and work in process items), supporting activities (maintenance, repairs and
parts).
Inventory Availability to D2.9 Pick Product Those stocks or items on hand used to support production (raw materials
parts).
Inventory Availability to M1.2 Issue Material Those stocks or items on hand used to support production (raw materials
parts).
Inventory Availability to ES.4 Manage Those stocks or items on hand used to support production (raw materials
Product Inventory and work in process items), supporting activities (maintenance, repairs and
parts).
parts).
Inventory Availability to P2.2 Identify, Those stocks or items on hand used to support production (raw materials
Assess, And Aggregate Product Resources and work in process items), supporting activities (maintenance, repairs and
parts).
Transferred Product to S2.5 Authorize Product being tranferred to the appropriate stocking location within the
Supplier Payment supply chain.


Authorize Supplier Payment Cycle Time The average time associated with authorizing payment to suppliers.
Cost to Authorize Supplier Payment The sum of the costs associated with authorizing supplier payment.
Best Practices:
Pay on Receipt Electronic Invoice Processing
Inputs:
Payment Terms from ES.9 Manage Supplier The process of authorizing payments and paying suppliers for product or
Agreements services. This process includes invoice collection, invoice matching and
Transferred Product from S2.4 Transfer Product being tranferred to the appropriate stocking location within the
Product supply chain.

S3 Source Engineer-to-Order Product
The negotiation, procurement and delivery of engineer-to-order assemblies or specialized product
or services that are designed and built based on the requirements or specifications of a particular
customer order or contract.
The Category S3 includes seven Level 3 Elements:

S3.1 Identify Sources of Supply The identification and qualification of potential suppliers capable of
designing and delivering product that will meet all of the required product
specifications.
S3.2 Select Final Supplier(s) and Negotiate The identification of the final supplier(s) based on the evaluation of RFQs,
supplier qualifications and the generation of a contract defining the costs
and terms and conditions of product availability.
product against the contract. The requirements for product deliveries are
determined based on the detailed sourcing plan. This includes all aspects
of managing the contract schedule including prototypes and qualifications.
requirements.
repackaging, staging, transferring, and stocking product.

orders.
asset.
Best Practices:

S3.1 Identify Sources of Supply
The identification and qualification of potential suppliers capable of designing and delivering
product that will meet all of the required product specifications.

. Cost to Identify Sources of Supply The sum of the costs associated with identifying sources of supply.
. Identify Sources of Supply Cycle Time The average time associated with the identification of sources of
supply
Best Practices:
. Concurrent Engineering is Used to Tightly None identified
Link Sourcing into the Product Development
Process Make/Buy Decision Process
(Outsourcing vs. In Sourcing)
. Electronic Data Interchange is Used to Send None identified
Technical Information to and from Potential
Suppliers
. On Line RFQ Processes Linked into the None identified
Document Management Process Reduces
Cycle Time and Product Management Costs
. Product Data Management & Electronic None identified
Document Management Are Used to
Manage Technical Documents and
Requirements for Engineer to Order Product
. Supplier Development Programs Are Used None identified
to Get Local Suppliers to Invest in
Developing New Technologies
Inputs:
. Business Rules for Source Processes from Rules that are translated into guidelines and policies for conducting
ES.1 Manage Sourcing Business Rules business within the enterprise and other legal entities. Sourcing
business rules include: supplier selection and negotiation
processes, fulfillment and delivery performance and relationship
definition for specific levels of collaboration and partnership.
. Current Inventory Source Data from ES.3 Data which will provide measurement of actual supplier
Maintain Source Data performance against internal and or external standards to provide
feedback to achieve and maintain the performance required to meet
the customer’s needs.
. ETO Spec or Design from Source: Company A clear, complete and accurate statement or drawing of the
technical requirements of a material, item or service, and of the
procedure to determine if the requirements are met.
. Sourcing Plans from P2.4 Establish Sourcing An aggregate material requirements plan used to schedule material
. Supplier Data from ES.7 Manage Supplier Data or information about the supplier. This data can be
Network organizational, product, information, financial. Structured supplier
data is needed to set up and implement ERP or similar systems.
Outputs:
. Workflow to S3.2 Select Final Supplier(s) and Negotiate
. ETO Request for Proposal to Supplier A document used to solicit vendor responses when the functional
requirements and features are known.

S3.2 Select Final Supplier(s) and Negotiate
The identification of the final supplier(s) based on the evaluation of RFQs, supplier qualifications
and the generation of a contract defining the costs and terms and conditions of product availability.

. Cost to Select Final Supplier(s) and The sum of the costs associated with selecting final suppliers and
Negotiate negotiating supplier agreements.
. Select Final Supplier(s) and Negotiate Cycle The average time associated with scheduling the shipment of the
Time return of MRO product
Best Practices:
. Electronic Data Interchange Can Be Used Electronic Data Interchange
To Send Rfqs and Technical Information to
and from Potential Suppliers to Determine
Supplier Capability to Fulfill Requirements So
that They May Be Added to Supplier Network
. On Line Document Management and ERP
Automated Supplier Approval Processes Can
Reduce the Cycle Time and Costs
Associated With Managing Supplier
Evaluations and Get Them into the Supplier
Network Faster
. On Line RFQ Processes Linked into the None identified
Document Management Process Reduces
Cycle Time and Product Management Costs
. On-Line Availability to Supplier Financials to Internet web sites for financial evaluation
Determine Potential Supplier Viability to be
Added to Supplier Network
. Supplier Certification Programs Can Reduce None identified
the Cycle Time for Certifying Existing
Suppliers to Provide New Technologies
. Utilize Concurrent Engineering with None identified
Suppliers to Allow Them to Provide
Engineering and Product Performance Test
Data
Inputs:
. Workflow from S3.1 Identify Sources of Supply
. ETO Proposal from Source: Supplier A proposal that may contain final drawings, specifications, formulas,
part programs, etc., that describe requirements of a product
Network organizational, product, information, financial. Structured supplier

Outputs:
. Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a
pull replenishment system, or the signal that sends the estimated
need of parts or services to the supplier.
. Supplier Agreement to ES.9 Manage An agreement between supplier and purchaser to perform or not to
Supplier Agreements perform specific acts or services or to deliver merchandise, such as
purchase order or supplier contract.
. Supplier Agreement to EM.6 Manage An agreement between supplier and purchaser to perform or not to
Transportation perform specific acts or services or to deliver merchandise, such as
. Supplier Agreement to S3.3 Schedule An agreement between supplier and purchaser to perform or not to
Product Deliveries perform specific acts or services or to deliver merchandise, such as

Scheduling and managing the execution of the individual deliveries of product against the contract.
The requirements for product deliveries are determined based on the detailed sourcing plan. This
includes all aspects of managing the contract schedule including prototypes and qualifications.

. % Schedules Changed within Supplier’s The number of schedules that are changed within the suppliers
Lead Time lead-time divided by the total number of schedules generated within
the measurement period
. Average Days per Engineering Change # of days each engineering change impacts the delivery date
divided by the total # of changes.
. Average Days per Schedule Change # of days each schedule change impacts the delivery date divided
by the total # of changes.
. Average Release Cycle of Changes Cycle time for implementing change notices divided by total number
of changes.
. Cost to Schedule Product Deliveries The sum of the costs associated with scheduling product deliveries.
. Schedule Product Deliveries Cycle Time The average time associated with scheduling the shipment of the
return of MRO product
Best Practices:
. Advanced Ship Notices Allow for Tight Blanket order support with scheduling interfaces to external supplier
Processes
. Consignment Agreements Are Used to Consignment inventory management
. Mechanical (Kanban) Pull Signals Are Used Electronic Kanban support
Product
. Utilize EDI Transactions to Reduce Cycle EDI interface for 830, 850, 856 & 862 transactions
Time and Costs
Inputs:
. Logistics Selection from ES.6 Manage Carrier selection and management for inbound or outbound
Incoming Product shipments (linked to terms of delivery)
. Production Schedule from M2.1 Schedule A plan that authorizes the factory to manufacture or repair a certain
. Replenishment Signal from M1.2 Issue Any signal that indicates when to produce or transport Items in a
Material pull replenishment system.
Sourced/In-Process Product pull replenishment system.
. Replenishment Signal from D3.3 Enter Any signal that indicates when to produce or transport Items in a
Order, Commit Resources & Launch pull replenishment system.
Program
. Return Inventory Transfer Data from DR3.4 The process of receipt and verification of the returned item against

Transfer Excess Product the return authorization and other documentation and prepares the
item for transfer.
Transfer Defective Product the return authorization and other documentation and prepares the
item for transfer.
Transfer MRO Product the return authorization and other documentation and prepares the
item for transfer.
. Supplier Agreement from S3.2 Select Final An agreement between supplier and purchaser to perform or not to
Supplier(s) and Negotiate perform specific acts or services or to deliver merchandise, such as
. Supplier Performance from ES.2 Assess The results of measuring the actual supplier performance on cost,
Supplier Performance quality, engineering, purchasing, and so on, based on an agreed
set of measurements.
Outputs:
. Procurement Signal (Supplier) to Supplier Any signal that indicates when to produce or transport Items in a
pull replenishment system, or the signal that sends the estimated
need of parts or services to the supplier.
. Product On Order to ES.9 Manage Supplier Product on order with a selected source.
Agreements
. Product On Order to P2.2 Identify, Assess, Product on order with a selected source.
. Scheduled Receipts to M1.1 Schedule Product due to arrive.
. Scheduled Receipts to S3.4 Receive Product Product due to arrive.


. % Orders/ Lines Processed Complete The number of orders / lines that are processed complete divided
by the total orders / lines processed within the measurement period
. % Orders/ Lines Received On-Time To The number of orders / lines that are received on-time to the
Demand Requirement demand requirements divided by the total orders / lines for the
demand requirements in the measurement period
. % Orders/ Lines Received with Correct The number of orders / lines that are received on-time with correct
Shipping Documents shipping documents divided by the total orders / lines processed in
. Cost to Receive Product The sum of the costs associated with receiving product.
. Receiving Product Cycle Time Total elapsed time from time product is received to time it is passed
to next process
Best Practices:
. Bar Coding is Used to Minimize Handling - Bar code interface for data collection devices
- RFID
. Carrier Agreement Carrier agreements are agreements between a company and its
domestic and global carriers (for both, inbound raw materials and
outbound finished goods) specifying service levels, payment terms,
and other conditions.
. Deliveries Are Balanced Throughout Each None identified
. Supplier Certification Programs Are Used to Skip lot/sampling inspection logic
Inspection
. Supplier Delivers Directly to Point of Use - Electronic Tag tracking to Point of Use (POU) destination
. Vendor Managed Inventory VMI is a concept for planning and control of inventory, in which the
supplier has access to the customer’s inventory data and is
responsible for maintaining the inventory level required by the
customer. Re-supply is performed by the vendor through regularly
scheduled reviews of the on-site inventory. The on-site inventory is
counted, damaged or outdated goods are removed, and the
inventory is restocked to predefined levels.
Inputs:
. Product from Source: Supplier The end object of a transformation process that includes physical
objects, information or services.
. Scheduled Receipts from S3.3 Schedule Product due to arrive.

Product Deliveries
Outputs:
. Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified
. Receipt Verification to ES.8 Manage Acknowledgement that the product received conforms to specified

. Receipt Verification to S3.5 Verify Product Acknowledgement that the product received conforms to specified
. Receipt Verification to ED.8 Manage Acknowledgement that the product received conforms to specified

S3.5 Verify Product

. % Orders/ Lines Received Defect Free The number of orders / lines that are received defect free divided by
the total orders / lines processed in the measurement period.
. Cost to Verify Product The sum of the costs associated with raw material verification.
. Verify Product Cycle Time The average time associated with verifying raw material product
Best Practices:
- RFID
. Deliveries Are Balanced Throughout Each None identified
. Supplier Certification Programs Are Used to Skip lot/sampling inspection logic
Inspection
. Supplier Delivers Directly to Point of Use Electronic Tag tracking to Point of Use (POU) destination
. Supplier Replaces Defective Material at Electronic Tag tracking to Point of Use (POU) destination
Required
Inputs:
. Receipt Verification from S3.4 Receive Acknowledgement that the product received conforms to specified
Outputs:
. Receipt Verification to S3.6 Transfer Product Acknowledgement that the product received conforms to specified
. Receipt Verification to ES.2 Assess Supplier Acknowledgement that the product received conforms to specified

includes all of the activities associated with repackaging, staging, transferring, and stocking
product.

. % Product Transferred On-Time to Demand The number of product orders / lines that are transferred on-time to
Requirement demand requirements divided by the total orders / lines transferred
in the measurement period
. % Product Transferred without Transaction The number of transactions processed without error divided by the
Errors total transactions processed in the measurement period
. Cost to Transfer Product The sum of the costs associated with transferring product to Make
or Deliver processes
. Inventory Days of Supply Five point annual average of the sum of all gross inventories (raw
materials & WIP, plant FG, field FG, field samples, other) ÷ (COGS
÷ 365). Total gross value of inventory at standard cost before
reserves for excess and obsolescence. Only includes inventory on
company books, future liabilities should not be included
. Transfer Product Cycle Time The average time associated transfer until product is moved to the
next process.
Best Practices:
. Capability Transfer to Organization None identified
. Drive Deliveries Directly to Stock or Point- Pay on receipt
Inputs:
. Finished Goods Inventory Location from The physical storage location where Finished Product inventory is
ED.4 Manage Finished Goods Inventories held in stock prior to use or shipment.
. Product Inventory Location from ES.4 The physical storage location where product inventory is held in
Manage Product Inventory stock prior to use or shipment.
. Receipt Verification from S3.5 Verify Product Acknowledgement that the product received conforms to specified
. Replenishment Signal from D1.3 Reserve Any signal that indicates when to produce or transport Items in a
Inventory & Determine Delivery Date pull replenishment system.
Material pull replenishment system.
. WIP Inventory Location from EM.6 Manage Location of inventory that is specified as “work in progress“. This
Transportation can be intermediate storage in a manufacturing facility prior to final
packaging or can be a class of materials waiting final transformation
to finished products.
Outputs:

. Existing Inventory Data to ES.4 Manage Available data that characterizes and quantifies raw material, work
Product Inventory in process, and finished goods inventories
. Inventory Availability to D3.9 Pick Product Those stocks or items on hand used to support production (raw
materials and work in process items), supporting activities
(maintenance, repairs and operating supplies), and customer
service (finished goods and spare parts).
. Inventory Availability to P2.2 Identify, Those stocks or items on hand used to support production (raw
Assess, And Aggregate Product Resources materials and work in process items), supporting activities
. Inventory Availability to M2.2 Issue Those stocks or items on hand used to support production (raw
Sourced/In-Process Product materials and work in process items), supporting activities
. Inventory Availability to M1.2 Issue Material Those stocks or items on hand used to support production (raw
. Inventory Availability to M3.3 Issue Those stocks or items on hand used to support production (raw
. Transferred Product to S3.7 Authorize Product being tranferred to the appropriate stocking location within
Supplier Payment the supply chain.


. Authorize Supplier Payment Cycle Time The average time associated with authorizing payment to suppliers.
. Cost to Authorize Supplier Payment The sum of the costs associated with authorizing supplier payment.
Best Practices:
. Pay on Receipt Electronic Invoice Processing
Inputs:
. Payment Terms from ES.9 Manage Supplier The process of authorizing payments and paying suppliers for
Agreements product or services. This process includes invoice collection,
invoice matching and the issuance of checks.
. Transferred Product from S3.6 Transfer Product being tranferred to the appropriate stocking location within
Product the supply chain.

ES Enable SOURCE
Enable Processes prepare, maintain, or manage information or relationships on which planning
and execution processes rely.
The Category ES includes nine Level 3 Elements:

ES.1 Manage Sourcing Business Rules The process of defining requirements and establishing, maintaining and
enforcing decision support criteria, in alignment with business strategy,
goals and objectives. The business strategy defines the criteria for
sourcing business rules that are translated into guidelines and policies for
conducting business within the enterprise and other legal entities. Sourcing
business rules include: supplier selection and negotiation processes,
fulfillment and delivery performance and relationship definition for specific
levels of collaboration and partnership.
ES.2 Assess Supplier Performance The process of measuring actual supplier performance against internal
and/or external standards, providing feedback to achieve and maintain the
performance required to meet the customers’ business and/or competitive
needs.
ES.3 Maintain Source Data The process of collecting, sorting, defining hierarchy and managing
configuration control of supplier information and source data that are
required to make sourcing and related planning and manufacturing
decisions. Source data to be maintained includes supplier profile data,
financials, quality and delivery performance, spend analysis at various
levels of the enterprise, from major business units to material part number.
ES.4 Manage Product Inventory The process of establishing and maintaining physical inventories and
inventory information. This includes warehouse management, cycle
counting, physical inventories and inventory reconciliation. For Services,
this may include tracking the number of service providers and the financial
resources committed at any given point in time.
ES.5 Manage Capital Assets The process of acquiring, maintaining and dispositioning an organization’s
<capital assets> located at a supplier’s facility and/or outside source, which
are used to operate the supply chain.
ES.6 Manage Incoming Product The process of defining and maintaining the information that characterizes
inbound logistics management of all supplier deliveries, including both
physical and electronic goods and services. This includes carrier selection
and management, tracking deliveries and import.
ES.7 Manage Supplier Network The process of defining and maintaining a unique network of suppliers to
deliver a specific product set. This includes establishment of a new supplier
or maintaining an existing supplier and all the tasks and activities
associated with identifying and qualifying the supplier and finalizing on the
sourcing terms and conditions. Also, the management of a supplier
certification process, which includes certifying new suppliers and
maintaining the current status of existing suppliers.
ES.8 Manage Import/Export Requirements The process of identifying and complying with import/export regulatory
documentation and process standards set by external entities (e.g.,
government).
ES.9 Manage Supplier Agreements The management of existing purchase orders or supplier contracts. This
includes managing volume/step pricing, resolving issues, enforcing terms
and conditions and maintaining an accurate status for existing purchase
orders or contracts. Also, the management of a supplier certification
process, which includes certifying new suppliers and maintaining the
current status of existing suppliers.

ES.1 Manage Sourcing Business Rules
The process of defining requirements and establishing, maintaining and enforcing decision support
criteria, in alignment with business strategy, goals and objectives. The business strategy defines
the criteria for sourcing business rules that are translated into guidelines and policies for
conducting business within the enterprise and other legal entities. Sourcing business rules include:
supplier selection and negotiation processes, fulfillment and delivery performance and relationship

. Cost to Manage Sourcing Business Rules The sum of the costs associated with Source business rules.
. Manage Sourcing Business Rules Cycle The average time associated with managing source business rules
Time
Best Practices:
. Collaborative Review and Agreement of Web based access to current spend data available from enterprise
Business Rules Prior to Contract Execution to part level
. Electronic Sourcing and Negotiation Business Rules for electronic sourcing process and hierarchy
. Enterprise Level Policies/Rules with Local Web based access to enterprise level business rules
Execution
. Enterprise Level Spend Analysis None identified
. Long Term Supplier Electronic rules for business relationships and transactions:
Agreements/Partnerships Vendor-managed Inventory Agreements, Fab & Hold Agreements,
Just-In-Time Agreements.
. Optimized Supply-Chain Processes, Web based access to preferred and recommended suppliers,
Optimized Supplier Count, Supplier and Part supplier performance data & spend data stratified by commodity,
Rationalization business unit/site, supplier, part type, process type
Inputs:
Network organizational , product, information , financial. Structured supplier

Outputs:
. Business Rules for Return Processes to Rules for conducting business, i.e. developing and maintaining
ES.7 Manage Supplier Network customer and channel performance standards of an return
processes such as service levels, given service requirements by
supply chain stakeholders/trading partners. Business rules align
Return process policies with business strategy, goals, and
objectives.
. Business Rules for Source Processes to Rules that are translated into guidelines and policies for conducting
ES.4 Manage Product Inventory business within the enterprise and other legal entities. Sourcing
S3.2 Select Final Supplier(s) and Negotiate business within the enterprise and other legal entities. Sourcing
S3.1 Identify Sources of Supply business within the enterprise and other legal entities. Sourcing

ES.2 Assess Supplier Performance
The process of measuring actual supplier performance against internal and/or external standards,
providing feedback to achieve and maintain the performance required to meet the customers’
business and/or competitive needs.

. Assess Supplier Performance Cycle Time The average time associated with assessing the performance of
supplier processes.
. Cost to Assess Supplier Performance The sum of the costs associated with assessing supplier
performance.
Best Practices:
. Comparative Analysis of Supplier Software application with data analysis capability
Performance is Used in Sourcing Decisions
. Continuous Improvement and Development None identified
is Driven and Measured through the
Performance Review Process
. Cost Reduction and or Cost Avoidance Are None identified
Opportunities Are Identified, Implemented
and Measured on a Periodic Basis
. Performance Expectations and Business Web based access / availability to business rules and performance
Rules Are Clearly Communicated Prior to the criteria
Initiation of Business with the Supplier
. Supplier “Cost of Nonconformance“ Data is Software application to automate data collection and reporting
Collected, Analyzed and Used in
Performance Reporting
. Supplier Performance Assessment System “Assess Supplier Performance” is the process of measuring actual
supplier performance against internal and/or external standards,
providing feedback to achieve and maintain the performance
required to meet the customers’ business and/or competitive needs.
. Supplier Performance Data is Collected, Web based relational database / management application
Analyzed and Reported to Suppliers Online
and Real-Time through Extranet Applications
. Suppliers Are Evaluated, Selected and None identified
Qualified with Criteria Matched to Business
Requirements and Competitive Needs
Inputs:

Outputs:
. Quality and Delivery Performance to ES.3 “The process of measuring actual supplier performance against
Maintain Source Data internal and/or external standards, providing feedback to achieve
and maintain the performance required to meet the customers’
Or, the extent to which the supplier delivers according to quality
specification (e.g. product quality, logistic quality) and to delivery
specification (in time, correct packaging etc). Sometimes these two
metrics are connected in one.“
. Supplier Performance to S3.3 Schedule The results of measuring the actual supplier performance on cost,
Product Deliveries quality, engineering, purchasing, and so on, based on an agreed set
of measurements.
. Supplier Performance to ES.7 Manage The results of measuring the actual supplier performance on cost,
Supplier Network quality, engineering, purchasing, and so on, based on an agreed set
of measurements.
of measurements.
of measurements.

ES.3 Maintain Source Data
The process of collecting, sorting, defining hierarchy and managing configuration control of
supplier information and source data that are required to make sourcing and related planning and
manufacturing decisions. Source data to be maintained includes supplier profile data, financials,
quality and delivery performance, spend analysis at various levels of the enterprise, from major
business units to material part number.

. Cost to Maintain Source Data The sum of the costs associated with maintaining supplier data.
. Maintain Source Data Cycle Time The average time associated with maintaining source data
Best Practices:
. Automated Update of Supplier Performance None identified
Information
. Data Accessibility across the Enterprise for Web based access to various levels of enterprise data
Visibility by Discrete Business Units
. On Demand Access of Supplier/Source Data Web based access to current supplier/source data
. Supplier and Material Rationalization Web based access to supplier/source data
Inputs:
. Quality and Delivery Performance from ES.2 “The process of measuring actual supplier performance against
Assess Supplier Performance internal and/or external standards, providing feedback to achieve
Or, the extent to which the supplier delivers according to quality
specification (e.g. product quality, logistic quality) and to delivery
specification (in time, correct packaging etc). Sometimes these two
metrics are connected in one.“
Outputs:
. Current Inventory Source Data to ES.7 Data which will provide measurement of actual supplier performance
Manage Supplier Network against internal and or external standards to provide feedback to
achieve and maintain the performance required to meet the
customer’s needs.
. Current Inventory Source Data to S3.2 Data which will provide measurement of actual supplier performance
Select Final Supplier(s) and Negotiate against internal and or external standards to provide feedback to
customer’s needs.
. Current Inventory Source Data to S3.1 Data which will provide measurement of actual supplier performance
Identify Sources of Supply against internal and or external standards to provide feedback to
customer’s needs.
. Current Inventory Source Data to ED.7 Data which will provide measurement of actual supplier performance
Manage Product Life Cycle against internal and or external standards to provide feedback to
customer’s needs.

ES.4 Manage Product Inventory
The process of establishing and maintaining physical inventories and inventory information. This
includes warehouse management, cycle counting, physical inventories and inventory
reconciliation. For Services, this may include tracking the number of service providers and the
financial resources committed at any given point in time.

. Cost to Manage Product Inventory The sum of the Cost to Manage Product Inventory
365). Total gross value of inventory at standard cost before reserves
for excess and obsolescence. Only includes inventory on company
books, future liabilities should not be included
. Manage Product Inventory Cycle Time The average time associated with managing raw material inventory
Best Practices:
. Periodic Review of Metrics and Strategy with Real time view of data.
Comparisons to Industry Benchmarks
. Real Time Data on Current Status Dynamic calculation of safety stock based on actual sales.
. Statistical Test Count The Statistical Test Count (STC) process is a method of validating
inventory on-hand values by physically counting and reconciling a
statistical sample of the entire inventory population. This sample is
then extrapolated across the inventory population, which provides an
indicative measure of entire inventory population. Furthermore, with
extrapolation the net and gross percentage of error is determined.
Inputs:
business rules include: supplier selection and negotiation processes,
fulfillment and delivery performance and relationship definition for
specific levels of collaboration and partnership.
. Existing Inventory Data from S2.4 Transfer Available data that characterizes and quantifies raw material, work in
Product process, and finished goods inventories
. Inventory Availability from S1.4 Transfer Those stocks or items on hand used to support production (raw
Product materials and work in process items), supporting activities
(maintenance, repairs and operating supplies), and customer service
(finished goods and spare parts).
(maintenance, repairs and operating supplies), and customer service
(finished goods and spare parts).

. Parts and Services Consumed from EM.5 The items and services utilized to manufacture a product.
Manage Equipment and Facilities
Outputs:
. MRO Parts Availability to EM.5 Manage The on-hand MRO inventory balance minus allocations,
Equipment and Facilities reservations, backorders, and (usually) quantities held for quality
problems.
. Product Inventory Location to S2.4 Transfer The physical storage location where product inventory is held in
Product stock prior to use or shipment.
. Product Inventory Target Levels to P2.2 The target for the total product inventory, including e.g. raw material,
Identify, Assess, And Aggregate Product work in progress and finished goods.
Resources
. Supply-Chain Performance Metrics to EP.2 Standard measures that indicate how well a supply chain performs
Manage Performance of Supply Chain within certain categories of performance known as Performance
Attributes, e.g. delivery reliability, flexibility and responsiveness, cost,
and asset management.

ES.5 Manage Capital Assets
The process of acquiring, maintaining and dispositioning an organization’s <capital assets>
located at a supplier’s facility and/or outside source, which are used to operate the supply chain.

. Cost to Manage Source Capital Assets The sum of the Costs to Manage Source Capital Assets
. Manage Capital Assets Cycle Time The average time associated with managing capital assets
Best Practices:
. Changeover Reduction / Continuous Changeover process flow element identification, instructional
Improvement Program directions to conduct changeover, and measurement tool, which can
be used to prioritize and track results of improvement efforts.
Software to identify operational constraints to the MAKE processes
to assist in directing resources toward bottleneck functional areas.
. Facility & Equipment Environmental / Safety System software to list checklist items, report results of audit &
Audit System forward actions to be taken
. Removal of Obsolete Capital Assets Automated Calculation of ABC Velocity Movement
. Total Preventative Maintenance Program Automatically generated TPM repair schedules integrated with MRP
systems, electronic equipment repair history, parts listings, part
stores inventory & reorder points, automatic store room parts
purchases, Shop floor access to electronic data base of equipment
line drawings, electrical wiring diagrams, parts listing reference guide
and part cost lists.
Inputs:
. Import/Export Requirements from ES.8 Requirements established by a government or trading areas (i.e EU,
Manage Import/Export Requirements NAFTA etc) which must be met before allowing the shipping or
delivery of a product across national boundaries.
. Supplier Agreement from ES.9 Manage An agreement between supplier and purchaser to perform or not to
Supplier Agreements perform specific acts or services or to deliver merchandise, such as
Outputs:
. Capital Assets to ES.8 Manage Physical objects that are held by an organization for its production
Import/Export Requirements potential and that costs more than some threshold value (APICS)

ES.6 Manage Incoming Product
The process of defining and maintaining the information that characterizes inbound logistics
management of all supplier deliveries, including both physical and electronic goods and services.
This includes carrier selection and management, tracking deliveries and import.

. Cost to Manage Incoming Product The sum of the costs associated with managing incoming product.
. Manage Incoming Product Cycle Time The average time associated with managing inbound raw material
Best Practices:
. Appointment Scheduling for Pickup and Transportation Management System (TMS) Maintenance
Delivery of Customer Shipments Management
. Automated Documentation for International Transportation Management System (TMS) Maintenance
Shipments Management
. Backhaul Trading Exchange Pooling
. Capture and Maintain Mode Specific Data Transportation Management System (TMS) Maintenance
Management
. Electronic Manifest and Electronic Billing Transportation Management System (TMS) Maintenance
Management
. Integrated Order Management, Warehouse Transportation Management System (TMS) Maintenance
Management, and Transportation Management
Management Systems View for analysis for
all orders and shipments the following data:
Logistics, Product, Cost, GL Charging
. Internet Pooling (Electronic Brokerage of Rating & Routing
Shipments)
. Manage Information Across 100% of Transportation Management System (TMS) Maintenance
. Measurement of Carrier Performance for Transportation Management System (TMS) Maintenance
On-time Delivery and Completeness Management
. Real-Time Optimized Shipment Method Transportation Management System (TMS) Maintenance
Selection (Air Parcel, Ground Parcel, LTL, Management
etc.) Based on Customer Service
Requirements
. Real-Time Shipment Tracking, (via internet) Transportation Management System (TMS) Maintenance
Management
Inputs:
. Contract Carrier Rates from ES.8 Manage The rates charged by a carrier that does not serve the general
Import/Export Requirements public, but provides transportation for hire for one or a limited
number of shippers under a specific contract.
. Import/Export Requirements from ES.8 Requirements established by a government or trading areas (i.e EU,
Manage Import/Export Requirements NAFTA etc) which must be met before allowing the shipping or
Outputs:

. Logistics Selection to S2.1 Schedule Product Carrier selection and management for inbound or outbound
Deliveries shipments (linked to terms of delivery)

ES.7 Manage Supplier Network
The process of defining and maintaining a unique network of suppliers to deliver a specific product
set. This includes establishment of a new supplier or maintaining an existing supplier and all the
tasks and activities associated with identifying and qualifying the supplier and finalizing on the
sourcing terms and conditions. Also, the management of a supplier certification process, which
includes certifying new suppliers and maintaining the current status of existing suppliers.

Cost to Manage Supplier Network The sum of the costs associated with managing the supplier network.
Manage Supplier Network Cycle Time The average time associated with managing the supplier network
Best Practices:
Create and Maintain Multiple Suppliers and None Identified
Multiple Supplier Sites to Record Information
about Individuals and Companies from
Whom You Want to Purchase Catalogue
Goods and Services
Electronic Data Interchange Can Be Used Electronic Data Interchange
To Send Rfqs and Technical Information to
and from Potential Suppliers to Determine
Supplier Capability to Fulfill Requirements So
that They May Be Added to Supplier Network
Establishment of Criteria to Rank Suppliers Utilize supplier delivery, quality, price performance as well as any other
criteria such as terms and conditions
Evaluate Supplier Network for Duplicates Supplier Merge Programs for duplicates
Identification of Suppliers Who Will Consignment Inventory Management
Participate in Consignment Inventory
Programs
Identification of Suppliers Who Will Electronic Kanban Support
Participate in Kanban Programs
Identification of Suppliers Who Will None identified
Participate in Procurement Split (Two or
More Suppliers Sharing Purchase
Requirements) Programs
Identification of Suppliers Who Will Supplier managed inventories with scheduling interfaces to external
Participate in Vendor Managed Inventory supplier systems to replenish
(VMI) Programs
Internet Exchanges Internet Exchanges are a hosted, business-to-business trading network.
Exchanges are an open procurement network, accessible to any buyer and
focused on new Internet-enabled purchasing models like spot buys or
reverse, buyer-driven auctions. Exchanges will also support more
traditional catalog-based sales.
On Line Document Management and ERP
Automated Supplier Approval Processes Can
Reduce the Cycle Time and Costs
Associated With Managing Supplier
Evaluations and Get Them into the Supplier
Network Faster
On-Line Availability to Supplier Financials to Internet web sites for financial evaluation
Determine Potential Supplier Viability to be
Added to Supplier Network
Supplier Certification Programs Can Reduce None identified
the Cycle Time for Certifying Existing
Suppliers to Provide New Technologies

Supplier Certification Programs Can Reduce None identified
the Cycle Time for Initial Certification of New
Suppliers or Certifying Existing Suppliers that
Wish to Provide New Technologies
Utilize Concurrent Engineering with Internet, EDI, FAX
Suppliers to Allow Them to Provide
Engineering and Product Performance Test
Data to Qualify as Part of Potential Supplier
Network
Inputs:
ES.1 Manage Sourcing Business Rules and channel performance standards of an return processes such as
service levels, given service requirements by supply chain
Current Inventory Source Data from ES.3 Data which will provide measurement of actual supplier performance
Maintain Source Data against internal and or external standards to provide feedback to achieve
and maintain the performance required to meet the customer’s needs.
Supplier Agreement from ES.9 Manage An agreement between supplier and purchaser to perform or not to perform
Supplier Agreements specific acts or services or to deliver merchandise, such as purchase order
or supplier contract.
measurements.
Outputs:
Supplier Data to ES.1 Manage Sourcing Data or information about the supplier. This data can be organizational ,
Business Rules product, information , financial. Structured supplier data is needed to set up
and implement ERP or similar systems.
Supplier Data to S3.2 Select Final Data or information about the supplier. This data can be organizational ,
Supplier(s) and Negotiate product, information , financial. Structured supplier data is needed to set up
Supplier Data to ES.3 Maintain Source Data Data or information about the supplier. This data can be organizational ,
product, information , financial. Structured supplier data is needed to set up
Supplier Data to ES.2 Assess Supplier Data or information about the supplier. This data can be organizational ,
Performance product, information , financial. Structured supplier data is needed to set up
Supplier Data to ES.9 Manage Supplier Data or information about the supplier. This data can be organizational ,
Agreements product, information , financial. Structured supplier data is needed to set up
Supplier Data to S3.1 Identify Sources of Data or information about the supplier. This data can be organizational ,
Supply product, information , financial. Structured supplier data is needed to set up

ES.8 Manage Import/Export Requirements
The process of identifying and complying with import/export regulatory documentation and process
standards set by external entities (e.g., government).

. Cost to Manage Import/Export The sum of the costs associated with the management of
Requirements import/export requirements
. Customs Clearance Cycle Time The average time associated with clearing an order through
customs
. Manage Import/Export Requirements Cycle The average time associated with managing import/export
Time requirements
Best Practices:
. Ability to Track Component/Sub-Component Component/lot tracking (lot trace-ability)
Manufacturing Country of Origin
. Assessing Export/Import Requirements Multi-country Export/Import documentation compliance
during Time of Product
Development/Manufacture
. Direct Connection to Customs Clearance Electronic documentation submission via EDI and/or internet.
. Direct Transfer of Documents to Recipient Electronic documentation submission via EDI and/or internet.
and Forwarder
. Documents Generated Automatically During Electronic documentation submission via EDI and/or internet.
Shipment Preparation.
Inputs:
. Capital Assets from ES.5 Manage Capital Physical objects that are held by an organization for its production
Assets potential and that costs more than some threshold value (APICS)
Outputs:
. Contract Carrier Rates to ES.6 Manage The rates charged by a carrier that does not serve the general
Incoming Product public, but provides transportation for hire for one or a limited
. Contract Carrier Rates to ED.6 Manage The rates charged by a carrier that does not serve the general
Transportation public, but provides transportation for hire for one or a limited
. Import/Export Requirements to ES.5 Manage Requirements established by a government or trading areas (i.e
Capital Assets EU, NAFTA etc) which must be met before allowing the shipping or
Supplier Agreements EU, NAFTA etc) which must be met before allowing the shipping or

Incoming Product EU, NAFTA etc) which must be met before allowing the shipping or

ES.9 Manage Supplier Agreements
The management of existing purchase orders or supplier contracts. This includes managing
volume/step pricing, resolving issues, enforcing terms and conditions and maintaining an accurate
status for existing purchase orders or contracts. Also, the management of a supplier certification
process, which includes certifying new suppliers and maintaining the current status of existing
suppliers.

. Cost to Manage Supplier Agreements The sum of the costs associated with managing supplier
agreements.
. Manage Supplier Agreements Cycle Time The average time associated with managing supplier agreements
Best Practices:
. Electronic Sourcing and Negotiation Business Rules for electronic sourcing process and hierarchy
Execution
. Enterprise Level Spend Analysis None identified
. Long Term Supplier Electronic rules for business relationships and transactions:
Agreements/Partnerships Vendor-managed Inventory Agreements, Fab & Hold Agreements,
Just-In-Time Agreements.
. Optimized Supply-Chain Processes, Web based access to preferred and recommended suppliers,
Optimized Supplier Count, Supplier and Part supplier performance data & spend data stratified by commodity,
Rationalization business unit/site, supplier, part type, process type
Inputs:
. Import/Export Requirements from ES.8 Requirements established by a government or trading areas (i.e
Manage Import/Export Requirements EU, NAFTA etc) which must be met before allowing the shipping or
. Product On Order from S2.1 Schedule Product on order with a selected source.
Product Deliveries
Product Deliveries
Product Deliveries
. Supplier Agreement from S3.2 Select Final An agreement between supplier and purchaser to perform or not to
Supplier(s) and Negotiate perform specific acts or services or to deliver merchandise, such as
Outputs:
. Payment Terms to S2.5 Authorize Supplier The process of authorizing payments and paying suppliers for
Payment product or services. This process includes invoice collection,

. Supplier Agreement to ES.5 Manage Capital An agreement between supplier and purchaser to perform or not to
Assets perform specific acts or services or to deliver merchandise, such as
. Supplier Agreement to ES.7 Manage An agreement between supplier and purchaser to perform or not to
Supplier Network perform specific acts or services or to deliver merchandise, such as

M1 Make-to-Stock
The process of manufacturing in a make to stock environment adds value to products through
mixing, separating, forming, machining, and chemical processes. Make to stock products are
intended to be shipped from finished goods or “off the shelf,“ are completed prior to receipt of a
customer order, and are generally produced in accordance with a sales forecast.
The Category M1 includes six Level 3 Elements:

M1.1 Schedule Production Activities Given plans for the production of specific parts, products, or formulations in
specified quantities and planned availability of required sourced products,
the scheduling of the operations to be performed in accordance with these
plans. Scheduling includes sequencing, and, depending on the factory
layout, any standards for setup and run. In general, intermediate
production activities are coordinated prior to the scheduling of the
operations to be performed in producing a finished product.
M1.2 Issue Material The selection and physical movement of sourced/in-process product (e.g.,
raw materials, fabricated components, subassemblies, required ingredients
or intermediate formulations) from a stocking location (e.g., stockroom, a
location on the production floor, a supplier) to a specific point of use
location. Issuing product includes the corresponding system transaction.
The Bill of Materials/routing information or recipe/production instructions
will determine the products to be issued to support the production
operation(s).
M1.3 Produce and Test The series of activities performed upon sourced/in-process product to
convert it from the raw or semi-finished state to a state of completion and
greater value. The processes associated with the validation of product
performance to ensure conformance to defined specifications and
requirements.
M1.4 Package The series of activities that containerize completed products for storage or
sale to end-users. Within certain industries, packaging may include
cleaning or sterilization.
M1.5 Stage Product The movement of packaged products into a temporary holding location to
await movement to a finished goods location. Products that are made to
order may remain in the holding location to await shipment per the
associated customer order. The movement to finished goods is part of the
Deliver process.
M1.6 Release Product to Deliver Activities associated with post-production documentation, testing, or
certification required prior to delivery of finished product to customer.
Examples include assembly of batch records for regulatory agencies,
laboratory tests for potency or purity, creating certificate of analysis, and
sign-off by the quality organization.

Outstanding]
Cost of Goods Sold The cost associated with buying raw materials and producing finished
goods. This cost includes direct costs (labor, materials) and indirect costs
(overhead).
Cost to Make The sum of the costs associated with make.
Downside Make Adaptability The production reduction sustainable at 30 days prior to delivery with no
inventory or cost penalties.
Make Cycle Time The average time associated with Make Processes

orders.
asset.
Upside Make Adaptability The maximum sustainable percentage increase in production that can be
achieved in 30 days with the assumption of no raw material constraints.
Upside Make Flexibility The number of days required to achieve an unplanned sustainable 20%
increase in production with the assumption of no raw material constraints.
Yield The ratio of usable output from a process to its input.
Best Practices:
Accurate and Approved Work Electronic document management that maintains current Standard
Instructions/Process Plans Operating Procedures (SOP)
Accurate and Low Cost Batch/Configuration Electronic batch recording/configuration
Records for Warranty and Regulatory
Tracking
Cellular Manufacturing Manufacturing is broken into work cells
Demand-Pull Manufacturing, Including Support of demand-pull mechanisms (Kanban, replenishment signals, etc.)
Active Reduction of Manufacturing Systems based on rate schedules and user-defined minimum/maximum trigger
Time and WIP Through the Use of Demand- points
Pull Mechanisms and Visual Controls
Lean Manufacturing Use a team based systematic approach to identifying and eliminating
wasteful, or non-value adding activities within your manufacturing
organization
Link Individual Performance to None identified
Organizational and Divisional Goals
Migrate From Build to Stock to Configure to None identified
Order; Build Subassemblies to Forecast at
the Highest Generic Level in the Bill of
Material/Recipe/Formula
Organize to Enhance Flexibility: Few Job Support for modular skills inventory with links to training databases,
Classifications, Self-Directed Work Force, compensations systems, and operator instructions
Flat Management Structure, Cross-
Functional Work Teams
Paperless Order Tracking and Customer Electronic dispatch and data collection with external interface to internet.
Visibility of Orders
Paperless Production Order and InventoryElectronic dispatch and data collection. Allow customer access to
Tracking production status and inventories using internet technologies and web site
features.
Performance Results that Are Compared to Data warehouse, report writing, real time database and Executive
Benchmarks (ie Capacity, Scheduling) and Information systems that are easily accessible. Use of web-based
Readily Available to Employees technologies for dissemination of information.
Posted Performance Results Data warehouse, report writing, real time data base and EI systems
Production Level Loading Capacity planning
Provide Continuous Formal Training to Examples would be TQM, Six Sigma.
Employees


M1.1 Schedule Production Activities
Given plans for the production of specific parts, products, or formulations in specified quantities
and planned availability of required sourced products, the scheduling of the operations to be
performed in accordance with these plans. Scheduling includes sequencing, and, depending on
the factory layout, any standards for setup and run. In general, intermediate production activities
are coordinated prior to the scheduling of the operations to be performed in producing a finished
product.

. Capacity Utilization A measure of how intensively a resource is being used to produce a
good or service. Some factors that should be considered are
internal manufacturing capacity, constraining processes, direct
labor availability and key components/materials availability.
. Cost to Schedule Production Activities The sum of the costs associated with scheduling production
activities.
. Schedule Achievement The percentage of time that a plant achieves its production
schedule. This calculation is based on the number of scheduled
end-items or total volume for a specific period. Note: over-
shipments do not make up for under-shipments.
. Schedule Production Activities Cycle Time The average time associated with scheduling production activities
Best Practices:
. Additional Capacity for Overflow Demand Outsource manufacturing and work force augmentation providers
connected to production schedules via the internet.
. Cross Training/Certification HR/certification support
. Demand-Pull Manufacturing, Including Support of demand-pull mechanisms (Kanban, replenishment
Active Reduction of Manufacturing Systems signals, etc.) based on rate schedules and user-defined
Time and WIP Through the Use of Demand- minimum/maximum trigger points
. Drum-Buffer-Rope Scheduling Technique (DBR, also referred to as Synchronous Manufacturing or Constraint
Management) A technique used to manage resources to maximize
throughput.
. Maintain Data and System Integrity by Detailed production model that synchronizes PLAN and MAKE
Ensuring Production Data, Inventory Levels, activities in real time.
and Schedule Requirements Are 99+%
Accurate
. Produce Products to Unique Customer Order entry, engineering, and product specifications linked to
Specification production order
. Provide Scheduling Output Back to Material Allow dynamic re-synchronization of MAKE activities by tying in real
and Labor Planning Systems time status information to scheduler
. Real Time Feedback from Production, Raw Allow dynamic re-synchronization of MAKE activities by tying in real
Materials, and Finished Goods Inventory and time status information to scheduler.
Test Activities
. Schedule Includes Preventative Interface between maintenance management system and
Maintenance Program scheduling system
. Schedule Minimizes Changeover Costs Detailed production scheduling model and simulation capabilities
. Schedule Optimizes Use of Shared Scheduling utilizing optimization techniques. Required production
Resources Such as Tooling and Production resources included in routing/process instructions
Equipment
. Schedule Reflects Current Plant Status Schedule undated by on line reporting and status systems and re-
(Equipment Availability, Other Jobs and sequence activities
Resource Availability) On Line
Inputs:

. Equipment and Facilities Schedules and Time-phased plans of present and future load (capacity required)
Plans from EM.5 Manage Equipment and on all resources (Equipment and Facilities) based on the planned
Facilities and released supply authorizations (i.e., orders) and the planned
capacity (capacity available) of these resources over a span of time.
. Information Feedback from M1.5 Stage The flow of information back into the control system so that actual
Product performance can be compared with planned performance.
. Information Feedback from M1.4 Package The flow of information back into the control system so that actual
performance can be compared with planned performance.
. Information Feedback from M1.3 Produce The flow of information back into the control system so that actual
and Test performance can be compared with planned performance.
. Information Feedback from M1.2 Issue The flow of information back into the control system so that actual
Material performance can be compared with planned performance.
. Information Feedback from M1.6 Release The flow of information back into the control system so that actual
Product to Deliver performance can be compared with planned performance.
. Preventative Maintenance and Calibration Planned and scheduled activities, including adjustments,
Schedule from EM.5 Manage Equipment and replacements, and basic cleanliness, that forestall machine and
Facilities facility breakdowns. Also, the established frequency to change and
maintain parts, based on failure consequences, with frequency set
per part or machine type. (Well cared for equipment and facilities
will last longer and cause fewer problems.)
. Production Plans from P3.4 Establish A master production plan used to allocate capacity among
Production Plans manufacturing resources and schedule finite manufacturing
activities or executing the performance of a service.

Product Deliveries
Product Deliveries
Product Deliveries
Outputs:
. Production Schedule to P3.2 Identify, A plan that authorizes the factory to manufacture or repair a certain
Assess, and Aggregate Production quantity of a specific item.
Resources
. Production Schedule to S2.1 Schedule A plan that authorizes the factory to manufacture or repair a certain
Product Deliveries quantity of a specific item.
. Production Schedule to D4.2 Receive A plan that authorizes the factory to manufacture or repair a certain
Product at Store quantity of a specific item.
. Production Schedule to D1.3 Reserve A plan that authorizes the factory to manufacture or repair a certain
Inventory & Determine Delivery Date quantity of a specific item.
. Production Schedule to M1.2 Issue Material A plan that authorizes the factory to manufacture or repair a certain
quantity of a specific item.

. Production Schedule to D1.8 Receive A plan that authorizes the factory to manufacture or repair a certain
Product from Source or Make quantity of a specific item.

M1.2 Issue Material
The selection and physical movement of sourced/in-process product (e.g., raw materials,
fabricated components, subassemblies, required ingredients or intermediate formulations) from a
stocking location (e.g., stockroom, a location on the production floor, a supplier) to a specific point
of use location. Issuing product includes the corresponding system transaction. The Bill of
Materials/routing information or recipe/production instructions will determine the products to be
issued to support the production operation(s).

. Cost to Issue Material The sum of the costs associated with issuing material.
. Issue Material Cycle Time The average time associated with the issuance of material to
production
Best Practices:
. Back Flush Material at Order Completion Flexible back flush logic
. Complete Lot History Inventory by lot of sourced/in-process or discrete order /usage
reporting by lot or discrete order
. Demand-Pull Mechanisms; Kanban None identified
Replenishment Signals from Stockroom,
Intermediate Products, or Subassembly Area
. Electronic Material Move Transactions Automated process control and/or barcode data collection
. Strategic Safety Stock of Selected Materials, Use of safety stock algorithms to minimize stock levels.
Items, or Subassemblies to Decouple
Sourced Product Issuance Cycle Time from
Supplier Lead Time
. Supplier Delivery to Production Process at EDI link to supplier’s sales order and inventory systems
Point of Use
Inputs:
. WIP Handling Rules, Move Information and The rules for handling WIP items in the production and repair
Methods from EM.4 Manage In-Process process. These rules include the movement and accounting for in-
Products (WIP) process items between work locations, in inventory, and movement
inventory.
. WIP Location Rules from EM.6 Manage The process and rules for establishing and maintaining in-process
Transportation item inventory ownership and stocking locations.

Outputs:
. Workflow to M1.3 Produce and Test
. Information Feedback to M1.1 Schedule The flow of information back into the control system so that actual
Production Activities performance can be compared with planned performance.
. Inventory Availability to D1.3 Reserve Those stocks or items on hand used to support production (raw
Inventory & Determine Delivery Date materials and work in process items), supporting activities
Assess, and Aggregate Production materials and work in process items), supporting activities
Resources (maintenance, repairs and operating supplies), and customer
. Product Location Information to EM.6 Attributes of the product’s storage location.

Manage Transportation
. Replenishment Signal to S3.3 Schedule Any signal that indicates when to produce or transport Items in a
Product Deliveries pull replenishment system.
. Replenishment Signal to S1.4 Transfer Any signal that indicates when to produce or transport Items in a
Product pull replenishment system.

M1.3 Produce and Test
The series of activities performed upon sourced/in-process product to convert it from the raw or
semi-finished state to a state of completion and greater value. The processes associated with the
validation of product performance to ensure conformance to defined specifications and
requirements.

. Asset Turns Total gross product revenue ÷ Total net assets
. Cost to Produce and Test The sum of the costs associated with production and test.
. Fill Rate The percentage of ship-from-stock orders shipped within 24 hours
of order receipt. For services, this metric is the proportion for
services that are filled so that the service is completed within 24
hours
. Produce and Test Cycle Time The average time associated with production and test
. Warranty and Returns Number of returns within the warranty period. Warranty is a
commitment, either expressed or implied, that a certain fact
regarding the subject matter of a contract is presently true or will be
true.
. Warranty Costs Warranty costs include materials, labor and problem diagnosis for
product defects.
. Yield The ratio of usable output from a process to its input.
. Yield Variability The condition that occurs when the output of a process is not
consistently repeatable either in quantity, quality, or combination of
these.
Best Practices:
. Accurate and Approved Process Electronic document management
Plans/Specifications
. Accurate and Low Cost Batch/Configuration Electronic batch recording/configuration
Tracking
. Authorize Each Operation to Assess the None identified
Quality of the Previous Operations
. Design/Upgrade Production Equipment to Machine productivity and downtime monitoring
Maximize Flexibility and Avoid Line
Stoppages
. Just-In-Time Demand Flow Techniques Demand-pull mechanisms
. Maintain Accurate Lot/Batch History Electronic data collection of employee actions and sourced/in-
Information process product lot used
. Measuring Process Metrics and Feedback to Electronic data collection of completion, quality, scrap, labor and
Operators equipment data and dissemination of information on factory floor
. Paperless Production Control Electronic dispatch of operations
. Provide Continuous Formal Training to Examples would be TQM, Six Sigma.
Employees
. Real Time quality control techniques Electronic collection of quality data and on-line SPC.
. Real Time Statistical Control Techniques Electronic collection of defect data and on-line SPC.
. Reduce Chances of Operator Error Automatic download of production equipment with batch
recipes/part programs
. Reduce Non-Value Added Activities, Use principals of Lean Manufacturing.
Including Queue, Move, and Set-Up Times
. Reduce Non-Value Added Paperwork While Electronic data collection of completion, quality, lot tractability,
Still Measuring Process Metrics scrap, and labor data
. Up-to-Date Shop Packet/Specifications Electronic work instructions

Inputs:
. Workflow from M1.2 Issue Material
Outputs:
. Workflow to M1.4 Package

M1.4 Package
The series of activities that containerize completed products for storage or sale to end-users.
Within certain industries, packaging may include cleaning or sterilization.

. Cost to Package The sum of the costs associated with product packaging.
. Package Cycle Time
. Warranty and Returns Number of returns within the warranty period. Warranty is a
commitment, either expressed or implied, that a certain fact
regarding the subject matter of a contract is presently true or will be
true.
product defects.
Best Practices:
. Accurate and Approved Process Plans, Electronic document management
Routings, Specifications and Procedures
Tracking
. Automatic Label and Seal Verification Automatic interface to inspection systems
Stoppages
. Minimize Operator Induced Errors Automatic download of production equipment with setup
parameters Graphical display of setup, changeover, or layout
. Packaging Operation is an Integral Part of None identified
the Overall Production Process
. Postponement and Pre-Kitting Of None identified
Accessories into Modular Packages that
Allow Flexibility While Maintaining Control
. Up-to-Date Shop Packet/Specification for Electronic Work Instructions
Each Unique Production Event/Demand
Inputs:
. Workflow from M1.3 Produce and Test
Outputs:
. Workflow to M1.5 Stage Product

M1.5 Stage Product
The movement of packaged products into a temporary holding location to await movement to a
finished goods location. Products that are made to order may remain in the holding location to
await shipment per the associated customer order. The movement to finished goods is part of the
Deliver process.

. Cost to Stage Finished Product The sum of the costs associated with staging finished goods.
. Stage Finished Product Cycle Time The average time associated with staging finished product
Best Practices:
. Direct Ship from Factory to Share production status with customers and transportation
Customer/Channel providers via web-based tools. Auto-Tendering for direct ship
utilizing EDI/XML protocols.
Inputs:
. Workflow from M1.4 Package
. Delivery Plans from P4.4 Establish Delivery A plan for a course of action over specified time periods that
Plans involves a projected appropriation of supply resources to meet
delivery requirements.
Outputs:
. Workflow to M1.6 Release Product to Deliver

M1.6 Release Product to Deliver
Activities associated with post-production documentation, testing, or certification required prior to
delivery of finished product to customer. Examples include assembly of batch records for
regulatory agencies, laboratory tests for potency or purity, creating certificate of analysis, and sign-
off by the quality organization.

. Cost to Release Finished Product to Deliver The sum of the costs associated with releasing finished goods to
deliver processes.
. Release Finished Product to Deliver Cycle The average time associated with releasing finished product to
Time deliver
Best Practices:
. Accurate and Low Cost Batch Records for Electronic batch records
Regulatory Compliance
. Automated Notification of Laboratory Interface between production system and LIMS
Regarding Sample Availability
. Review Batch Records by Exception Electronic batch records linked to process plans/recipes and
exceptions flagged
Inputs:
. Workflow from M1.5 Stage Product
Outputs:
. Finished Product Release to D4.2 Receive The authorization to ship a finished product that has been ordered.
Product at Store
. Finished Product Release to D1.8 Receive The authorization to ship a finished product that has been ordered.
Product from Source or Make

M2 Make-to-Order
The process of manufacturing in a make to order environment adds value to products through
mixing, separating, forming, machining, and chemical processes. A make to order environment is
one in which products are completed after receipt of a customer order and are built or configured
only in response to a customer order.
The Category M2 includes six Level 3 Elements:

M2.2 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e.g.,
operation(s).
requirements.
M2.5 Stage Finished Product The movement of packaged products into a temporary holding location to
Deliver process.
M2.6 Release Finished Product to Deliver Activities associated with post-production documentation, testing, or

Outstanding]
(overhead).
Inventory Days of Supply (WIP) Total value of Work in Process ÷ (COGS ÷ 365).

orders.
asset.
Best Practices:
Accurate and Approved Work Electronic document management that maintains current Standard
Instructions/Process Plans Operating Procedures (SOP)
Accurate and Low Cost Batch/Configuration Electronic batch recording/configuration
Tracking
Build Subassemblies/Products to Forecast None identified
at Highest Generic Level to Minimize Make
Cycle Time
Cellular and Demand Pull Manufacturing Support for cellular and demand pull manufacturing execution
Delivery Schedules Are Collaboratively Web-based access to plant scheduling status, collaborative data-sharing
Developed with Customers environment.
Link Individual Performance to None identified
Produce Products to Unique Customer Order entry specifications linked to manufacturing order
Requirements
Production Level Loading Capacity planning
Provide Continuous Formal Training to Examples would be TQM, Six Sigma.
Employees

product.

activities.
Best Practices:
. Demand Pull Mechanisms Repetitive scheduling and sequencing
. Demand-Pull Manufacturing, Including Support of demand-pull mechanisms (Kanban, replenishment
Active Reduction of Manufacturing Systems signals, etc.) based on rate schedules and user-defined
Time and WIP Through the Use of Demand- minimum/maximum trigger points
throughput.
. Maintain Data and System Integrity by Detailed production model that synchronizes PLAN and MAKE
Ensuring Production Data, Inventory Levels, activities in real time.
and Schedule Requirements Are 99+%
Accurate
. Produce Products to Unique Customer Order entry, engineering, and product specifications linked to
Specification production order
. Schedule Minimizes Changeover Costs Detailed production scheduling model and simulation capabilities
Equipment
Inputs:

Sourced/In-Process Product performance can be compared with planned performance.
Finished Product performance can be compared with planned performance.
Finished Product to Deliver performance can be compared with planned performance.

Product Deliveries
Product Deliveries
Product Deliveries
Outputs:
. Production Schedule to D2.9 Pick Product A plan that authorizes the factory to manufacture or repair a certain
. Production Schedule to M2.2 Issue A plan that authorizes the factory to manufacture or repair a certain
Sourced/In-Process Product quantity of a specific item.
Resources
. Production Schedule to D2.3 Reserve A plan that authorizes the factory to manufacture or repair a certain
Resources & Determine Delivery Date quantity of a specific item.

M2.2 Issue Sourced/In-Process Product
issued to support the production operation(s).

. Cost to Issue Sourced/In-Process Product The sum of the costs associated with issuing sourced or in-process
material.
. Issue Sourced/In-Process Product Cycle The average time associated with the issuance of material to
Time production
Best Practices:
. Complete Lot History Inventory by lot of sourced/in-process or discrete order /usage
reporting by lot or discrete order
Supplier Lead Time
Point of Use
Inputs:
inventory.

Outputs:

. Production Schedule to M2.3 Produce and A plan that authorizes the factory to manufacture or repair a certain
Test quantity of a specific item.
. Source Execution Data to S2.1 Schedule Data which will provide measurement of actual supplier
Product Deliveries performance against internal and or external standards to provide

requirements.

product defects.
these.
Best Practices:
. Accurate and Approved Process Electronic document management
Plans/Specifications
Tracking
Stoppages
. Real Time quality control techniques Electronic collection of qualityt data and on-line SPC.
. Reduce Chances of Operator Error Automatic download of production equipment with batch
recipes/part programs
Outputs:

M2.4 Package

product defects.
Best Practices:
. Accurate and Approved Process Plans, Electronic document management
Routings, Specifications and Procedures
Tracking
Stoppages
Inputs:
Outputs:
. Workflow to M2.5 Stage Finished Product

M2.5 Stage Finished Product
Deliver process.

Best Practices:
Inputs:
Outputs:
. Workflow to M2.6 Release Finished Product to Deliver

M2.6 Release Finished Product to Deliver

deliver processes.
Time deliver
Best Practices:
exceptions flagged
Inputs:
. Workflow from M2.5 Stage Finished Product
Outputs:
. Finished Product Release to D2.9 Pick The authorization to ship a finished product that has been ordered.
Product

M3 Engineer-to-Order
The process of manufacturing distinct items, such as parts that retain their identity through the
transformation process and are intended to be completed after receipt of a customer order. While
Make to Order includes standard products built only in response to a customer order or products
configured in response to a customer order, Engineer to Order includes custom products that are
designed, developed, and manufactured in response to a specific customer request.
The Category M3 includes seven Level 3 Elements:

M3.1 Finalize Production Engineering Engineering activities required after acceptance of order, but before
product can be produced. May include generation and delivery of final
drawings, specifications, formulas, part programs, etc. In general, the last
step in the completion of any preliminary engineering work done as part of
the quotation process.
M3.3 Issue Sourced/In-Process Product The selection and physical movement of sourced/in-process product (e.g.,
operation(s).
requirements.
M3.6 Stage Finished Product The movement of packaged products into a temporary holding location to
Deliver process.
M3.7 Release Product to Deliver Activities associated with post-production documentation, testing, or

Outstanding]

(overhead).
Inventory Days of Supply (WIP) Total value of Work in Process ÷ (COGS ÷ 365).
orders.
asset.
Best Practices:
Cellular Manufacturing Manufacturing is broken into work cells
Delivery Schedules Are Collaboratively Web-based access to plant scheduling status, collaborative data-sharing
Developed with Customers environment.
Demand-Pull Manufacturing, Including Support of demand-pull mechanisms (Kanban, replenishment signals, etc.)
Active Reduction of Manufacturing Systems based on rate schedules and user-defined minimum/maximum trigger
Time and WIP Through the Use of Demand- points
Product Design Collaboration with On-line design tools facilitated by internet connections.
Customers

M3.1 Finalize Production Engineering
Engineering activities required after acceptance of order, but before product can be produced.
May include generation and delivery of final drawings, specifications, formulas, part programs, etc.
In general, the last step in the completion of any preliminary engineering work done as part of the
quotation process.

. Cost to Finalize Production Engineering The sum of the costs associated with finalizing production
engineering.
. ECO Cost
. Finalize Production Engineering Cycle Time The average time associated with the finalization of production
engineering
Best Practices:
. Automated Configuration Management Configuration
. Automated Conversion of Engineering None identified
Drawings into Product Specifications
Inputs:
. Engineering Design from Source: Company Final drawings, specifications, formulas, part programs, etc.that
describe requirements of a product. The design process consists of
translating a set of functional requirements into an operational
product, process, or service.
. Order Information from D3.3 Enter Order, The function encompasses receiving and entering all data
Commit Resources & Launch Program necessary on orders, so the order can be finalized and entered into
the order system.
Outputs:
. Methods, Procedures, Processes to M3.2 Methods, procedures and processes required to produce distinct
Schedule Production Activities items, such as parts that retain their identity through the
transformation process and are intended to be completed after
receipt of a customer order, including custom products that are
designed, developed, and produced in response to a specific
customer request.

product.

activities.
Best Practices:
. Build Subassemblies to Forecast at Highest None identified
Generic Level in Bill of Material; Maintain
Flexibility While Minimizing Cycle Time and
Inventory Position
. Cellular Manufacturing Manufacturing is broken into work cells
. Demand Pull Mechanisms Repetitive scheduling and sequencing
Stoppages
throughput.
. Maximize Data Integrity and System None identified
Accuracy by Ensuring 99%+ Accuracy of
BOM Configuration, Inventory Levels, and
Schedule Requirements
. Schedule Minimizes Changeover Costs Algorithms that manage set up times/costs, cleaning times, and
between Products ideal job sequences (eg, color sequencing light to dark)
Equipment
Inputs:

Sourced/In-Process Product performance can be compared with planned performance.
Product to Deliver performance can be compared with planned performance.
Finished Product performance can be compared with planned performance.
. Methods, Procedures, Processes from M3.1 Methods, procedures and processes required to produce distinct
Finalize Production Engineering items, such as parts that retain their identity through the
transformation process and are intended to be completed after
receipt of a customer order, including custom products that are
designed, developed, and produced in response to a specific
customer request.

Product Deliveries
Product Deliveries
Product Deliveries
Outputs:
. Production Schedule to D3.9 Pick Product A plan that authorizes the factory to manufacture or repair a certain

. Production Schedule to M3.3 Issue A plan that authorizes the factory to manufacture or repair a certain
Sourced/In-Process Product quantity of a specific item.
Resources
. Production Schedule to D3.3 Enter Order, A plan that authorizes the factory to manufacture or repair a certain
Commit Resources & Launch Program quantity of a specific item.

M3.3 Issue Sourced/In-Process Product
issued to support the production operation(s). Activity Usage Type:

. Cost to Issue Sourced/In-Process Product The sum of the costs associated with issuing sourced or in-process
material.
. Issue Sourced/In-Process Product Cycle The average time associated with the issuance of material to
Time production
Best Practices:
Supplier Lead Time
Point of Use
. Two-Bin Floor Stock Located at Work None identified
Center for “B“ And “C“ Components -
Controlled by Operators and Replenished
When One Bin is Empty
Inputs:
inventory.

Outputs:
. Workflow to M3.4 Produce and Test


requirements.

product defects.
these.
Best Practices:
Stoppages
. Implement Employee Involvement Programs
. Link Individual Performance to None identified
. Provide Continuous Formal Training to Examples would be TQM, Six Sigma.
Employees
. Real Time quality control techniques Electronic collection of qualityt data and on-line SPC.
Inputs:
. Workflow from M3.3 Issue Sourced/In-Process Product
Outputs:

M3.5 Package

product defects.
Best Practices:
Stoppages
Inputs:
Outputs:
. Workflow to M3.6 Stage Finished Product

Deliver process.

Best Practices:
Inputs:
Outputs:
. Workflow to M3.7 Release Product to Deliver

M3.7 Release Product to Deliver

deliver processes.
Time deliver
Best Practices:
exceptions flagged
Inputs:
. Workflow from M3.6 Stage Finished Product
Outputs:
. Finished Product Release to D3.9 Pick The authorization to ship a finished product that has been ordered.
Product

EM Enable MAKE

The Category EM includes eight Level 3 Elements:

EM.1 Manage Production Rules The process of establishing, maintaining, and enforcing rules for managing
production details in line with business strategy, goals, and objectives.
Production details include part/item master, bills of materials/formulas,
routings, processes, equipment requirements, tooling, and other
information specifying the method of production for a particular product.
EM.2 Manage Production Performance The process of developing and maintaining performance standards and
analysis methods to compare actual production performance against the
established standards. This process allows the development and
implementation of a course of action to achieve targeted performance.
EM.3 Manage MAKE Information The process of managing, collecting, maintaining, and communicating
information to support MAKE planning and execution processes. The
information to be managed includes production, order and process data.
EM.4 Manage In-Process Products (WIP) The process of establishing and maintaining limits or levels, replenishment
models, ownership, product mix and stocking locations for In-Process
Product (WIP).
Management of the activities associated with handling/storage/movement

of materials used to support production.
EM.5 Manage Equipment and Facilities The process of specifying maintaining and dispositioning MAKE’s capital
assets to operate the supply chain production processes. This process
element includes repairs, alterations, calibration and other miscellaneous
items to maintain production capabilities of the manufacturing fixed asset
base.
The ongoing management of the activities associated with ensuring

equipment and facilities are kept in proper order.
EM.6 Manage Transportation The process of transporting In-Process Product (WIP). This includes
management of the activities associated with in transit handling and
movement of In-Process Product (WIP).
EM.7 Manage Production Network The process of identifying and maintaining a network of intra-company
production units that deliver specific semi-finished materials or product sets
to the final production site.
EM.8 Manage Regulatory Compliance The process of identifying and complying with regulatory documentation
and process standards set by external entities (e.g. government)

EM.1 Manage Production Rules
The process of establishing, maintaining, and enforcing rules for managing production details in
line with business strategy, goals, and objectives. Production details include part/item master, bills
of materials/formulas, routings, processes, equipment requirements, tooling, and other information
specifying the method of production for a particular product.

Cost to Manage Production Rules The sum of the costs to manage production rules.
Manage Production Rules Cycle Time The average time associated with managing production rules
Best Practices:
Attribute-Based Process Planning Computer aided process planning / recipe management
Automated Engineering Specifications Automated Intelligence (Heuristic) - based engineering specifications
system
Automated Links To Existing CAD & CAM Electronic hypertext or links to existing database of detail/parts/setup
Information sketches/drawings
Automatic Generation / Configuration Of Parametric driven (Group Technology - based) manufacturing design
Tooling / Set-Up Instructions system
Automatic Link to Recipe Management, PLC Seamless application interface to manufacturing planning documentation
Program, CNC Program Systems, Etc., to and CAM systems
Deliver New Manufacturing Documentation
Automatic Notification When to Begin and Workflow/Groupware
When to Complete
Design For Production Table of manufacturing capacities or design envelops (capacities; envelop
sizes; tank, vessel or batch sizes)
Document Control Control who can create, revise and access information
Electronic Documentation and Imaging Graphical display of drawings, diagrams, recipes/formulas, specifications,
instructions, etc., to all users
Genealogy Tracking Where-used listing of as-planned vs. as-built documentation
On Line Access and Notification of Tooling Delivery of tooling and equipment details drawings
and Equipment Information
Pre-Defined Manufacturing Design Rules Libraries of manufacturing capabilities or design envelopes
Storage and Configuration Management for Product data management (PDM) or Electronic Data Management (EDM)
Release and Revision Control of Final feature set
Documents
Inputs:
Corporate Objectives and Strategies from Corporate objectives are the goals and mission of an organization.
Source: Company
Inventory Capacity from EP.4 Manage Maximum rate of output for the inventory management and warehouse
Integrated Supply Chain Inventory process
Product Design from Source: Company The product design is the translation of a set of functional requirements into
an operational product that meets both the enterprise and customer
expectations.
Production Capacity from EP.5 Manage The highest, sustainable output rate which can be achieved with the
Integrated Supply Chain Capital Assets current product specifications, product mix, worker effort, plant, and
equipment.


Transportation Capacity from EP.6 Manage The capability of a trasportation system to perform it’s function.
Integrated Supply Chain Transportation
Outputs:
Production Rules to Deliver The rules directing or regulating the movement of goods through the entire
manufacturing and repair cycle (parameters of production) from the
requisitioning of raw material to the delivery of the finished products.
Production Rules to Make The rules directing or regulating the movement of goods through the entire
Production Rules to Source The rules directing or regulating the movement of goods through the entire
Production Rules to Plan The rules directing or regulating the movement of goods through the entire

EM.2 Manage Production Performance
The process of developing and maintaining performance standards and analysis methods to
compare actual production performance against the established standards. This process allows
the development and implementation of a course of action to achieve targeted performance.

Cost to Manage Production Performance The sum of the costs to manage production performance.
Manage Production Performance Cycle The average time associated with managing production performance
Time
Best Practices:
Periodic Review of Standards Process for establishing and maintaining review schedules
Real Time Performance Measurement Systems to collect production information online generate reports upon
Reporting Systems request by operators, and track progress against schedule and standards.
Standards and Measurements Aligned to Internal/external benchmarking, industry standards, customer/supplier
Maximize Supply Chain Performance alignment agreements, visibility of key performance indicators
Inputs:
Source: Company
Inventory Capacity from EP.4 Manage Maximum rate of output for the inventory management and warehouse
Integrated Supply Chain Inventory process
Product Design/Quality from Source: A product design approach that uses quality measures to capture the
Company extent to which the design meets the needs of the target market (customer
attributes), as well as its actual performance, aesthetics, and cost.
Production Capacity from EP.5 Manage The highest, sustainable output rate which can be achieved with the
Integrated Supply Chain Capital Assets current product specifications, product mix, worker effort, plant, and
equipment.

Transportation Capacity from EP.6 Manage The capability of a trasportation system to perform it’s function.
Integrated Supply Chain Transportation
Outputs:
Production Quality and Policies to EM.5 The operational techniques and planned and systematic activities used to
Manage Equipment and Facilities fulfill requirements for quality in the production process, or the quality of the
production, as defined by the company. For example, a percentage of parts
produced without a need for adjustment or repair. The production policy
indicates standard rules on how the production quality should be secured.
Production Rules to Deliver The rules directing or regulating the movement of goods through the entire

Production Rules to Source The rules directing or regulating the movement of goods through the entire
Production Rules to Make The rules directing or regulating the movement of goods through the entire
Production Rules to Plan The rules directing or regulating the movement of goods through the entire
Supply-Chain Performance Metrics to EP.2 Standard measures that indicate how well a supply chain performs within
Manage Performance of Supply Chain certain categories of performance known as Performance Attributes, e.g.
management.

EM.3 Manage MAKE Information
The process of managing, collecting, maintaining, and communicating information to support
MAKE planning and execution processes. The information to be managed includes production,
order and process data.

Cost to Manage MAKE Information The sum of the Cost to Manage MAKE Information
Manage MAKE Information Cycle Time The average time associated with managing production information
Best Practices:
Continuous Improvement Historical trending, cause and effect analysis, and Key Performance
Indicators Scheduling reviews of processes for possible improvements
On-Demand Access of Production Data Collection and Display Systems designed for efficient performance of
Information value-added operations in production. This could include using PLC,
Machine Interface, bar code, Radio Frequency Communication, Radio
Frequency Identification, Magnetic Stripe, Smart Cards, etc., to enable
data collection
On-Demand Access to Available to Promise None identified
(ATP), Production Schedules and Inventory
Status by Internal Operations and Customers
Utilize Enterprise Information Systems Enter, Process, and Deliver information about the manufacturing process
to management using information systems that span the enterprise
Inputs:
Information from Business Processes from Data arranged or presented from a set of logically related tasks or activities
Source: Make performed to achieve a defined business outcome; so that the data yields
an understanding not available from any single data element.
Source: Plan performed to achieve a defined business outcome; so that the data yields
Source: Source performed to achieve a defined business outcome; so that the data yields
Source: Deliver performed to achieve a defined business outcome; so that the data yields
Information Needed to Create and Maintain Interrelated computer hardware and software along with people and
IT from Source: Company processes designed for the collection, processing, and dissemination of
information for planning, decision making, and control.
Information Needs Analysis from Source: Specifying the inputs, files, processing, business rules and outputs for a
Make new system, but without expressing computer alternatives and technical
details.
Source new system, but without expressing computer alternatives and technical
details.
Deliver new system, but without expressing computer alternatives and technical
details.

Plan new system, but without expressing computer alternatives and technical
details.
Systems Capability from Source: Make The capability of a system to perform its expected function
Systems Capability from Source: Source The capability of a system to perform its expected function
Outputs:
Information Infrastructure Plan to Plan A plan outlining the processes required for managing, collecting,
maintaining, and communicating information and master data to support
planning and execution processes.
Information Infrastructure Plan to Source A plan outlining the processes required for managing, collecting,
maintaining, and communicating information and master data to support
planning and execution processes.
Reports, Information, and Documents to Collecting data and organizing, arranging or presenting the data so that
Make they yield an understanding not available from any single data element.
Plan they yield an understanding not available from any single data element.
Deliver they yield an understanding not available from any single data element.
Source they yield an understanding not available from any single data element.

EM.4 Manage In-Process Products (WIP)
The process of establishing and maintaining limits or levels, replenishment models, ownership,
product mix and stocking locations for In-Process Product (WIP).
Management of the activities associated with handling/storage/movement of materials used to
support production.

Cost to Manage In-Process Products (WIP) The sum of the costs associated with managing in-process products (WIP).
Manage In-Process Products (WIP) Cycle The average time associated with managing WIP inventory
Time
Best Practices:
Dunnage Control System data field to specify where the part / product shipping container
should be removed. Best practice is to remove the dunnage as soon as
possible unless part / product damage will result. Reuse of intermediate
WIP containers for finished goods.
First In - First Out Part / WIP location by date received for those parts that must be stocked or
staged in a holding area
In-Process Product (WIP) Handling Rules Tracking, genealogy
Minimizing In-Process Product (WIP) WIP Storage Management System Efficient Space Utilization Implementing
Pull Systems
Minimum Product Handling Move high frequency used inventory close to point of use. For example, the
system should provide the frequency of picks by part number so that high
frequency picks can be moved to convenient locations or part pick
quantities increased.
Optimize Packing No packing and unpacking time required. Recyclable or no containers
where appropriate. No discarded material.
Statistical Test Count The Statistical Test Count (STC) process is a method of validating
statistical sample of the entire inventory population. This sample is then
extrapolated across the inventory population, which provides an indicative
measure of entire inventory population. Furthermore, with extrapolation the
net and gross percentage of error is determined.
Inputs:
Capacity Requirements from Source: Plan The resources needed to produce the projected level of work required
from a facility over a time horizon. Capacity requirements are usually
expressed in terms of hours of work or, when units consume similar
resources at the same rate, units of production.
Incoming Product Information from Source: Data concerning product on order and due to be delivered to location
Source agreed in the order.
Production Orders Planned & Actual Reports A statement of the output of a production facility for a specified period,
from Source: Plan comparing planned to actual production.

Returned Product Information from Source: Data concerning the return and disposition of defective products, excess
Deliver inventory and/or serviceable or obsolete products, or MRO product.
Outputs:
WIP Handling Rules, Move Information and The rules for handling WIP items in the production and repair process.
Methods to M1.2 Issue Material These rules include the movement and accounting for in-process items
between work locations, in inventory, and movement inventory.
Methods to Deliver These rules include the movement and accounting for in-process items
Methods to Source These rules include the movement and accounting for in-process items
Methods to M2.2 Issue Sourced/In-Process These rules include the movement and accounting for in-process items
Product between work locations, in inventory, and movement inventory.
Methods to M3.3 Issue Sourced/In-Process These rules include the movement and accounting for in-process items
Product between work locations, in inventory, and movement inventory.
Methods to Plan These rules include the movement and accounting for in-process items
Methods to EM.6 Manage Transportation These rules include the movement and accounting for in-process items

EM.5 Manage Equipment and Facilities
The process of specifying maintaining and dispositioning MAKE’s capital assets to operate the
supply chain production processes. This process element includes repairs, alterations, calibration
and other miscellaneous items to maintain production capabilities of the manufacturing fixed asset
base.
The ongoing management of the activities associated with ensuring equipment and facilities are
kept in proper order.

Actual Asset Life Maintenance Cost as % of Measure of total lifecycle maintenance cost of an asset compared to its
Replacement Value replacement cost. This ratio is based maintenance cost to-date so that that
replacement or upgrade cost can be evaluated as the asset ages on an on-
going basis.
Cost to Manage MAKE Equipment and The sum of the costs associated with managing Make equipment and
Facilities facilities.
Manage MAKE Equipment and Facilities The average time associated with managing production equipment and
Cycle Time facilities
Best Practices:
Changeover Reduction / Continuous Changeover process flow element identification, instructional directions to
Improvement Program conduct changeover, and measurement tool, which can be used to
prioritize and track results of improvement efforts. Software to identify
operational constraints to the MAKE processes to assist in directing
resources toward bottleneck functional areas.
Facility & Equipment Environmental / Safety System software to list checklist items, report results of audit & forward
Audit System actions to be taken
Factory Floor Electronic Decision Making Software to capture actual performance history / costs of operations with
Information System capability of predicting “best cost action plans“ relating to maintaining
equipment and facilities.
Minimize Capital Assets Required and Outsourcing strategies including the use of Application Service Providers
Maintenance Costs (ASPs), web-based maintenance/diagnostic assistance and MRO parts.
Predictive Maintenance Monitoring (Heat, Database for equipment to contain expected results of analysis, allow entry
Noise, Lubrication Composition & Vibration) of test readings, and have capability of generating desired reports, which
could highlight suggested actions based upon readings obtained, track
maintenance completed, contain a help-file to be consulted
Supplier Managed Inventory of Parts E.D.I. linkage of Inventory Information
Systematic Disposition Of Equipment Rules for deciding appropriate disposition.
Total Preventative Maintenance Program Automatically generated TPM repair schedules integrated with MRP
systems, electronic equipment repair history, parts listings, part stores
inventory & reorder points, automatic store room parts purchases, Shop
floor access to electronic data base of equipment line drawings, electrical
wiring diagrams, parts listing reference guide and part cost lists.
Inputs:
Budgets from Source: Make A plan that includes an estimate of future costs and revenues related to
expected activities. The budget serves as a pattern for and a control over
future operations.
Equipment and Facilities Monitoring Data gathered by measuring, examining, testing, or gauging one or more
Information from Source: Company characteristics of equipment and facilities and comparing it to planned.
Manufacturer’s Recommended Maintenance The scheduled activities, including adjustments, replacements, and basic
Schedules & Specifications from Source: cleanliness, that are recommended by the manufacturer to forestall
Company machine breakdowns.

MRO Parts Availability from ES.4 Manage The on-hand MRO inventory balance minus allocations, reservations,
Product Inventory backorders, and (usually) quantities held for quality problems.

Production Quality and Policies from EM.2 The operational techniques and planned and systematic activities used to
Manage Production Performance fulfill requirements for quality in the production process, or the quality of the
Outputs:
Equipment and Facilities Maintenance The process of documenting of the timing and maintenance of equipment
History to Source and facilities including required repairs, alterations, calibration, servicing,
replacement of parts and other miscellaneous items to maintain production
capability of the manufacturing fixed asset base
History to Make and facilities including required repairs, alterations, calibration, servicing,
Equipment and Facilities Replacement and Actions relating to the planning, financing and disposition of capital outlays
Disposition Plans to P3.2 Identify, Assess, for such purposes as the purchase of new equipment, the introduction of
and Aggregate Production Resources new product lines, and the modernization of plant facilities
Disposition Plans to EM.6 Manage for such purposes as the purchase of new equipment, the introduction of
Transportation new product lines, and the modernization of plant facilities
Equipment and Facilities Schedules and Time-phased plans of present and future load (capacity required) on all
Plans to M2.1 Schedule Production Activities resources (Equipment and Facilities) based on the planned and released
supply authorizations (i.e., orders) and the planned capacity (capacity
available) of these resources over a span of time.
Parts and Services Consumed to ES.4 The items and services utilized to manufacture a product.
Manage Product Inventory
Manage Capital Assets
Manage Import/Export Requirements
Preventative Maintenance and Calibration Planned and scheduled activities, including adjustments, replacements,
Schedule to Source and basic cleanliness, that forestall machine and facility breakdowns. Also,
the established frequency to change and maintain parts, based on failure
consequences, with frequency set per part or machine type. (Well cared
for equipment and facilities will last longer and cause fewer problems.)

Schedule to M3.2 Schedule Production and basic cleanliness, that forestall machine and facility breakdowns. Also,
Activities the established frequency to change and maintain parts, based on failure
Schedule to Plan and basic cleanliness, that forestall machine and facility breakdowns. Also,
the established frequency to change and maintain parts, based on failure
Production Status to EM.7 Manage Feedback on the production schedule allowing for corrective action to a
Production Network production problem, or an indication of how far in the production process a
specific part has progressed

EM.6 Manage Transportation
The process of transporting In-Process Product (WIP). This includes management of the activities
associated with in transit handling and movement of In-Process Product (WIP).

Cost to Manage Transportation (WIP) The sum of the costs associated with managing WIP Transportation
Manage Transportation (WIP) Cycle Time The average time associated with managing (WIP) transportation
Best Practices:
Reduce In-Process Product (WIP) Handling Reduction of WIP handling through automation (i.e. AGVs and ASRS) and
process improvement (i.e. reduction of handling steps, shorter move paths)
Short Move Paths Software that allows for input of the distance that particular parts/WIP need
to be moved. This software then needs to provide a report based on the
cubic feet of material times distance moved by part number.
Inputs:
Capacity Requirements from Source: Plan The resources needed to produce the projected level of work required from
a facility over a time horizon. Capacity requirements are usually expressed
in terms of hours of work or, when units consume similar resources at the
same rate, units of production.
Disposition Plans from EM.5 Manage for such purposes as the purchase of new equipment, the introduction of
Equipment and Facilities new product lines, and the modernization of plant facilities
Product Location Information from M2.2 Attributes of the product’s storage location.
Issue Sourced/In-Process Product
Issue Material
Issue Sourced/In-Process Product
Product Location Information from Source: Attributes of the product’s storage location.
Deliver
Production Orders Planned & Actual Reports A statement of the output of a production facility for a specified period,
from Source: Company comparing planned to actual production.
Projected Delivery Requirements from EM.7 The company’s goal for the time to ship the product after the receipt of a
Manage Production Network customer’s order. The policy is sometimes stated as “our quoted delivery
time,“ or an estimate of the customer delivery requirements of a product or
service, e.g. which kind of packaging, should the parts be shipped one by
one or in bulks etc.
Supplier Agreement from S3.2 Select Final An agreement between supplier and purchaser to perform or not to perform
Supplier(s) and Negotiate specific acts or services or to deliver merchandise, such as purchase order
Methods from Source: Source These rules include the movement and accounting for in-process items
Methods from Source: Plan These rules include the movement and accounting for in-process items

Methods from Source: Deliver These rules include the movement and accounting for in-process items
Methods from Source: Make These rules include the movement and accounting for in-process items
Methods from EM.4 Manage In-Process These rules include the movement and accounting for in-process items
Products (WIP) between work locations, in inventory, and movement inventory.
Outputs:
WIP Inventory Location to S2.4 Transfer Location of inventory that is specified as “work in progress“. This can be
Product intermediate storage in a manufacturing facility prior to final packaging or
WIP Location Rules to D2.9 Pick Product The process and rules for establishing and maintaining in-process item
inventory ownership and stocking locations.
WIP Location Rules to M3.3 Issue The process and rules for establishing and maintaining in-process item
Sourced/In-Process Product inventory ownership and stocking locations.
WIP Location Rules to M2.2 Issue The process and rules for establishing and maintaining in-process item
Sourced/In-Process Product inventory ownership and stocking locations.
WIP Location Rules to M1.2 Issue Material The process and rules for establishing and maintaining in-process item
WIP Move Information and Methods to MakeThe process of recording and tracking the movement of WIP items through
the production and repair process. This process includes item stocking
and accounting requirements.
WIP Move Information and Methods to The process of recording and tracking the movement of WIP items through
Source the production and repair process. This process includes item stocking
WIP Move Information and Methods to Plan The process of recording and tracking the movement of WIP items through
the production and repair process. This process includes item stocking
WIP Move Information and Methods to The process of recording and tracking the movement of WIP items through
Deliver the production and repair process. This process includes item stocking

EM.7 Manage Production Network
The process of identifying and maintaining a network of intra-company production units that deliver
specific semi-finished materials or product sets to the final production site.

Cost to Manage Production Network The sum of the costs to manage the production network
Manage Production Network Cycle Time The average time associated with managing the production network
Best Practices:
Collaborative Planning/Scheduling Interactive, on-line planning/scheduling systems. Capacity planning
systems with accurate production capability data.
JIT Environment Schedule visibility, on-line communications between source and demand
Production Reporting/Status Real time monitoring of production status and In-Process Product (WIP)
Inputs:
Planning Data from Source: Plan Execution information necessary to plan the balance of supply chain
resources to demand requirements at both the highest aggregate and
Production Status from EM.5 Manage Feedback on the production schedule allowing for corrective action to a
Equipment and Facilities production problem, or an indication of how far in the production process a
Supply Chain Plans from Source: Plan Courses of action over specified time periods that represent a projected
Outputs:
Cost to Produce to Plan The cost to produce and item during a given period of time. Includes: the
amount of direct materials, direct labor, and allocated overhead.
Internal Capacity to Source The organic capability of an organization to produce output per time period.
Internal Capacity to Plan The organic capability of an organization to produce output per time period.
Projected Delivery Requirements to Plan The company’s goal for the time to ship the product after the receipt of a
customer’s order. The policy is sometimes stated as “our quoted delivery
Projected Delivery Requirements to EM.6 The company’s goal for the time to ship the product after the receipt of a
Manage Transportation customer’s order. The policy is sometimes stated as “our quoted delivery
Projected Delivery Requirements to Deliver The company’s goal for the time to ship the product after the receipt of a
customer’s order. The policy is sometimes stated as “our quoted delivery

EM.8 Manage Regulatory Compliance
set by external entities (e.g. government)

Cost to Manage MAKE Regulatory The sum of the Cost to Manage MAKE Regulatory Compliance
Compliance
Manage MAKE Regulatory Compliance The average time associated with managing compliance to the make
Cycle Time regulatory environment
Best Practices:
Automated Conformance Monitoring And Internal automatic notification of conformance, including holding of
Control product until requirements are met
Automatic Generation And Submission Of Software specific to industry regulations and standards (e.g. may be
Conformance Documents software to produce MSDS documents, or FDA requirements, etc.)
Maintaining Repository of Current Electronic subscription and publication of conformance documentation.
Regulatory Requirements Electronic Document Management System features.
Inputs:
Source: Company
Equipment and Facilities Characteristics from Equipment and facility traits and specifications required to meet external
Source: Company entities requirements.
External Regulatory Information from Source: Documentation and process standards set by external entities (i.e.
Source government, trade officials, etc.)
Plan government, trade officials, etc.)
Make government, trade officials, etc.)
Product Design/Claims from Source: The product design is the translation of a set of functional requirements
Company into an operational product that meets both the enterprise and customer
expectations. Claims are marketing information provided as to
performance, etc. Claims from the users of the product indicate a need to
change the product design
Outputs:
Conformance Plan to Source Courses of action and processes that are established to meet the
requirements placed on production by external entities.
Conformance Plan to Make Courses of action and processes that are established to meet the
Conformance Rules to Make An affirmative indication or judgment that a product or service has met
criteria translated into rules for meeting external regulatory requirements

D1 Deliver Stocked Product
The process of delivering product that is maintained in a finished goods state prior to the receipt of
a firm customer order.
The Category D1 includes fifteen Level 3 Elements:

D1.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for
quotes.
D1.10 Pack Product The activities such as sorting / combining the products, packing / kitting the
products, paste labels, barcodes etc. and delivering the products to the
shipping area for loading.
D1.11 Load Vehicle & Generate Shipping The series of tasks including placing/loading product onto modes of
Documentation transportation and generating the documentation necessary to meet
internal, customer, carrier and government needs..
D1.12 Ship Product The process of shipping the product to the customer site.
D1.13 Receive & Verify Product by Customer The process of receiving the shipment by the customer site (either at
customer site or at shipping area in case of self-collection) and verifying
that the order was shipped complete and that the product meets delivery
terms.
D1.14 Install Product When necessary, the process of preparing, testing and installing the
product at the customer site. The product is fully functional upon
completion.
D1.15 Invoice A signal is sent to the financial organization that the order has been
shipped and that the billing process should begin and payment be received
or be closed out if payment has already been received. Payment is
received from the customer within the payment terms of the invoice.
D1.2 Receive, Enter & Validate Order Receive orders from the customer and enter them into a company’s order
processing system. Orders can be received through phone, fax, or
electronic media. “Technically“ examine orders to ensure an orderable
configuration and provide accurate price. Check the customer’s credit.
Optionally accept payment.
D1.3 Reserve Inventory & Determine Inventory and/or planned capacity (both on hand and scheduled) is
Delivery Date identified and reserved for specific orders and a delivery date is committed
and scheduled.
D1.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in
least cost/best service fulfillment and transportation.
D1.5 Build Loads Transportation modes are selected and efficient loads are built.
D1.6 Route Shipments Loads are consolidated and routed by mode, lane and location.
D1.7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are
rated and tendered.
D1.8 Receive Product from Source or Make The activities such as receiving product, verifying, recording product
receipt, determining put-away location, putting away and recording location
that a company performs at its own warehouses. May include quality
inspection.
D1.9 Pick Product The series of activities including retrieving orders to pick, determining
inventory availability, building the pick wave, picking the product, recording
the pick and delivering product to shipping in response to an order.

Outstanding]

Cost to Deliver The sum of the costs associated with deliver
Deliver Cycle Time The average time associated with Deliver Processes
Downside Deliver Adaptability The reduction in delivered quantities sustainable at 30 days prior to
delivery with no inventory or cost penalties.
Finished Goods Inventory Days of Supply Plant finished goods inventory days of supply are calculated as gross plant
finished goods inventory ÷ (value of transfers/365 days).
orders.
Order Management Costs The aggregation of the following cost elements (contained in this glossary):
asset.
Upside Deliver Adaptability The maximum sustainable percentage increase in quantities delivered that
can be achieved in 30 days with the assumption of unconstrained finished
good availability.
Upside Deliver Flexibility The number of days required to achieve an unplanned sustainable 20%
increase in quantity delivered with the assumption of no other constraints.
Best Practices:
Efficient Consumer Response (ECR); Quick Demand Planning, Deployment, Scheduling
Response
Electronic Catalogues/Malls None identified
Internet Ordering None identified
Rapid Replenishment, VMI, EDI None identified

D1.1 Process Inquiry & Quote
Receive and respond to general customer inquiries and requests for quotes.

Cost to Process Inquiry & Quote The sum of the costs associated with processing inquiry and quotes.
Process Inquiry & Quote Cycle Time The average time associated with processing inquiries and quotes
It is associated with deliverables:

Deliverable: Customer Inquiry General customer inquiries for information concerning products,
availability, cost, and requests for quotes.
Deliverable: Order Quote (Customer) A statement of price, terms of sale, and description of goods or services
offered by a supplier to a prospective purchaser; a bid. When given in
response to an inquiry, it is usually considered an offer to sell.
Best Practices:
Quote Capability, without Reserving None identified
Inventory, Which Can Be Converted into an
Order in a Single Step
Single Point of Contact for All Order None identified
Inquiries (Including Order Entry)
Inputs:
Customer Inquiry from Source: Customer General customer inquiries for information concerning products,
Outputs:
Customer Quote to D1.2 Receive, Enter & A statement of price, terms of sale, and description of goods or services
Validate Order offered by a supplier to a prospective purchaser; a bid. When given in

D1.2 Receive, Enter & Validate Order
Receive orders from the customer and enter them into a company’s order processing system.
Orders can be received through phone, fax, or electronic media. “Technically“ examine orders to
ensure an orderable configuration and provide accurate price. Check the customer’s credit.

Cost to Receive, Enter & Validate Order The sum of the costs associated with receiving, entering and validating a
customer order.
Order Fulfillment Dwell Time Any lead time during the order fulfillment process where no activity takes
place, which is imposed by customer requirements. Note that this dwell
time is different from ‘idle time’ or ‘non-value-add lead time’, which is
caused by inefficiencies in the organization’s processes and therefore
ultimately under responsibility of the organization. This kind of idle time
should not be deducted from Order Fulfillment Cycle Time.
Receive, Enter & Validate Order Cycle Time The average time associated with receiving and verifying an order at the
customer site
Best Practices:
Automatic Multi-level Credit Checking: Dollar Integrated Order/Financial Management
Limits; Days Sales Outstanding; Margin
Testing
Continuous Replenishment Programs; Integrated demand/deployment planning to customer location driven by
Vendor Managed Inventory, Telemetry to POS; Customer movement data
Automatically Communicate Replenishment
of Chemicals
Electronic Commerce (Customer Visibility of EDI applications and integrated order management
Stock Availability, Use of Hand-Held
Terminals for Direct Order Entry,
Confirmation, Credit Approval), On-Line
Stock Check and Reservation of Inventory
Enable Real-Time Visibility into Backlog, None identified
Order Status, Shipments, Scheduled Material
Receipts, Customer Credit History, and
Current Inventory Positions
Remote (Sales, Customers) Order Entry None identified
Capability
Value Pricing Based on “Cost to Serve“; Activity Based Costing; Integrated Order Management by Customer by
EDLP; Cost Plus Pricing Line Item
Inputs:
Customer Order from Source: Customer An order from a customer for a particular product or a number of products.
It is often referred to as an actual demand to distinguish it from a
forecasted demand.
Customer Quote from D1.1 Process Inquiry A statement of price, terms of sale, and description of goods or services
& Quote offered by a supplier to a prospective purchaser; a bid. When given in
Customer Replenish Signal from Source: A requirement for product from a distribution location to a source location.
Customer
Deliver Contract Terms from Source: The process of making a delivery commitment. For make-to-order
Customer products, this usually involves a check of uncommitted material and
availability of capacity, often as represented by the master schedule
available-to-promise.
Order Rules from ED.1 Manage Deliver Rules for the function that encompasses receiving, entering, and promising
Business Rules orders from customers, distribution centers, and interplant operations.

Outputs:
Actual Sales History to P5.1 Assess, and Amount of past sales spanning any specified period of time (weeks,
Aggregate Return Requirements months, years, etc.) and expressed in any specified increments (per day,
Contract Status to ED.3 Manage Deliver Customer profile, which include address data, credit and purchase
Information histories, customer preferences including shipping, status, and delivery
requirements, etc.
Credit History to ED.3 Manage Deliver Report that portrays a potential customer’s payment history and debt,
Information indicating the ability to pay in a timely manner in the future.
Customer Address Data to ED.3 Manage Customer profile, which include address data, credit and purchase
Deliver Information histories, customer preferences including shipping, status, and delivery
requirements, etc.
Customer Order to ED.2 Assess Delivery An order from a customer for a particular product or a number of products.
Performance It is often referred to as an actual demand to distinguish it from a
forecasted demand.
Customer Order Size, Weight, and Freight Coupled with cube and route, these criteria determine type of carrier and
Class to ED.6 Manage Transportation cost of shipment
Location of Customers to ED.7 Manage Customer profile, which includes address and location data, credit and
Product Life Cycle purchase histories, customer preferences including shipping, status, and
delivery requirements, etc.
Optional Payment to Company Payment at the time of order, maybe partial or in full.
Purchase History to ED.3 Manage Deliver The amount of purchased products for a certain time in history per specific
Information intervals
Shipping Preferences to ED.3 Manage Customer preferences including shipping, status, and delivery
Deliver Information requirements, etc., and customer profile, which includes address data,
credit and purchase histories,
Validated Order to D1.3 Reserve Inventory & An order that has had the instructions / requirements validated i.e. the
Determine Delivery Date information that the order contains is accurate , consistent with previous
information and does not violate business policies or rules.
Note 1 - this does not make the order ““committed““ there may be other
tasks to be performed before a commitment can be made.
Note 2 - this order could be customer, internal , purchase or production.

D1.3 Reserve Inventory & Determine Delivery Date
Inventory and/or planned capacity (both on hand and scheduled) is identified and reserved for
specific orders and a delivery date is committed and scheduled.

% of Orders Delivered in Full Percentage of orders which all of the items are received by customer in the
quantities committed
The number of orders that are received by the customer in the quantities
committed divided by the total orders [Total number of orders delivered in
full] / [Total number of orders delivered] x 100%
Cost to Reserve Resources & Determine The sum of the costs associated with reserving resources and determining
Delivery Date a delivery date.
Delivery Performance to Customer Commit The percentage of orders that are fulfilled on the customer’s original
Date commit date
Order Fulfillment Dwell Time Any lead time during the order fulfillment process where no activity takes
place, which is imposed by customer requirements. Note that this dwell
time is different from ‘idle time’ or ‘non-value-add lead time’, which is
caused by inefficiencies in the organization’s processes and therefore
ultimately under responsibility of the organization. This kind of idle time
should not be deducted from Order Fulfillment Cycle Time.
Reserve Inventory & Determine Delivery The average time associated with reserving inventory and determining a
Date Cycle Time delivery date
Best Practices:
Automatic Reservation of Inventory and Integrated order management system that treats each order line as a
Dynamic Sourcing of Product for Single separate order with integration to inventory source and status; Real-time
Shipment to Customer inventory management
Available-to-Promise (ATP) Available-to-Promise (ATP) provides an availability and feasibility check
concerning a customer request or a customer order.
EDI Links between Manufacturing and None identified
Distributor to Achieve Visibility of Complete
Finished Goods Inventory and Expected
Shipments
Inventory Allocation Exception Process is None identified
Clearly Defined and Jointly Owned by
Manufacturing and Sales
Priority-Based Inventory Reservations, for None identified
Key Customers, with FIFO Allocation for All
Others
Inputs:
Material and work in process items), supporting activities (maintenance, repairs and
parts).
parts).

Validated Order from D1.2 Receive, Enter & An order that has had the instructions / requirements validated i.e. the
Validate Order information that the order contains is accurate , consistent with previous
Note 1 - this does not make the order ““committed““ there may be other
tasks to be performed before a commitment can be made.
Note 2 - this order could be customer, internal , purchase or production.
Outputs:
Delivery Date to D1.4 Consolidate Orders Those stocks or items on hand used to support production (raw materials
Inventory Availability/Delivery Date to P4.2 Those stocks or items on hand used to support production (raw materials
Identify, Assess, and Aggregate Delivery and work in process items), supporting activities (maintenance, repairs and
Resources and Capabilities operating supplies), and customer service (finished goods and spare
Order Backlog to P1.1 Identify, Prioritize, and Orders that have been received and entered into the order processing
Aggregate Supply Chain Requirements system and are in a queue waiting to be processed and shipped.
Aggregate Delivery Requirements system and are in a queue waiting to be processed and shipped.
Replenishment Signal to S1.1 Schedule Any signal that indicates when to produce or transport Items in a pull
Product Deliveries replenishment system.
Replenishment Signal to S2.4 Transfer Any signal that indicates when to produce or transport Items in a pull
Product replenishment system.
Shipments to P1.1 Identify, Prioritize, and Transactions related to sending the product to the customer.
Aggregate Supply Chain Requirements

D1.4 Consolidate Orders
The process of analyzing orders to determine the groupings that result in least cost/best service
fulfillment and transportation.

Consolidate Orders Cycle Time The average time required for customer order consolidation.
Cost to Consolidate Orders The sum of the costs associated with consolidating customer orders.
Best Practices:
Combine Consolidation Needs with Other None identified
Products/Divisions/Companies
Consolidate Orders by Customer, Source, Integrated load planning and building with warehouse management
Traffic Lane, Carrier, Etc.
Inputs:
Delivery Date from D1.3 Reserve Inventory & Those stocks or items on hand used to support production (raw materials
Determine Delivery Date and work in process items), supporting activities (maintenance, repairs and
Outputs:
Daily Shipment Volume to Carrier Daily Shipment Volume categorized by customer, source, traffic lane,
carrier, etc.
Daily Shipment Volume to D1.5 Build Loads Daily Shipment Volume categorized by customer, source, traffic lane,
carrier, etc.

D1.5 Build Loads
Transportation modes are selected and efficient loads are built.

Build Loads Cycle Time The average time associated with building shipment loads.
Cost to Build Loads The sum of the costs associated with building transportation loads.
Best Practices:
Build Load in Stop Sequence Integrated inbound/outbound transportation planning (i.e. 1st truck
destination loaded last, etc.).
Consolidation of Inbound and Outbound Integrated inbound/outbound transportation planning
Requirements
CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems
Inputs:
Daily Shipment Volume from D1.4 Daily Shipment Volume categorized by customer, source, traffic lane,
Consolidate Orders carrier, etc.
Outputs:
Load Information to P4.2 Identify, Assess, Information relative to a load that is built and shipped, i.e. customer, items,
and Aggregate Delivery Resources and destinations, weight, etc
Capabilities
Load Information to D1.6 Route Shipments Information relative to a load that is built and shipped, i.e. customer, items,
Plan and Build Loads Information to SR2.4 Transportation modes are selected and efficient loads are built.
Schedule MRO Shipment
Schedule Excess Product Shipment
Schedule Defective Product Shipment

D1.6 Route Shipments
Loads are consolidated and routed by mode, lane and location.

Cost to Route Shipments The sum of the costs associated with routing shipments.
Route Shipments Cycle Time The average time associated with routing shipments
Best Practices:
Carrier/Route Optimization Based on Route scheduling, carrier selection, and rating
Continuous Movement and
Consolidation/Pooling
Consolidation of Carriers Transportation modeling and rate analysis
CRP/VMI Integrated Load Building; Routing & Scheduling with Advanced Ship Notice
(ASN)
Shipment Tracking and Tracing Satellite communications, GPS, RFID
Inputs:
Load Information from D1.5 Build Loads Information relative to a load that is built and shipped, i.e. customer, items,
Rated Carrier Data from Source: Carrier Contract rates and tariffs from carriers by commodity, lane, mode, etc. for
shipments.
Routing Guide from Source: Carrier Information used to select modes, transportation lanes, available carriers,
etc. Listing or routes, carriers & rates.
Outputs:
Shipment Routes to D1.7 Select Carriers & Routes for shipping by consolidating loads.
Rate Shipments

D1.7 Select Carriers & Rate Shipments
Specific carriers are selected by lowest cost per route and shipments are rated and tendered.

Cost to Select Carriers & Rate Shipments The sum of the costs associated with selecting carriers and rating
shipments.
Select Carriers & Rate Shipments Cycle The average time associated with selecting carriers and rating shipments
Time
Best Practices:
Select Carriers by Least Cost per Shipment Rules based carrier selection and actual rate database
and Rate Using Actual Rates Prior to
Release to Billing
Inputs:
Shipment Routes from D1.6 Route Routes for shipping by consolidating loads.
Shipments
Outputs:
Scheduled Deliveries to Plan The required or agreed time or rate of delivery of goods or services
purchased for a future period.
Scheduled Deliveries to D1.9 Pick Product The required or agreed time or rate of delivery of goods or services

D1.8 Receive Product from Source or Make
The activities such as receiving product, verifying, recording product receipt, determining put-away
location, putting away and recording location that a company performs at its own warehouses.
May include quality inspection.

Cost to Receive Product from Source or The sum of the costs associated with transferring product from source or
Make make activities.
Receive Product from Source or Make Cycle The average time associated with receiving a transfer of product to deliver
Time processes from source or make
Best Practices:
Automatic Identification Bar Coding & Radio Frequency Communications
Cross-Docking Used in many distribution centers (DC) to increase inventory velocity while
maintaining shipping efficiency. In a traditional DC, the receiving process
is disjointed from the shipping process and storage acts as an
intermediary between the two processes. Cross docking actively links the
receiving and shipping processes. In a DC, both cross docking (no
storage) and traditional (with storage) operations might take place.
Download P.O. & Advanced Ship Notices for Integration with Procurement Systems & Electronic Commerce with
Automated Receiving and Put Away Vendors
Dynamic Location Assignment Including Lot Real time inventory control, stock locator, and rules based put away logic
Control, Zoned Put Away, Quality Assurance,
ABC Frequency of Access
Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into
a single customer shipment. This includes items on stock in the
distribution center, from which the shipment is sent, items on stock in
other distribution centers, items on stock elsewhere (e.g. at a plant or a
supplier) as well as make-to-order items. The items to be merged are
cross-docked from inbound receipt to outbound shipping. Merging is
usually performed in a shipper’s distribution center (DC) or in a carrier’s
terminal.
Inputs:
Authorization to Return to Service from Permission to return to service an item that has been repaired and found
SR2.2 Disposition MRO Product to be within specifications and operable.
SR1.2 Disposition Defective Product to be within specifications and operable.
SR3.2 Disposition Excess Product to be within specifications and operable.
Authorization to Scrap from SR3.2 Permission to scrap material or item outside of specifications and
Disposition Excess Product possessing characteristics that make rework impractical.
Disposition Defective Product possessing characteristics that make rework impractical.
Disposition MRO Product possessing characteristics that make rework impractical.
Finished Product Release from M1.6 The authorization to ship a finished product that has been ordered.
Release Product to Deliver

Product and work in process items), supporting activities (maintenance, repairs
parts).

Product Deliveries
Outputs:
Existing Inventory Data to ED.4 Manage Available data that characterizes and quantifies raw material, work in
Finished Goods Inventories process, and finished goods inventories
Inventory Availability to D1.9 Pick Product Those stocks or items on hand used to support production (raw materials
and work in process items), supporting activities (maintenance, repairs
parts).

D1.9 Pick Product
The series of activities including retrieving orders to pick, determining inventory availability,
building the pick wave, picking the product, recording the pick and delivering product to shipping in
response to an order.

Cost to Pick Product The sum of the costs associated with picking product.
Pick Product Cycle Time The average time associated with product pick
Best Practices:
Dynamic Location Assignment Including Lot Real time inventory control, stock locator, and rules based picking logic
Control, Zoned Picking, Quality Assurance
Dynamic Simulation of Picking Rules based picking logic and simulation
Requirements Optimized for Labor, Cost,
and Time
Merge-in-Transit Merge-in-Transit is a practice to combine items from multiple sources into a
single customer shipment. This includes items on stock in the distribution
center, from which the shipment is sent, items on stock in other distribution
centers, items on stock elsewhere (e.g. at a plant or a supplier) as well as
make-to-order items. The items to be merged are cross-docked from
inbound receipt to outbound shipping. Merging is usually performed in a
shipper’s distribution center (DC) or in a carrier’s terminal.
Use of Speed Racks for Automated Material None identified
Handling
Wave picking A practice used in many DC operations to increase labor picking
productivity and reduce the labor cost per pick. In some DC’s, orders are
scheduled to be picked when they are received. Wave picking
consolidates orders into “waves“ where multiple orders with similar
characteristics are picked at one time. Orders can be consolidated by
customer, geography, or any other criteria that makes sense for the DC
operation.
Inputs:
Scheduled Deliveries from D1.7 Select The required or agreed time or rate of delivery of goods or services
Carriers & Rate Shipments purchased for a future period.
Inventory Availability from D1.8 Receive Those stocks or items on hand used to support production (raw materials
Product from Source or Make and work in process items), supporting activities (maintenance, repairs and
parts).
Outputs:
Workflow to D1.10 Pack Product

D1.10 Pack Product
The activities such as sorting / combining the products, packing / kitting the products, paste labels,
barcodes etc. and delivering the products to the shipping area for loading.

Cost to Pack Product The sum of the costs associated with product packaging.
Pack Product Cycle Time The average time associated with packing a product for shipment.
Inputs:
Workflow from D1.9 Pick Product
Outputs:
Workflow to D1.11 Load Vehicle & Generate Shipping Documentation

D1.11 Load Vehicle & Generate Shipping Documentation
The series of tasks including placing/loading product onto modes of transportation and generating
the documentation necessary to meet internal, customer, carrier and government needs.

Cost to Load Product & Generate Shipping The sum of the costs associated with loading product & generating
Documentation shipping documentation.
Date commit date
Documentation Accuracy Percentage of orders with on time and accurate documentation supporting
the order, including packing slips, bills of lading, invoices, etc. [Total
number of orders delivered with correct and timely documentation] / [Total
number of orders delivered] x 100%
Load Product & Generate Shipping The average time associated with product loading and the generation of
Documentation Cycle Time shipping documentation
Best Practices:
Advanced Shipping Notices & UCC128 Bar coding; EDI; integrated transportation/warehouse management
Container Labeling
is disjointed from the shipping process and storage acts as an intermediary
between the two processes. Cross docking actively links the receiving and
shipping processes. In a DC, both cross docking (no storage) and
traditional (with storage) operations might take place.
Electronic Generation and Download of None identified

Shipping Documents
Full Visibility of Credit History by Shipping None identified
Personnel
Integrated Credit Checking Interface to supplier’s shipping system to financials
Shipment Tracking None identified
Inputs:
Shipping Export Parameters and Shipping and documentation requirements established by a government
Documentation from ED.8 Manage which must be met before allowing the shipping or delivery of a product
Import/Export Requirements across national boundaries.
Shipping Parameters and Documentation Shipping parameters, such as weight, size, cube and route decide carrier
from ED.6 Manage Transportation and cost. Legal documentation of the contents of a shipment (e.g. way bill,
bill of lading, export papers, etc.) are required.
Outputs:
Delivered End Items to Customer Products that have been acknowledged as received by the customer.
Load, Shipping, Verify, and Credit The function that performs tasks for the outgoing shipment of parts,
Information to SR1.5 Return Defective components, and products. It includes packaging, marking, weighing, and
Product loading for shipment. Also, verify the shipment and customer credit
information.

Information to SR2.5 Return MRO Product components, and products. It includes packaging, marking, weighing, and
loading for shipment. Also, verify the shipment and customer credit
information.
Information to SR3.5 Return Excess Product components, and products. It includes packaging, marking, weighing, and
loading for shipment. Also, verify the shipment and customer credit
information.
Aggregate Supply Chain Requirements system and are in a queue waiting to be processed and shipped.
Shipments to P1.1 Identify, Prioritize, and Transactions related to sending the product to the customer.
Aggregate Supply Chain Requirements
Shipping Documents to Government Legal documentation of the contents of a shipment (e.g. way bill, bill of
lading, export papers, etc....).
Shipping Documents to Customer Legal documentation of the contents of a shipment (e.g. way bill, bill of
Shipping Documents to Carrier Legal documentation of the contents of a shipment (e.g. way bill, bill of
Shipping History to ED.8 Manage The transaction history of the physical shipment of an item to another
Import/Export Requirements internal location or to a customer.

D1.12 Ship Product
The process of shipping the product to the customer site.

Cost to Ship Product The sum of the costs associated with shipping products.
Date commit date
Ship Product Cycle Time The average time associated with shipping product
Best Practices:
is disjointed from the shipping process and storage acts as an intermediary
between the two processes. Cross docking actively links the receiving and
shipping processes. In a DC, both cross docking (no storage) and
traditional (with storage) operations might take place.
Shipment Tracking None identified
Inputs:
Workflow from D1.11 Load Vehicle & Generate Shipping Documentation
Outputs:
Workflow to D1.13 Receive & Verify Product by Customer

D1.13 Receive & Verify Product by Customer
The process of receiving the shipment by the customer site (either at customer site or at shipping
area in case of self-collection) and verifying that the order was shipped complete and that the
product meets delivery terms.

Cost to Receive & Verify Product by The sum of the costs associated with receipt and verification at customer
Customer site.
Date commit date
Perfect Condition Percentage of orders delivered in an undamaged state that meet
specification, have the correct configuration, are faultlessly installed (as
applicable), and accepted by the customer
[ Number of orders delivered in Perfect Condition ] / [Number of orders
delivered ] x 100%
Receive & Verify Product by Customer The average time associated with receiving and verifying an order at the
Cycle Time customer site
Best Practices:
Advanced Shipping Notices & UCC128 Bar coding; EDI; integrated transportation/warehouse management
Container Labeling
Inputs:
Workflow from D1.12 Ship Product
Outputs:
Product to D1.14 Install Product The end object of a transformation process that includes physical objects,

D1.14 Install Product
When necessary, the process of preparing, testing and installing the product at the customer site.
The product is fully functional upon completion.

% of Faultless Installations Number of Faultless Installations divided by Total Number of Units
Installed.
Cost to Install Product The sum of the costs associated with product installation.
Install Product Cycle Time The average time associated with product installation
Perfect Condition Percentage of orders delivered in an undamaged state that meet
specification, have the correct configuration, are faultlessly installed (as
applicable), and accepted by the customer
[ Number of orders delivered in Perfect Condition ] / [Number of orders
delivered ] x 100%
Best Practices:
Joint Service Agreements to Document Collaborative planning tools with the Source suppliers
Acceptable Service Levels in Terms of
Installation Costs, Installation Cycle Time, (This would be effective between customer and supplier, and between
Etc. internal functions such as Field Service, Manufacturing, Marketing and
Order Management)
Inputs:
Product from D1.13 Receive & Verify Product The end object of a transformation process that includes physical objects,
by Customer information or services.
Outputs:
Installed Product to D1.15 Invoice The process of preparing, testing and installing the product at the customer
site. The standalone product is fully functional upon completion, but there
may be requirement for subsequent integration.

D1.15 Invoice
A signal is sent to the financial organization that the order has been shipped and that the billing
process should begin and payment be received or be closed out if payment has already been
received. Payment is received from the customer within the payment terms of the invoice.

% of Faultless Invoices The number of invoices processed without issues and or errors divided by
the total number of invoices. Examples of potential invoice defects are:
Change from customer purchase order without proper customer
involvement Wrong Customer Information (e.g., name, address, telephone
number) Wrong Product Information (e.g., part number, product
description) Wrong Price (e.g., discounts not applied) Wrong Quantity or
Wrong Terms or Wrong Date
Cost to Invoice The sum of the costs associated with invoicing.

Documentation Accuracy Percentage of orders with on time and accurate documentation supporting
the order, including packing slips, bills of lading, invoices, etc. [Total
number of orders delivered with correct and timely documentation] / [Total
number of orders delivered] x 100%
Invoice Cycle Time The average time associated with the the generation and issuance of an
invoice
Best Practices:
Electronic Transfer of Shipment Information None identified
to Finance
Provide Visibility to and Quickly Escalate Integrated accounts receivables
Delinquent Accounts for Resolution
Utilize EDI and EFT for Payment to Speed EDI transaction and network services
Closing of Receivables and to Reduce
Processing Costs
Inputs:
Installed Product from D1.14 Install Product The process of preparing, testing and installing the product at the customer
may be requirement for subsequent integration.
Outputs:
Payment to Company Receipt of payment for goods and services per contract or purchase order.

D2 Deliver Make-to-Order Product
The process of delivering product that is manufactured, assembled or configured from standard
parts or subassemblies. Manufacture, assembly or configuration will begins only after the receipt
and validation of a firm customer order.

D2.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for
quotes.
D2.10 Pack Product The activities such as sorting / combining the products, packing / kitting the
products, paste labels, barcodes etc. ande delivering the products to the
shipping area for loading.
D2.11 Load Product & Generate Shipping The series of tasks including placing/loading product onto modes of
Documentation transportation and generating the documentation necessary to meet
internal, customer, carrier and government needs..
D2.13 Receive & Verify Product by Customer The process of receiving the shipment at the customer (either at customer
site or at shipping area in case of self-collection) site and verifying that the
order was shipped complete and that the product meets delivery terms.
D2.14 Install Product When necessary, the process of preparing, testing and installing the
completion.
D2.15 Invoice A signal is sent to the financial organization that the order has been
shipped and that the billing process should begin and payment be received
or be closed out if payment has already been received. Payment is
received from the customer within the payment terms of the invoice.
D2.2 Receive, Configure, Enter and Validate Receive orders from the customer and enter them into a company’s order
Order processing system. Orders can be received through phone, fax, or through
electronic media. Configure your product to the customer’s specific
needs, based on standard available parts or options. “Technically“
examine order to ensure an orderable configuration and provide accurate
price. Check the customer’s credit. Optionally accept payment.
D2.3 Reserve Resources & Determine Inventory and/or planned capacity is identified and reserved for specific
Delivery Date orders, and a delivery date is committed and scheduled.
D2.4 Consolidate Orders The process of analyzing orders to determine the groupings that result in
D2.7 Select Carriers & Rate Shipments Specific carriers are selected by lowest cost per route and shipments are
rated and tendered.
D2.8 Receive Product from Source or Make The activities such as receiving product, verifying, recording product
that a company performs at its own warehouses. May include quality
inspection.
D2.9 Pick Product The series of activities including retrieving orders to pick, verifying
inventory availability, building the pick wave, picking the product, recording
the pick and delivering product to packing area in response to an order.

Outstanding]

Finished Goods Inventory Days of Supply Plant finished goods inventory days of supply are calculated as gross plant
finished goods inventory ÷ (value of transfers/365 days).
orders.
asset.
good availability.
Best Practices:

D2.1 Process Inquiry & Quote
Receive and respond to general customer inquiries and requests for quotes.

. Cost to Process Inquiry & Quote The sum of the costs associated with processing inquiry and
quotes.
. Process Inquiry & Quote Cycle Time The average time associated with processing inquiries and quotes
Best Practices:
. Quote Capability, without Reserving None identified
Inventory, Which Can Be Converted into an
Order in a Single Step
. Quote Capability, without Reserving None identified
Inventory, Which Can be Converted into an
Order, But Does Not Generate Build Signal
or Reserve Inventory Capacity
. Single Point of Contact for All Order None identified
Inquiries (Including Order Entry)
Inputs:
. Customer Inquiry from Source: Customer General customer inquiries for information concerning products,
Outputs:
. Order Quote (Customer) to Customer A statement of price, terms of sale, and description of goods or
services offered by a supplier to a prospective purchaser; a bid.
When given in response to an inquiry, it is usually considered an
offer to sell.
. Order Quote (Customer) to D2.2 Receive, A statement of price, terms of sale, and description of goods or
Configure, Enter and Validate Order services offered by a supplier to a prospective purchaser; a bid.
offer to sell.

D2.2 Receive, Configure, Enter and Validate Order
Receive orders from the customer and enter them into a company’s order processing system.
Orders can be received through phone, fax, or through electronic media. Configure your product
to the customer’s specific needs, based on standard available parts or options. “Technically“
examine order to ensure an orderable configuration and provide accurate price. Check the
customer’s credit. Optionally accept payment.

. Cost to Receive, Enter & Validate Order The sum of the costs associated with receiving, entering and
validating a customer order.
. Order Fulfillment Dwell Time Any lead time during the order fulfillment process where no activity
takes place, which is imposed by customer requirements. Note that
this dwell time is different from ‘idle time’ or ‘non-value-add lead
time’, which is caused by inefficiencies in the organization’s
processes and therefore ultimately under responsibility of the
organization. This kind of idle time should not be deducted from
Order Fulfillment Cycle Time.
. Receive, Configure, Enter & Validate Order The average time associated with receiving and verifying an order
Cycle Time at the customer site
Best Practices:
. Automated Configuration Management Configuration
. Automatic Multi-level Credit Checking: Dollar Integrated Order/Financial Management
Limits; Days Sales Outstanding; Margin
Testing
. Continuous Replenishment Programs; Integrated demand/deployment planning to customer location
Vendor Managed Inventory, Telemetry to driven by POS; Customer movement data
Automatically Communicate Replenishment
of Chemicals
. Electronic Commerce (Customer Visibility of EDI applications and integrated order management
Stock Availability, Use of Hand-Held
Terminals for Direct Order Entry,
Confirmation, Credit Approval), On-Line
Stock Check and Reservation of Inventory
. Enable Real-Time Visibility into Backlog, None identified
Order Status, Shipments, Scheduled Material
Receipts, Customer Credit History, and
Current Inventory Positions
. Order Entry is Organized by Customer None identified
Segment Customers Receive Differentiated
Service Based on Volume of Business
Customer Team is Empowered to Fully
Service Customer Requests, Including
Formal Orders and Ad Hoc Requests
Customers Have One Point of Contact for All
Products
. Remote (Sales, Customers) Order Entry None identified
Capability
. Value Pricing Based on “Cost to Serve“; Activity Based Costing; Integrated Order Management by Customer
EDLP; Cost Plus Pricing by Line Item
Inputs:
. Configuration Rules from ED.1 Manage The rules for the management of product configuration, which
Deliver Business Rules includes the management of critical sub processes needed to
manage the life cycle of individual item numbers including item
masters, routings, rationalization, and bill of materials.

. Contract Terms from Source: Customer All the provisions and agreements of a contract.
. Credit History from Source: Customer Report that portrays a potential customer’s payment history and
debt, indicating the ability to pay in a timely manner in the future.
. Order Quote (Customer) from D2.1 Process A statement of price, terms of sale, and description of goods or
Inquiry & Quote services offered by a supplier to a prospective purchaser; a bid.
offer to sell.
. Order Rules from ED.1 Manage Deliver Rules for the function that encompasses receiving, entering, and
Business Rules promising orders from customers, distribution centers, and
interplant operations.
Outputs:
. Actual Sales History to P5.1 Assess, and Amount of past sales spanning any specified period of time (weeks,
Aggregate Return Requirements months, years, etc.) and expressed in any specified increments (per
day, week, month, year, etc.)
. Booked Order to D2.3 Reserve Resources & The process of accepting and translating what a customer wants
Determine Delivery Date into terms used by the manufacturer or distributor. The commitment
should be based on the available-to-promise line (ATP) in the
master schedule. This can be as simple as creating shipping
documents for finished goods in a make-to-stock environment, or it
might be a more complicated series of activities, including design
efforts for make-to-order products
. Booked Order to ED.3 Manage Deliver The process of accepting and translating what a customer wants
Information into terms used by the manufacturer or distributor. The commitment
. Contract Status to ED.3 Manage Deliver Customer profile, which include address data, credit and purchase
Information histories, customer preferences including shipping, status, and
. Credit History to ED.3 Manage Deliver Report that portrays a potential customer’s payment history and
Information debt, indicating the ability to pay in a timely manner in the future.
. Customer Address Data to ED.3 Manage Customer profile, which include address data, credit and purchase
Deliver Information histories, customer preferences including shipping, status, and
. Customer Order Size, Weight, and Freight Coupled with cube and route, these criteria determine type of
Class to ED.6 Manage Transportation carrier and cost of shipment
. Location of Customers to ED.7 Manage Customer profile, which includes address and location data, credit
Product Life Cycle and purchase histories, customer preferences including shipping,
status, and delivery requirements, etc.
. Optional Payment to Company Payment at the time of order, maybe partial or in full.
. Purchase History to ED.3 Manage Deliver The amount of purchased products for a certain time in history per
Information specific intervals

. Shipping Preferences to ED.3 Manage Customer preferences including shipping, status, and delivery
Deliver Information requirements, etc., and customer profile, which includes address
data, credit and purchase histories,

D2.3 Reserve Resources & Determine Delivery Date
Inventory and/or planned capacity is identified and reserved for specific orders, and a delivery date
is committed and scheduled.

. % of Orders Delivered in Full Percentage of orders which all of the items are received by
customer in the quantities committed
The number of orders that are received by the customer in the

quantities committed divided by the total orders [Total number of
orders delivered in full] / [Total number of orders delivered] x 100%
. Cost to Reserve Resources & Determine The sum of the costs associated with reserving resources and
Delivery Date determining a delivery date.
. Delivery Performance to Customer Commit The percentage of orders that are fulfilled on the customer’s original
Date commit date
. Reserve Resources & Determine Delivery The average time associated with reserving resources and
Date Cycle Time determining a delivery date
Best Practices:
. Automatic Reservation of Inventory and Integrated order management system that treats each order line as
Dynamic Sourcing of Product for Single a separate order with integration to inventory source and status;
Shipment to Customer Real-time inventory management
. Available-to-Promise (ATP) Available-to-Promise (ATP) provides an availability and feasibility
check concerning a customer request or a customer order.
. Dynamic Deployment Based on Constraint Advanced planning and scheduling logic with constraint, cost, and
Based Planning and Optimal Scheduling resource optimization
Inputs:
. Booked Order from D2.2 Receive, Configure, The process of accepting and translating what a customer wants
Enter and Validate Order into terms used by the manufacturer or distributor. The commitment

Outputs:
. Available to Promise Date to Make The uncommitted portion of a company’s inventory and planned
production maintained in the master schedule to support customer-
order promising. The ATP quantity is the uncommitted inventory
balance in the first period and is normally calculated for each period
in which an MPS receipt is scheduled. In the first period, ATP
includes on-hand inventory less customer orders that are due and
overdue
. Customer Order to ED.2 Assess Delivery An order from a customer for a particular product or a number of
Performance products. It is often referred to as an actual demand to distinguish it
from a forecasted demand.
. Delivery Date to D2.4 Consolidate Orders Those stocks or items on hand used to support production (raw
service (finished goods and spare parts). Determination of the time
required from the receipt of the order until the item should be
delivered.
. Inventory Availability/Delivery Date to P4.2 Those stocks or items on hand used to support production (raw
Identify, Assess, and Aggregate Delivery materials and work in process items), supporting activities
Resources and Capabilities (maintenance, repairs and operating supplies), and customer
delivered.
. Inventory Status to Deliver A periodic report showing the inventory on hand and usually
showing the inventory on order and some sales or usage history for
the products that are covered in the stock status report.
. Inventory Status to Plan A periodic report showing the inventory on hand and usually
. Inventory Status to Make A periodic report showing the inventory on hand and usually
. Inventory Status to Source A periodic report showing the inventory on hand and usually
. Order Backlog to P4.1 Identify, Prioritize, and Orders that have been received and entered into the order
Aggregate Delivery Requirements processing system and are in a queue waiting to be processed and
shipped.
. Order Signal to P3.1 Identify, Prioritize, and Reserved inventory and/or planned capacity and delivery date for a
Aggregate Production Requirements specific order.
Aggregate Product Requirements specific order.

D2.4 Consolidate Orders
The process of analyzing orders to determine the groupings that result in least cost/best service
fulfillment and transportation.

. Consolidate Orders Cycle Time The average time required for customer order consolidation.
. Cost to Consolidate Orders The sum of the costs associated with consolidating customer
orders.
Best Practices:
. Consolidate Orders by Customer, Source, Integrated load planning and building with warehouse management
Traffic Lane, Carrier, Etc.
Inputs:
. Delivery Date from D2.3 Reserve Resources Those stocks or items on hand used to support production (raw
& Determine Delivery Date materials and work in process items), supporting activities
delivered.
Outputs:
. Consolidated Orders to D2.5 Build Loads The process of analyzing orders to determine the groupings that
result in least cost/best service fulfillment and transportation.

D2.5 Build Loads
Transportation modes are selected and efficient loads are built.

. Build Loads Cycle Time The average time associated with building shipment loads.
. Cost to Build Loads The sum of the costs associated with building transportation loads.
Best Practices:
. Build Load in Stop Sequence Integrated inbound/outbound transportation planning (i.e. 1st truck
. Consolidation of Inbound and Outbound Integrated inbound/outbound transportation planning
Requirements
. CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems
Inputs:
. Consolidated Orders from D2.4 Consolidate The process of analyzing orders to determine the groupings that
Orders result in least cost/best service fulfillment and transportation.
Outputs:
. Load Information to D2.6 Route Shipments Information relative to a load that is built and shipped, i.e. customer,
items, destinations, weight, etc

Loads are consolidated and routed by mode, lane and location.

. Cost to Route Shipments The sum of the costs associated with routing shipments.
. Route Shipments Cycle Time The average time associated with routing shipments
Best Practices:
. Carrier/Route Optimization Based on Route scheduling, carrier selection, and rating
. Consolidation of Carriers Transportation modeling and rate analysis
. CRP/VMI Integrated Load Building; Routing & Scheduling with Advanced Ship
Notice (ASN)
. Shipment Tracking and Tracing Satellite communications, GPS, RFID
Inputs:
. Load Information from D2.5 Build Loads Information relative to a load that is built and shipped, i.e. customer,
. Rated Carrier Data from Source: Company Contract rates and tariffs from carriers by commodity, lane, mode,
etc. for shipments.
. Routing Guide from Source: Company Information used to select modes, transportation lanes, available
carriers, etc. Listing or routes, carriers & rates.
Outputs:
. Scheduled Deliveries to Plan The required or agreed time or rate of delivery of goods or services
. Shipment Routes to D2.7 Select Carriers & Routes for shipping by consolidating loads.
Rate Shipments

D2.7 Select Carriers & Rate Shipments

. Cost to Select Carriers & Rate Shipments The sum of the costs associated with selecting carriers and rating
shipments.
. Select Carriers & Rate Shipments Cycle The average time associated with selecting carriers and rating
Time shipments
Best Practices:
. Select Carriers by Least Cost per Shipment Rules based carrier selection and actual rate database
Release to Billing
Inputs:
. Shipment Routes from D2.6 Route Routes for shipping by consolidating loads.
Shipments
Outputs:
. Workflow to D2.9 Pick Product


. Cost to Receive Product from Source or The sum of the costs associated with transferring product from
Make source or make activities.
. Receive Product from Source or Make Cycle The average time associated with receiving a transfer of product to
Time deliver processes from source or make
Best Practices:
. Automatic Identification Bar Coding & Radio Frequency Communications
. Cross-Docking Used in many distribution centers (DC) to increase inventory
velocity while maintaining shipping efficiency. In a traditional DC,
the receiving process is disjointed from the shipping process and
storage acts as an intermediary between the two processes. Cross
docking actively links the receiving and shipping processes. In a
DC, both cross docking (no storage) and traditional (with storage)
operations might take place.
. Download P.O. & Advanced Ship Notices for Integration with Procurement Systems & Electronic Commerce with
. Dynamic Location Assignment Including Lot Real time inventory control, stock locator, and rules based picking
Control, Zoned Picking, Quality Assurance logic
Outputs:

D2.9 Pick Product
The series of activities including retrieving orders to pick, verifying inventory availability, building
the pick wave, picking the product, recording the pick and delivering product to packing area in

. Cost to Pick Product The sum of the costs associated with picking product.
. Pick Product Cycle Time The average time associated with product pick
Best Practices:
. Dynamic Simulation of Picking Rules based picking logic and simulation
and Time
. Use of Speed Racks for Automated Material None identified
Handling
Inputs:
. Workflow from D2.7 Select Carriers & Rate Shipments
. Workflow from D2.8 Receive Product from Source or Make
. Finished Product Release from M2.6 The authorization to ship a finished product that has been ordered.
Release Finished Product to Deliver
. Inventory Availability from M2.2 Issue Those stocks or items on hand used to support production (raw
Outputs:
. Workflow to D2.10 Pack Product

D2.10 Pack Product
barcodes etc. and delivering the products to the shipping area for loading.

. Cost to Pack Product The sum of the costs associated with product packaging.
. Pack Product Cycle Time The average time associated with packing a product for shipment.
Inputs:
. Workflow from D2.9 Pick Product
Outputs:
. Workflow to D2.11 Load Product & Generate Shipping Documentation

D2.11 Load Product & Generate Shipping Documentation
The series of tasks including placing/loading product onto modes of transportation and generating
the documentation necessary to meet internal, customer, carrier and government needs.

. Cost to Load Product & Generate Shipping The sum of the costs associated with loading product & generating
Date commit date
. Documentation Accuracy Percentage of orders with on time and accurate documentation
supporting the order, including packing slips, bills of lading,
invoices, etc. [Total number of orders delivered with correct and
timely documentation] / [Total number of orders delivered] x 100%
. Load Product & Generate Shipping The average time associated with product loading and the
Documentation Cycle Time generation of shipping documentation
Best Practices:
. Advanced Shipping Notices & UCC128 Bar coding; EDI; integrated transportation/warehouse management
Container Labeling
. Electronic Generation and Download of None identified

Shipping Documents
. Full Visibility of Credit History by Shipping None identified
Personnel
. Integrated Credit Checking Interface to supplier’s shipping system to financials
Inputs:
. Workflow from D2.10 Pack Product
. Shipping Export Parameters and Shipping and documentation requirements established by a
Documentation from ED.8 Manage government which must be met before allowing the shipping or
Import/Export Requirements delivery of a product across national boundaries.
. Shipping Parameters and Documentation Shipping parameters, such as weight, size, cube and route decide
from ED.6 Manage Transportation carrier and cost. Legal documentation of the contents of a
shipment (e.g. way bill, bill of lading, export papers, etc.) are
required.
Outputs:
. Workflow to D2.12 Ship Product
. Advanced Ship Notice to D2.13 Receive & An EDI notification of shipment of product.
Verify Product by Customer
. Delivered End Items to Customer Products that have been acknowledged as received by the
customer.

. Shipping Documents to Carrier Legal documentation of the contents of a shipment (e.g. way bill, bill
of lading, export papers, etc....).
. Shipping History to ED.8 Manage The transaction history of the physical shipment of an item to
Import/Export Requirements another internal location or to a customer.

D2.12 Ship Product
The process of shipping the product to the customer site.


. Cost to Ship Product The sum of the costs associated with shipping products.
Date commit date
. Ship Product Cycle Time The average time associated with shipping product
Best Practices:
. Shipment Tracking None identified
Inputs:
. Workflow from D2.11 Load Product & Generate Shipping Documentation
Outputs:
. Workflow to D2.13 Receive & Verify Product by Customer

The process of receiving the shipment at the customer (either at customer site or at shipping area
in case of self-collection) site and verifying that the order was shipped complete and that the
product meets delivery terms.

. Cost to Receive & Verify Product by The sum of the costs associated with receipt and verification at
Customer customer site.
Date commit date
. Perfect Condition Percentage of orders delivered in an undamaged state that meet
specification, have the correct configuration, are faultlessly installed
(as applicable), and accepted by the customer
[ Number of orders delivered in Perfect Condition ] / [Number of
orders delivered ] x 100%
. Receive & Verify Product by Customer Cycle The average time associated with receiving and verifying an order
Time at the customer site
Best Practices:
Container Labeling
Inputs:
. Workflow from D2.12 Ship Product
. Advanced Ship Notice from D2.11 Load An EDI notification of shipment of product.
Product & Generate Shipping Documentation
Outputs:
. Product to D2.14 Install Product The end object of a transformation process that includes physical


. % of Faultless Installations Number of Faultless Installations divided by Total Number of Units
Installed.
. Cost to Install Product The sum of the costs associated with product installation.
. Install Product Cycle Time The average time associated with product installation
Best Practices:
. Joint Service Agreements to Document Collaborative planning tools with the Source suppliers
Acceptable Service Levels in Terms of
Installation Costs, Installation Cycle Time, (This would be effective between customer and supplier, and
Etc. between internal functions such as Field Service, Manufacturing,
Marketing and Order Management)
Inputs:
. Product from D2.13 Receive & Verify Product The end object of a transformation process that includes physical
by Customer objects, information or services.
Outputs:
. Installed Product to D2.15 Invoice The process of preparing, testing and installing the product at the
customer site. The standalone product is fully functional upon
completion, but there may be requirement for subsequent
integration.
. Installed Product to Customer The process of preparing, testing and installing the product at the
integration.

D2.15 Invoice

. % of Faultless Invoices The number of invoices processed without issues and or errors
divided by the total number of invoices. Examples of potential
invoice defects are: Change from customer purchase order without
proper customer involvement Wrong Customer Information (e.g.,
name, address, telephone number) Wrong Product Information
(e.g., part number, product description) Wrong Price (e.g.,
discounts not applied) Wrong Quantity or Wrong Terms or Wrong
Date
. Customer Invoicing/ Accounting Costs

. Days Sales Outstanding 5 point annual average of gross accounts receivable ÷ (total gross
annual sales ÷ 365)
. Deliver Cycle Time The average time associated with Deliver Processes
Best Practices:
. Electronic Transfer of Shipment Information None identified
to Finance
. Provide Visibility to and Quickly Escalate Integrated accounts receivables
. Utilize EDI and EFT for Payment to Speed EDI transaction and network services
Processing Costs
Inputs:
. Installed Product from D2.14 Install Product The process of preparing, testing and installing the product at the
integration.
Outputs:
. Payment to Company Receipt of payment for goods and services per contract or purchase
order.

D3 Deliver Engineer-to-Order Product
The process of delivering a product that is designed, manufactured, and assembled from a bill of
materials that includes one or more custom parts. Design will begin only after the receipt and
validation of a firm customer order.

. D3.1 Obtain and Respond to RFP/RFQ The process of receiving a request for proposal or request for
quote, evaluating the request (estimating the schedule, developing
costs estimates, establishing price), and responding to the potential
customer.
. D3.10 Pack Product The activities such as sorting / combining the products, packing /
kitting the products, paste labels, barcodes etc. ande delivering the
products to the shipping area for loading.
. D3.11 Load Product & Generate Ship The series of tasks including placing product onto vehicles,
Documents generating the documentation necessary to meet internal,
customer, carrier and government needs.
. D3.12 Ship Product The process of shipping the product to the customer site
. D3.13 Receive & Verify Product by Customer The process of receiving the shipment (either at customer site or at
shipping area in case of self-collection) and verifying that the order
was shipped complete and that the product meets delivery terms.
. D3.14 Install Product When necessary, the process of preparing, testing and installing the
completion.
. D3.15 Invoice A signal is sent to the financial organization that the order has been
shipped and that the billing process should begin and payment be
received or be closed out if payment has already been received.
Payment is received from the customer within the payment terms of
the invoice.
. D3.2 Negotiate & Receive Contract The process of negotiating order details with customer (e.g., price,
schedule, product performance) and finalizing the contract.
. D3.3 Enter Order, Commit Resources & The process of entering/finalizing the customers order, approving
Launch Program the planned resources (e.g., engineering, manufacturing, etc.) and
officially launching the program.
. D3.4 Schedule Installation The process of evaluating the design and build schedules relative to
customer requested installation date to determine installation
schedule.
. D3.5 Build Loads Transportation loads are selected and efficient loads are built.
. D3.6 Route Shipments The process of consolidating and routing shipments by mode, lane,
and location.
. D3.7 Select Carriers and Rate Shipments Specific carriers are selected by lowest cost per route and
shipments are rated and tendered.
. D3.8 Receive Product from Source or Make The activities such as receiving product, verifying, recording product
receipt, determining put-away location, putting away and recording
location that a company performs at its own warehouses. May
include quality inspection.
. D3.9 Pick Product The series of activities including retrieving orders to pick, verifying
inventory availability, building the pick wave, picking the product,
recording the pick and delivering product to packing area in

. Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales Outstanding - Days
Payable Outstanding]
The time it takes for an investment made to flow back into a

company after it has been spent for raw materials. For services,
this represents the time from the point where a company pays for
the resources consumed in the performance of a service to the time
that the company received payment from the customer for those
services.

. Deliver Cycle Time The average time associated with Deliver Processes
. Downside Deliver Adaptability The reduction in delivered quantities sustainable at 30 days prior to
. Finished Goods Inventory Days of Supply Plant finished goods inventory days of supply are calculated as
gross plant finished goods inventory ÷ (value of transfers/365 days).
. Order Fulfillment Cycle Time The average actual cycle time consistently achieved to fulfill
customer orders.
. Order Management Costs The aggregation of the following cost elements (contained in this
glossary):
. Perfect Order Fulfillment The percentage of orders meeting delivery performance with
complete and accurate documentation and no delivery damage.
Components include all items and quantities on-time using the
customer’s definition of on-time, and documentation - packing slips,
bills of lading, invoices, etc.
. Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets measures the return an
organization receives on its invested capital in supply chain fixed
assets. This includes the fixed assets used in Plan, Source, Make,
Deliver, and Return. The levels of aggregation can be at any
element associated with a supply chain asset.
. Return on Working Capital Return on working capital is a measurement which assesses the
magnitude of investment relative to a company’s working capital
position verses the revenue generated from a supply chain.
Components include accounts receivable, accounts payable,
inventory, supply chain revenue, cost of goods sold and supply
chain management costs.
. Upside Deliver Adaptability The maximum sustainable percentage increase in quantities
delivered that can be achieved in 30 days with the assumption of
unconstrained finished good availability.
. Upside Deliver Flexibility The number of days required to achieve an unplanned sustainable
20% increase in quantity delivered with the assumption of no other
constraints.

D3.1 Obtain and Respond to RFP/RFQ
The process of receiving a request for proposal or request for quote, evaluating the request
(estimating the schedule, developing costs estimates, establishing price), and responding to the
potential customer.

. Cost to Obtain & Respond to Request for The sum of the costs associated with obtaining and responding to
Quote (RFQ) / Request for Proposal (RFP) Request for Quote (RFQ) / Request for Proposal (RFP).
. Obtain & Respond to Request for Quote The average time associated with obtaining and responding to
(RFQ) / Request for Proposal (RFP) Cycle RFQs/RFPs
Time
Best Practices:
. Partnership with Outside Design Firms to None identified
Provide Skills and Capacity, as Needed
. Use of CAD/CAE Applications to Simulate None identified
Design, Cost and Manufacturing Process
Inputs:
. RFQ/RFP from Source: Customer Request for Quote - A document used to solicit vendor responses
when a product has been selected and price quotations are needed
from several vendors. Request for Proposal - A document used to
solicit vendor responses when the functional requirements and
features are known but no specific product is in mind.
Outputs:
. Completed Proposal to Customer A document submitted in response to the a request for proposal
from a customer with all the terms and conditions of sale of a
product or service
. Completed Proposal to D3.2 Negotiate & A document submitted in response to the a request for proposal
Receive Contract from a customer with all the terms and conditions of sale of a
product or service
. Contract Status to ED.3 Manage Deliver Customer profile, which include address data, credit and purchase
Information histories, customer preferences including shipping, status, and
. Credit History to ED.3 Manage Deliver Report that portrays a potential customer’s payment history and
Information debt, indicating the ability to pay in a timely manner in the future.
. Customer Address Data to ED.3 Manage Customer profile, which include address data, credit and purchase
Deliver Information histories, customer preferences including shipping, status, and
. Purchase History to ED.3 Manage Deliver The amount of purchased products for a certain time in history per
Information specific intervals
. Shipping Preferences to ED.3 Manage Customer preferences including shipping, status, and delivery
Deliver Information requirements, etc., and customer profile, which includes address

D3.2 Negotiate & Receive Contract
The process of negotiating order details with customer (e.g., price, schedule, product
performance) and finalizing the contract. Optionally accept payment.

. Cost to Negotiate & Receive Contract The sum of the costs associated with negotiating and receiving
contracts
. Negotiate & Receive Contract Cycle Time The average time associated with negotiating and receiving a
contract
Inputs:
. Completed Proposal from D3.1 Obtain and A document submitted in response to the a request for proposal
Respond to RFP/RFQ from a customer with all the terms and conditions of sale of a
product or service
Outputs:
. Approved Contract to D3.3 Enter Order, Acceptance of an agreement between two or more competent
Commit Resources & Launch Program persons or companies to perform or not to perform specific acts or
services or to deliver merchandise. A contract may be oral or
written.
. Customer Order to ED.2 Assess Delivery An order from a customer for a particular product or a number of
Performance products. It is often referred to as an actual demand to distinguish it
Class to ED.6 Manage Transportation carrier and cost of shipment
. Location of Customers to ED.7 Manage Customer profile, which includes address and location data, credit
Product Life Cycle and purchase histories, customer preferences including shipping,
. Optional Payment to Company Payment at the time of order, maybe partial or in full.

D3.3 Enter Order, Commit Resources & Launch Program
The process of entering/finalizing the customers order, approving the planned resources (e.g.,
engineering, manufacturing, etc.) and officially launching the program.


. Cost to Enter Order, Commit Resources & The sum of the costs associated with entering the order, committing
Launch Program resources & launching a program.
Date commit date
. Enter Order, Commit Resources & Launch The average time associated with entering an order, committing
Program Cycle Time resources and program launch
Inputs:
. Approved Contract from D3.2 Negotiate & Acceptance of an agreement between two or more competent
Receive Contract persons or companies to perform or not to perform specific acts or
services or to deliver merchandise. A contract may be oral or
written.

Outputs:
. Actual Sales History to P5.1 Assess, and Amount of past sales spanning any specified period of time (weeks,
Aggregate Return Requirements months, years, etc.) and expressed in any specified increments (per
day, week, month, year, etc.)
. Customer Order to D3.4 Schedule An order from a customer for a particular product or a number of
Installation products. It is often referred to as an actual demand to distinguish it
. Order Backlog to P4.1 Identify, Prioritize, and Orders that have been received and entered into the order
Aggregate Delivery Requirements processing system and are in a queue waiting to be processed and
shipped.

. Order Information to M3.1 Finalize The function encompasses receiving and entering all data
Production Engineering necessary on orders, so the order can be finalized and entered into
the order system.
Aggregate Product Requirements specific order.
Aggregate Production Requirements specific order.
. Resource Availability to P4.2 Identify, The capability of a system or resource to produce a quantity of
Assess, and Aggregate Delivery Resources output in a particular time period, or the available resources at a
and Capabilities point in time able to generate an output.

D3.4 Schedule Installation
The process of evaluating the design and build schedules relative to customer requested
installation date to determine installation schedule.

. Cost to Schedule Installation The sum of the costs associated with scheduling product
installation.
. Schedule Installation Cycle Time The average time associated with scheduling the installation of
product
Inputs:
. Customer Order from D3.3 Enter Order, An order from a customer for a particular product or a number of
Commit Resources & Launch Program products. It is often referred to as an actual demand to distinguish it
Outputs:
. Scheduled Installation to Customer The process of evaluating the design and build schedules relative to
schedule.
. Scheduled Installation to D3.5 Build Loads The process of evaluating the design and build schedules relative to
schedule.

D3.5 Build Loads
Transportation loads are selected and efficient loads are built.

. Build Loads Cycle Time The average time associated with building shipment loads.
. Cost to Build Loads The sum of the costs associated with building transportation loads.
Best Practices:
. Build Load in Stop Sequence Integrated inbound/outbound transportation planning (i.e. 1st truck
. Consolidation of Inbound and Outbound Integrated inbound/outbound transportation planning
Requirements
. CRP & VMI Loads Optimized for Utilization Integration with CRP/VMI vendor systems
Inputs:
. Scheduled Installation from D3.4 Schedule The process of evaluating the design and build schedules relative to
Installation customer requested installation date to determine installation
schedule.
Outputs:
. Load Information to D3.6 Route Shipments Information relative to a load that is built and shipped, i.e. customer,
. Scheduled Deliveries to Plan The required or agreed time or rate of delivery of goods or services

The process of consolidating and routing shipments by mode, lane, and location.

. Cost to Route Shipments The sum of the costs associated with routing shipments.
. Route Shipments Cycle Time The average time associated with routing shipments
Best Practices:
. Carrier/Route Optimization Based on Route scheduling, carrier selection, and rating
. Consolidation of Carriers Transportation modeling and rate analysis
. CRP/VMI Integrated Load Building; Routing & Scheduling with Advanced Ship
Notice (ASN)
Release to Billing
Inputs:
. Load Information from D3.5 Build Loads Information relative to a load that is built and shipped, i.e. customer,
. Rated Carrier Data from Source: Company Contract rates and tariffs from carriers by commodity, lane, mode,
etc. for shipments.
. Routing Guide from Source: Company Information used to select modes, transportation lanes, available
carriers, etc. Listing or routes, carriers & rates.
Outputs:
. Workflow to D3.7 Select Carriers and Rate Shipments

D3.7 Select Carriers and Rate Shipments

. Cost to Select Carriers & Rate Shipments The sum of the costs associated with selecting carriers and rating
shipments.
. Select Carriers & Rate Shipments Cycle The average time associated with selecting carriers and rating
Time shipments
Best Practices:
Release to Billing
Inputs:
. Workflow from D3.6 Route Shipments
Outputs:


. Cost to Receive Product from Source or The sum of the costs associated with transferring product from
Make source or make activities.
. Receive Product from Source or Make Cycle The average time associated with receiving a transfer of product to
Time deliver processes from source or make
Best Practices:
. Automatic Identification Bar Coding & Radio Frequency Communications
. Download P.O. & Advanced Ship Notices for Integration with Procurement Systems & Electronic Commerce with
. Dynamic Location Assignment Including Lot Real time inventory control, stock locator, and rules based put away
Control, Zoned Put Away, Quality Assurance, logic
ABC Frequency of Access
Outputs:

D3.9 Pick Product
The series of activities including retrieving orders to pick, verifying inventory availability, building
the pick wave, picking the product, recording the pick and delivering product to packing area in

. Cost to Pick Product The sum of the costs associated with picking product.
. Pick Product Cycle Time The average time associated with product pick
Best Practices:
. Dynamic Simulation of Picking Rules based picking logic and simulation
and Time
Inputs:
. Workflow from D3.7 Select Carriers and Rate Shipments
. Workflow from D3.8 Receive Product from Source or Make
. Inventory Availability from M3.3 Issue Those stocks or items on hand used to support production (raw
Outputs:
. Workflow to D3.10 Pack Product

D3.10 Pack Product
barcodes etc. ande delivering the products to the shipping area for loading.

. Cost to Pack Product The sum of the costs associated with product packaging.
. Pack Product Cycle Time The average time associated with packing a product for shipment.
Inputs:
. Workflow from D3.9 Pick Product
Outputs:
. Workflow to D3.11 Load Product & Generate Ship Documents

D3.11 Load Product & Generate Ship Documents
The series of tasks including placing product onto vehicles, generating the documentation
necessary to meet internal, customer, carrier and government needs.

. Cost to Load Product & Generate Shipping The sum of the costs associated with loading product & generating
. Load Product & Generate Shipping The average time associated with product loading and the
Documentation Cycle Time generation of shipping documentation
Best Practices:
Container Labeling
. Electronic Generation and Download of None identified

Shipping Documents
. Full Visibility of Credit History by Shipping None identified
Personnel
. Integrated Credit Checking Interface to supplier’s shipping system to financials
Inputs:
. Workflow from D3.10 Pack Product
Documentation from ED.8 Manage government which must be met before allowing the shipping or
Import/Export Requirements delivery of a product across national boundaries.
. Shipping Parameters and Documentation Shipping parameters, such as weight, size, cube and route decide
from ED.6 Manage Transportation carrier and cost. Legal documentation of the contents of a
shipment (e.g. way bill, bill of lading, export papers, etc.) are
required.
Outputs:
. Workflow to D3.12 Ship Product
. Shipping Documents to Carrier Legal documentation of the contents of a shipment (e.g. way bill, bill
. Shipping History to ED.8 Manage The transaction history of the physical shipment of an item to
Import/Export Requirements another internal location or to a customer.

D3.12 Ship Product
The process of shipping the product to the customer site


. Cost to Ship Product The sum of the costs associated with shipping products.
Date commit date
. Ship Product Cycle Time The average time associated with shipping product
Best Practices:
Inputs:
. Workflow from D3.11 Load Product & Generate Ship Documents
Outputs:
. Workflow to D3.13 Receive & Verify Product by Customer

The process of receiving the shipment (either at customer site or at shipping area in case of self-
collection) and verifying that the order was shipped complete and that the product meets delivery
terms.


. Cost to Receive & Verify Product by The sum of the costs associated with receipt and verification at
Customer customer site.
Date commit date
. Receive & Verify Product by Customer The average time associated with receiving and verifying an order
Cycle Time at the customer site
Best Practices:
Container Labeling
Inputs:
. Workflow from D3.12 Ship Product
Outputs:
. Product to D3.14 Install Product The end object of a transformation process that includes physical


. Cost to Install Product The sum of the costs associated with product installation.
. Install Product Cycle Time The average time associated with product installation
It initiates event:
. Product Installed for D3.15 Invoice
Inputs:
. Product from D3.13 Receive & Verify Product The end object of a transformation process that includes physical
by Customer objects, information or services.
Outputs:
. Workflow to D3.15 Invoice
. Installed Product to Customer The process of preparing, testing and installing the product at the
integration.

D3.15 Invoice

. % of Faultless Invoices The number of invoices processed without issues and or errors
divided by the total number of invoices. Examples of potential
invoice defects are: Change from customer purchase order without
proper customer involvement Wrong Customer Information (e.g.,
name, address, telephone number) Wrong Product Information
(e.g., part number, product description) Wrong Price (e.g.,
discounts not applied) Wrong Quantity or Wrong Terms or Wrong
Date
. Cost to Invoice The sum of the costs associated with invoicing.

. Invoice Cycle Time The average time associated with the the generation and issuance
of an invoice
Best Practices:
. Electronic Transfer of Shipment Information None identified
to Finance
. Provide Visibility to and Quickly Escalate Integrated accounts receivables
. Utilize EDI and EFT for Payment to Speed EDI transaction and network services
Processing Costs
It is initiated by event:
. Product Installed from D3.14 Install Product
Inputs:
. Workflow from D3.14 Install Product
Outputs:
. Payment to Company Receipt of payment for goods and services per contract or purchase
order.

D4 Deliver Retail Product
Deliver Retail Products are the processes used to acquire, merchandise, and sell finished goods
at a retail store. A retail store is a physical location that sells products (and services) direct to the
consumer using a point of sale process (manual or automated) to collect payment. Merchandising
at a store level is the stocking and restocking of products in designated storage locations to
generate sales in a retail store.
The Category D4 includes seven Level 3 Elements:

D4.1 Generate Stocking Schedule The process of scheduling resources to support item-stocking
requirements.
D4.2 Receive Product at Store The activities such as receiving product, verifying, recording product
that a company performs at its own stores. May include quality inspection.
D4.3 Pick Product from Backroom The process of retrieving restocking orders to pick, determining inventory
availability, building a pick wave, picking item and quantity from a
designated backroom warehouse location, recording the resulting inventory
transaction, and delivering the product to point of stock
D4.4 Stock Shelf For restocks, the tasks associated with identifying the item location,
stocking the shelf according to merchandise plans, and recording the
appropriate inventory transaction. For promotional items and stock
repositioning the tasks associated with shelf and point of sale preparation,
stock placement, and end of sale activities.
D4.5 Fill Shopping Cart Typical set of tasks associated with product selection, storage and
movement through to checkout.
D4.6 Checkout The processes and tasks associated with product checkout including
scanning, method of payment, credit application and approval, service
agreement, order confirmation, and/or invoice or receipt.
D4.7 Deliver and/or Install The process of preparing and installing the product at the customer site.

Outstanding]

orders.
asset.

good availability.

D4.1 Generate Stocking Schedule
The process of scheduling resources to support item-stocking requirements.

Cost to Generate Stocking Schedule The sum of the costs associated with generating a stocking schedule.
Generate Stocking Schedule Cycle Time The average time associated with the generating a stocking schedule
Best Practices:
. Automated Pick List System generated pick-lists based on picking / batching rules.
. Labor Scheduling that Matches Product Workforce management solution with flexible rules.
Flow
. Push Product on Trailer Arrival System prioritization of items coming off trucks vs. picked from back
room.
It initiates event:
. Item Stocking Resources Scheduled for D4.2 Receive Product at Store
Inputs:
. Daily Replenishment Requirements from Resources needed to meet Item stocking schedule requirement.
. On-demand Replenishment Requirements Requirements for the triggering of material movement to a work
from Source: Company center only when that work center is ready to begin the next job.
. Resource Availability from Source: Company The capability of a system or resource to produce a quantity of
output in a particular time period, or the available resources at a
point in time able to generate an output.
. Shipping Schedules (internal or 3PL) from Scheduling of direct deliveries of material to a specified location on
Source: Company a plant floor near the operation where it is to be used.
. Stocking Requirements from P4.4 Establish The activities and techniques of determining the desired levels of
Delivery Plans items, whether raw materials, work in process, or finished products.
Demand for inventory may be dependant or independent. Inventory
functions are anticipation, hedge, cycle (lot size), fluctuation (safety,
buffer or reserve), transportation (pipeline), and service parts.
. Store Allocation Instructions from P4.1 Identify, Prioritize, and Aggregate Delivery Requirements
. Vendor/DC inventory availability from Vendor/DC inventory available to a customer to supply demands.
Source: Company (Where the customer has access to the supplier’s inventory and the
supplier has access to the customer’s requirements and inventory
or vendor managed inventory).
Outputs:
. Workflow to D4.2 Receive Product at Store
. Stocking Schedule to D4.4 Stock Shelf A timetable for the planned movement of material from a bulk
storage area to an order pick storage area.

D4.2 Receive Product at Store
location, putting away and recording location that a company performs at its own stores. May
include quality inspection.

. Cost to Receive Product at Store The sum of the costs associated with receiving product at the store.
. Receive Product at Store Cycle Time The average time associated with receiving product at the customer
store
Best Practices:
. Automated Pick List System generated pick-lists based on picking / batching rules.
. Labor Scheduling that Matches Product Workforce management solution with flexible rules.
Flow
. Push Product on Trailer Arrival System prioritization of items coming off trucks vs. picked from back
room.
. Item Stocking Resources Scheduled from D4.1 Generate Stocking Schedule
Inputs:
. Workflow from D4.1 Generate Stocking Schedule
. Item Stocking Requirements from P4.1 The activities and techniques of determining the desired levels of
Identify, Prioritize, and Aggregate Delivery items, whether raw materials, work in process, or finished products.
Requirements Demand for inventory maybe dependant or independent. Inventory
functions are anticipation, hedge, cycle (lot size), fluctuation (safety,
buffer or reserve), transportation (pipeline), an service parts.

Product Deliveries
Outputs:
from Backroom materials and work in process items), supporting activities
. Item Pick Sheet for Stocking Schedule to A document that lists the material to be picked to meet the schedule
D4.3 Pick Product from Backroom for the planned movement of material from a bulk storage area to
an order pick storage area.

D4.3 Pick Product from Backroom
The process of retrieving restocking orders to pick, determining inventory availability, building a
pick wave, picking item and quantity from a designated backroom warehouse location, recording
the resulting inventory transaction, and delivering the product to point of stock

. Cost to Pick Product from Backroom The sum of the costs associated with picking product from
backroom.
. Pick Product from Backroom Cycle Time The average time associated with product pick from backroom
Best Practices:
. Automated Directed Picking A pick list displayed on a handheld device that directs picks and
relieves inventory from backroom locations
. Automated Replenishment of Back Stock None identified
Based on Minimum Stocking Levels
. Defined Stocking Levels and Criteria None identified
. Staging Based on In-store Zones Items are staged for re-stocking based on zones within the store.
This minimizes restocking effort.
Inputs:
. Workflow from Source: Company
. Inventory Availability from D4.2 Receive Those stocks or items on hand used to support production (raw
Product at Store materials and work in process items), supporting activities
. Inventory in Stock from Source: Company Stored products or service parts ready for sale, as distinguished
from stores, which are usually components or raw materials.
. Item Pick Sheet for Stocking Schedule from A document that lists the material to be picked to meet the schedule
D4.2 Receive Product at Store for the planned movement of material from a bulk storage area to
. On-Order/Backorder from Source: Company An unfilled customer order or commitment. A backorder is an

immediate (or past due) demand against an item whose inventory is
insufficient to satisfy the demand.
. Replenishment Quantities from Source: In a fixed-reorder quantity system of inventory control, the fixed
Company quantity that should be ordered each time the available stock (on-
hand plus on-order) falls to or below the reorder point.
Outputs:
. Assorted by Shelf Order to Company The function of physically separating a homogeneous subgroup
from a heterogeneous population of items
. Loaded Retail Cart or Pallet to D4.4 Stock Customer selected retail finished goods transferred to the point of
Shelf sale.

D4.4 Stock Shelf
For restocks, the tasks associated with identifying the item location, stocking the shelf according to
merchandise plans, and recording the appropriate inventory transaction. For promotional items
and stock repositioning the tasks associated with shelf and point of sale preparation, stock
placement, and end of sale activities.

. Cost to Stock Shelf The sum of the costs associated with stocking shelves.
. In-Stock % Percentage of materials, components, or finished goods that are
there when needed.
. Stock Shelf Cycle Time The average time associate with stocking shelves
Best Practices:
. Item/Shelf Scanning Upon Put-A-Way Scan store shelves / bar codes to confirm put-a-way.
. Off Peak Stocking The majority of stocking is completed with minimal impact to or
visibility from the customer.
. Proof of Performance (Promotion Scan store shelves / bar codes to confirm put-a-way. Scan using
Management) handheld and match with ad.
. Scan Displays for Promotion Conformance None identified
. Stocking is Completed in Zones Each area of the store has its own stocking plan and items are
routed specifically to that area.
Inputs:
. Loaded Retail Cart or Pallet from D4.3 Pick Customer selected retail finished goods transferred to the point of
Product from Backroom sale.
. Loaded Retail Cart or Pallet from S1.4 Customer selected retail finished goods transferred to the point of
Transfer Product sale.
. Plan-o-gram Data from Source: Company Data required to develop and build a Plan-O-Gram display to help
minimize setup time by showing specific placement of all items, by
product number, on the display.
. Stocking Schedule from D4.1 Generate A timetable for the planned movement of material from a bulk
Stocking Schedule storage area to an order pick storage area.
. Vendor Merchandising / Co-op advertising The plan for a promotional product offering and how it is
agreements from Source: Company communicated to the customer and includes public relations,
advertising, sales promotions, and other tools to persuade
customers to purchase the product offering.
Outputs:
. Full Shelf Locations to D4.5 Fill Shopping Determination of the best retail locations for implementation of full
Cart shelf equipment.
. Store Shelf Inventory Counts to P4.1 Identify, The determination of inventory quantity by actual count. Physical
Prioritize, and Aggregate Delivery inventories can be taken on a continuous, periodic or annual basis.
Requirements

D4.5 Fill Shopping Cart
Typical set of tasks associated with product selection, storage and movement through to checkout.

. % Item Location Accuracy
. Cost to Fill Shopping Cart The sum of the costs associated with filling a shopping cart.
. Fill Shopping Cart Cycle Time The average time associated with “filling the shopping cart“
Best Practices:
. Items Are Relieved from Inventory When RFID, smart cart or customer self-service reduces system inventory
Item is Removed from Shelf upon item pick.
. Loyalty Card Data Use for comparison to previous sales activity/track new consumers,
etc.
. Measured and Compared with Same Activity DSS or portal tool that shows previous period performance and
Previous Period comparison for store management (whether it is a year ago, period
ago, etc.).
. Multiple Locations Throughout Store Planned and tracked via a plan-o-gram system;
Location specific product labeling.
. Substitution Trained staff or automated systems (Internet) that recommend up-
sell, cross-sell, and/or substitution
See Up and cross selling

. Up and Cross Selling and/or Substitution Trained staff or automated systems (Internet) that recommend up-
sell, cross-sell, and/or substitution.
Inputs:
. Customer Data (preference) from Source: Customer profile, which includes history, customer preferences,
Company status, and delivery requirements, etc.
. Full Shelf Locations from D4.4 Stock Shelf Determination of the best retail locations for implementation of full
shelf equipment.
. Lost or Dropped Shopping Carts from On-line orders that are missing due to internet, software, or
Source: Company hardware malfunctions.
. Merchandising Plan (Supplier) from Source: The merchandising plan includes the current market position,
Company opportunity and issue analysis, merchandising objectives and
strategies, action plans, programs, projects, budgets, and pro forma
profit and loss statement and management controls.
. Product Data (linked/related SKU’s) from The properties and characteristics of a product (e.g. the part
Source: Company number and a text description of the product) and the relationships
to other items in the product family and linked / related SKU’s.
. Promotional Plan from Source: Company The plan for a promotional product offering and how it is
communicated to the customer and includes public relations,
customers to purchase the product offering
Outputs:
. Full Cart Ready for Checkout to D4.6 Customer selected goods transferred to the point of sale.
Checkout

D4.6 Checkout
The processes and tasks associated with product checkout including scanning, method of
payment, credit application and approval, service agreement, order confirmation, and/or invoice or
receipt.

. Checkout Cycle Time The average time required for customer checkout.
. Cost to Checkout The sum of the costs associated with product checkout.
Best Practices:
. Automatic Customer Payment RFID, smart cart or customer self-service charges goods to card
upon store departure.
. Customer Profile Drive Recognition Upon None identified
Checkout
. Notification of Existing/Future Event or None identified
Promotions
It initiates event:
. Checkout Completed for D4.7 Deliver and/or Install
Inputs:
. Customer Profile/Data from Source: Customer profile, which includes history, customer preferences,
Company status, and delivery requirements, etc.
. Full Cart Ready for Checkout from D4.5 Fill Customer selected goods transferred to the point of sale.
Shopping Cart
. Promotion Event Calendar from Source: Time phased promotion / event tasks where the product offering is
Company communicated to the customer and includes public relations,
customers to purchase the product offering during the year.
Outputs:
. Workflow to D4.7 Deliver and/or Install
. Customer Loyalty / Recurring Visits to Input to customer profile, frequency of visits, recurring, time frame,
Company what purchased, numbers and rings. Measure of customer
satisfaction with products and service.
. Full Cart (Empty Cart) to Company Completion of customer checkout, sale of the selected goods, cart
transitions from full to empty.
. Loyalty Customer Profile Changes to More units, higher average ring, etc.
Company
. Point of Sale Data (Daily) to P4.1 Identify, The relief of inventory and computation of sales data at the time
Prioritize, and Aggregate Delivery and place of the sales, generally (may be manual) through the use
Requirements of bar-coding, or magnetic media and equipment.
. Satisfied Customer to Company Customers who are satisfied with the product or service delivered
by the suppliers, including the aspects such as time, quality, cost,
etc.

D4.7 Deliver and/or Install
The process of preparing and installing the product at the customer site. The product is fully
functional upon completion.

. Cost to Deliver and/or Install The sum of the costs associated with deliver and/or install
. Deliver and/or Install Cycle Time The average time required to deliver and install product.
Best Practices:
. Goals / Performance Plans None identified
. Measurement, Monitoring and Adjustment of None identified
Service or Product Installation
. Provide Product or Service Training to None identified
Employees or FAQ’s Online
. Stage Product or Service Adoption None identified
. Checkout Completed from D4.6 Checkout
Inputs:
. Workflow from D4.6 Checkout
Outputs:
. Consistently High Adoption Rates to Indication of product and service quality, i.e. customer satisfaction.
Company
. High Customer Services Satisfaction Levels Indication of product and service quality.
to Company
. Low Rates of Failure to Company Indication of quality in workmanship and design.
. Successful Installation / Live System to The installation of product is completed at the customer site, and
Company the product is fully functional.

ED Enable DELIVER

The Category ED includes eight Level 3 Elements:

ED.1 Manage Deliver Business Rules The process of defining and maintaining rules which affect the acceptance
of an order, based on quantity, method of delivery, credit, customer
experience, etc. (Include distribution channel rules)
ED.2 Assess Delivery Performance The process of defining the requirement and monitoring the performance of
the delivery of product to a customer. When physical delivery is out-
sourced the performance is passed on to source for contract
administration.
ED.3 Manage Deliver Information The process of collecting, maintaining, and communicating information to
support deliver planning and execution processes. The information to be
managed includes: order data - (customer preference, history, status, and
delivery requirements, etc.), warehouse data, transportation data, and
deliver data.
ED.4 Manage Finished Goods Inventories The process of establishing and maintaining finished goods, inventory
limits or levels, replenishment models, ownership, product mix, stocking
locations.
ED.5 Manage Deliver Capital Assets Acquisition, maintenance, and disposition of order management,
warehouse, and transportation capital assets. Determine material handling
(inventory) pick pack & ship methods (inventory), and equipment.
ED.6 Manage Transportation The process of 1) defining and maintaining the information which
characterizes product, containerization, vehicle, route, terminals,
regulations, rates/tariffs and backhaul opportunity (Characterization include
information necessary to support maintenance of internal Outbound
Transportation equipment - CAPITAL ASSETS) and 2) the management of
transporters.
ED.7 Manage Product Life Cycle The process of defining and maintaining the distribution channel/ network
for a specific product line (no capital asset or transportation management).
ED.8 Manage Import/Export Requirements The process of recording and maintaining regulations and rates, which
constrain the ordering and delivering of product. Determine customs
requirements, establish letters of credit terms and conditions, etc.

ED.1 Manage Deliver Business Rules
The process of defining and maintaining rules which affect the acceptance of an order, based on
quantity, method of delivery, credit, customer experience, etc. (Include distribution channel rules)

. Cost to Manage Deliver Business Rules The sum of the Costs to Manage Deliver Business Rules
. Manage Deliver Business Rules Cycle Time The average time associated with managing deliver business rules
Best Practices:
. Integrated Edit at Order Entry Time Customer Master Record
. On-Line Rule Base None identified
Inputs:
. Configuration Rules from Source: Company The rules for the management of product configuration, which
includes the management of critical sub processes needed to
. Management Process Reports from ED.2 Reports which provide management with the process information
Assess Delivery Performance required to evaluate prescribed activities to ensure that the stated
objectives of a project, manufactured good, or service are achieved.
. Planning Decision Policies from Source: Plan Any company policies that affect how a planning process is defined,
approved, and performed.
. Supply-Chain Performance Metrics from Standard measures that indicate how well a supply chain performs
ED.2 Assess Delivery Performance within certain categories of performance known as Performance
Attributes, e.g. delivery reliability, flexibility and responsiveness,
cost, and asset management.
Outputs:
. Configuration Rules to D2.2 Receive, The rules for the management of product configuration, which
Configure, Enter and Validate Order includes the management of critical sub processes needed to
. Order Rules to ED.5 Manage Deliver Capital Rules for the function that encompasses receiving, entering, and
Assets promising orders from customers, distribution centers, and
. Order Rules to ED.4 Manage Finished Rules for the function that encompasses receiving, entering, and
Goods Inventories promising orders from customers, distribution centers, and
. Order Rules to D2.2 Receive, Configure, Rules for the function that encompasses receiving, entering, and
Enter and Validate Order promising orders from customers, distribution centers, and
. Order Rules to D1.2 Receive, Enter & Rules for the function that encompasses receiving, entering, and
Validate Order promising orders from customers, distribution centers, and
. Order Rules to D3.2 Negotiate & Receive Rules for the function that encompasses receiving, entering, and
Contract promising orders from customers, distribution centers, and

ED.2 Assess Delivery Performance
The process of defining the requirement and monitoring the performance of the delivery of product
to a customer. When physical delivery is out-sourced the performance is passed on to source for
contract administration.

. Assess Delivery Performance Cycle Time The average time associated with assessing the performance of
deliver processes.
. Cost to Assess Delivery Performance The sum of the costs associated with assessing delivery
performance.
Best Practices:
. Customer Initiated Package Tracking WEB based Shared systems
. Real Time Package Tracking Tracking and tracing
Inputs:
. Benchmark Data from Source: Company A set of measurements (or metrics) that is used to establish goals
for improvements in processes, functions, products, and so on
Benchmark measures are often derived from other firms that
display “best in class“ achievement
. Carrier Contracts (Customer) from Source: Contracts that customers have with specific freight carriers through
Source which suppliers have to work for the delivery of products. Customer
manages carrier selection, shipment of purchased product, and
payment of carrier.
. Customer Order from D1.2 Receive, Enter & An order from a customer for a particular product or a number of
Validate Order products. It is often referred to as an actual demand to distinguish it
. Customer Order from D2.3 Reserve An order from a customer for a particular product or a number of
Resources & Determine Delivery Date products. It is often referred to as an actual demand to distinguish it
. Customer Order from D3.2 Negotiate & An order from a customer for a particular product or a number of
Receive Contract products. It is often referred to as an actual demand to distinguish it
. Delivery Performance from ED.5 Manage The process of measuring actual supplier performance against
Deliver Capital Assets internal and/or external standards, providing feedback to achieve
Transportation internal and/or external standards, providing feedback to achieve

Finished Goods Inventories internal and/or external standards, providing feedback to achieve
Outputs:
. Customer Service Requirements to ED.6 Supply chain requirements related to the customer’s needs,
Manage Transportation including service requirements, sales forecasts and actual
orders/backorders.
. Customer Service Requirements to Plan Supply chain requirements related to the customer’s needs,
including service requirements, sales forecasts and actual
orders/backorders.
. Management Process Reports to ED.1 Reports which provide management with the process information
Manage Deliver Business Rules required to evaluate prescribed activities to ensure that the stated
objectives of a project, manufactured good, or service are achieved.
. Supply-Chain Performance Metrics to EP.2 Standard measures that indicate how well a supply chain performs
Manage Performance of Supply Chain within certain categories of performance known as Performance
. Supply-Chain Performance Metrics to ED.1 Standard measures that indicate how well a supply chain performs
Manage Deliver Business Rules within certain categories of performance known as Performance
. Supply-Chain Performance Metrics to ED.5 Standard measures that indicate how well a supply chain performs
Manage Deliver Capital Assets within certain categories of performance known as Performance

ED.3 Manage Deliver Information
The process of collecting, maintaining, and communicating information to support deliver planning
and execution processes. The information to be managed includes: order data - (customer
preference, history, status, and delivery requirements, etc.), warehouse data, transportation data,
and deliver data.

. Cost to Manage Deliver Information The sum of the Cost to Manage Deliver Information
. Manage Deliver Information Cycle Time The average time associated with managing deliver information
Best Practices:
. Comprehensive History of Customer None identified
Interactions Including Order History, Claims,
Problems, Etc.
. Customer Access to Online Tracking of Internet-enabled package/shipment tracking
Order Status and Shipping Information
. Customer Service Data Validation Including None identified
Geo-Coding
. Online Real-Time Customer Entry and Edit On-line Customer Service Module CRM (Customer resource
Management) software is getting a big push in the E-Commerce/E-
Business areas and generally provides a means to fulfill this
requirement
. Provide Single Source of Information on the Secure E-Commerce Server and integrated Order Management
Customer (Single Group / Owner System (OMS) Warehouse Management System (WMS) and
Responsible for Accuracy / Quality of Transportation Management System (TMS)
Customer Data)
Inputs:
. Booked Order from D2.2 Receive, Configure, The process of accepting and translating what a customer wants
Enter and Validate Order into terms used by the manufacturer or distributor. The commitment
. Contract Status from D3.1 Obtain and Customer profile, which include address data, credit and purchase
Respond to RFP/RFQ histories, customer preferences including shipping, status, and
. Contract Status from D2.2 Receive, Customer profile, which include address data, credit and purchase
Configure, Enter and Validate Order histories, customer preferences including shipping, status, and
. Contract Status from D1.2 Receive, Enter & Customer profile, which include address data, credit and purchase
Validate Order histories, customer preferences including shipping, status, and
. Credit History from D3.1 Obtain and Report that portrays a potential customer’s payment history and
Respond to RFP/RFQ debt, indicating the ability to pay in a timely manner in the future.
. Credit History from D2.2 Receive, Configure, Report that portrays a potential customer’s payment history and
Enter and Validate Order debt, indicating the ability to pay in a timely manner in the future.
. Credit History from D1.2 Receive, Enter & Report that portrays a potential customer’s payment history and
Validate Order debt, indicating the ability to pay in a timely manner in the future.

. Customer Address Data from D1.2 Receive, Customer profile, which include address data, credit and purchase
Enter & Validate Order histories, customer preferences including shipping, status, and
. Customer Address Data from D3.1 Obtain Customer profile, which include address data, credit and purchase
and Respond to RFP/RFQ histories, customer preferences including shipping, status, and
. Customer Address Data from D2.2 Receive, Customer profile, which include address data, credit and purchase
Configure, Enter and Validate Order histories, customer preferences including shipping, status, and
. Purchase History from D1.2 Receive, Enter & The amount of purchased products for a certain time in history per
Validate Order specific intervals
. Purchase History from D3.1 Obtain and The amount of purchased products for a certain time in history per
Respond to RFP/RFQ specific intervals
. Purchase History from D2.2 Receive, The amount of purchased products for a certain time in history per
Configure, Enter and Validate Order specific intervals
. Shipping Preferences from D3.1 Obtain and Customer preferences including shipping, status, and delivery
Respond to RFP/RFQ requirements, etc., and customer profile, which includes address
. Shipping Preferences from D2.2 Receive, Customer preferences including shipping, status, and delivery
Configure, Enter and Validate Order requirements, etc., and customer profile, which includes address
. Shipping Preferences from D1.2 Receive, Customer preferences including shipping, status, and delivery
Enter & Validate Order requirements, etc., and customer profile, which includes address
Outputs:
. Customer Master Database/Up to Date to This database contains all information relative to customers as a
ED.4 Manage Finished Goods Inventories group or singly and is updated when ever new information is
received about a customer, includes customer profiles.

ED.4 Manage Finished Goods Inventories
The process of establishing and maintaining finished goods, inventory limits or levels,
replenishment models, ownership, product mix, stocking locations.


. Cost to Manage Finished Goods Inventories The sum of the Costs to Manage Finished Good Inventory
. Finished Goods Inventory Days of Supply Plant finished goods inventory days of supply are calculated as
gross plant finished goods inventory ÷ (value of transfers/365 days).
materials & WIP, plant FG, field FG, field samples, other) ÷ (COGS
÷ 365). Total gross value of inventory at standard cost before
reserves for excess and obsolescence. Only includes inventory on
company books, future liabilities should not be included
. Manage Finished Goods Inventories Cycle The average time associated with managing finished good
Time inventory
Best Practices:
. Periodic Review of Metrics and Strategy with Real time view of data.
. Real Time Data on Current Status Dynamic calculation of safety stock based on actual sales.
. Statistical Test Count The Statistical Test Count (STC) process is a method of validating
statistical sample of the entire inventory population. This sample is
then extrapolated across the inventory population, which provides
an indicative measure of entire inventory population. Furthermore,
with extrapolation the net and gross percentage of error is
determined.
Inputs:
. Customer Master Database/Up to Date from This database contains all information relative to customers as a
ED.3 Manage Deliver Information group or singly and is updated when ever new information is
received about a customer, includes customer profiles.
. Existing Inventory Data from D1.8 Receive Available data that characterizes and quantifies raw material, work
Product from Source or Make in process, and finished goods inventories
. Integrated Supply Chain Plan from Source: Communication of courses of action over the appropriate time-
Plan defined planning horizon and interval, representing a projected
appropriation of supply chain resource to meet supply-chain
requirements as they affect the customer.
. Inventory Rules from Source: Plan The rules that determining the desired levels of items, whether raw
materials, work in process, or finished products including order
quantities and safety stock levels.

. Product Mix and Plans from Source: Plan The proportion of individual products that make up the total
production or sales volume and plan that authorizes the factory to
manufacture a certain quantity of a specific item, or the portfolio of
products the company has to cover the targeted customer need and
the plans of how to manage that portfolio.
. Returns Data from ED.8 Manage The properties, characteristics and information relating to returns,
Import/Export Requirements including failure information, excess, obsolete, MRO, customer, etc.
. Scrap Authorization from ED.8 Manage Permission to scrap material or item outside of specifications and
Import/Export Requirements possessing characteristics that make rework impractical.
Outputs:
. Delivery Performance to ED.2 Assess The process of measuring actual supplier performance against
Delivery Performance internal and/or external standards, providing feedback to achieve
. Finish Goods Inventory Target Levels to P4.2 In a min-max inventory system, the equivalent of the maximum. The
Identify, Assess, and Aggregate Delivery target inventory is equal to the order point plus a variable order
Resources and Capabilities quantity.
. Finished Goods Inventory Location to S3.6 The physical storage location where Finished Product inventory is
Transfer Product held in stock prior to use or shipment.
. Inventory Rules to ED.5 Manage Deliver The rules that determining the desired levels of items, whether raw
Capital Assets materials, work in process, or finished products including order

ED.5 Manage Deliver Capital Assets
Acquisition, maintenance, and disposition of order management, warehouse, and transportation
capital assets. Determine material handling (inventory) pick pack & ship methods (inventory), and
equipment.

. Cost to Manage Deliver Capital Assets The sum of the Costs to Manage Deliver Capital Assets
. Manage Deliver Capital Assets Cycle Time The average time associated with managing deliver capital assets
Best Practices:
. Automated Data Entry Scanning with RFID/Bar-codes systems
. Facility Master Plan Automated Item Cubing and Weighting systems
. Measure Customer Service Advanced Shipping Notices (ASN)Parcel and Container Routing
and Rating Compliance Labeling Real time shipment tracking
. Removal of Obsolete Stock Automated Calculation of ABC Velocity Movement
. Standard Operating Procedures and None identified
Methodology
. Storage Location Zoning Automated or Optimized Slotting (Storage Location) Systems
Inputs:
. Approved Item Master from Source: Plan The “master“ record for an item. Typically, it contains identifying and
descriptive data and control values (lead times, lot sizes, etc.) and
may contain data on inventory status, requirements, planned
orders, and costs. Item records are linked by bill of material records
(or product structure records), thus defining the bill of material.
. Budgets from Source: Plan A plan that includes an estimate of future costs and revenues
related to expected activities. The budget serves as a pattern for
and a control over future operations.
. Inventory Rules from ED.4 Manage Finished The rules that determining the desired levels of items, whether raw
Goods Inventories materials, work in process, or finished products including order
. Inventory Rules from Source: Plan The rules that determining the desired levels of items, whether raw
materials, work in process, or finished products including order
. Supply-Chain Performance Metrics from Standard measures that indicate how well a supply chain performs
ED.2 Assess Delivery Performance within certain categories of performance known as Performance
Outputs:
. Warehouse Operating Constraints to Plan Warehouse constraints are those storage items that impact on the
supply chain efficiency, including material handling equipment and
personnel, equipment maintenance, building maintenance, and
security personnel.

ED.6 Manage Transportation
The process of 1) defining and maintaining the information which characterizes product,
containerization, vehicle, route, terminals, regulations, rates/tariffs and backhaul opportunity
(Characterization include information necessary to support maintenance of internal Outbound
Transportation equipment - CAPITAL ASSETS) and 2) the management of transporters.

. Cost to Manage Transportation The sum of the costs associated with managing Finished Good
Transportation
. Manage Transportation Cycle Time The average time associated with managing transportation
Best Practices:
. Appointment Scheduling for Pickup and Transportation Management System (TMS) Maintenance
Delivery of Customer Shipments Management
. Automated Documentation for International Transportation Management System (TMS) Maintenance
. Backhaul Trading Exchange Pooling
. Capture and Maintain Mode Specific Data Transportation Management System (TMS) Maintenance
Management
. Electronic Manifest and Electronic Billing Transportation Management System (TMS) Maintenance
Management
. Integrated Order Management, Warehouse Transportation Management System (TMS) Maintenance
Management, and Transportation Management
. Internet Pooling (Electronic Brokerage of Rating & Routing
Shipments)
. Manage Information Across 100% of Transportation Management System (TMS) Maintenance
. Measurement of Carrier Performance for Transportation Management System (TMS) Maintenance
On-time Delivery and Completeness Management
. Real-Time Optimized Shipment Method Transportation Management System (TMS) Maintenance
Selection (Air Parcel, Ground Parcel, LTL, Management
Requirements
. Real-Time Shipment Tracking, (via internet) Transportation Management System (TMS) Maintenance
Management
. View for Analysis for All Orders and Transportation Management System (TMS) Maintenance
Shipments the Following Data: Logistics, Management
Product, Cost, GL Charging
Inputs:
. Air, Ground....Carrier Rate Tables from Rates charged by common carriers to move goods, or freight.
Source: Company
. Contract Carrier Rates from ES.8 Manage The rates charged by a carrier that does not serve the general
Import/Export Requirements public, but provides transportation for hire for one or a limited
Class from D3.2 Negotiate & Receive carrier and cost of shipment
Contract
Class from D1.2 Receive, Enter & Validate carrier and cost of shipment
Order
Class from D2.2 Receive, Configure, Enter carrier and cost of shipment

and Validate Order
. Customer Service Requirements from ED.2 Supply chain requirements related to the customer’s needs,
Assess Delivery Performance including service requirements, sales forecasts and actual
orders/backorders.
. Projected Delivery Requirements from The company’s goal for the time to ship the product after the receipt
Source: Make of a customer’s order. The policy is sometimes stated as “our
quoted delivery time,“ or an estimate of the customer delivery
requirements of a product or service, e.g. which kind of packaging,
should the parts be shipped one by one or in bulks etc.
. Standard Practices/Rules from Source: Plan Industry established common practices, rules, and methods of
doing business.
Outputs:
. Shipping Parameters and Documentation to Shipping parameters, such as weight, size, cube and route decide
D2.11 Load Product & Generate Shipping carrier and cost. Legal documentation of the contents of a
Documentation shipment (e.g. way bill, bill of lading, export papers, etc.) are
required.
D1.11 Load Vehicle & Generate Shipping carrier and cost. Legal documentation of the contents of a
Documentation shipment (e.g. way bill, bill of lading, export papers, etc.) are
required.
D3.11 Load Product & Generate Ship carrier and cost. Legal documentation of the contents of a
Documents shipment (e.g. way bill, bill of lading, export papers, etc.) are
required.

ED.7 Manage Product Life Cycle
The process of defining and maintaining the distribution channel/ network for a specific product
line (no capital asset or transportation management).

. Cost to Manage Product Life Cycle The sum of the Cost to Manage Product Life Cycle
. Manage Product Life Cycle Time The average time associated with managing the product life cycle
Best Practices:
. Integrated Facility Management None identified
. Operations and Network Analysis None identified
. Standard Operating Procedures and None identified
Methodology
Inputs:
. Budgets from Source: Plan A plan that includes an estimate of future costs and revenues
related to expected activities. The budget serves as a pattern for
and a control over future operations.
. Government Constraints from ED.8 Manage Requirements established by a government which must be met
Import/Export Requirements before allowing the shipping, delivery of a product or manufacture of
an item.
. Location of Customers from D2.2 Receive, Customer profile, which includes address and location data, credit
Configure, Enter and Validate Order and purchase histories, customer preferences including shipping,
. Location of Customers from D3.2 Negotiate Customer profile, which includes address and location data, credit
& Receive Contract and purchase histories, customer preferences including shipping,
. Location of Customers from D1.2 Receive, Customer profile, which includes address and location data, credit
Enter & Validate Order and purchase histories, customer preferences including shipping,
. Product Mix and Plans from Source: Plan The proportion of individual products that make up the total
production or sales volume and plan that authorizes the factory to
manufacture a certain quantity of a specific item, or the portfolio of
products the company has to cover the targeted customer need and
the plans of how to manage that portfolio.
. Revised Business Assumptions from Source: An update to the expected cause and effect statements that are the
Plan base for the Revised Aggregate Forecast and Projections. These
are reviewed periodically with actual results to verify the linkage of
actual cause and effect.
Outputs:
. Enterprise Distribution Model to Plan Model of the distribution enterprise including the flows, processes,
inputs, outputs, metrics, and best business practices.

ED.8 Manage Import/Export Requirements
The process of recording and maintaining regulations and rates, which constrain the ordering and
delivering of product. Determine customs requirements, establish letters of credit terms and
conditions, etc.

. Cost to Manage Import/Export The sum of the costs associated with the management of
Requirements import/export requirements
. Customs Clearance Cycle Time The average time associated with clearing an order through
customs
. Manage Import/Export Requirements Cycle The average time associated with managing import/export
Time requirements
Best Practices:
. Ability to Track Component/Sub-Component Component/lot tracking (lot trace-ability)
Manufacturing Country of Origin
. Assessing Export/Import Requirements Multi-country Export/Import documentation compliance
during Time of Product
Development/Manufacture
. Direct Connection to Customs Clearance Electronic documentation submission via EDI and/or internet.
. Direct Transfer of Documents to Recipient Electronic documentation submission via EDI and/or internet.
and Forwarder
. Documents Generated Automatically During Electronic documentation submission via EDI and/or internet.
Shipment Preparation.
. Multi-country Export/Import documentation None identified
compliance
Inputs:
. Government Regulations from Source: Documents the implement law and requirements concerning the
Government import and export of items and the manufacture of item.
. Shipping History from D1.11 Load Vehicle & The transaction history of the physical shipment of an item to
Generate Shipping Documentation another internal location or to a customer.
. Shipping History from D3.11 Load Product & The transaction history of the physical shipment of an item to
Generate Ship Documents another internal location or to a customer.
. Shipping History from D2.11 Load Product & The transaction history of the physical shipment of an item to
Generate Shipping Documentation another internal location or to a customer.
. Tariffs and Duties from Source: Company Charges established by a government which must be met before
allowing the shipping or delivery of a product across national
boundaries.
Outputs:

. Duty Drawback Claims to Company Claims for the refund of duties as a result of a ruling by a
government agency.
. Government Constraints to Plan Requirements established by a government which must be met

before allowing the shipping, delivery of a product or manufacture of
an item.
. Government Constraints to ED.7 Manage Requirements established by a government which must be met
Product Life Cycle before allowing the shipping, delivery of a product or manufacture of
an item.
. Returns Data to ED.4 Manage Finished The properties, characteristics and information relating to returns,
Goods Inventories including failure information, excess, obsolete, MRO, customer, etc.
. Scrap Authorization to ED.4 Manage Permission to scrap material or item outside of specifications and
Finished Goods Inventories possessing characteristics that make rework impractical.

Documentation to D2.11 Load Product & government which must be met before allowing the shipping or
Generate Shipping Documentation delivery of a product across national boundaries.

Documentation to D1.11 Load Vehicle & government which must be met before allowing the shipping or
Generate Shipping Documentation delivery of a product across national boundaries.

Documentation to D3.11 Load Product & government which must be met before allowing the shipping or
Generate Ship Documents delivery of a product across national boundaries.

SR1 Source Return Defective Product
The process, initiated by the customer, of returning material deemed defective by to the last
known holder or designated return center. Process includes: customer identification that an action
is required and determining what that action should be, communicating with the last known holder,
generating return documentation, and physically returning of the excess product.
The Category SR1 includes five Level 3 Elements:

SR1.1 Identify Defective Product ConditionThe process where the customer utilizes planned policies, business rules
and product operating conditions inspection as criteria to identify and
confirm that material is excess to requirements defective.
SR1.2 Disposition Defective Product The process of the customer determining whether to return the defective
item and the appropriate source contact for a return authorization.
SR1.3 Request Defective Return The process of a customer requesting and obtaining authorization, from
Authorization last known holder or designated return center, for the return of defective
product. Additionally, the customer and last known holder or designated
return center would discuss enabling conditions such as return
replacement or credit, packaging, handling, transportation and import /
export requirements to facilitate the efficient return of the defective product.
SR1.4 Schedule Defective Product Shipment The process where the customer develops the schedule for a carrier to
pick-up for delivery of the defective product. Activities include selecting the
carrier and rates, preparing the item for transfer, preparing scheduling
documentation and managing overall scheduling administration.
SR1.5 Return Defective Product The process where the customer packages, and handles the defective
product in preparation for shipping in accord with pre-determined
conditions. The product is then provided by the customer to the carrier who
physically transports the product and its associated documentation to the
last known holder or designated return center.

Cost to Source Return The sum of the costs associated with Source Return.
orders.
asset.
Source Return Cycle Time The average time associated with Source Return Processes

SR1.1 Identify Defective Product Condition
The process where the customer utilizes planned policies, business rules and product operating
conditions inspection as criteria to identify and confirm that material is excess to requirements
defective.

. Cost of Identifying the Defective Condition as a % of Total Source Return Cost
. Value of Defective Inventory in Identification Stage/ Total Inventory Value
Best Practices:
Execution
Inputs:
. Business Rules for Return Processes from Rules for conducting business, i.e. developing and maintaining
ER.1 Manage Business Rules for Return customer and channel performance standards of an return
Processes processes such as service levels, given service requirements by
objectives.
. Manage Regulatory Return Policy from ER.8 The process of identifying and complying with regulatory
Manage Return Regulatory Requirements documentation and process standards set by external entities (i.e.
government, trade officials, etc.) when planning for the Return and
Recovery of Assets.
. Warranty Data from ER.8 Manage Return All data relevant to a warranty claim for a customer for
Regulatory Requirements replacement, repair or credit because the product received did not
meet a commitment, either expressed or implied, concerning a
certain fact regarding the product
Outputs:
. Returned Defective Product to SR1.2 Product being returned that is in a defective condition.
Disposition Defective Product

SR1.2 Disposition Defective Product
The process of the customer determining whether to return the defective item and the appropriate
source contact for a return authorization.

. Defective Product Disposition Costs as % Total Source Return Cost
. Value of Defective Inventory in Disposition Inventory Awaiting Return
Stage/ Total Inventory Value
Best Practices:
. Confirm Asset Return Condition Codes Are None identified
Clearly Understood by All Employees,
Especially Those Who Are New to the
Process
. Confirm Changes in Condition Code Policies None identified
Are Promptly Communicated to All
Employees and Supply-Chain Partners.
. Drive Returns Directly to Return Stock Point Specify return disposition location and time.
of Disposition to Reduce Cost and Cycle
Time
Inputs:
. Return Plans from P5.4 Establish and Courses of action over specified time periods that represent the
Communicate Return Plans projected appropriation of required return resources and or assets
to meet the return process requirements.
. Returned Defective Product from SR1.1 Product being returned that is in a defective condition.
Identify Defective Product Condition
Outputs:
. Authorization to Return to Service to D1.8 Permission to return to service an item that has been repaired and
Receive Product from Source or Make found to be within specifications and operable.
. Authorization to Scrap to D1.8 Receive Permission to scrap material or item outside of specifications and
Product from Source or Make possessing characteristics that make rework impractical.
. Return Inventory Availability to ER.4 Manage Inventory relative to return process available for use.
Return Inventory
. Return Product Location to ER.4 Manage The physical location where the returned product inventory is held
Return Inventory prior to disposition
Request Defective Return Authorization

SR1.3 Request Defective Return Authorization
The process of a customer requesting and obtaining authorization, from last known holder or
designated return center, for the return of defective product. Additionally, the customer and last
known holder or designated return center would discuss enabling conditions such as return
replacement or credit, packaging, handling, transportation and import / export requirements to
facilitate the efficient return of the defective product.

. Cost per Request Authorization
. Ratio of Authorization Cost to Total Source Return cost
. Value of Defective Product Inventory in Inventory awaiting return authorization.
Request Return Authorization Stage/ Total
Defective Product Inventory Value
Best Practices:
. Clarify Point of Contact and Return Location Electronic rules for business relationships and transactions.
. Develop and Clarify Mutually Understood Clarification as to who will pay in-bound and out-bound freight cost.
Cycle Times to Process Return
Authorizations
. Enable Customer-Service Representatives Clarification of policy if authorizations are not processed within the
to Complete the Bill Of Lading for the expected cycle time.
Customer Including Carrier Routing, Weight,
Description and Class to Minimize
Guesswork & Wrong Estimates
. Long-Term Return Agreements / None identified
Partnerships
Inputs:
. Defective Product Return Authorization The approved or disapproved Return Product Authorization (RPA)
Response from DR1.1 Authorize Defective for excess inventory, unserviceable products and/or serviceable or
Product Return obsolete products as defined by the terms and conditions of a
customer/supplier contract.
. Return Inventory Availability from ER.4 Inventory relative to return process available for use.
Manage Return Inventory
. Return Schedule Instructions from DR1.2 A list of operations and procedures for scheduling the return of
Schedule Defective Return Receipt product.
Outputs:
. Credit/ Exchange Options to SR1.4 The options available on the return of a repairable item, credit for
Schedule Defective Product Shipment the cost of the item, repair of the repairable item, receipt of a
serviceable item from stock.
. Defective Product Disposition Request to The customer request for disposition instructions for a defective
DR1.1 Authorize Defective Product Return product from the appropriate source.
. Defective Product Return Authorization The customer request for disposition instructions for a defective
Request to DR1.1 Authorize Defective product from the appropriate source.
Product Return
. Historical Return Rates to P5.1 Assess, and A judgmental forecasting technique based upon the a return history
Aggregate Return Requirements that is analogous to a present situation, such as the return history
on a similar product, and using the past pattern to predict future
returns.

. Ship-to Data to SR1.4 Schedule Defective Data about the destination of a retun delivery.
Product Shipment
. Validated Return Material Authorization to A validated and approved Return Product Authorization (RPA).
SR1.4 Schedule Defective Product Shipment

SR1.4 Schedule Defective Product Shipment
The process where the customer develops the schedule for a carrier to pick-up for delivery of the
defective product. Activities include selecting the carrier and rates, preparing the item for transfer,
preparing scheduling documentation and managing overall scheduling administration.

. % Defective Product Scheduling Cost to Total Source Return Cost
. % Shipping Schedules that Support Customer Required Return by Date
. Value of Defective Product Inventory in Scheduling Stage/ Total Defective Product Inventory Value
Best Practices:
. Carrier Selection Based on Performance Scheduling, carrier selection, and rating
Criteria at Least Cost
. Consolidation of Return Carriers Outbound logistics software to assist with route.
. Transportation Modeling and Rate Analysis None identified
Inputs:
. Validated Return Material Authorization from SR1.3 Request Defective Return Authorization
. Credit/ Exchange Options from SR1.3 Request Defective Return Authorization
. Returned Defective Product from SR1.3 Request Defective Return Authorization
. Ship-to Data from SR1.3 Request Defective Return Authorization
. Plan and Build Loads Information from D1.5 Transportation modes are selected and efficient loads are built.
Build Loads
. Ship-to Data from DR1.1 Authorize Defective Data about the destination of a retun delivery.
Product Return
Outputs:
. Returned Defective Product to SR1.5 Return Product being returned that is in a defective condition.
Defective Product
. Scheduled Defective Product Return to Planned or scheduled returning of material deemed defective for
SR1.5 Return Defective Product some certain time or times

SR1.5 Return Defective Product
The process where the customer packages, and handles the defective product in preparation for
shipping in accord with pre-determined conditions. The product is then provided by the customer
to the carrier who physically transports the product and its associated documentation to the last
known holder or designated return center.

. % Error-Free Returns Shipped
. Return Shipments Shipped on Time
. Return Transportation Costs
. Value of Defective Product Inventory in Physical Return and Transportation Stage/ Total Defective Inventory Value
Best Practices:
. Advanced Shipping Notice Integrated data sharing with repair facility.
Inputs:
. Scheduled Defective Product Return from SR1.4 Schedule Defective Product Shipment
. Returned Defective Product from SR1.4 Schedule Defective Product Shipment
. Load, Shipping, Verify, and Credit The function that performs tasks for the outgoing shipment of parts,
Information from D1.11 Load Vehicle & components, and products. It includes packaging, marking,
Generate Shipping Documentation weighing, and loading for shipment. Also, verify the shipment and
customer credit information.
Outputs:
. Returned Defective Product to DR1.3 Product being returned that is in a defective condition.
Receive Defective Product
. Shipment Documents to Government Legal documentation of the contents of a shipment (e.g. way bill, bill
. Shipment Documents to Customer Legal documentation of the contents of a shipment (e.g. way bill, bill
. Shipment Documents to Carrier Legal documentation of the contents of a shipment (e.g. way bill, bill

DR1 Deliver Return Defective Product
The processes of the last known holder or designated return center authorizing and scheduling the
defective product return and the physical receipt of the item by the last known holder or known
return center and their transfer of the item for final disposition determination. The process includes
communication between the customer and last known holder or known return center and the
generation of associated documentation.
The Category DR1 includes four Level 3 Elements:

. DR1.1 Authorize Defective Product Return The process where the last known holder or designated return
center receives a defective product return authorization request
from a customer, determines if the item can be accepted and
communicates decision to the customer. Accepting the request
would include negotiating the conditions of the return with the
customer, including authorizing return replacement or credit.
Rejecting the request would include providing a reason for the
rejection to the customer.
. DR1.2 Schedule Defective Return Receipt The process where the last known holder or designated return
center evaluates the defective product handling requirements
including negotiated conditions and develops a schedule that tells
the Customer when to ship the product. The scheduling activity
would also inform Receiving when to expect the shipment and
where to send the product, for disposition, upon receipt.
. DR1.3 Receive Defective Product The process where the last known holder or designated return
center receives and verifies the returned defective product against
the return authorization and other documentation and prepares the
item for transfer.
. DR1.4 Transfer Defective Product The process where the last known holder or designated return
center transfers the defective product to the appropriate process to
implement the disposition decision.

. Cost to Deliver Return
. Deliver Return Cycle Time The average time associated with returns.
. Order Fulfillment Cycle Time The average actual cycle time consistently achieved to fulfill
customer orders.
. Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets measures the return an
organization receives on its invested capital in supply chain fixed
assets. This includes the fixed assets used in Plan, Source, Make,
Deliver, and Return. The levels of aggregation can be at any
element associated with a supply chain asset.
. Value of Defective Product Inventory in Deliver
Return Process/ Total Defective Product
Inventory Value

DR1.1 Authorize Defective Product Return
The process where the last known holder or designated return center receives a defective product
return authorization request from a customer, determines if the item can be accepted and
communicates decision to the customer. Accepting the request would include negotiating the
conditions of the return with the customer, including authorizing return replacement or credit.
Rejecting the request would include providing a reason for the rejection to the customer.

. Authorize Defective Product Return Cycle The average time associated with authorizing the return of defective
Time product.
. Cost to Authorize Defective Product Return The sum of the costs associated with authorizing the return of
defective product.
. Value of Defective Product Inventory in Authorization Stage/ Total Defective Product Inventory Value
Best Practices:
. Communicate with Customer before the None identified
Return to Establish What Types of Returns
Are Acceptable
. Set Up Electronic or Pre-authorized Returns None identified
. Use an Exchange System Where Customer None identified
is Issued a Serviceable Item Upon
Submitting an Unserviceable Item
Inputs:
objectives.
. Defective Product Disposition Request from The customer request for disposition instructions for a defective
SR1.3 Request Defective Return product from the appropriate source.
Authorization
. Defective Product Return Authorization The customer request for disposition instructions for a defective
Request from SR1.3 Request Defective product from the appropriate source.
Return Authorization
. Manage Integrated Supply Chain Inventory Managing the flow of raw materials and products in a supply chain
Information from EP.4 Manage Integrated based on uncertain demand for the finished products
Supply Chain Inventory
. Product Return Capabilities from P5.4 The capability of a system or resources to produce a quantity output
Establish and Communicate Return Plans in a particular time period; and, any element or factor that
constrains the system or resources from achieving a higher level of
performance in respect to its goal. The ability the supply chain has
to return products in a valid and accurate way.
Outputs:
. Defective Product Return Authorization The approved or disapproved Return Product Authorization (RPA)
Response to SR1.3 Request Defective for excess inventory, unserviceable products and/or serviceable or
Return Authorization obsolete products as defined by the terms and conditions of a
customer/supplier contract.

returns.
Information to EP.4 Manage Integrated based on uncertain demand for the finished products
. Ship-to Data to SR1.4 Schedule Defective Data about the destination of a retun delivery.
Product Shipment
. Valid Returns Request to DR1.2 Schedule Requests for returns that are valid.
Defective Return Receipt

DR1.2 Schedule Defective Return Receipt
The process where the last known holder or designated return center evaluates the defective
product handling requirements including negotiated conditions and develops a schedule that tells
the Customer when to ship the product. The scheduling activity would also inform Receiving when
to expect the shipment and where to send the product, for disposition, upon receipt.

. Cost to Schedule Defective Product Receipt The sum of the costs associated with scheduling defective product
receipt.
. Schedule Defective Return Receipt Cycle The average time associated with scheduling the receipt of the
Time return of defective product
Best Practices:
. Integrate Return Planning with Maintenance Both customer and Service Provider departments are alerted at the
and Inventory Planning to Optimize the same time and viewing the same information.
System
. Fault Found from DR1.1 Authorize Defective Product Return
Inputs:
. Valid Returns Request from DR1.1 Authorize Requests for returns that are valid.
Defective Product Return
Outputs:
. Return Schedule Instructions to SR1.3 A list of operations and procedures for scheduling the return of
Request Defective Return Authorization product.
. Return Schedule Instructions to DR1.3 A list of operations and procedures for scheduling the return of
Receive Defective Product product.

DR1.3 Receive Defective Product
The process where the last known holder or designated return center receives and verifies the
returned defective product against the return authorization and other documentation and prepares
the item for transfer.

. Cost to Receive Defective Product The sum of the costs associated with receiving defective product
returns.
. Receive Defective Product Cycle Time The average time associated with receiving defective product
returns from the customer
Best Practices:
- RFID
. Customer Sends Receiving Advanced Electronically link Return authorization, Return schedule and
Shipment Notification Prior to Shipment shipping documents. .
. Develop Local Receiving Process Close to Minimize time spent in product movement.
Repair
. Electronically Track Shipment from None Identified
Customer to Service Provider
. Pre-Certify Supplier Capability to Send - Push inspection to SOURCE
Return Products Correctly to Minimize the - Receiving quality criteria connected to ISO 9000 practices
Need for Receipt Verification
. Receivers on the Dock Communicate Buyer’s name for every receipt is clearly visible on Receiver.
Directly with the Buyer to Efficiently Resolve
Any Discrepancies
Inputs:
. Receipt Data from ER.4 Manage Return A collection of related receipt data records organized in a specific
Inventory manner.
Data Collection manner.
. Return Regulatory Requirements from ER.8 Return requirements dictated by process standards set by external
Schedule Defective Return Receipt product.
. Return Transportation Guidelines, Policies, & Guidelines, policies and agreements for the transportation activities
Agreements from ER.6 Manage Return around return process.
Transportation
Return Defective Product
Outputs:
. Receipt Discrepancy Notification to Enable Notification of a discrepancy relating to a receipt, including:
Return damage, packaging, quantity, etc.
. Receipt Discrepancy Notification to Plan Notification of a discrepancy relating to a receipt, including:

damage, packaging, quantity, etc.
. Receipt Discrepancy Notification to Source Notification of a discrepancy relating to a receipt, including:


. Return Inventory Transfer Data to ER.4 The process of receipt and verification of the returned item against
Manage Return Inventory the return authorization and other documentation and prepares the
item for transfer.
. Return Inventory Transfer Data to P5.2 The process of receipt and verification of the returned item against
Identify, Assess, and Aggregate Return the return authorization and other documentation and prepares the
Resources item for transfer.
. Returned Defective Product to DR1.4 Product being returned that is in a defective condition.
Transfer Defective Product

DR1.4 Transfer Defective Product
The process where the last known holder or designated return center transfers the defective
product to the appropriate process to implement the disposition decision.

. Cost to Transfer Defective Product The sum of the costs associated transferring defective product for
disposition
. Transfer Defective Product Cycle Time The average time associated transfer until product is moved to the
next process.
Best Practices:
. Defective Products Scheduling Identifies Utilize electronic links
Next Destination (Source, Make, or Deliver)
on Return Authorization
. Receiving Equipment and Packaging Include packaging materials in inventory management system and
Materials to Transfer Product Are Planned treat as any other inventory to minimize potential of stock-out.
for In Advance and Readily Available When
Needed
. Return Process Electronically Tracks Utilize Bar coding
Transfer from Station to Station
. Review Transfer Cycle Time Trends and Periodic review of capital asset plan to determine if additional
Determine If Equipment Capacity is Properly equipment, if needed, can be funded.
Balanced with Projected Usage
Inputs:
. Return Inventory for Transfer from ER.4 Inventory relative to return process available for transfer to other
Manage Return Inventory destination.
. Returned Defective Product from DR1.3 Product being returned that is in a defective condition.
Receive Defective Product
Outputs:
. Defective Products to S1.2 Receive Product Maintenance, Repair and Overhaul spare parts used to support of
operations and maintenance.
. Defective Products to S2.2 Receive Product Maintenance, Repair and Overhaul spare parts used to support of
. Return Inventory Transfer Data to S1.1 The process of receipt and verification of the returned item against
Schedule Product Deliveries the return authorization and other documentation and prepares the
item for transfer.
item for transfer.
item for transfer.
item for transfer.

SR2 Source Return MRO Product
The process, initiated by the customer, of returning maintenance, repair, and overhaul items to a
service provider. Process includes: customer identification that an action is required and
determining what that action should be, communicating with the service provider, generating
return documentation, and physically returning or disposing of the product.

SR2.1 Identify MRO Product Condition The process where the customer utilizes pre-determined MRO policies,
business rules and product operating conditions as criteria to identify and
confirm that an item requires maintenance, repair, overhaul or disposal.
Includes operating failures and planned maintenance requirements.
SR2.2 Disposition MRO Product The process of the customer determining whether to service the item, what
service is required, and who the appropriate service provider would be to
service the item. Outputs include a decision to: (1) send a return
authorization request to a service provider, (2) send the product back into
service without requiring a return authorization request, or (3) discard the
item.
SR2.3 Request MRO Return Authorization The process of a customer requesting and obtaining authorization, from a
service provider, for the return of an MRO product. In addition to discussing
the MRO issue, the customer and service provider would discuss enabling
conditions such as return replacement or credit, packaging, handling,
transportation and import / export requirements to facilitate the efficient
return of the MRO product to the service provider. The customer may need
to go through several return authorization iterations with multiple service
providers before authorization is received.
SR2.4 Schedule MRO Shipment The process where the customer develops the schedule for a carrier to
pick-up and deliver the MRO product. Activities include selecting the carrier
and rates, preparing the item for transfer, preparing scheduling
documentation and managing overall scheduling administration.
SR2.5 Return MRO Product The process where the customer packages, and handles the MRO product
in preparation for shipping in accord with pre-determined conditions. The
product is then provided by the customer to the carrier who physically
transports the product and its associated documentation to the service
provider.

orders.
asset.
Total Source Return Costs The sum of the costs associated with the return of raw materials to the
supplier.

SR2.1 Identify MRO Product Condition
The process where the customer utilizes pre-determined MRO policies, business rules and
product operating conditions as criteria to identify and confirm that an item requires maintenance,
repair, overhaul or disposal. Includes operating failures and planned maintenance requirements.

. Cost of Identifying the MRO Condition as a % of Total Source Return Cost
. Total Number of Confirmed MRO Conditions / Total Number of MRO Service Requests Initiated
. Value of Unserviceable MRO Inventory In Identification Stage/Total MRO Inventory Value
Inputs:
objectives.
Recovery of Assets.
. Warranty Data from ER.8 Manage Return All data relevant to a warranty claim for a customer for replacement,
Regulatory Requirements repair or credit because the product received did not meet a
commitment, either expressed or implied, concerning a certain fact
regarding the product
Outputs:
. Returned MRO Product to SR2.2 Disposition Product being returned for maintenance, repair, or overhaul.
MRO Product

SR2.2 Disposition MRO Product
The process of the customer determining whether to service the item, what service is required,
and who the appropriate service provider would be to service the item. Outputs include a decision
to: (1) send a return authorization request to a service provider, (2) send the product back into
service without requiring a return authorization request, or (3) discard the item.

. % Identified MRO Products Returned to Service
. MRO Disposition Costs as % Total Source Return Cost
. Value of Defective Inventory in Disposition Inventory Awaiting Return
. Value of Unserviceable MRO Inventory In Inventory awaiting disposition
Disposition Stage/ Total MRO Inventory
Value
Inputs:
. Returned MRO Product from SR2.1 Identify Product being returned for maintenance, repair, or overhaul.
MRO Product Condition
Outputs:
Return Inventory
. Returned MRO Product to SR2.3 Request Product being returned for maintenance, repair, or overhaul.
MRO Return Authorization
. Returned Product Location to ER.4 Manage The storage location of those items being returned.
Return Inventory

SR2.3 Request MRO Return Authorization
The process of a customer requesting and obtaining authorization, from a service provider, for the
return of an MRO product. In addition to discussing the MRO issue, the customer and service
provider would discuss enabling conditions such as return replacement or credit, packaging,
handling, transportation and import / export requirements to facilitate the efficient return of the
MRO product to the service provider. The customer may need to go through several return
authorization iterations with multiple service providers before authorization is received.

. % Authorization Requests Transmitted Error-Free / Total Authorizations Requested
. Ratio of Authorization Cost To Total Source Return Cost
. Value of Unserviceable MRO Inventory in Inventory awaiting return authorization
MRO Inventory Value
Inputs:
. MRO Return Authorization Response from The process of a customer obtaining authorization, from a service
DR2.1 Authorize MRO Product Return provider, for the return of an MRO product
Schedule MRO Return Receipt product.
. Returned MRO Product from SR2.2 Product being returned for maintenance, repair, or overhaul.
Disposition MRO Product
Outputs:
. Workflow to SR2.4 Schedule MRO Shipment
. Credit Exchange Options to SR2.4 Schedule The options available on the return of a repairable item, credit for
MRO Shipment the cost of the item, repair of the repairable item, receipt of a
returns.
. MRO Disposition Request to DR2.1 Request disposition instructions for an MRO item from the Supplier.
Authorize MRO Product Return
. MRO Return Authorization Request to DR2.1 The process of a customer requesting authorization from a service
Authorize MRO Product Return provider, for the return of an MRO product. In addition to discussing
the MRO issue, the customer and service provider would discuss
enabling conditions such as return replacement or credit,
packaging, handling, transportation and import / export
requirements to facilitate the efficient return of the MRO product to
the service provider. The customer may need to go through several
return authorization iterations with multiple service providers before
authorization is received.
. Returned MRO Product to SR2.4 Schedule Product being returned for maintenance, repair, or overhaul.
MRO Shipment
. Ship-to Data to SR2.4 Schedule MRO Data about the destination of a return delivery.
Shipment

SR2.4 Schedule MRO Shipment
The process where the customer develops the schedule for a carrier to pick-up and deliver the
MRO product. Activities include selecting the carrier and rates, preparing the item for transfer,
preparing scheduling documentation and managing overall scheduling administration.

. % MRO Scheduling Cost to Total Source Return Cost
. Value of Unserviceable MRO inventory in Scheduling Stage/ Total MRO Inventory Value
Best Practices:
Inputs:
. Workflow from SR2.3 Request MRO Return Authorization
. Returned MRO Product from SR2.3 Request MRO Return Authorization
. Ship-to Data from SR2.3 Request MRO Return Authorization
. Credit Exchange Options from SR2.3 Request MRO Return Authorization
Build Loads
. Ship-to Data from DR2.1 Authorize MRO Data about the destination of a return delivery.
Product Return
Outputs:
. Returned MRO Product to SR2.5 Return Product being returned for maintenance, repair, or overhaul.
MRO Product
. Scheduled MRO Return to SR2.5 Return Planned or scheduled act of installing something for some certain
MRO Product time or times.

SR2.5 Return MRO Product
The process where the customer packages, and handles the MRO product in preparation for
to the carrier who physically transports the product and its associated documentation to the
service provider.

. Value of Unserviceable MRO Inventory in Physical Return and Transportation Stage/ Total MRO Inventory Value
Best Practices:
Inputs:
. Returned MRO Product from SR2.4 Schedule MRO Shipment
. Scheduled MRO Return from SR2.4 Schedule MRO Shipment
Outputs:
. Returned MRO Product to DR2.3 Receive Product being returned for maintenance, repair, or overhaul.
MRO Product

DR2 Deliver Return MRO Product
The processes of the service provider authorizing and scheduling the MRO return product and the
physical receipt of the item by the service provider and their transfer of the item for final disposition
determination. The process includes communication between the customer and service provider
and the generation of associated documentation.

DR2.1 Authorize MRO Product Return The process where a service provider receives an MRO product return
authorization request from a customer, determines if the item can be
accepted for MRO and communicates their decision to the customer.
Accepting the request would include negotiating the conditions of the return
with the customer, including authorizing return replacement or credit.
Rejecting the request would include providing a reason for the rejection to
the customer.
DR2.2 Schedule MRO Return Receipt The process where the service provider evaluates the MRO service
requirements including negotiated conditions and develops a schedule that
tells the Customer when to ship the part. The scheduling activity would also
inform Receiving when to expect the shipment and where to send the part,
for induction or storage, upon receipt.
DR2.3 Receive MRO Product The process where the service provider receives and verifies the returned
MRO item against the return authorization and other documentation and
prepares the item for transfer (includes verify).
DR2.4 Transfer MRO Product The process where the service provider transfers the MRO product to the
appropriate process to implement the disposition decision.

% of MRO Returns Delivered to the Correct
Service Provider Location, within Schedule,
with the Correct Part and Documentation
Cost to Deliver Return
Deliver Return Cycle Time The average time associated with returns.
orders.
asset.
Upside Deliver Return Adaptability The maximum sustainable percentage increase in returns of finished
goods from customers that can be achieved in 30 days.
Upside Deliver Return Flexibility The number of days required to achieve an unplanned sustainable 20%
increase in the return of finished goods from customers.
Value of Unserviceable MRO Inventory in
Deliver Return Process/ Total MRO Inventory
Value

DR2.1 Authorize MRO Product Return
The process where a service provider receives an MRO product return authorization request from
a customer, determines if the item can be accepted for MRO and communicates their decision to
the customer. Accepting the request would include negotiating the conditions of the return with the
customer, including authorizing return replacement or credit. Rejecting the request would include
providing a reason for the rejection to the customer.

. Authorize MRO Product Return Cycle Time The average time associated with authorizing the return of MRO
product.
. Cost to Authorize MRO Product Return The sum of the costs associated with authorizing the return of
product to be maintained, repaired, or overhauled.
Best Practices:
Are Acceptable
. Use an Exchange System Where Customer None identified
is Issued a Serviceable Item Upon
Submitting an Unserviceable Item
Inputs:
objectives.
. MRO Disposition Request from SR2.3 Request disposition instructions for an MRO item from the Supplier.
Request MRO Return Authorization
. MRO Return Authorization Request from The process of a customer requesting authorization from a service
SR2.3 Request MRO Return Authorization provider, for the return of an MRO product. In addition to discussing
the MRO issue, the customer and service provider would discuss
enabling conditions such as return replacement or credit,
packaging, handling, transportation and import / export
requirements to facilitate the efficient return of the MRO product to
the service provider. The customer may need to go through several
return authorization iterations with multiple service providers before
authorization is received.

Outputs:
returns.
. MRO Return Authorization Response to The process of a customer obtaining authorization, from a service
SR2.3 Request MRO Return Authorization provider, for the return of an MRO product
. Ship-to Data to SR2.4 Schedule MRO Data about the destination of a retun delivery.
Shipment
. Valid Returns Request to DR2.2 Schedule Requests for returns that are valid.
MRO Return Receipt

DR2.2 Schedule MRO Return Receipt
The process where the service provider evaluates the MRO service requirements including
negotiated conditions and develops a schedule that tells the Customer when to ship the part. The
scheduling activity would also inform Receiving when to expect the shipment and where to send
the part, for induction or storage, upon receipt.

. Cost to Schedule MRO Product Receipt The sum of the costs associated with scheduling MRO product
receipt.
. Schedule MRO Return Receipt Cycle Time The average time associated with scheduling the receipt of the
return of MRO product
Best Practices:
. Integrate Return Planning with Maintenance Both customer and Service Provider departments are alerted at
and Inventory Planning to Optimize the the same time and viewing the same information.
System
Inputs:
. Valid Returns Request from DR2.1 Authorize Requests for returns that are valid.
MRO Product Return
Outputs:
Request MRO Return Authorization product.
Receive MRO Product product.

DR2.3 Receive MRO Product
The process where the service provider receives and verifies the returned MRO item against the
return authorization and other documentation and prepares the item for transfer (includes verify).

. Cost to Receive MRO Product The sum of the costs associated with receiving MRO product
returns.
. Receive MRO Product Cycle Time The average time associated with receiving MRO product returns
from the customer
Best Practices:
- RFID
Repair
Any Discrepancies
Inputs:
Inventory manner.
Schedule MRO Return Receipt product.
Transportation
. Returned MRO Product from SR2.5 Return Product being returned for maintenance, repair, or overhaul.
MRO Product
Outputs:



item for transfer.
. Returned MRO Product to DR2.4 Transfer Product being returned for maintenance, repair, or overhaul.
MRO Product

DR2.4 Transfer MRO Product
The process where the service provider transfers the MRO product to the appropriate process to
implement the disposition decision.

. Cost to Transfer MRO Product The sum of the costs associated transferring MRO product for
disposition
. Transfer MRO Product Cycle Time The average time associated transfer until product is moved to the
next process.
Best Practices:
. MRO Scheduling Identifies Next Destination Utilize electronic links
(Stores or Repair Station) on Return
Authorization
Needed
Inputs:
. Returned MRO Product from DR2.3 Receive Product being returned for maintenance, repair, or overhaul.
MRO Product
Outputs:
. MRO Products to S2.2 Receive Product Maintenance, Repair and Overhaul spare parts used to support of
. MRO Products to S1.2 Receive Product Maintenance, Repair and Overhaul spare parts used to support of
item for transfer.
item for transfer.
item for transfer.

item for transfer.

SR3 Source Return Excess Product
The process, initiated by the customer, of returning material deemed in excess of current
requirements to the designated return center. Process includes: customer identification that an
action is required, determining what that action should be, requesting authorization from the
designated return center, generating return documentation, and physically returning the excess
product.

SR3.1 Identify Excess Product Condition The process where the customer utilizes planned policies, business rules
and product inspection as criteria to identify and confirm that material is in
excess of the current requirements.
SR3.2 Disposition Excess Product The process of the customer determining whether to return the excess
material and identification of a designated return center a return
authorization.
SR3.3 Request Excess Return Authorization The process of a customer requesting and obtaining authorization, from the
designated return center, for the return of excess product. Additionally, the
customer and designated return center would negotiate enabling conditions
such as return credit or cash discount, packaging, handling, transportation
and import / export requirements to facilitate the efficient return of the
excess product.
SR3.4 Schedule Excess Product Shipment The process where the customer develops the schedule for a carrier to
pick-up the excess product. Activities include selecting the carrier and
rates, preparing the item for transfer, preparing scheduling documentation
and managing overall scheduling administration.
SR3.5 Return Excess Product The process where the customer packages, and handles the excess
product in preparation for shipping in accord with pre-determined
conditions. The product is then provided by the customer to the carrier who
physically transports the product and its associated documentation to the
last known holder or designated return center.

% of Excess Product Returns Delivered Correct destination, according to the schedule, with the correct part and
Complete to the Designated Return Center documentation
Average Age of Excess Inventory
Cost to Source Return
orders.
asset.
Source Return Cycle Time
Total Excess Material Return Costs The sum of the costs associated with the receipt of returned excess
products from the customer
Value of Excess Inventory/ Total Inventory
Value

SR3.1 Identify Excess Product Condition
The process where the customer utilizes planned policies, business rules and product inspection
as criteria to identify and confirm that material is in excess of the current requirements.

. Cost of Identifying the Excess Condition as a % of Total Source Return Cost
. Number of Occurrences Where Excess Inventory is Returned and Subsequently Followed by an Expedite Request
. Value of Excess Inventory in Identification Stage/ Total Inventory Value
Best Practices:
. Automated Inventory Visibility and Planning Automated inventory planning package linked to real time demand
System to Highlight Inventory in Excess of data and inventory business rules.
Requirements
Execution
Inputs:
objectives.
Recovery of Assets.
Outputs:
. Returned Excess Product to SR3.2 Product being returned as defined by the terms and conditions of a
Disposition Excess Product customer/supplier contract as available inventory and disposition
excess not usable for sale.

SR3.2 Disposition Excess Product
The process of the customer determining whether to return the excess material and identification
of a designated return center a return authorization.

. Excess Product Disposition Costs as % Total Source Return Cost
. Number of Occurrences of Incorrect Designated Return Center
. Value of Excess Inventory in Disposition Inventory Awaiting Return
Best Practices:
. Automated Registry of Inventory Return None identified
Locations by Item to Speed Identification of
Proper Return Location
. Drive Returns Directly to Return Stock Point Specify return disposition location and time.
of Disposition to Reduce Cost and Cycle
Time
Inputs:
. Returned Excess Product from SR3.1 Product being returned as defined by the terms and conditions of a
Identify Excess Product Condition customer/supplier contract as available inventory and disposition
Outputs:
Return Inventory
. Return Product Location to ER.4 Manage The physical location where the returned product inventory is held
Return Inventory prior to disposition
. Returned Excess Product to SR3.3 Request Product being returned as defined by the terms and conditions of a
Excess Return Authorization customer/supplier contract as available inventory and disposition

SR3.3 Request Excess Return Authorization
The process of a customer requesting and obtaining authorization, from the designated return
center, for the return of excess product. Additionally, the customer and designated return center
would negotiate enabling conditions such as return credit or cash discount, packaging, handling,
transportation and import / export requirements to facilitate the efficient return of the excess
product.

. % Authorization Requests Transmitted Error-Free / Total Authorizations Requested
. Ratio of Authorization Cost to Total Source Return cost
. Value of Excess Product Inventory in Inventory Awaiting Return Authorization
Excess Product Inventory Value
Best Practices:
. Clarify Point of Contact and Return Location Electronic rules for business relationships and transactions.
. Develop and Clarify Mutually Understood Clarification as to who will pay in-bound and out-bound freight cost.
Cycle Times to Process Return
Authorizations
. Enable Customer-Service Representatives Clarification of policy if authorizations are not processed within the
to Complete the Bill Of Lading for the expected cycle time.
Customer Including Carrier Routing, Weight,
Description and Class to Minimize
Guesswork & Wrong Estimates
. Long-Term Return Agreements / None identified
Partnerships
Inputs:
. Excess Product Return Authorization The process of a customer obtaining authorization, from a service
Response from DR3.1 Authorize Excess provider, for the return of excess product
Product Return
Schedule Excess Return Receipt product.
. Returned Excess Product from SR3.2 Product being returned as defined by the terms and conditions of a
Disposition Excess Product customer/supplier contract as available inventory and disposition
Outputs:
. Credit/ Exchange Options to SR3.4 The options available on the return of a repairable item, credit for
Schedule Excess Product Shipment the cost of the item, repair of the repairable item, receipt of a
. Excess Product Disposition Request to Request disposition instructions for an excess item from the
DR3.1 Authorize Excess Product Return Supplier.

. Excess Product Return Authorization The process of a customer requesting authorization from a service
Request to DR3.1 Authorize Excess Product provider, for the return of excess. In addition to discussing the
Return excess, the customer and service provider would discuss enabling
conditions such as return replacement or credit, packaging,
handling, transportation and import / export requirements to
facilitate the efficient return of excess to the service provider. The
customer may need to go through several return authorization
iterations with multiple service providers before authorization is
received.
returns.
. Returned Excess Product to SR3.4 Schedule Product being returned as defined by the terms and conditions of a
Excess Product Shipment customer/supplier contract as available inventory and disposition
. Ship-to Data to SR3.4 Schedule Excess Data about the destination of a return delivery.
Product Shipment
. Validated Return Material Authorization to A validated and approved Return Product Authorization (RPA).
SR3.4 Schedule Excess Product Shipment

SR3.4 Schedule Excess Product Shipment
The process where the customer develops the schedule for a carrier to pick-up the excess
product. Activities include selecting the carrier and rates, preparing the item for transfer, preparing
scheduling documentation and managing overall scheduling administration.

. % Excess Product Scheduling Cost to Total Source Return Cost
. Value of Excess Product Inventory in Scheduling Stage/ Total Excess Product Inventory Value
Best Practices:
. Arrange for Shipping Insurance in Case Of Preventative management
In-Transit Loss or Damage
Inputs:
. Validated Return Material Authorization from SR3.3 Request Excess Return Authorization
. Returned Excess Product from SR3.3 Request Excess Return Authorization
. Credit/ Exchange Options from SR3.3 Request Excess Return Authorization
. Ship-to Data from SR3.3 Request Excess Return Authorization
Build Loads
. Ship-to Data from DR3.1 Authorize Excess Data about the destination of a retun delivery.
Product Return
Outputs:
. Returned Excess Product to SR3.5 Return Product being returned as defined by the terms and conditions of a
Excess Product customer/supplier contract as available inventory and disposition
. Scheduled Excess Product Return to SR3.5 Planned or scheduled returning of material deemed in excess of
Return Excess Product current requirements for some certain time or times.

SR3.5 Return Excess Product
The process where the customer packages, and handles the excess product in preparation for
to the carrier who physically transports the product and its associated documentation to the last
known holder or designated return center.

. Value of Excess Product Inventory in Physical Return and Transportation Stage/ Total Excess Inventory Value
Best Practices:
Inputs:
. Scheduled Excess Product Return from SR3.4 Schedule Excess Product Shipment
. Returned Excess Product from SR3.4 Schedule Excess Product Shipment
Outputs:
. Returned Excess Product to DR3.3 Receive Product being returned as defined by the terms and conditions of a

DR3 Deliver Return Excess Product
The processes of the designated return center authorizing and scheduling the excess product
return, the physical receipt of the item by the designated return center and transfer of the item for
final disposition The process includes communication between the customer and designated
return center and the generation of associated documentation.

DR3.1 Authorize Excess Product Return The process where the designated return center receives an excess
product return authorization request from a customer, determines if the
item can be accepted and communicates their decision to the customer.
with the customer, including authorizing credit or cash discount. Rejecting
the request would include providing a reason for the rejection to the
customer.
DR3.2 Schedule Excess Return Receipt The process where the designated return center evaluates an authorized
excess material return to determine packaging and handling requirements.
This assessment will lead to the development of a return disposition
decision and a return schedule with terms and conditions that will tell the
Customer how and when to ship the product. The scheduling activity would
also inform the Return Center’s Receiving department when to expect the
shipment and where to send the product, for disposition, upon receipt.
DR3.3 Receive Excess Product The process where the designated return center receives and verifies the
returned excess product and associated documentation against the return
authorization and other documentation and prepares the item for transfer.
Administrate any discrepancies that arise.
DR3.4 Transfer Excess Product The process where the designated return center transfers the excess
product to the appropriate process to implement the disposition decision.

% of Excess Product Returns Delivered Correct destination, according to the schedule, with the correct part and
Complete to the Designated Return Center documentation
orders.
asset.
Upside Deliver Return Adaptability The maximum sustainable percentage increase in returns of finished goods
from customers that can be achieved in 30 days.
Upside Deliver Return Flexibility The number of days required to achieve an unplanned sustainable 20%

DR3.1 Authorize Excess Product Return
The process where the designated return center receives an excess product return authorization
request from a customer, determines if the item can be accepted and communicates their decision
to the customer. Accepting the request would include negotiating the conditions of the return with
the customer, including authorizing credit or cash discount. Rejecting the request would include
providing a reason for the rejection to the customer.

. Authorize Excess Product Return Cycle The average time associated with authorizing the return of excess
Time product.
. Cost to Authorize Excess Product Return The sum of the costs associated with authorizing the return of
excess product.
Best Practices:
Are Acceptable
Inputs:
objectives.
. Excess Product Disposition Request from Request disposition instructions for an excess item from the
SR3.3 Request Excess Return Authorization Supplier.
. Excess Product Return Authorization The process of a customer requesting authorization from a service
Request from SR3.3 Request Excess Return provider, for the return of excess. In addition to discussing the
Authorization excess, the customer and service provider would discuss enabling
conditions such as return replacement or credit, packaging,
handling, transportation and import / export requirements to
facilitate the efficient return of excess to the service provider. The
customer may need to go through several return authorization
iterations with multiple service providers before authorization is
received.

Outputs:
. Excess Product Return Authorization The process of a customer obtaining authorization, from a service
Response to SR3.3 Request Excess Return provider, for the return of excess product
Authorization
returns.
. Return Product Authorization to DR3.2 Permission to accept an excess product return for the designated
Schedule Excess Return Receipt return center, after communicating with the customer.
. Ship-to Data to SR3.4 Schedule Excess Data about the destination of a retun delivery.
Product Shipment

DR3.2 Schedule Excess Return Receipt
The process where the designated return center evaluates an authorized excess material return to
determine packaging and handling requirements. This assessment will lead to the development of
a return disposition decision and a return schedule with terms and conditions that will tell the
Customer how and when to ship the product. The scheduling activity would also inform the Return
Center’s Receiving department when to expect the shipment and where to send the product, for
disposition, upon receipt.

. Cost to Schedule Excess Product Receipt The sum of the costs associated with scheduling excess product
receipt.
. Schedule Excess Return Receipt Cycle The average time associated with scheduling the receipt of the
Time return of excess product
Best Practices:
. Establish Designated Processes for None Identified
Scheduling and Receiving Excess Inventory
Inputs:
. Return Product Authorization from DR3.1 Permission to accept an excess product return for the designated
Authorize Excess Product Return return center, after communicating with the customer.
Outputs:
Request Excess Return Authorization product.
Receive Excess Product product.

DR3.3 Receive Excess Product
The process where the designated return center receives and verifies the returned excess product
and associated documentation against the return authorization and other documentation and
prepares the item for transfer. Administrate any discrepancies that arise.

. Cost to Receive Excess Product The sum of the costs associated with receiving excess returns.
. Receive Excess Product Cycle Time The average time associated with receiving excess product returns
from the customer
Best Practices:
- RFID
Repair
Any Discrepancies
Inputs:
Inventory manner.
Schedule Excess Return Receipt product.
Transportation
. Returned Excess Product from SR3.5 Return Product being returned as defined by the terms and conditions of a
Outputs:


item for transfer.
. Returned Excess Product to DR3.4 Transfer Product being returned as defined by the terms and conditions of a

DR3.4 Transfer Excess Product
The process where the designated return center transfers the excess product to the appropriate
process to implement the disposition decision.

. Cost to Transfer Excess Product The sum of the costs associated transferring excess product for
disposition
. Transfer Excess Product Cycle Time The average time associated transfer until product is moved to the
next process.
Best Practices:
. Excess Products Scheduling Identifies Next Utilize electronic links
Destination (Source, Make, or Deliver) on
Needed
Inputs:
. Returned Excess Product from DR3.3 Product being returned as defined by the terms and conditions of a
Receive Excess Product customer/supplier contract as available inventory and disposition
. Sourcing Plans from P2.4 Establish Sourcing An aggregate material requirements plan used to schedule
Plans material deliveries to meet production plan.
Outputs:
. Excess Products to S2.2 Receive Product Material in excess of the current requirements.
. Excess Products to S1.2 Receive Product Material in excess of the current requirements.
item for transfer.
item for transfer.
item for transfer.

item for transfer.

ER Enable RETURN

The Category ER includes eight Level 3 Elements:

ER.1 Manage Business Rules for Return The process of establishing, maintaining, and enforcing decision support
Processes criteria for Return Planning that are translated into rules for conducting
business. These rules align Return process policies with business strategy,
goals, and objectives. Examples of business rules include those that (1)
Enable customers to identify when scheduled and unscheduled conditions
occur that require a return authorization request, (2) Enable a service
provider to confirm a part is authorized to be returned, (3) Identify the
waiting period to confirm a return item has been shipped and received
before following up (4) Develop and maintain customer and channel
performance standards of return processes such as service levels, given
service requirements by supply chain stakeholders/trading partners.(5)
Communicate to customers the allowable amount of elapsed time from
purchase and condition in which excess material must be received in order
for it to be accepted as a return (6) Negotiate any restocking charge
stipulations.
ER.2 Manage Performance of Return The process of measuring actual Return Process performance against
Processes internal and/or external standards to develop and implement a course of
action to achieve targeted performance levels.
ER.3 Manage Return Data Collection The process of collecting, cleansing, integrating and maintaining the
accuracy of return execution information necessary to plan the recovery of
supply chain resources.
ER.4 Manage Return Inventory The process of establishing a return process inventory strategy and
planning the recovery process inventory limits or levels (unserviceable
carcasses ready for teardown/evaluation and those carcasses already
evaluated and ready for repair) including replenishment models,
company.
ER.5 Manage Return Capital Assets The process of acquiring, maintaining and dispositioning capital assets
such as fork lift trucks, information systems and equipment in receiving
docks that are utilized in support of Return. Management activities would
include defining asset requirements, determining resource availability and
conducting gap analysis and resolution. The process includes lease-buy
and outsourcing decisions.
ER.6 Manage Return Transportation The process of providing the least cost transportation of a returned product
from a customer location to the appropriate service provider location within
specified time frames. Can include interim transportation activities
conducted within more than one service provider locations. Includes
defining and implementing a Return transportation strategy throughout the
supply chain, maintaining transportation-related information (rates, lead
times) and managing transportation performance.
ER.7 Manage Return Network Configuration The process where customer and service provider locations involved in the
flow of returns are defined and maintained throughout the supply chain.
Locations include retail and wholesale customer and supplier sites,
manufacturing facilities, distribution centers, warehouses, repair depots
and military bases. How unserviceable material flow throughout the
network is governed by the specific supply chain’s business rules. (See
ER1)
ER.8 Manage Return Regulatory The process of identifying and complying with regulatory documentation
Requirements and process standards set by external entities (i.e. government, trade
officials, etc.) when planning for the Return of Assets. Includes Customs
requirements and Import / Export Controls.

ER.1 Manage Business Rules for Return Processes
The process of establishing, maintaining, and enforcing decision support criteria for Return
Planning that are translated into rules for conducting business. These rules align Return process
policies with business strategy, goals, and objectives. Examples of business rules include those
that (1) Enable customers to identify when scheduled and unscheduled conditions occur that
require a return authorization request, (2) Enable a service provider to confirm a part is authorized
to be returned, (3) Identify the waiting period to confirm a return item has been shipped and
received before following up (4) Develop and maintain customer and channel performance
standards of return processes such as service levels, given service requirements by supply chain
stakeholders/trading partners.(5) Communicate to customers the allowable amount of elapsed
time from purchase and condition in which excess material must be received in order for it to be
accepted as a return (6) Negotiate any restocking charge stipulations.

Cost to Manage Business Rules for Return The sum of the Cost to Manage Business Rules for Return Processes
Processes
Manage Business Rules for Return The average time associated with managing rules for returns
Processes Cycle Time
Best Practices:
Electronic Reminders of Possible Scheduled Pull signals.
Maintenance
Evaluate the Benefits of Out-Sourcing the Enables customer to focus on core competencies.
Excess Material Return Process
Publish Return Policy Easy access to return business rules.
Standard Inventory Policy to Determine None Identified
Excess
Utilize Real-World Cases in Employee None Identified
Training
Inputs:
Process Procedures from P5.4 Establish and A planned series of actions or operations that advances returns from one
Communicate Return Plans stage to another, or established procedures to manage and execute all
Return Rules and Policies from P5.4 Rules and Policies for conducting business, i.e. developing and
Establish and Communicate Return Plans maintaining customer and channel performance standards of return
processes such as service levels, given service requirements by supply
chain stakeholders/trading partners. Rules and policies align the Return
process with the organization’s business strategy, goals and objectives.
Outputs:
Business Rules for Return Processes to Rules for conducting business, i.e. developing and maintaining customer
DR3.1 Authorize Excess Product Return and channel performance standards of an return processes such as
ER.4 Manage Return Inventory and channel performance standards of an return processes such as

ER.5 Manage Return Capital Assets and channel performance standards of an return processes such as
Business Rules for Return Processes to P5.2 Rules for conducting business, i.e. developing and maintaining customer
Identify, Assess, and Aggregate Return and channel performance standards of an return processes such as
Resources service levels, given service requirements by supply chain
DR1.1 Authorize Defective Product Return and channel performance standards of an return processes such as
SR2.1 Identify MRO Product Condition and channel performance standards of an return processes such as
ER.7 Manage Return Network Configuration and channel performance standards of an return processes such as
DR2.1 Authorize MRO Product Return and channel performance standards of an return processes such as
ER.8 Manage Return Regulatory and channel performance standards of an return processes such as
Requirements service levels, given service requirements by supply chain
SR1.1 Identify Defective Product Condition and channel performance standards of an return processes such as
Business Rules for Return Processes to P5.1 Rules for conducting business, i.e. developing and maintaining customer
Assess, and Aggregate Return and channel performance standards of an return processes such as
Requirements service levels, given service requirements by supply chain
SR3.1 Identify Excess Product Condition and channel performance standards of an return processes such as

ER.2 Manage Performance of Return Processes
The process of measuring actual Return Process performance against internal and/or external
standards to develop and implement a course of action to achieve targeted performance levels.

Cost to Manage Performance of Return The sum of the costs to Manage Performance of Return Processes.
Processes
Manage Performance of Return Processes The average time associated with managing the performance of supply
Cycle Time chain activities
Best Practices:
Business Rules Are Clearly Communicated Convenient availability to business rules and return criteria.
with the Customer
Continuous Improvement is Planned through Avenue to receive customer comments.
Process Reviews and Customer Feedback
Inputs:
Manage Return Capital Assets
Receipt Data from ER.3 Manage Return A collection of related receipt data records organized in a specific manner.
Data Collection
Receipt Data from ER.4 Manage Return A collection of related receipt data records organized in a specific manner.
Inventory
Return Benchmark Data from Source: Data relative to the return process utilized to compare the company’s
Company actual results to selected values identified as reference.
Outputs:
MRO Product Return Capabilities to P5.2 See “Product Return Capabilities“
Identify, Assess, and Aggregate Return
Resources
Return Performance to ER.5 Manage Return Performance measurement information for the Return Process (the actual
Capital Assets value of measured for the criterion).
Return Performance to ER.6 Manage Return Performance measurement information for the Return Process (the actual
Transportation value of measured for the criterion).
Return Product History to ER.3 Manage The return history of product including failure rates, failure causes, etc.
Return Data Collection
Supply-Chain Performance Metrics to EP.2 Standard measures that indicate how well a supply chain performs within
Manage Performance of Supply Chain certain categories of performance known as Performance Attributes, e.g.
management.

ER.3 Manage Return Data Collection
The process of collecting, cleansing, integrating and maintaining the accuracy of return execution
information necessary to plan the recovery of supply chain resources.

Cost to Manage Return Data Collection The sum of the costs to manage the capital assets associated with returns
data collection.
Manage Return Data Collection Cycle Time The average time associated with managing return data collection
Best Practices:
Automated Update of Customer Excess - Use trend analysis to influence inventory level decisions.
Material Return Transaction History - Web-based alerts to identify update occurred and when pre-determined
thresholds are exceeded.
Data Accessibility across the Enterprise for Web based access to various levels of enterprise data
Visibility by Discrete Business Units
Inputs:
Data Cleansing Procedure from Source: The procedure that outlines the cleansing of return data to insure its validity
Company and accuracy during the return process.
Data System Requirements from Source: List of requirements of the data system that insure cleansed data is
Company compatible and usable, or the data system requirements to fully automate
the return process.
Return Product History from ER.2 Manage The return history of product including failure rates, failure causes, etc.
Performance of Return Processes
Outputs:
Data About Return Capabilities to P5.2 Information required in the process of integrating and maintaining the
Identify, Assess, and Aggregate Return accuracy of return execution.
Resources
Receipt Data to DR1.3 Receive Defective A collection of related receipt data records organized in a specific manner.
Product
Receipt Data to ER.2 Manage Performance A collection of related receipt data records organized in a specific manner.
of Return Processes
Receipt Data to DR2.3 Receive MRO A collection of related receipt data records organized in a specific manner.
Product
Receipt Data to DR3.3 Receive Excess A collection of related receipt data records organized in a specific manner.
Product

ER.4 Manage Return Inventory
The process of establishing a return process inventory strategy and planning the recovery process
inventory limits or levels (unserviceable carcasses ready for teardown/evaluation and those
carcasses already evaluated and ready for repair) including replenishment models, ownership,
product mix, and stocking locations, both inter and intra company.

Cost to Manage Return Inventory The sum of the costs to manage the capital assets associated with return
inventory.
Manage Return Inventory Cycle Time The average time associated with managing return inventory
Best Practices:
Periodic Review of Metrics and Strategy with Real time view of data.
Real Time Data on Current Status Dynamic calculation of safety stock based on actual sales.
Statistical Test Count The Statistical Test Count (STC) process is a method of validating
statistical sample of the entire inventory population. This sample is then
extrapolated across the inventory population, which provides an indicative
measure of entire inventory population. Furthermore, with extrapolation
the net and gross percentage of error is determined.
Unique Identifier Tag for Each Repairable Asset management software using bar code, RFI tag, etc.
Asset
Inputs:
Return Inventory Availability from SR1.2 Inventory relative to return process available for use.
Disposition Excess Product
Receive Excess Product return authorization and other documentation and prepares the item for
transfer.
Receive MRO Product return authorization and other documentation and prepares the item for
transfer.
transfer.
transfer.
transfer.

Receive Defective Product return authorization and other documentation and prepares the item for
transfer.
Return Plans from P5.4 Establish and Courses of action over specified time periods that represent the projected
Communicate Return Plans appropriation of required return resources and or assets to meet the
return process requirements.
Return Product Location from SR3.2 The physical location where the returned product inventory is held prior to
Disposition Excess Product disposition
Return Product Location from SR1.2 The physical location where the returned product inventory is held prior to
Disposition Defective Product disposition
Returned Product Location from SR2.2 The storage location of those items being returned.
Outputs:
Receipt Data to DR1.3 Receive Defective A collection of related receipt data records organized in a specific manner.
Product
Receipt Data to DR2.3 Receive MRO A collection of related receipt data records organized in a specific manner.
Product
Receipt Data to ER.2 Manage Performance A collection of related receipt data records organized in a specific manner.
of Return Processes
Receipt Data to DR3.3 Receive Excess A collection of related receipt data records organized in a specific manner.
Product
Return Inventory Availability to SR2.3 Inventory relative to return process available for use.
Request MRO Return Authorization
Request Excess Return Authorization
Return Inventory Availability to SR3.5 Return Inventory relative to return process available for use.
Excess Product
Schedule Excess Product Shipment
Defective Product
MRO Product
Request Defective Return Authorization
Schedule MRO Shipment
Return Inventory for Transfer to DR2.4 Inventory relative to return process available for transfer to other
Transfer MRO Product destination.
Transfer Excess Product destination.
Transfer Defective Product destination.
Return Inventory Targets to P5.2 Identify, The goals and approach to the management of return inventories.
Assess, and Aggregate Return Resources

ER.5 Manage Return Capital Assets
The process of acquiring, maintaining and dispositioning capital assets such as fork lift trucks,
information systems and equipment in receiving docks that are utilized in support of Return.
Management activities would include defining asset requirements, determining resource
availability and conducting gap analysis and resolution. The process includes lease-buy and
outsourcing decisions.

Cost to Manage Return Capital Assets The sum of the costs to manage the capital assets associated with returns.
Manage Return Capital Assets Cycle Time The average time associated with managing return capital assets
Best Practices:
Automated Data Entry Scanning with RFID/Bar-codes systems
Automated Disposition Instructions for Advanced planning and scheduling capability coupled with decision support
Returns Based on Data Interchange with logic.
Strategic Providers
Integrated Transportation Visibility - Advanced shipping notices
- Real time shipping tracking
Outsource If Not a Core Competency Use 4PL to manage and move.
Inputs:
stakeholders/trading partners. Business rules align Return process policies
with business strategy, goals, and objectives.
Return Performance from ER.2 Manage Performance measurement information for the Return Process (the actual
Performance of Return Processes value of measured for the criterion).
Communicate Return Plans appropriation of required return resources and or assets to meet the return
Outputs:
MRO Product Return Capabilities to ER.2 See “Product Return Capabilities“
Manage Performance of Return Processes
MRO Product Return Capabilities to P5.2 See “Product Return Capabilities“
Identify, Assess, and Aggregate Return
Resources

ER.6 Manage Return Transportation
The process of providing the least cost transportation of a returned product from a customer
location to the appropriate service provider location within specified time frames. Can include
interim transportation activities conducted within more than one service provider locations.
Includes defining and implementing a Return transportation strategy throughout the supply chain,
maintaining transportation-related information (rates, lead times) and managing transportation
performance.

Cost to Manage Return Transportation The sum of the costs associated with managing return transportation.
Manage Return Transportation Cycle Time The average time associated with managing return transportation
Best Practices:
Appointment Scheduling for Pickup and Transportation Management System (TMS) Maintenance Management
Delivery of Customer Shipments
Automated Documentation for International Transportation Management System (TMS) Maintenance Management
Shipments
Backhaul Trading Exchange Pooling
Capture and Maintain Mode Specific Data Transportation Management System (TMS) Maintenance Management
Consolidate Shipments Through Cross None Identified
Docking - Coordinate with Other Shipments
Develop Proactive Transit Damage None Identified
Programs
Electronic Manifest and Electronic Billing Transportation Management System (TMS) Maintenance Management
Integrated Order Management, Warehouse Transportation Management System (TMS) Maintenance Management
Management, and Transportation
Internet Pooling (Electronic Brokerage of Rating & Routing
Shipments)
Involve Your Other Supply-Chain Partners If Utilization of transportation management system (TMS) to manage returns.
Possible to Leverage Transportation Maximization of TMS use, both intra and inter-company within the supply
throughout the Chain chain.
Limit the Number of Carriers, Treat Them as Utilization of transportation management system (TMS) to manage returns.
Partners and Build a Strong Relationship Maximization of TMS use, both intra and inter-company within the supply
with Each One Geared Toward Continually chain.
Improving Service and Lowering Cost
Manage Information Across 100% of Transportation Management System (TMS) Maintenance Management
Shipments
Measurement of Carrier Performance for Transportation Management System (TMS) Maintenance Management
On-time Delivery and Completeness
Real-Time Optimized Shipment Method Transportation Management System (TMS) Maintenance Management
Selection (Air Parcel, Ground Parcel, LTL,
Requirements
Real-Time Shipment Tracking, (via internet) Transportation Management System (TMS) Maintenance Management
Segregate In-Bound Carcass Return Cost None Identified
from Other Transportation Costs
Utilize Internet-Based Freight Bidding Built None Identified
Around Shared Shipping Volume Projections
Utilize Invoice-less Freight Payment None Identified
View for Analysis for All Orders and Transportation Management System (TMS) Maintenance Management
Shipments the Following Data: Logistics,
Product, Cost, GL Charging

Inputs:
Return Performance from ER.2 Manage Performance measurement information for the Return Process (the actual
Performance of Return Processes value of measured for the criterion).
Outputs:
Agreements to DR3.3 Receive Excess return process.
Product
Agreements to DR1.3 Receive Defective return process.
Product
Agreements to P5.2 Identify, Assess, and return process.
Aggregate Return Resources
Agreements to DR2.3 Receive MRO Product return process.

ER.7 Manage Return Network Configuration
The process where customer and service provider locations involved in the flow of returns are
defined and maintained throughout the supply chain. Locations include retail and wholesale
customer and supplier sites, manufacturing facilities, distribution centers, warehouses, repair
depots and military bases. How unserviceable material flow throughout the network is governed by
the specific supply chain’s business rules. (See ER1)

Cost to Manage Return Network The sum of the costs to manage the capital assets associated with
Configuration configuring the return network.
Manage Return Network Configuration The average time associated with managing the return network
Cycle Time configuration
Best Practices:
Service Provider Utilizes Web-Based Continuously updated authorized repair sites
Communicate to Identify New and
Discontinued Repair Sites to Customers
Utilize Web-Based Collaboration between Total return asset visibility throughout the network
Asset Manager and Repair Sites Regarding
Capacity and Scheduling
Utilize Web-Based Collaboration between Shared return forecasts
Customer and Service Provider on In-Bound
Return Forecasts and Asset Tracking
Utilize Web-Based Collaboration to Identify Shared knowledge of resource availability and bottlenecks
Potential New Repair Sites Prior to Their
Selection
Inputs:
Outputs:
Return Network Configuration to ER.8 The business rules that govern the flow of unserviceable material through
Manage Return Regulatory Requirements the network, i.e. the network configuration.
Return Process Workflow Definition and Definition and maintenance of the information flow about the Returns
Policies to P5.2 Identify, Assess, and supply chain network for a group of similar or complimentary items
Aggregate Return Resources through out their life cycle

ER.8 Manage Return Regulatory Requirements
set by external entities (i.e. government, trade officials, etc.) when planning for the Return of
Assets. Includes Customs requirements and Import / Export Controls.

Cost to Manage Return Regulatory The sum of the costs associated with managing compliance to return
Requirements and Compliance regulatory requirements.
Manage Return Regulatory Requirements The average time associated with compliance and regulatory
and Compliance Cycle Time requirements for return products
Best Practices:
Clarify in Advance Hazardous Material Overseas packaging, labeling and shipping regulatory requirements are
Packaging, Labeling and Shipping given specific attention.
Requirements
Clarify in Advance If the Product to be Participants at all customer and service provider locations involved clearly
Returned Requires Specific, Formal understand all regulatory requirements at each step in the return process .
Authorization from the Service Provider per
Federal, State or Local Regulation, Prior to
Returning
Compare Local Customs Requirements to None Identified
Your Process Procedures to Ensure All
Requirements Are Accounted for Before
Shipping
Confirm All Documentation and Inspection None Identified
Requirements Before Shipping
Note and Communicate Shelf Life Hazardous material regulations are given specific attention.
Requirements Carefully Before Shipping
Inputs:
ER.1 Manage Business Rules for Return and channel performance standards of return processes such as service
Processes levels, given service requirements by supply chain stakeholders/trading
partners. Business rules align Return process policies with business
strategy, goals, and objectives.
Return Network Configuration from ER.7 The business rules that govern the flow of unserviceable material
Manage Return Network Configuration through the network, i.e. the network configuration.
Outputs:
Manage Regulatory Return Policy to SR2.1 The process of identifying and complying with regulatory documentation
Identify MRO Product Condition and process standards set by external entities (i.e. government, trade
officials, etc.) when planning for the Return and Recovery of Assets.
Identify Defective Product Condition and process standards set by external entities (i.e. government, trade
Identify Excess Product Condition and process standards set by external entities (i.e. government, trade

Return Regulatory Requirements to DR3.3 Return requirements dictated by process standards set by external
Receive Excess Product entities (i.e. government, trade officials, etc.).
Receive Defective Product entities (i.e. government, trade officials, etc.).
Return Regulatory Requirements to P5.1 Return requirements dictated by process standards set by external
Assess, and Aggregate Return entities (i.e. government, trade officials, etc.).
Requirements
Return Regulatory Requirements to P5.2 Return requirements dictated by process standards set by external
Identify, Assess, and Aggregate Return entities (i.e. government, trade officials, etc.).
Resources
Receive MRO Product entities (i.e. government, trade officials, etc.).
Warranty Data to SR2.1 Identify MRO All data relevant to a warranty claim for a customer for replacement,
Product Condition repair or credit because the product received did not meet a
Warranty Data to SR1.1 Identify Defective All data relevant to a warranty claim for a customer for replacement,
Product Condition repair or credit because the product received did not meet a

Workflow Graphics

GLOSSARY
PROCESS TERMS
PROCESS TERM NAME DEFINITION
Processes that provide finished goods and services to meet planned or actual
demand, typically including order management, transportation management,
D Deliver and distribution management.
The process of delivering product that is maintained in a finished goods state
D1 Deliver Stocked Product prior to the receipt of a firm customer order.
D1.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes.
The activities such as sorting / combining the products, packing / kitting the
products, paste labels, barcodes etc. and delivering the products to the
D1.10 Pack Product shipping area for loading.
The series of tasks including placing/loading product onto modes of
D1.11 Load Vehicle & Generate transportation and generating the documentation necessary to meet internal,
Shipping Documentation customer, carrier and government needs..
The process of receiving the shipment by the customer site (either at customer
D1.13 Receive & Verify Product by site or at shipping area in case of self-collection) and verifying that the order
Customer was shipped complete and that the product meets delivery terms.
When necessary, the process of preparing, testing and installing the product at
D1.14 Install Product the customer site. The product is fully functional upon completion.
A signal is sent to the financial organization that the order has been shipped
and that the billing process should begin and payment be received or be closed
out if payment has already been received. Payment is received from the
D1.15 Invoice customer within the payment terms of the invoice.
Receive orders from the customer and enter them into a company's order
processing system. Orders can be received through phone, fax, or electronic
media. "Technically" examine orders to ensure an orderable configuration and
D1.2 Receive, Enter & Validate provide accurate price. Check the customer's credit. Optionally accept
Order payment.
Inventory and/or planned capacity (both on hand and scheduled) is identified
D1.3 Reserve Inventory & and reserved for specific orders and a delivery date is committed and
Determine Delivery Date scheduled.
The process of analyzing orders to determine the groupings that result in least
D1.4 Consolidate Orders cost/best service fulfillment and transportation.
D1.7 Select Carriers & Rate Specific carriers are selected by lowest cost per route and shipments are rated
Shipments and tendered.
The activities such as receiving product, verifying, recording product receipt,
D1.8 Receive Product from Source determining put-away location, putting away and recording location that a
or Make company performs at its own warehouses. May include quality inspection.
The series of activities including retrieving orders to pick, determining inventory
availability, building the pick wave, picking the product, recording the pick and
D1.9 Pick Product delivering product to shipping in response to an order.
The process of delivering product that is manufactured, assembled or
configured from standard parts or subassemblies. Manufacture, assembly or
configuration will begins only after the receipt and validation of a firm customer
D2 Deliver Make-to-Order Product order.
D2.1 Process Inquiry & Quote Receive and respond to general customer inquiries and requests for quotes.
The series of tasks including placing/loading product onto modes of
D2.11 Load Product & Generate transportation and generating the documentation necessary to meet internal,
Shipping Documentation customer, carrier and government needs..

The process of receiving the shipment at the customer (either at customer site
D2.13 Receive & Verify Product by or at shipping area in case of self-collection) site and verifying that the order
Customer was shipped complete and that the product meets delivery terms.
Receive orders from the customer and enter them into a company's order
processing system. Orders can be received through phone, fax, or through
electronic media. Configure your product to the customer's specific needs,
based on standard available parts or options. "Technically" examine order to
D2.2 Receive, Configure, Enter and ensure an orderable configuration and provide accurate price. Check the
Validate Order customer's credit. Optionally accept payment.
D2.3 Reserve Resources & Inventory and/or planned capacity is identified and reserved for specific orders,
Determine Delivery Date and a delivery date is committed and scheduled.
The process of analyzing orders to determine the groupings that result in least
D2.4 Consolidate Orders cost/best service fulfillment and transportation.
D2.7 Select Carriers & Rate Specific carriers are selected by lowest cost per route and shipments are rated
The series of activities including retrieving orders to pick, verifying inventory
D2.9 Pick Product delivering product to packing area in response to an order.
The process of delivering a product that is designed, manufactured, and
D3 Deliver Engineer-to-Order assembled from a bill of materials that includes one or more custom parts.
Product Design will begin only after the receipt and validation of a firm customer order.
The process of receiving a request for proposal or request for quote, evaluating
D3.1 Obtain and Respond to the request (estimating the schedule, developing costs estimates, establishing
RFP/RFQ price), and responding to the potential customer.
The series of tasks including placing product onto vehicles, generating the
D3.11 Load Product & Generate documentation necessary to meet internal, customer, carrier and government
Ship Documents needs.
D3.12 Ship Product The process of shipping the product to the customer site
The process of receiving the shipment (either at customer site or at shipping
area in case of self-collection) and verifying that the order was shipped
D3.13 Receive & Verify Product by complete and that the product meets delivery terms.
Customer
The process of negotiating order details with customer (e.g., price, schedule,
D3.2 Negotiate & Receive Contract product performance) and finalizing the contract. Optionally accept payment.
The process of entering/finalizing the customers order, approving the planned
D3.3 Enter Order, Commit resources (e.g., engineering, manufacturing, etc.) and officially launching the
Resources & Launch Program program.
The process of evaluating the design and build schedules relative to customer
D3.4 Schedule Installation requested installation date to determine installation schedule.
D3.5 Build Loads Transportation loads are selected and efficient loads are built.

The process of consolidating and routing shipments by mode, lane, and
D3.6 Route Shipments location.
D3.7 Select Carriers and Rate Specific carriers are selected by lowest cost per route and shipments are rated
The series of activities including retrieving orders to pick, verifying inventory
D3.9 Pick Product delivering product to packing area in response to an order.
Deliver Retail Products are the processes used to acquire, merchandise, and
sell finished goods at a retail store. A retail store is a physical location that
sells products (and services) direct to the consumer using a point of sale
process (manual or automated) to collect payment. Merchandising at a store
level is the stocking and restocking of products in designated storage locations
D4 Deliver Retail Product to generate sales in a retail store.
D4.1 Generate Stocking Schedule The process of scheduling resources to support item-stocking requirements.
determining put-away location, putting away and recording location that a
D4.2 Receive Product at Store company performs at its own stores. May include quality inspection.
The process of retrieving restocking orders to pick, determining inventory
availability, building a pick wave, picking item and quantity from a designated
backroom warehouse location, recording the resulting inventory transaction,
D4.3 Pick Product from Backroom and delivering the product to point of stock
For restocks, the tasks associated with identifying the item location, stocking
the shelf according to merchandise plans, and recording the appropriate
inventory transaction. For promotional items and stock repositioning the tasks
associated with shelf and point of sale preparation, stock placement, and end
D4.4 Stock Shelf of sale activities.
Typical set of tasks associated with product selection, storage and movement
D4.5 Fill Shopping Cart through to checkout.
The processes and tasks associated with product checkout including scanning,
method of payment, credit application and approval, service agreement, order
D4.6 Checkout confirmation, and/or invoice or receipt.
The process of preparing and installing the product at the customer site. The
D4.7 Deliver and/or Install product is fully functional upon completion.
Processes associated with receiving returned products for any reason. These
DR Deliver Return processes extend into post-delivery customer support.
The processes of the last known holder or designated return center authorizing
and scheduling the defective product return and the physical receipt of the item
by the last known holder or known return center and their transfer of the item
for final disposition determination. The process includes communication
DR1 Deliver Return Defective between the customer and last known holder or known return center and the
Product generation of associated documentation.
The process where the last known holder or designated return center receives
a defective product return authorization request from a customer, determines if
the item can be accepted and communicates decision to the customer.
DR1.1 Authorize Defective Product with the customer, including authorizing return replacement or credit. Rejecting
Return the request would include providing a reason for the rejection to the customer.
The process where the last known holder or designated return center evaluates
the defective product handling requirements including negotiated conditions
and develops a schedule that tells the Customer when to ship the product. The
DR1.2 Schedule Defective Return scheduling activity would also inform Receiving when to expect the shipment
Receipt and where to send the product, for disposition, upon receipt.
The process where the last known holder or designated return center receives
and verifies the returned defective product against the return authorization and
DR1.3 Receive Defective Product other documentation and prepares the item for transfer.

The process where the last known holder or designated return center transfers
the defective product to the appropriate process to implement the disposition
DR1.4 Transfer Defective Product decision.
The processes of the service provider authorizing and scheduling the MRO
return product and the physical receipt of the item by the service provider and
their transfer of the item for final disposition determination. The process
includes communication between the customer and service provider and the
DR2 Deliver Return MRO Product generation of associated documentation.
The process where a service provider receives an MRO product return
authorization request from a customer, determines if the item can be accepted
for MRO and communicates their decision to the customer. Accepting the
request would include negotiating the conditions of the return with the
DR2.1 Authorize MRO Product customer, including authorizing return replacement or credit. Rejecting the
Return request would include providing a reason for the rejection to the customer.
The process where the service provider evaluates the MRO service
requirements including negotiated conditions and develops a schedule that tells
the Customer when to ship the part. The scheduling activity would also inform
DR2.2 Schedule MRO Return Receiving when to expect the shipment and where to send the part, for
Receipt induction or storage, upon receipt.
The process where the service provider receives and verifies the returned MRO
item against the return authorization and other documentation and prepares the
DR2.3 Receive MRO Product item for transfer (includes verify).
The process where the service provider transfers the MRO product to the
DR2.4 Transfer MRO Product appropriate process to implement the disposition decision.
The processes of the designated return center authorizing and scheduling the
excess product return, the physical receipt of the item by the designated return
center and transfer of the item for final disposition The process includes
communication between the customer and designated return center and the
DR3 Deliver Return Excess Product generation of associated documentation.
The process where the designated return center receives an excess product
return authorization request from a customer, determines if the item can be
accepted and communicates their decision to the customer. Accepting the
request would include negotiating the conditions of the return with the
DR3.1 Authorize Excess Product customer, including authorizing credit or cash discount. Rejecting the request
Return would include providing a reason for the rejection to the customer.
The process where the designated return center evaluates an authorized
excess material return to determine packaging and handling requirements. This
assessment will lead to the development of a return disposition decision and a
return schedule with terms and conditions that will tell the Customer how and
when to ship the product. The scheduling activity would also inform the Return
DR3.2 Schedule Excess Return Center's Receiving department when to expect the shipment and where to
Receipt send the product, for disposition, upon receipt.
The process where the designated return center receives and verifies the
returned excess product and associated documentation against the return
DR3.3 Receive Excess Product Administrate any discrepancies that arise.
The process where the designated return center transfers the excess product
DR3.4 Transfer Excess Product to the appropriate process to implement the disposition decision.
Enable Processes prepare, maintain, or manage information or relationships on
ED Enable Deliver which planning and execution processes rely.
The process of defining and maintaining rules which affect the acceptance of
ED.1 Manage Deliver Business an order, based on quantity, method of delivery, credit, customer experience,
Rules etc. (Include distribution channel rules)
The process of defining the requirement and monitoring the performance of the
delivery of product to a customer. When physical delivery is out-sourced the
ED.2 Assess Delivery Performance performance is passed on to source for contract administration.

The process of collecting, maintaining, and communicating information to
support deliver planning and execution processes. The information to be
managed includes: order data - (customer preference, history, status, and
delivery requirements, etc.), warehouse data, transportation data, and deliver
ED.3 Manage Deliver Information data.
ED.4 Manage Finished Goods The process of establishing and maintaining finished goods, inventory limits or
Inventories levels, replenishment models, ownership, product mix, stocking locations.
Acquisition, maintenance, and disposition of order management, warehouse,
ED.5 Manage Deliver Capital and transportation capital assets. Determine material handling (inventory) pick
Assets pack & ship methods (inventory), and equipment.
The process of 1) defining and maintaining the information which characterizes
product, containerization, vehicle, route, terminals, regulations, rates/tariffs and
backhaul opportunity (Characterization include information necessary to
support maintenance of internal Outbound Transportation equipment -
ED.6 Manage Transportation CAPITAL ASSETS) and 2) the management of transporters.
The process of defining and maintaining the distribution channel/ network for a
ED.7 Manage Product Life Cycle specific product line (no capital asset or transportation management).
The process of recording and maintaining regulations and rates, which
ED.8 Manage Import/Export constrain the ordering and delivering of product. Determine customs
Requirements requirements, establish letters of credit terms and conditions, etc.
EM Enable Make which planning and execution processes rely.
The process of establishing, maintaining, and enforcing rules for managing
production details in line with business strategy, goals, and objectives.
Production details include part/item master, bills of materials/formulas, routings,
processes, equipment requirements, tooling, and other information specifying
EM.1 Manage Production Rules the method of production for a particular product.
The process of developing and maintaining performance standards and
analysis methods to compare actual production performance against the
EM.2 Manage Production established standards. This process allows the development and
Performance implementation of a course of action to achieve targeted performance.
The process of managing, collecting, maintaining, and communicating
information to support MAKE planning and execution processes. The
EM.3 Manage MAKE Information information to be managed includes production, order and process data.
The process of establishing and maintaining limits or levels, replenishment
models, ownership, product mix and stocking locations for In-Process Product
(WIP).
EM.4 Manage In-Process Products Management of the activities associated with handling/storage/movement of
(WIP) materials used to support production.
The process of specifying maintaining and dispositioning MAKE's capital assets
to operate the supply chain production processes. This process element
includes repairs, alterations, calibration and other miscellaneous items to
maintain production capabilities of the manufacturing fixed asset base.
EM.5 Manage Equipment and The ongoing management of the activities associated with ensuring equipment
Facilities and facilities are kept in proper order.
The process of transporting In-Process Product (WIP). This includes
management of the activities associated with in transit handling and movement
EM.6 Manage Transportation of In-Process Product (WIP).
The process of identifying and maintaining a network of intra-company
production units that deliver specific semi-finished materials or product sets to
EM.7 Manage Production Network the final production site.
EM.8 Manage Regulatory The process of identifying and complying with regulatory documentation and
Compliance process standards set by external entities (e.g. government)
A plan for the development and establishment of courses of action over
specified time periods to appropriate delivery resources to meet projected
delivery requirements. The plan contains necessary business requirements for
information and relationships to effectively and efficiently PLAN the Supply
EP Enable PLAN Chain.

The process of establishing, maintaining, and enforcing decision support
criteria for Supply Chain Planning which translate to rules for conducting
business, i.e. developing and maintaining customer and channel performance
standards of an entire supply chain such as service levels, given service
EP.1 Manage Business Rules for requirements by supply chain stakeholders/trading partners. Business rules
PLAN Processes align PLAN process policies with business strategy, goals, and objectives.
The process of measuring actual integrated Supply Chain performance against
internal and/or external standards to develop and implement a course of action
to achieve targeted performance levels. Performance targets established for
EP.2 Manage Performance of the execution of supply chain processes are reflected in the process elements
Supply Chain for PLAN, i.e. cost, delivery reliability, cycle time, responsiveness, and assets.
The process of collecting, integrating and maintaining the accuracy of supply
chain execution information necessary to plan the balance of supply chain
EP.3 Manage PLAN Data resources to demand requirements at both the highest aggregate and lowest
Collection SKU planning levels.
The process of establishing total supply chain inventory strategy and planning
the total inventory limits or levels (including Raw Material, Work In Process,
EP.4 Manage Integrated Supply Finished and Purchased Finished Goods) including replenishment models,
Chain Inventory ownership, product mix, and stocking locations, both inter and intra company.
The process of defining capacity strategy (i.e. internal versus contract
manufacturing or internal versus 3rd Party Logistics) and then acquiring,
EP.5 Manage Integrated Supply maintaining and dispositioning an organization's capital assets to operate the
Chain Capital Assets integrated supply chain.
The process of defining an integrated supply chain transportation strategy and
maintaining the information which characterizes total supply chain
EP.6 Manage Integrated Supply transportation requirements, and the management of transporters both inter
Chain Transportation and intra company.
The process of defining and maintaining the information about a unique supply
chain network for a group of similar or complimentary products through their full
life cycle, including the evaluation of market need, product realization
(development, introduction and production), product discontinuation, and after-
market support. This element also includes the management of critical sub
processes needed to manage the life cycle of individual item numbers including
EP.7 Manage Planning item masters, routings, event planning (promotions, etc.), ABC classification,
Configuration rationalization, and bill of materials.
The process of identifying and complying with regulatory documentation and
EP.8 Manage PLAN Regulatory process standards set by external entities (i.e. government, trade officials, etc.)
Requirements and Compliance when planning for the integrated supply chain network.
The process of revising the long-term supply chain capacity and resource
plans, given the inputs from the strategic and business plans. This includes
EP.9 Align Supply Chain Unit Plan revision of not only aggregate forecast and projections related to supply chain,
with Financial Plan source, make, and delivery plans, but also business assumptions.
ER Enable Return which planning and execution processes rely.
The process of establishing, maintaining, and enforcing decision support
criteria for Return Planning that are translated into rules for conducting
business. These rules align Return process policies with business strategy,
goals, and objectives. Examples of business rules include those that (1) Enable
customers to identify when scheduled and unscheduled conditions occur that
require a return authorization request, (2) Enable a service provider to confirm
a part is authorized to be returned, (3) Identify the waiting period to confirm a
return item has been shipped and received before following up (4) Develop and
maintain customer and channel performance standards of return processes
such as service levels, given service requirements by supply chain
stakeholders/trading partners.(5) Communicate to customers the allowable
amount of elapsed time from purchase and condition in which excess material
ER.1 Manage Business Rules for must be received in order for it to be accepted as a return (6) Negotiate any
Return Processes restocking charge stipulations.

The process of measuring actual Return Process performance against internal
ER.2 Manage Performance of and/or external standards to develop and implement a course of action to
Return Processes achieve targeted performance levels.
The process of collecting, cleansing, integrating and maintaining the accuracy
ER.3 Manage Return Data of return execution information necessary to plan the recovery of supply chain
Collection resources.
The process of establishing a return process inventory strategy and planning
the recovery process inventory limits or levels (unserviceable carcasses ready
for teardown/evaluation and those carcasses already evaluated and ready for
repair) including replenishment models, ownership, product mix, and stocking
ER.4 Manage Return Inventory locations, both inter and intra company.
The process of acquiring, maintaining and dispositioning capital assets such as
fork lift trucks, information systems and equipment in receiving docks that are
utilized in support of Return. Management activities would include defining
asset requirements, determining resource availability and conducting gap
ER.5 Manage Return Capital analysis and resolution. The process includes lease-buy and outsourcing
Assets decisions.
The process of providing the least cost transportation of a returned product
from a customer location to the appropriate service provider location within
specified time frames. Can include interim transportation activities conducted
within more than one service provider locations. Includes defining and
implementing a Return transportation strategy throughout the supply chain,
ER.6 Manage Return maintaining transportation-related information (rates, lead times) and managing
Transportation transportation performance.
The process where customer and service provider locations involved in the flow
of returns are defined and maintained throughout the supply chain. Locations
include retail and wholesale customer and supplier sites, manufacturing
facilities, distribution centers, warehouses, repair depots and military bases.
ER.7 Manage Return Network How unserviceable material flow throughout the network is governed by the
Configuration specific supply chain's business rules. (See ER1)
The process of identifying and complying with regulatory documentation and
process standards set by external entities (i.e. government, trade officials, etc.)
ER.8 Manage Return Regulatory when planning for the Return of Assets. Includes Customs requirements and
Requirements Import / Export Controls.
ES Enable Source which planning and execution processes rely.
The process of defining requirements and establishing, maintaining and
enforcing decision support criteria, in alignment with business strategy, goals
and objectives. The business strategy defines the criteria for sourcing business
rules that are translated into guidelines and policies for conducting business
within the enterprise and other legal entities. Sourcing business rules include:
supplier selection and negotiation processes, fulfillment and delivery
ES.1 Manage Sourcing Business performance and relationship definition for specific levels of collaboration and
Rules partnership.
The process of measuring actual supplier performance against internal and/or
external standards, providing feedback to achieve and maintain the
performance required to meet the customers' business and/or competitive
ES.2 Assess Supplier Performance needs.
The process of collecting, sorting, defining hierarchy and managing
configuration control of supplier information and source data that are required
to make sourcing and related planning and manufacturing decisions. Source
data to be maintained includes supplier profile data, financials, quality and
delivery performance, spend analysis at various levels of the enterprise, from
ES.3 Maintain Source Data major business units to material part number.
The process of establishing and maintaining physical inventories and inventory
information. This includes warehouse management, cycle counting, physical
inventories and inventory reconciliation. For Services, this may include tracking
the number of service providers and the financial resources committed at any
ES.4 Manage Product Inventory given point in time.

The process of acquiring, maintaining and dispositioning an organization's
<capital assets> located at a supplier's facility and/or outside source, which are
ES.5 Manage Capital Assets used to operate the supply chain.
The process of defining and maintaining the information that characterizes
inbound logistics management of all supplier deliveries, including both physical
and electronic goods and services. This includes carrier selection and
ES.6 Manage Incoming Product management, tracking deliveries and import.
The process of defining and maintaining a unique network of suppliers to
deliver a specific product set. This includes establishment of a new supplier or
maintaining an existing supplier and all the tasks and activities associated with
identifying and qualifying the supplier and finalizing on the sourcing terms and
conditions. Also, the management of a supplier certification process, which
includes certifying new suppliers and maintaining the current status of existing
ES.7 Manage Supplier Network suppliers.
The process of identifying and complying with import/export regulatory
ES.8 Manage Import/Export documentation and process standards set by external entities (e.g.,
Requirements government).
The management of existing purchase orders or supplier contracts. This
includes managing volume/step pricing, resolving issues, enforcing terms and
conditions and maintaining an accurate status for existing purchase orders or
contracts. Also, the management of a supplier certification process, which
includes certifying new suppliers and maintaining the current status of existing
ES.9 Manage Supplier Agreements suppliers.
Processes that transform product to a finished state to meet planned or actual
M Make demand.
The process of manufacturing in a make to stock environment adds value to
products through mixing, separating, forming, machining, and chemical
processes. Make to stock products are intended to be shipped from finished
goods or "off the shelf," are completed prior to receipt of a customer order, and
M1 Make-to-Stock are generally produced in accordance with a sales forecast.
Given plans for the production of specific parts, products, or formulations in
specified quantities and planned availability of required sourced products, the
scheduling of the operations to be performed in accordance with these plans.
Scheduling includes sequencing, and, depending on the factory layout, any
standards for setup and run. In general, intermediate production activities are
M1.1 Schedule Production coordinated prior to the scheduling of the operations to be performed in
Activities producing a finished product.
The selection and physical movement of sourced/in-process product (e.g., raw
materials, fabricated components, subassemblies, required ingredients or
intermediate formulations) from a stocking location (e.g., stockroom, a location
on the production floor, a supplier) to a specific point of use location. Issuing
product includes the corresponding system transaction. The Bill of
Materials/routing information or recipe/production instructions will determine the
M1.2 Issue Material products to be issued to support the production operation(s).
The series of activities performed upon sourced/in-process product to convert it
from the raw or semi-finished state to a state of completion and greater value.
The processes associated with the validation of product performance to ensure
M1.3 Produce and Test conformance to defined specifications and requirements.
The series of activities that containerize completed products for storage or sale
to end-users. Within certain industries, packaging may include cleaning or
M1.4 Package sterilization.
The movement of packaged products into a temporary holding location to await
movement to a finished goods location. Products that are made to order may
remain in the holding location to await shipment per the associated customer
M1.5 Stage Product order. The movement to finished goods is part of the Deliver process.
Activities associated with post-production documentation, testing, or
laboratory tests for potency or purity, creating certificate of analysis, and sign-
M1.6 Release Product to Deliver off by the quality organization.

The process of manufacturing in a make to order environment adds value to
products through mixing, separating, forming, machining, and chemical
processes. A make to order environment is one in which products are
completed after receipt of a customer order and are built or configured only in
M2 Make-to-Order response to a customer order.
M2.2 Issue Sourced/In-Process Materials/routing information or recipe/production instructions will determine the
Product products to be issued to support the production operation(s).
M2.5 Stage Finished Product order. The movement to finished goods is part of the Deliver process.
M2.6 Release Finished Product to laboratory tests for potency or purity, creating certificate of analysis, and sign-
Deliver off by the quality organization.
The process of manufacturing distinct items, such as parts that retain their
identity through the transformation process and are intended to be completed
after receipt of a customer order. While Make to Order includes standard
products built only in response to a customer order or products configured in
response to a customer order, Engineer to Order includes custom products that
are designed, developed, and manufactured in response to a specific customer
M3 Engineer-to-Order request.
Engineering activities required after acceptance of order, but before product
can be produced. May include generation and delivery of final drawings,
specifications, formulas, part programs, etc. In general, the last step in the
M3.1 Finalize Production completion of any preliminary engineering work done as part of the quotation
Engineering process.

M3.3 Issue Sourced/In-Process Materials/routing information or recipe/production instructions will determine the
Product products to be issued to support the production operation(s).
M3.6 Stage Finished Product order. The movement to finished goods is part of the Deliver process.
laboratory tests for potency or purity, creating certificate of analysis, and sign-
M3.7 Release Product to Deliver off by the quality organization.
Processes that balance aggregate demand and supply to develop a course of
P Plan action which best meets sourcing, production and delivery requirements.
The development and establishment of courses of action over specified time
periods that represent a projected appropriation of supply chain resources to
meet supply chain requirements for the longest time fence constraints of supply
P1 Plan Supply Chain resources.
The process of identifying, aggregating, and prioritizing, all sources of demand
for the integrated supply chain of a product or service at the appropriate level,
horizon and interval.
The sales forecast is comprised of the following concepts: sales forecasting

level, time horizon, and time interval. The sales forecasting level is the focal
point in the corporate hierarchy where the forecast is needed at the most
generic level. i.e. Corporate forecast, Divisional forecast, Product Line forecast,
SKU, SKU by Location. The sales forecasting time horizon generally coincides
with the time frame of the plan for which it was developed i.e. Annual, 1-5
P1.1 Identify, Prioritize, and years, 1- 6 months, Daily, Weekly, Monthly. The sales forecasting time interval
Aggregate Supply Chain generally coincides with how often the plan is updated, i.e. Daily, Weekly,
Requirements Monthly, and Quarterly.
The process of identifying, prioritizing, and aggregating, as a whole with
constituent parts, all sources of supply that are required and add value in the
P1.2 Identify, Assess, and supply chain of a product or service at the appropriate level, horizon and
Aggregate Supply Chain Resources interval.
The process of identifying, prioritizing, and aggregating, as a whole with
constituent parts, all sources of supply that are required and add value in the
P1.2 Identify, Assess, And supply chain of a product or service at the appropriate level, horizon and
Aggregate Supply Chain Resources interval.
The process of identifying and measuring the gaps and imbalances between
demand and resources in order to determine how to best resolve the variances
through marketing, pricing, packaging, warehousing, outsource plans or some
other action that will optimize service, flexibility, costs, assets, (or other supply
P1.3 Balance Supply Chain chain inconsistencies) in an iterative and collaborative environment.
Resources with Supply Chain The process of developing a time-phased course of action that commits supply-
Requirements chain resources to meet supply-chain requirements.

The establishment and communication of courses of action over the
appropriate time-defined (long-term, annual, monthly, weekly) planning horizon
and interval, representing a projected appropriation of supply-chain resources
P1.4 Establish Supply Chain Plans to meet supply-chain requirements.
periods that represent a projected appropriation of material resources to meet
P2 Plan Source supply chain requirements.
The process of identifying, prioritizing, and considering, as a whole with
P2.1 Identify, Prioritize, and constituent parts, all sources of demand for a product or service in the supply
Aggregate Product Requirements chain.
The process of identifying, evaluating, and considering, as a whole with
P2.2 Identify, Assess, And constituent parts, all material and other resources used to add value in the
Aggregate Product Resources supply chain for a product or services.
P2.3 Balance Product Resources The process of developing a time-phased course of action that commits
with Product Requirements resources to meet requirements.
The establishment of courses of action over specified time periods that
represent a projected appropriation of supply resources to meet sourcing plan
P2.4 Establish Sourcing Plans requirements.
periods that represent a projected appropriation of production resources to
P3 Plan Make meet production requirements.
P3.1 Identify, Prioritize, and
Aggregate Production The process of identifying, prioritizing, and considering as a whole with
Requirements constituent parts, all sources of demand in the creation of a product or service.
The process of identifying, evaluating, and considering, as a whole with
P3.2 Identify, Assess, and constituent parts, all things that add value in the creation of a product or
Aggregate Production Resources performance of a service.
P3.3 Balance Production
Resources with Production The process of developing a time-phased course of action that commits
Requirements creation and operation resources to meet creation and operation requirements.
represent a projected appropriation of supply resources to meet production and
P3.4 Establish Production Plans operating plan requirements.
periods that represent a projected appropriation of delivery resources to meet
P4 Plan Deliver delivery requirements.
P4.1 Identify, Prioritize, and The process of identifying, prioritizing, and considering, as a whole with
Aggregate Delivery Requirements constituent parts, all sources of demand in the delivery of a product or service.
P4.2 Identify, Assess, and The process of identifying, evaluating, and considering, as a whole with
Aggregate Delivery Resources and constituent parts, all things that add value in the delivery of a product or
Capabilities service.
P4.3 Balance Delivery Resources
and Capabilities with Delivery The process of developing a time-phased course of action that commits
Requirements delivery resources to meet delivery requirements.
represent a projected appropriation of delivery resources to meet delivery
P4.4 Establish Delivery Plans requirements.
A strategic or tactical process to establish and adjust courses of action or tasks
over specified time periods that represent a projected appropriation of return
resources and assets to meet anticipated as well as unanticipated return
requirements. The scope includes unplanned returns of sold merchandise as
well as planned returns of "rotable" products that are refurbished for reissue to
P5 Plan Return customers.
P5.1 Assess, and Aggregate The process of identifying, evaluating, and considering, as a whole with
Return Requirements constituent parts, all sources of demand for the return of a product.
P5.2 Identify, Assess, and The process of identifying, evaluating, and consideration for all resources that
Aggregate Return Resources add value to, execute, or constrain the processes for the return of a product.
The process of developing courses of action that make feasible the
P5.3 Balance Return Resources commitment the appropriate return resources and or assets to satisfy return
with Return Requirements requirements.

The establishment and communication of courses of action over specified time
P5.4 Establish and Communicate periods that represent a projected appropriation of required return resources
Return Plans and or assets to meet return process requirements.
The return and disposition of defective products as defined by the warranty
claims, product recall, non-conforming product and/or other similar policies
R1 Return Defective Product including appropriate replacement.
The return of MRO products as defined by the planned and unplanned Capital
R2 Return MRO Product Maintenance Plan.
The return of excess inventory and/or serviceable or obsolete products as
R3 Return Excess Product defined by the terms and conditions of a customer/supplier contract.
S Source Processes that procure goods and services to meet planned or actual demand.
The procurement, delivery, receipt and transfer of raw material items,
S1 Source Stocked Product subassemblies, product and or services.
Scheduling and managing the execution of the individual deliveries of product
against an existing contract or purchase order. The requirements for product
releases are determined based on the detailed sourcing plan or other types of
S1.1 Schedule Product Deliveries product pull signals.
The process and associated activities of receiving product to contract
S1.2 Receive Product requirements.
The process and actions required determining product conformance to
S1.3 Verify Product requirements and criteria.
The transfer of accepted product to the appropriate stocking location within the
supply chain. This includes all of the activities associated with repackaging,
staging, transferring and stocking product. For service this is the transfer or
S1.4 Transfer Product application of service to the final customer or end user.
The process of authorizing payments and paying suppliers for product or
services. This process includes invoice collection, invoice matching and the
S1.5 Authorize Supplier Payment issuance of checks.
The procurement and delivery of product that is built to a specific design or
S2 Source Make-to-Order Product configured based on the requirements of a particular customer order.
against the contract. The requirements for product deliveries are determined
based on the detailed sourcing plan. This includes all aspects of managing the
S2.1 Schedule Product Deliveries contract schedule including prototypes, qualifications or service deployment.
S2.4 Transfer Product staging, transferring, and stocking product and or application of service.
The negotiation, procurement and delivery of engineer-to-order assemblies or
S3 Source Engineer-to-Order specialized product or services that are designed and built based on the
Product requirements or specifications of a particular customer order or contract.
The identification and qualification of potential suppliers capable of designing
S3.1 Identify Sources of Supply and delivering product that will meet all of the required product specifications.
The identification of the final supplier(s) based on the evaluation of RFQs,
S3.2 Select Final Supplier(s) and supplier qualifications and the generation of a contract defining the costs and
Negotiate terms and conditions of product availability.
against the contract. The requirements for product deliveries are determined
based on the detailed sourcing plan. This includes all aspects of managing the
S3.3 Schedule Product Deliveries contract schedule including prototypes and qualifications.

S3.6 Transfer Product staging, transferring, and stocking product.
Processes associated with returning products for any reason. These
SR Source Return processes extend into post-delivery customer support.
The process, initiated by the customer, of returning material deemed defective
by to the last known holder or designated return center. Process includes:
customer identification that an action is required and determining what that
SR1 Source Return Defective action should be, communicating with the last known holder, generating return
Product documentation, and physically returning of the excess product.
The process where the customer utilizes planned policies, business rules and
SR1.1 Identify Defective Product product operating conditions inspection as criteria to identify and confirm that
Condition material is excess to requirements defective.
SR1.2 Disposition Defective The process of the customer determining whether to return the defective item
Product and the appropriate source contact for a return authorization.
The process of a customer requesting and obtaining authorization, from last
known holder or designated return center, for the return of defective product.
Additionally, the customer and last known holder or designated return center
would discuss enabling conditions such as return replacement or credit,
SR1.3 Request Defective Return packaging, handling, transportation and import / export requirements to
Authorization facilitate the efficient return of the defective product.
The process where the customer develops the schedule for a carrier to pick-up
for delivery of the defective product. Activities include selecting the carrier and
SR1.4 Schedule Defective Product rates, preparing the item for transfer, preparing scheduling documentation and
Shipment managing overall scheduling administration.
The process where the customer packages, and handles the defective product
in preparation for shipping in accord with pre-determined conditions. The
product is then provided by the customer to the carrier who physically
transports the product and its associated documentation to the last known
SR1.5 Return Defective Product holder or designated return center.
The process, initiated by the customer, of returning maintenance, repair, and
overhaul items to a service provider. Process includes: customer identification
that an action is required and determining what that action should be,
communicating with the service provider, generating return documentation, and
SR2 Source Return MRO Product physically returning or disposing of the product.
The process where the customer utilizes pre-determined MRO policies,
business rules and product operating conditions as criteria to identify and
SR2.1 Identify MRO Product confirm that an item requires maintenance, repair, overhaul or disposal.
Condition Includes operating failures and planned maintenance requirements.
The process of the customer determining whether to service the item, what
service is required, and who the appropriate service provider would be to
service the item. Outputs include a decision to: (1) send a return authorization
request to a service provider, (2) send the product back into service without
SR2.2 Disposition MRO Product requiring a return authorization request, or (3) discard the item.
The process of a customer requesting and obtaining authorization, from a
service provider, for the return of an MRO product. In addition to discussing the
MRO issue, the customer and service provider would discuss enabling
conditions such as return replacement or credit, packaging, handling,
transportation and import / export requirements to facilitate the efficient return
of the MRO product to the service provider. The customer may need to go
SR2.3 Request MRO Return through several return authorization iterations with multiple service providers
Authorization before authorization is received.
and deliver the MRO product. Activities include selecting the carrier and rates,
preparing the item for transfer, preparing scheduling documentation and
SR2.4 Schedule MRO Shipment managing overall scheduling administration.

The process where the customer packages, and handles the MRO product in
preparation for shipping in accord with pre-determined conditions. The product
is then provided by the customer to the carrier who physically transports the
SR2.5 Return MRO Product product and its associated documentation to the service provider.
The process, initiated by the customer, of returning material deemed in excess
of current requirements to the designated return center. Process includes:
customer identification that an action is required, determining what that action
should be, requesting authorization from the designated return center,
SR3 Source Return Excess Product generating return documentation, and physically returning the excess product.
The process where the customer utilizes planned policies, business rules and
SR3.1 Identify Excess Product product inspection as criteria to identify and confirm that material is in excess of
Condition the current requirements.
The process of the customer determining whether to return the excess material
SR3.2 Disposition Excess Product and identification of a designated return center a return authorization.
The process of a customer requesting and obtaining authorization, from the
designated return center, for the return of excess product. Additionally, the
customer and designated return center would negotiate enabling conditions
such as return credit or cash discount, packaging, handling, transportation and
SR3.3 Request Excess Return import / export requirements to facilitate the efficient return of the excess
Authorization product.
the excess product. Activities include selecting the carrier and rates, preparing
SR3.4 Schedule Excess Product the item for transfer, preparing scheduling documentation and managing overall
Shipment scheduling administration.
The process where the customer packages, and handles the excess product in
preparation for shipping in accord with pre-determined conditions. The product
is then provided by the customer to the carrier who physically transports the
product and its associated documentation to the last known holder or
SR3.5 Return Excess Product designated return center.

METRICS
METRIC DEFINITION PROCESS
% In-Stock Percentage of materials, components, or D4.4 Stock Shelf
finished goods that are there when needed.
% of Excess Product Returns Correct destination, according to the DR3 Deliver Return Excess
Delivered Complete to the Designated schedule, with the correct part and Product
Return Center documentation SR3 Source Return Excess
Product
% of Faultless Invoices The number of invoices processed without D2.14 Install Product
issues and or errors divided by the total D1.14 Install Product
number of invoices. Examples of potential D3.15 Invoice
invoice defects are: Change from customer D2.15 Invoice
purchase order without proper customer D1.15 Invoice
involvement Wrong Customer Information
(e.g., name, address, telephone number)
Wrong Product Information (e.g., part
number, product description) Wrong Price
(e.g., discounts not applied) Wrong Quantity
or Wrong Terms or Wrong Date
% Orders/ Lines Processed Complete The number of orders / lines that are S1.2, S2.2, S3.4
processed complete divided by the total
orders / lines processed within the
measurement period
% Orders/ Lines Received Defect The number of orders / lines that are S1.3, S2.3, S3.5
Free received defect free divided by the total
orders / lines processed in the
measurement period.
% Orders/ Lines Received On-Time The number of orders / lines that are S1.2, S2.2, S3.4
To Demand Requirement received on-time to the demand
requirements divided by the total orders /
lines for the demand requirements in the
measurement period
% Orders/ Lines Received with The number of orders / lines that are S1.2, S2.2, S3.4
Correct Shipping Documents received on-time with correct shipping
documents divided by the total orders / lines
processed in the measurement period
% of Orders Delivered In Full Percentage of orders which all of the items M1.1, M2.1, M3.1, D1.3,
are received by customer in the quantities D1.12, D1.13, D2.3, D2.12,
committed D2.13, D3.3, D3.12, D3.13,
ED
The number of orders that are received by
the customer in the quantities committed
divided by the total orders [Total number of
orders delivered in full] / [Total number of
orders delivered] x 100%
% Product Transferred On-Time to The number of product orders / lines that S1.4, S2.4,
Demand Requirement are transferred on-time to demand S3.6
requirements divided by the total orders /
lines transferred in the measurement period
% Product Transferred without The number of transactions processed S1.4, S2.4,
Transaction Errors without error divided by the total S3.6
transactions processed in the measurement
period.
% Return % Return to sales at any level of R1 Return Defective Product
merchandise hierarchy R2 Return MRO Product
% Schedules Changed within The number of schedules that are changed S1.1, S2.1, S3.3
Supplier's Lead Time within the suppliers lead-time divided by the
total number of schedules generated within

Actual Asset Life Maintenance Cost Measure of total lifecycle maintenance cost EM.5
as % of Replacement Value of an asset compared to its replacement
cost. This ratio is based maintenance cost
to-date so that that replacement or upgrade
cost can be evaluated as the asset ages on
an on-going basis.
Align Supply Chain Unit Plan with The average time associated with aligning EP.9 Align Supply Chain Unit
Financial Plan Cycle Time the supply chain unit plan with the financial Plan with Financial Plan
plan
Assess Delivery Performance Cycle The average time associated with ED.2 Assess Delivery
Time assessing the performance of deliver Performance
processes.
Assess Supplier Performance Cycle The average time associated with ES.2 Assess Supplier
Time assessing the performance of supplier Performance
processes.
Asset Turns Total gross product revenue ÷ Total net M1.3, M1.4, M2.3, M2.4,
assets M3.4, M3.5
Authorize Defective Product Return The average time associated with DR1.1 Authorize Defective
Cycle Time authorizing the return of defective product. Product Return
Authorize Excess Product Return The average time associated with DR3.1 Authorize Excess
Cycle Time authorizing the return of excess product. Product Return
Authorize MRO Product Return Cycle The average time associated with DR2.1 Authorize MRO
Time authorizing the return of MRO product. Product Return
Authorize Supplier Payment Cycle The average time associated with S3.7 Authorize Supplier
Time authorizing payment to suppliers. Payment
S2.5 Authorize Supplier
Payment
Payment
Average Days per Engineering # of days each engineering change impacts S1.1, S2.1, S3.3
Change the delivery date divided by the total # of
changes.
Average Days per Schedule Change # of days each schedule change impacts S1.1, S2.1, S3.3
the delivery date divided by the total # of
changes.
Average Release Cycle of Changes Cycle time for implementing change notices S1.1, S2.1, S3.3
divided by total number of changes.
Balance Delivery Resources with The average time associated with balancing P4.3 Balance Delivery
Delivery Requirements Cycle Time deliver resources and deliver requirements. Resources and Capabilities
with Delivery Requirements
Balance Product Resources with The average time associated with balancing P2.3 Balance Product
Product Requirements Cycle Time product resources and product Resources with Product
requirements. Requirements
Balance Production Resources with The average time associated with balancing P3.3 Balance Production
Product Creation Requirements Cycle production resources with production Resources with Production
Time creation requirements. Requirements
Balance Return Resources with The average time associated with balancing P5.3 Balance Return
Return Requirements Cycle Time return resources and return requirements. Resources with Return
Requirements
Balance Supply Chain Resources with The average time associated with balancing P1.3 Balance Supply Chain
Supply Chain Requirements Cycle supply chain resources and supply chain Resources with Supply Chain
Time requirements. Requirements
Build Loads Cycle Time The average time associated with building D1.5 Build Loads
shipment loads. D2.5 Build Loads
D3.5 Build Loads

Capacity Utilization A measure of how intensively a resource is M1.1, M1.3, M1.4, M2.1,
being used to produce a good or service. M2.3, M2.4, M3.2, M3.4, M3.5
Some factors that should be considered are
internal manufacturing capacity,
constraining processes, direct labor
availability and key components/materials
availability.
Cash-To-Cash Cycle Time [Inventory Days of Supply + Days Sales P1, P2, P3, P4, S1, S2, S3,
Outstanding – Days Payable Outstanding] M1, M2, M3, D1, D2, D3, D4
The time it takes for an investment made to

flow back into a company after it has been
spent for raw materials. For services, this
represents the time from the point where a
company pays for the resources consumed
in the performance of a service to the time
that the company received payment from
the customer for those services.
Checkout Cycle Time The average time required for customer D4.6 Checkout
checkout.
Consolidate Orders Cycle Time The average time required for customer D1.4 Consolidate Orders
order consolidation. D2.4 Consolidate Orders
Cost of Compliance Including Total MAKE cost to comply with regulatory EM.8
Administrative Costs requirements.
Cost of Goods Sold The cost associated with buying raw M2 Make-to-Order
materials and producing finished goods. M1 Make-to-Stock
This cost includes direct costs (labor, M3 Engineer-to-Order
materials) and indirect costs (overhead).
Cost to Align Supply Chain Unit Plan The sum of the costs associated with EP.9 Align Supply Chain Unit
with Financial Plan aligning supply chain performance plans Plan with Financial Plan
with financial plans.
Cost to Assess Delivery Performance The sum of the costs associated with ED.2 Assess Delivery
assessing delivery performance. Performance
Cost to Assess Supplier Performance The sum of the costs associated with ES.2 Assess Supplier
assessing supplier performance. Performance
Cost to Authorize Defective Product The sum of the costs associated with DR1.1 Authorize Defective
Return authorizing the return of defective product. Product Return
Cost to Authorize Excess Product The sum of the costs associated with DR3.1 Authorize Excess
Return authorizing the return of excess product. Product Return
Cost to Authorize MRO Product The sum of the costs associated with DR2.1 Authorize MRO
Return authorizing the return of product to be Product Return
maintained, repaired, or overhauled.
Cost to Authorize Supplier Payment The sum of the costs associated with S3.7 Authorize Supplier
authorizing supplier payment. Payment
Payment
Payment
Cost to Balance Delivery Resources The sum of the costs associated with P4.3 Balance Delivery
with Delivery Requirements balance of delivery resources with delivery Resources and Capabilities
requirements. with Delivery Requirements
Cost to Balance Product Resources The sum of the costs associated with P2.3 Balance Product
with Product Requirements balance of product resources with product Resources with Product
Cost to Balance Production The sum of the costs associated with P3.3 Balance Production
Resources with Product Creation balance of production resources with Resources with Production
Requirements product creation requirements. Requirements
Cost to Balance Return Resources The sum of the costs associated with P5.3 Balance Return
with Return Requirements balance of return resources with return Resources with Return

Cost to Balance Supply Chain The sum of the costs associated with P1.3 Balance Supply Chain
Resources with Supply Chain balance of supply chain resources with Resources with Supply Chain
Requirements supply chain requirements. Requirements
Cost to Build Loads The sum of the costs associated with D1.5 Build Loads
building transportation loads. D2.5 Build Loads
D3.5 Build Loads
Cost to Checkout The sum of the costs associated with D4.6 Checkout
product checkout.
Cost to Consolidate Orders The sum of the costs associated with D1.4 Consolidate Orders
consolidating customer orders. D2.4 Consolidate Orders
Cost to Deliver The sum of the costs associated with D1 Deliver Stocked Product
deliver D2 Deliver Make-to-Order
Product
D3 Deliver Engineer-to-Order
Product
Cost to Deliver and/or Install The sum of the costs associated with D4.7 Deliver and/or Install
deliver and/or install
Cost to Enter Order, Commit The sum of the costs associated with D3.3 Enter Order, Commit
Resources & Launch Program entering the order, committing resources & Resources & Launch Program
launching a program.
Cost to Establish and Communicate The sum of the costs associated with P5.4 Establish and
Return Plans establishing and communicating return Communicate Return Plans
plans.
Cost to Establish and Communicate The sum of the costs associated with P1.4 Establish Supply Chain
Supply Chain Plans establishing and communicating supply Plans
chain plans.
Cost to Establish Delivery Plans The sum of the costs associated with P4.4 Establish Delivery Plans
establishing and communicating deliver
plans.
Cost to Establish Production Plans The sum of the costs associated with P3.4 Establish Production
establishing and communicating production Plans
plans.
Cost to Establish Sourcing Plans The sum of the costs associated with P2.4 Establish Sourcing Plans
establishing and communicating source
plans.
Cost to Fill Shopping Cart The sum of the costs associated with filling D4.5 Fill Shopping Cart
a shopping cart.
Cost to Finalize Production The sum of the costs associated with M3.1 Finalize Production
Engineering finalizing production engineering. Engineering
Cost to Generate Stocking Schedule The sum of the costs associated with D4.1 Generate Stocking
generating a stocking schedule. Schedule
Cost to Identify Sources of Supply The sum of the costs associated with S3.1 Identify Sources of
identifying sources of supply. Supply
Cost to Identify, Assess, and The sum of the costs associated with P2.2 Identify, Assess, And
Aggregate Product Resources identifying, assessing and aggregating Aggregate Product Resources
product resources.
Cost to Identify, Assess, and The sum of the costs associated with P3.2 Identify, Assess, and
Aggregate Production Resources identifying, assessing and aggregating Aggregate Production
production resources. Resources
P4.2 Identify, Assess, and
Aggregate Delivery
Resources and Capabilities
Aggregate Return Resources identifying, assessing and aggregating Aggregate Return Resources
return resources.
Aggregate Supply Chain Resources identifying, assessing and aggregating Aggregate Supply Chain
supply chain resources. Resources

Cost to Identify, Prioritize, and The sum of the costs associated with P4.1 Identify, Prioritize, and
Aggregate Delivery Requirements identifying, assessing and aggregating Aggregate Delivery
deliver requirements Requirements
Aggregate Product Requirements identifying, assessing and aggregating Aggregate Product
deliver requirements. Requirements
Aggregate Production Requirements identifying, assessing and aggregating Aggregate Production
production requirements Requirements
Cost to Identify, Prioritize, and The sum of the costs associated with P5.1 Assess, and Aggregate
Aggregate Return Requirements identifying, assessing and aggregating Return Requirements
return requirements.
Aggregate Supply Chain identifying, assessing and aggregating Aggregate Supply Chain
Requirements supply chain requirements. Requirements
Cost to Install Product The sum of the costs associated with D1.14 Install Product
product installation. D2.14 Install Product
Cost to Invoice The sum of the costs associated with D1.15 Invoice
invoicing. D3.15 Invoice
Cost to Issue Material The sum of the costs associated with M1.2 Issue Material
issuing material.
Cost to Issue Sourced/In-Process The sum of the costs associated with M3.3 Issue Sourced/In-
Product issuing sourced or in-process material. Process Product
M2.2 Issue Sourced/In-
Process Product
Cost to Load Product & Generate The sum of the costs associated with D1.11 Load Vehicle &
Shipping Documentation loading product & generating shipping Generate Shipping
documentation. Documentation
D2.11 Load Product &
Generate Shipping
Documentation
Generate Ship Documents
Cost to Maintain Source Data The sum of the costs associated with ES.3 Maintain Source Data
maintaining supplier data.
Cost to Make The sum of the costs associated with make. M1, M2, M3
Cost to Manage Business Rules for The sum of the .Costs to Manage Business EP.1 Manage Business Rules
PLAN Processes Rules for PLAN Processes for PLAN Processes
Cost to Manage Business Rules for The sum of the Cost to Manage Business ER.1 Manage Business Rules
Return Processes Rules for Return Processes for Return Processes
Cost to Manage Deliver Business The sum of the Costs to Manage Deliver ED.1 Manage Deliver
Rules Business Rules Business Rules
Cost to Manage Deliver Capital The sum of the Costs to Manage Deliver ED.5 Manage Deliver Capital
Assets Capital Assets Assets
Cost to Manage Deliver Information The sum of the Cost to Manage Deliver ED.3 Manage Deliver
Information Information
Cost to Manage Finished Goods The sum of the Costs to Manage Finished ED.4 Manage Finished Goods
Inventories Good Inventory Inventories
Cost to Manage Import/Export The sum of the costs associated with the ED.8 Manage Import/Export
Requirements management of import/export requirements Requirements
ES.8 Manage Import/Export
Requirements
Cost to Manage Incoming Product The sum of the costs associated with ES.6 Manage Incoming
managing incoming product. Product
Cost to Manage In-Process Products The sum of the costs associated with EM.4 Manage In-Process
(WIP) managing in-process products (WIP). Products (WIP)
Cost to Manage Integrated Supply The sum of the costs associated with EP.5 Manage Integrated
Chain Capital Assets managing integrated supply chain assets. Supply Chain Capital Assets

Chain Inventory managing the integrated supply chain Supply Chain Inventory
inventory.
Chain Transportation managing integrated supply chain Supply Chain Transportation
transportation.
Cost to Manage MAKE Equipment The sum of the costs associated with EM.5 Manage Equipment and
and Facilities managing Make equipment and facilities. Facilities
Cost to Manage MAKE Information The sum of the Cost to Manage MAKE EM.3 Manage MAKE
Information Information
Cost to Manage MAKE Regulatory The sum of the Cost to Manage MAKE EM.8 Manage Regulatory
Compliance Regulatory Compliance Compliance
Cost to Manage Performance of The sum of the costs to Manage ER.2 Manage Performance of
Return Processes Performance of Return Processes. Return Processes
Cost to Manage Performance of The sum of the costs associated with EP.2 Manage Performance of
Supply Chain assessing supplier performance. Supply Chain
Cost to Manage PLAN Data The sum of the costs to Manage PLAN Data EP.3 Manage PLAN Data
Collection Collection. Collection
Cost to Manage Plan Regulatory The sum of the costs to Manage Plan EP.8 Manage PLAN
Requirements and Compliance Regulatory Requirements and Compliance. Regulatory Requirements and
Compliance
Cost to Manage Planning The sum of the Cost to Manage Planning EP.7 Manage Planning
Configuration Configuration Configuration
Cost to Manage Product Inventory The sum of the Cost to Manage Product ES.4 Manage Product
Inventory Inventory
Cost to Manage Product Life Cycle The sum of the Cost to Manage Product ED.7 Manage Product Life
Life Cycle Cycle
Cost to Manage Production Network The sum of the costs to manage the EM.7 Manage Production
production network Network
Cost to Manage Production The sum of the costs to manage production EM.2 Manage Production
Performance performance. Performance
Cost to Manage Production Rules The sum of the costs to manage production EM.1 Manage Production
rules. Rules
Cost to Manage Return Capital The sum of the costs to manage the capital ER.5 Manage Return Capital
Assets assets associated with returns. Assets
Cost to Manage Return Data The sum of the costs to manage the capital ER.3 Manage Return Data
Collection assets associated with returns data Collection
collection.
Cost to Manage Return Inventory The sum of the costs to manage the capital ER.4 Manage Return
assets associated with return inventory. Inventory
Cost to Manage Return Network The sum of the costs to manage the capital ER.7 Manage Return Network
Configuration assets associated with configuring the Configuration
return network.
Cost to Manage Return Regulatory The sum of the costs associated with ER.8 Manage Return
Requirements and Compliance managing compliance to return regulatory Regulatory Requirements
requirements.
Cost to Manage Return The sum of the costs associated with ER.6 Manage Return
Transportation managing return transportation. Transportation
Cost to Manage Source Capital The sum of the Costs to Manage Source ES.5 Manage Capital Assets
Assets Capital Assets
Cost to Manage Sourcing Business The sum of the costs associated with ES.1 Manage Sourcing
Rules Source business rules. Business Rules
Cost to Manage Supplier Agreements The sum of the costs associated with ES.9 Manage Supplier
managing supplier agreements. Agreements
Cost to Manage Supplier Network The sum of the costs associated with ES.7 Manage Supplier
managing the supplier network. Network
Cost to Manage Transportation The sum of the costs associated with ED.6 Manage Transportation
managing Finished Good Transportation

Cost to Manage Transportation (WIP) The sum of the costs associated with EM.6 Manage Transportation
managing WIP Transportation
Cost to Negotiate & Receive Contract The sum of the costs associated with D3.2 Negotiate & Receive
negotiating and receiving contracts Contract
Cost to Obtain & Respond to Request The sum of the costs associated with D3.1 Obtain and Respond to
for Quote (RFQ) / Request for obtaining and responding to Request for RFP/RFQ
Proposal (RFP) Quote (RFQ) / Request for Proposal (RFP).
Cost to Pack Product The sum of the costs associated with D1.10 Pack Product
product packaging. D2.10 Pack Product
D3.10 Pack Product
Cost to Package The sum of the costs associated with M3.5 Package
product packaging. M2.4 Package
M1.4 Package
Cost to Pick Product The sum of the costs associated with D1.9 Pick Product
picking product. D2.9 Pick Product
D3.9 Pick Product
Cost to Pick Product from Backroom The sum of the costs associated with D4.3 Pick Product from
picking product from backroom. Backroom
Cost to Plan Deliver The sum of the costs associated with P4
planning the delivery of product.
Cost to Plan Make The sum of the costs associated with P3
planning the making of product.
Cost to Plan Return The sum of the costs associated with P5
planning the returning of product.
Cost to Plan Source The sum of the costs associated with P2 Plan Source
planning source activities.
Cost to Plan Supply Chain The sum of the costs associated with P1 Plan Supply Chain
planning supply chain activities.
Cost to Process Inquiry & Quote The sum of the costs associated with D1.1 Process Inquiry & Quote
processing inquiry and quotes. D2.1 Process Inquiry & Quote
Cost to Produce and Test The sum of the costs associated with M3.4 Produce and Test
production and test. M2.3 Produce and Test
Cost to Receive & Verify Product by The sum of the costs associated with D1.13 Receive & Verify
Customer receipt and verification at customer site. Product by Customer
D2.13 Receive & Verify
Product by Customer
Product by Customer
Cost to Receive Defective Product The sum of the costs associated with DR1.3 Receive Defective
receiving defective product returns. Product
Cost to Receive Excess Product The sum of the costs associated with DR3.3 Receive Excess
receiving excess returns. Product
Cost to Receive MRO Product The sum of the costs associated with DR2.3 Receive MRO Product
receiving MRO product returns.
Cost to Receive Product The sum of the costs associated with S3.4 Receive Product
receiving product. S2.2 Receive Product
Cost to Receive Product at Store The sum of the costs associated with D4.2 Receive Product at
receiving product at the store. Store
Cost to Receive Product from Source The sum of the costs associated with D2.8 Receive Product from
or Make transferring product from source or make Source or Make
activities. D3.8 Receive Product from
Source or Make
D1.8 Receive Product from
Source or Make
Cost to Receive, Enter & Validate The sum of the costs associated with D1.2 Receive, Enter &
Order receiving, entering and validating a Validate Order
customer order. D2.2 Receive, Configure,
Enter and Validate Order

Cost to Release Finished Product to The sum of the costs associated with M3.7 Release Product to
Deliver releasing finished goods to deliver Deliver
processes. M2.6 Release Finished
Product to Deliver
M1.6 Release Product to
Deliver
Cost to Reserve Resources & The sum of the costs associated with D1.3 Reserve Inventory &
Determine Delivery Date reserving resources and determining a Determine Delivery Date
delivery date. D2.3 Reserve Resources &
Cost to Route Shipments The sum of the costs associated with D3.6 Route Shipments
routing shipments. D2.6 Route Shipments
Cost to Schedule Excess Product The sum of the costs associated with DR3.2 Schedule Excess
Receipt scheduling excess product receipt. Return Receipt
Cost to Schedule Installation The sum of the costs associated with D3.4 Schedule Installation
scheduling product installation.
Cost to Schedule MRO Product The sum of the costs associated with DR2.2 Schedule MRO Return
Receipt scheduling MRO product receipt. Receipt
Cost to Schedule Product Deliveries The sum of the costs associated with S3.3 Schedule Product
scheduling product deliveries. Deliveries
S2.1 Schedule Product
Deliveries
Deliveries
Cost to Schedule Production Activities The sum of the costs associated with M1.1 Schedule Production
scheduling production activities. Activities
M2.1 Schedule Production
Activities
Activities
Cost to Select Carriers & Rate The sum of the costs associated with D2.7 Select Carriers & Rate
Shipments selecting carriers and rating shipments. Shipments
D1.7 Select Carriers & Rate
Shipments
D3.7 Select Carriers and Rate
Shipments
Cost to Select Final Supplier(s) and The sum of the costs associated with S3.2 Select Final Supplier(s)
Negotiate selecting final suppliers and negotiating and Negotiate
supplier agreements.
Cost to Ship Product The sum of the costs associated with D1.12 Ship Product
shipping products. D2.12 Ship Product
D3.12 Ship Product
Cost to Source The sum of the costs associated with S1 Source Stocked Product
Source. S2 Source Make-to-Order
Product
S3 Source Engineer-to-Order
Product
Cost to Source Return The sum of the costs associated with SR3 Source Return Excess
Source Return Product
SR2 Source Return MRO
Product
SR1 Source Return Defective
Product
Cost to Stage Finished Product The sum of the costs associated with M3.6 Stage Finished Product
staging finished goods. M2.5 Stage Finished Product
M1.5 Stage Product
Cost to Stock Shelf The sum of the costs associated with D4.4 Stock Shelf
stocking shelves.

Cost to Transfer Defective Product The sum of the costs associated DR1.4 Transfer Defective
transferring defective product for disposition Product
Cost to Transfer Excess Product The sum of the costs associated DR3.4 Transfer Excess
transferring excess product for disposition Product
Cost to Transfer MRO Product The sum of the costs associated DR2.4 Transfer MRO Product
transferring MRO product for disposition
Cost to Transfer Product The sum of the costs associated with S3.6 Transfer Product
transferring product to Make or Deliver S2.4 Transfer Product
processes S1.4 Transfer Product
Cost to Verify Product The sum of the costs associated with raw S2.3 Verify Product
material verification. S1.3 Verify Product
S3.5 Verify Product
Costs Associated with Managing Ratio of Cost for Managing Production EM.2
Production Performance as a % Performance to Manufacturing Controllable
Manufacturing Controllable Cost Cost.
Customs Clearance Cycle Time The average time associated with clearing ES.8 Manage Import/Export
an order through customs Requirements
ED.8 Manage Import/Export
Requirements
Days of Supply (See Inventory Days
of Supply)
Days Payable Outstanding [Sum of the 4 previous quarters + projection D1.15, D2.15 Invoice, D3.15
for next quarter) / 5]
The length of time from purchasing

materials, labor and/or conversion
resources until cash payments must be
made expressed in days. The [5 point
rolling average of gross accounts payable
(AP)] / [total gross annual material
purchases / 365].
(Other names: Average payment period for
materials, Days purchases in accounts
payable, Days’ outstanding in accounts
payable)
The “5 point rolling average” calculation

uses a combination of both historical and
forward-looking data. This means that the
rolling average value has to be calculated
based on the average over the four
previous quarters and the projection for the
current or next quarter.
Days Sales Outstanding 5 point annual average of gross accounts D1.15, D2.15 Invoice, D3.15
receivable ÷ (total gross annual sales ÷ 365)
The length of time from when a sale is
made until cash for it is received from
customers. The amount of sales
outstanding expressed in days.
Deliver and/or Install Cycle Time The average time required to deliver and D4.7 Deliver and/or Install
install product.
Deliver Cycle Time The average time associated with Deliver D3 Deliver Engineer-to-Order
Processes Product
D2.15 Invoice
D2 Deliver Make-to-Order
Product

Deliver Return Cycle Time The average time associated with returns. DR1 Deliver Return Defective
Product
DR Deliver Return
DR2 Deliver Return MRO
Product
Delivery Performance to Customer The percentage of orders that are fulfilled D1.3, D1.12, D1.13, D2.3,
Commit Date on the customer's original commit date D2.12, D2.13, D3.3, D3.12,
D3.13
Documentation Accuracy Percentage of orders with on time and D1.11, D1.15, D2.11, D2.15,
accurate documentation supporting the D3.11, D3.15, ED.2
order, including packing slips, bills of lading,
invoices, etc. [Total number of orders
delivered with correct and timely
documentation] / [Total number of orders
delivered] x 100%
Downside Deliver Adaptability The reduction in delivered quantities D2 Deliver Make-to-Order
sustainable at 30 days prior to delivery with Product
no inventory or cost penalties. D1 Deliver Stocked Product
D3 Deliver Engineer-to-Order
Product
Downside Make Adaptability The production reduction sustainable at 30 M1 Make-to-Stock
days prior to delivery with no inventory or M2 Make-to-Order
cost penalties. M3 Engineer-to-Order
Enter Order, Commit Resources & The average time associated with entering D3.3 Enter Order, Commit
Launch Program Cycle Time an order, committing resources and Resources & Launch Program
program launch
Establish and Communicate Return The average time associated with P5.4 Establish and
Plans Cycle Time establishing and communicating return Communicate Return Plans
plans
Establish and Communicate Supply The average time associated with P1.4 Establish Supply Chain
Chain Plans Cycle Time establishing and communicating supply Plans
chain plans
Establish Delivery Plans Cycle Time The average time associated with P4.4 Establish Delivery Plans
establishing and communicating deliver
plans
Establish Production Plans Cycle The average time associated with P3.4 Establish Production
Time establishing and communicating production Plans
plans
Establish Sourcing Plans Cycle Time The average time associated with P2.4 Establish Sourcing Plans
establishing and communicating source
plans
Fill Rate The percentage of ship-from-stock orders P1.3, P4.4, M1.3, D1.3, D1.9
shipped within 24 hours of order receipt.
For services, this metric is the proportion for
services that are filled so that the service is
completed within 24 hours
Fill Shopping Cart Cycle Time The average time associated with "filling the D4.5 Fill Shopping Cart
shopping cart"
Finalize Production Engineering Cycle The average time associated with the M3.1 Finalize Production
Time finalization of production engineering Engineering

Forecast Accuracy Forecast accuracy is calculated for products EP.4, EP.5,
and/or families for markets/distribution EP.6, EP.7, P1,
channels, in unit measurement. Common P1.1, P2.1,
calculation (Sum Actuals - Sum of Variance) P3.1, P4, P4.1,
/ Sum Actuals to determine percentage P4.2
error.
*monitoring the delta of Forecast Accuracy

over measured time periods can determine
success rates.
Generate Stocking Schedule Cycle The average time associated with the D4.1 Generate Stocking
Time generating a stocking schedule Schedule
Identify Sources of Supply Cycle Time The average time associated with the S3.1 Identify Sources of
identification of sources of supply Supply
Identify, Assess, and Aggregate The average time associated with the P4.2 Identify, Assess, and
Delivery Resources Cycle Time identifying, assessing, and aggregating Aggregate Delivery
delivery resource availability Resources and Capabilities
Identify, Assess, and Aggregate The average time associated with the P2.2 Identify, Assess, And
Product Resources Cycle Time identifying, assessing, and aggregating Aggregate Product Resources
product resource availability
Production Resources Cycle Time identifying, assessing, and aggregating Aggregate Production
production resource availability Resources
Return Resources Cycle Time identifying, assessing, and aggregating Aggregate Return Resources
return resource availability
Supply Chain Resources Cycle Time identifying, assessing, and aggregating Aggregate Supply Chain
supply chain resource availability Resources
Identify, Prioritize, and Aggregate The average time associated with the P4.1 Identify, Prioritize, and
Delivery Requirements Cycle Time identifying, prioritizing, and aggregating Aggregate Delivery
delivery requirements Requirements
Product Requirements Cycle Time identifying, prioritizing, and aggregating Aggregate Product
product requirements Requirements
Production Requirements Cycle Time identifying, prioritizing, and aggregating Aggregate Production
production requirements Requirements
Identify, Prioritize, and Aggregate The average time associated with the P5.1 Assess, and Aggregate
Return Requirements Cycle Time identifying, prioritizing, and aggregating Return Requirements
return requirements
Supply Chain Requirements Cycle identifying, prioritizing, and aggregating Aggregate Supply Chain
Time supply chain requirements Requirements
Install Product Cycle Time The average time associated with product D1.14 Install Product
installation D2.14 Install Product
Inventory Days of Supply The amount of inventory (stock) expressed P1.2, P1.3, P1.4, S1.4, S2.4,
in days of sales. The [5 point rolling average S3.6, ES.4, EM.4, ED.4
of gross value of inventory at standard cost]
/ [annual cost of goods sold (COGS) / 365].
Example: If 2 items a day are sold and 20
items are held in inventory, this represents
10 days’ (20/2) sales in inventory.
(Other names: Days cost-of-sales in
inventory, Days’ sales in inventory).
Inventory Days of Supply (Finished Plant finished goods inventory days of D1.3, D1.8, D1.11, D1.14,
Goods) supply are calculated as gross plant D2.3, D2.8, D2.11, D2.14,
finished goods inventory ÷ (value of D3.3, D3.8, D3.11, D3.14
transfers/365 days).

Inventory Days of Supply (Raw Value of raw materials ÷ (COGS ÷ 365). S2 Source Make-to-Order
Material) Product
Product
Inventory Days of Supply (WIP) Total value of Work in Process ÷ (COGS ÷ P3.3, P3.4, M1.1, M1.5, M2.1,
365). M2.5, M3.2, M3.6
Invoice Cycle Time The average time associated with the D1.15 Invoice
generation and issuance of an invoice D3.15 Invoice
Issue Material Cycle Time The average time associated with the M1.2 Issue Material
issuance of material to production
Issue Sourced/In-Process Product The average time associated with the M2.2 Issue Sourced/In-
Cycle Time issuance of material to production Process Product
Process Product
Load Product & Generate Shipping The average time associated with product D1.11 Load Vehicle &
Documentation Cycle Time loading and the generation of shipping Generate Shipping
documentation Documentation
Generate Shipping
Documentation
Maintain Source Data Cycle Time The average time associated with ES.3 Maintain Source Data
maintaining source data
Make Cycle Time The average time associated with Make M1 Make-to-Stock
Processes M3 Engineer-to-Order
M2 Make-to-Order
Manage Business Rules for PLAN The average time associated with managing EP.1 Manage Business Rules
Processes Cycle Time plan business rules for PLAN Processes
Manage Business Rules for Return The average time associated with managing ER.1 Manage Business Rules
Processes Cycle Time rules for returns for Return Processes
Manage Capital Assets Cycle Time The average time associated with managing ES.5 Manage Capital Assets
capital assets
Manage Deliver Business Rules Cycle The average time associated with managing ED.1 Manage Deliver
Time deliver business rules Business Rules
Manage Deliver Capital Assets Cycle The average time associated with managing ED.5 Manage Deliver Capital
Time deliver capital assets Assets
Manage Deliver Information Cycle The average time associated with managing ED.3 Manage Deliver
Time deliver information Information
Manage Finished Goods Inventories The average time associated with managing ED.4 Manage Finished Goods
Cycle Time finished good inventory Inventories
Manage Import/Export Requirements The average time associated with managing ED.8 Manage Import/Export
Cycle Time import/export requirements Requirements
Requirements
Manage Incoming Product Cycle Time The average time associated with managing ES.6 Manage Incoming
inbound raw material Product
Manage In-Process Products (WIP) The average time associated with managing EM.4 Manage In-Process
Cycle Time WIP inventory Products (WIP)
Manage Integrated Supply Chain The average time associated with managing EP.5 Manage Integrated
Capital Assets Cycle Time integrated supply chain capital assets Supply Chain Capital Assets
Inventory Cycle Time integrated supply chain inventory Supply Chain Inventory
Transportation Cycle Time integrated supply chain transportation Supply Chain Transportation
Manage MAKE Equipment and The average time associated with managing EM.5 Manage Equipment and
Facilities Cycle Time production equipment and facilities Facilities
Manage MAKE Information Cycle The average time associated with managing EM.3 Manage MAKE
Time production information Information

Manage MAKE Regulatory The average time associated with managing EM.8 Manage Regulatory
Compliance Cycle Time compliance to the make regulatory Compliance
environment
Manage Performance of Return The average time associated with managing ER.2 Manage Performance of
Processes Cycle Time the performance of supply chain activities Return Processes
Manage Performance of Supply Chain The average time associated with managing EP.2 Manage Performance of
Cycle Time the performance of return activities Supply Chain
Manage PLAN Data Collection Cycle The average time associated with collecting EP.3 Manage PLAN Data
Time plan data Collection
Manage Plan Regulatory The average time associated with managing EP.8 Manage PLAN
Requirements and Compliance Cycle the planning of regulatory requirements and Regulatory Requirements and
Time compliance Compliance
Manage Planning Configuration Cycle The average time associated with managing EP.7 Manage Planning
Time the planning of the supply chain Configuration
configuration
Manage Product Inventory Cycle The average time associated with managing ES.4 Manage Product
Time raw material inventory Inventory
Manage Product Life Cycle Time The average time associated with managing ED.7 Manage Product Life
the product life cycle Cycle
Manage Production Network Cycle The average time associated with managing EM.7 Manage Production
Time the production network Network
Manage Production Performance The average time associated with managing EM.2 Manage Production
Cycle Time production performance Performance
Manage Production Rules Cycle Time The average time associated with managing EM.1 Manage Production
production rules Rules
Manage Return Capital Assets Cycle The average time associated with managing ER.5 Manage Return Capital
Time return capital assets Assets
Manage Return Data Collection Cycle The average time associated with managing ER.3 Manage Return Data
Time return data collection Collection
Manage Return Inventory Cycle Time The average time associated with managing ER.4 Manage Return
return inventory Inventory
Manage Return Network The average time associated with managing ER.7 Manage Return Network
Configuration Cycle Time the return network configuration Configuration
Manage Return Regulatory The average time associated with ER.8 Manage Return
Requirements and Compliance Cycle compliance and regulatory requirements for Regulatory Requirements
Time return products
Manage Return Transportation Cycle The average time associated with managing ER.6 Manage Return
Time return transportation Transportation
Manage Sourcing Business Rules The average time associated with managing ES.1 Manage Sourcing
Cycle Time source business rules Business Rules
Manage Supplier Agreements Cycle The average time associated with managing ES.9 Manage Supplier
Time supplier agreements Agreements
Manage Supplier Network Cycle Time The average time associated with managing ES.7 Manage Supplier
the supplier network Network
Manage Transportation (WIP) Cycle The average time associated with managing EM.6 Manage Transportation
Time (WIP) transportation
Manage Transportation Cycle Time The average time associated with managing ED.6 Manage Transportation
transportation
Negotiate & Receive Contract Cycle The average time associated with D3.2 Negotiate & Receive
Time negotiating and receiving a contract Contract
Obtain & Respond to Request for The average time associated with obtaining D3.1 Obtain and Respond to
Quote (RFQ) / Request for Proposal and responding to RFQs/RFPs RFP/RFQ
(RFP) Cycle Time
Order Entry and Maintenance Costs Includes costs for maintaining the customer D1.2, D2.2
database, credit check, accepting new
orders and adding them to the order system
as well as later order modifications.

Order Fulfillment Costs Includes costs for processing the order, D1.3, D2.3, D3.3, D3.4
allocating inventory, ordering from the
internal or external supplier, scheduling the
shipment, reporting order status and
initiating shipment.
Order Fulfillment Cycle Time The average actual cycle time consistently P1, P2, P3, P4, S1, S2, S3,
achieved to fulfill customer orders. M1, M2, M3, D1, D2, D3, D4,
SR1, DR1, SR2, DR2, SR3,
DR3
Order Fulfillment Dwell Time Any lead time during the order fulfillment D1.2, D1.3, D2.2, D2.3, D3.3
process where no activity takes place,
which is imposed by customer
requirements. Note that this dwell time is
different from ‘idle time’ or ‘non-value-add
lead time’, which is caused by inefficiencies
in the organization’s processes and
therefore ultimately under responsibility of
the organization. This kind of idle time
should not be deducted from Order
Fulfillment Cycle Time.
Order Management Costs The aggregation of the following cost D3 Deliver Engineer-to-Order
elements (contained in this glossary): Product
Pack Product Cycle Times The average time associated with packing a D1.10 Pack Product
product for shipment. D2.10 Pack Product
D3.10 Pack Product
Perfect Condition Percentage of orders delivered in an D1.13, D1.14, D2.13, D2.14,
undamaged state that meet specification, D3.13, D3.14, ED.2
have the correct configuration, are
faultlessly installed (as applicable), and
accepted by the customer
[ Number of orders delivered in Perfect
Condition ] / [Number of orders delivered ] x
100%
Perfect Order Fulfillment The percentage of orders meeting delivery S2, M2
performance with complete and accurate D3 Deliver Engineer-to-Order
documentation and no delivery damage. Product
Components include all items and quantities D2 Deliver Make-to-Order
on-time using the customer's definition of Product
on-time, and documentation - packing slips, D1 Deliver Stocked Product
bills of lading, invoices, etc.
Pick Product Cycle Time The average time associated with product D1.9 Pick Product
pick D2.9 Pick Product
D3.9 Pick Product
Pick Product from Backroom Cycle The average time associated with product D4.3 Pick Product from
Time pick from backroom Backroom
Plan Cycle Time The average time associated with Plan P1 Plan Supply Chain
Processes
Plan Source Cycle Time The average time associated with planning P2 Plan Source
source activities
Process Inquiry & Quote Cycle Time The average time associated with D1.1 Process Inquiry & Quote
processing inquiries and quotes D2.1 Process Inquiry & Quote
Produce and Test Cycle Time The average time associated with M1.3 Produce and Test
production and test M3.4 Produce and Test

Product Acquisition Costs Product acquisition costs include costs S3 Source Engineer-to-Order
incurred for the production of product: sum Product
of product management and planning, S2 Source Make-to-Order
supplier quality engineering, inbound freight Product
and duties, receiving and product storage, S1 Source Stocked Product
incoming inspection, product process
engineering and tooling costs.
Receive & Verify Product by The average time associated with receiving D1.13 Receive & Verify
Customer Cycle Time and verifying an order at the customer site Product by Customer
Product by Customer
Product by Customer
Receive Defective Product Cycle The average time associated with receiving DR1.3 Receive Defective
Time defective product returns from the customer Product
Receive Excess Product Cycle Time The average time associated with receiving DR3.3 Receive Excess
excess product returns from the customer Product
Receive MRO Product Cycle Time The average time associated with receiving DR2.3 Receive MRO Product
MRO product returns from the customer
Receive Product at Store Cycle Time The average time associated with receiving D4.2 Receive Product at
product at the customer store Store
Receive Product from Source or Make The average time associated with receiving D1.8 Receive Product from
Cycle Time a transfer of product to deliver processes Source or Make
from source or make D2.8 Receive Product from
Source or Make
Source or Make
Receive, Configure, Enter & Validate The average time associated with receiving D2.2 Receive, Configure,
Order Cycle Time and verifying an order at the customer site Enter and Validate Order
Receive, Enter & Validate Order The average time associated with receiving D1.2 Receive, Enter &
Cycle Time and verifying an order at the customer site Validate Order
Receiving Product Cycle Time Total elapsed time from time product is S3.4 Receive Product
received to time it is passed to next process S2.2 Receive Product
Release Finished Product to Deliver The average time associated with releasing M2.6 Release Finished
Cycle Time finished product to deliver Product to Deliver
Deliver
Deliver
Reserve Inventory & Determine The average time associated with reserving D1.3 Reserve Inventory &
Delivery Date Cycle Time inventory and determining a delivery date Determine Delivery Date
Return on Supply Chain Fixed Assets Return on Supply Chain Fixed Assets P1, P2, P3, P4, S1, S2, S3,
measures the return an organization M1, M2, M3, D1, D2, D3, D4,
receives on its invested capital in supply SR1, DR1, SR2, DR2, SR3,
chain fixed assets. This includes the fixed DR3
assets used in Plan, Source, Make, Deliver,
and Return.
Return on Working Capital Return on working capital is a measurement P1, P2, P3, P4, S1, S2, S3,
which assesses the magnitude of M1, M2, M3, D1, D2, D3, D4,
investment relative to a company’s working SR1, DR1, SR2, DR2, SR3,
capital position verses the revenue DR3
generated from a supply chain.
Components include accounts receivable,
accounts payable, inventory, supply chain
revenue, cost of goods sold and supply
Route Shipments Cycle Time The average time associated with routing D3.6 Route Shipments
shipments D2.6 Route Shipments

Schedule Achievement The percentage of time that a plant M1.1 Schedule Production
achieves its production schedule. This Activities
calculation is based on the number of M2.1 Schedule Production
scheduled end-items or total volume for a Activities
specific period. Note: over-shipments do M3.2 Schedule Production
not make up for under-shipments. Activities
Schedule Defective Return Receipt The average time associated with DR1.2 Schedule Defective
Cycle Time scheduling the receipt of the return of Return Receipt
defective product
Schedule Excess Return Receipt The average time associated with DR3.2 Schedule Excess
Cycle Time scheduling the receipt of the return of Return Receipt
excess product
Schedule Installation Cycle Time The average time associated with D3.4 Schedule Installation
scheduling the installation of product
Schedule MRO Return Receipt Cycle The average time associated with DR2.2 Schedule MRO Return
Time scheduling the receipt of the return of MRO Receipt
product
Schedule Product Deliveries Cycle The average time associated with S3.3 Schedule Product
Time scheduling the shipment of the return of Deliveries
MRO product S2.1 Schedule Product
Deliveries
Deliveries
Schedule Production Activities Cycle The average time associated with M1.1 Schedule Production
Time scheduling production activities Activities
Activities
Activities
Select Carriers & Rate Shipments The average time associated with selecting D1.7 Select Carriers & Rate
Cycle Time carriers and rating shipments Shipments
Shipments
D3.7 Select Carriers and Rate
Shipments
Select Final Supplier(s) and Negotiate The average time associated with S3.2 Select Final Supplier(s)
Cycle Time scheduling the shipment of the return of and Negotiate
MRO product
Ship Product Cycle Time The average time associated with shipping D1.12 Ship Product
product D2.12 Ship Product
D3.12 Ship Product
Source Cycle Time The average time associated with Source S1 Source Stocked Product
Processes S2 Source Make-to-Order
Product
Product
Stage Finished Product Cycle Time The average time associated with staging M1.5 Stage Product
finished product M2.5 Stage Finished Product
Stock Shelf Cycle Time The average time associate with stocking D4.4 Stock Shelf
shelves
Total Deliver Costs The sum of the costs associated with the P4 Plan Deliver
Deliver processes.
Total Excess Material Return Costs The sum of the costs associated with the SR3 Source Return Excess
receipt of returned excess products from the Product
customer
Total Source Return Costs The sum of the costs associated with the SR2 Source Return MRO
return of raw materials to the supplier. Product
Transfer Defective Product Cycle The average time associated transfer until DR1.4 Transfer Defective
Time product is moved to the next process. Product

Transfer Excess Product Cycle Time The average time associated transfer until DR3.4 Transfer Excess
product is moved to the next process. Product
Transfer MRO Product Cycle Time The average time associated transfer until DR2.4 Transfer MRO Product
product is moved to the next process.
Transfer Product Cycle Time The average time associated transfer until S1.4 Transfer Product
product is moved to the next process. S3.6 Transfer Product
Upside Deliver Adaptability The maximum sustainable percentage D1 Deliver Stocked Product
increase in quantities delivered that can be D2 Deliver Make-to-Order
achieved in 30 days with the assumption of Product
unconstrained finished good availability. D3 Deliver Engineer-to-Order
Product
Upside Deliver Flexibility The number of days required to achieve an D1 Deliver Stocked Product
unplanned sustainable 20% increase in D2 Deliver Make-to-Order
quantity delivered with the assumption of no Product
other constraints. D3 Deliver Engineer-to-Order
Product
Upside Deliver Return Adaptability The maximum sustainable percentage DR Deliver Return
increase in returns of finished goods from DR2 Deliver Return MRO
customers that can be achieved in 30 days. Product
DR3 Deliver Return Excess
Product
Upside Deliver Return Flexibility The number of days required to achieve an DR Deliver Return
unplanned sustainable 20% increase in the DR2 Deliver Return MRO
return of finished goods from customers. Product
DR3 Deliver Return Excess
Product
Upside Make Adaptability The maximum sustainable percentage M1 Make-to-Stock
increase in production that can be achieved M2 Make-to-Order
in 30 days with the assumption of no raw M3 Engineer-to-Order
material constraints.
Upside Make Flexibility The number of days required to achieve an M1 Make-to-Stock
unplanned sustainable 20% increase in M2 Make-to-Order
production with the assumption of no raw M3 Engineer-to-Order
material constraints.
Value of Defective Inventory in Inventory Awaiting Return SR1.2 Disposition Defective
Disposition Stage/ Total Inventory Product
Value SR2.2 Disposition MRO
Product
Value of Defective Product Inventory Inventory awaiting return authorization. SR1.3 Request Defective
in Request Return Authorization Return Authorization
Stage/ Total Defective Product
Inventory Value
Value of Excess Inventory in Inventory Awaiting Return SR3.2 Disposition Excess
Disposition Stage/ Total Inventory Product
Value
Value of Excess Product Inventory in Inventory Awaiting Return Authorization SR3.3 Request Excess
Request Return Authorization Stage/ Return Authorization
Total Excess Product Inventory Value
Value of Unserviceable MRO Inventory awaiting disposition SR2.2 Disposition MRO
Inventory In Disposition Stage/ Total Product
MRO Inventory Value
Value of Unserviceable MRO Inventory awaiting return authorization SR2.3 Request MRO Return
Inventory in Request Return Authorization
Authorization Stage/ Total MRO
Inventory Value

Verify Product Cycle Time The average time associated with verifying S3.5 Verify Product
raw material product S2.3 Verify Product
S1.3 Verify Product
Warranty and Returns Number of returns within the warranty M1.3, M1.4
period. Warranty is a commitment, either
expressed or implied that a certain fact
regarding the subject matter of a contract is
presently true or will be true.
Warranty Costs Warranty costs include materials, labor and M1, M1.3, M1.4,
problem diagnosis for product defects. M2, M2.3, M2.4,
M3, M3.4, M3.5
Yield The ratio of usable output from a process to M2 Make-to-Order
its input. M2.3 Produce and Test
M1 Make-to-Stock
Yield Variability The condition that occurs when the output M1.3 Produce and Test
of a process is not consistently repeatable M3.4 Produce and Test
either in quantity, quality, or combination of M2.3 Produce and Test
these.

BEST PRACTICES
BEST PRACTICE DEFINITION PROCESS
ABC Classification None identified EP.7 Manage Planning
Configuration
Ability to Track Component/Sub- Component/lot tracking (lot trace-ability) ED.8 Manage Import/Export
Component Manufacturing Country of Requirements
Origin ES.8 Manage Import/Export
Requirements
Accurate and Approved Process Electronic document management M1.4 Package
Plans, Routings, Specifications and M2.4 Package
Procedures
Accurate and Approved Process Electronic document management M1.3 Produce and Test
Plans/Specifications M2.3 Produce and Test
Accurate and Approved Work Electronic document management that M2 Make-to-Order
Instructions/Process Plans maintains current Standard Operating M1 Make-to-Stock
Procedures (SOP)
Accurate and Low Cost Batch Electronic batch records M2.6 Release Product to
Records for Regulatory Compliance Deliver
Deliver
Deliver
M2.6 Release Finished
Product to Deliver
Accurate and Low Cost Electronic batch recording/configuration M2 Make-to-Order
Batch/Configuration Records for M1 Make-to-Stock
Warranty and Regulatory Tracking M2.3 Produce and Test
M1.4 Package
M2.4 Package
Additional Capacity for Overflow Outsource manufacturing and work force M1.1 Schedule Production
Demand augmentation providers connected to Activities
production schedules via the internet. M2.1 Schedule Production
Activities
Activities
Advance Planning Engines Applied to Advanced math model "solvers" that P5.3 Balance Return
Returns optimize / minimize constraints, routing, Resources with Return
restocking priorities and costs. Requirements
Advanced Ship Notices Allow for Blanket order support with scheduling S1.1 Schedule Product
Tight Synchronization between interfaces to external supplier systems Deliveries
Source and Make Processes S2.1 Schedule Product
Deliveries
Deliveries
Advanced Shipping Notice Integrated data sharing with repair facility. SR2.5 Return MRO Product
SR1.5 Return Defective
Product

Advanced Shipping Notices & Bar coding; EDI; integrated D2.10 Receive & Verify
UCC128 Container Labeling transportation/warehouse management Product at Customer Site
Product at Customer Site
Generate Shipping
Documentation
Product by Customer
D1.11 Load Vehicle &
Generate Shipping
Documentation
Product by Customer
Product by Customer
Alignment of Strategic and Business None identified EP.5 Manage Integrated
Plans with Long-Term Capacity and Supply Chain Capital Assets
Resource Planning EP.6 Manage Integrated
Supply Chain Transportation
All Functions and Organizations None identified P1 Plan Supply Chain
Understand Their Impact on
Supply/Demand Balancing, Including
Sales, Marketing, Product
Management, Manufacturing,
Customer, Suppliers, Materials
Management, and Product
Development
All Key Participants in the Supply Supply Chain Event Management Systems P2 Plan Source
Chain, Including Strategic Partners,
Have Full Visibility of the
Demand/Supply Plan
Alliance and Leverage Agreements None identified S1 Source Stocked Product
Allow Source Suppliers Full Visibility Shared supply chain forecasting and event P5.2 Identify, Assess, and
into the Current Return Situations and management functionality with Source Aggregate Return Resources
the Forecasted Return Activity suppliers
Appointment Scheduling for Pickup Transportation Management System (TMS) ES.6 Manage Incoming
and Delivery of Customer Shipments Maintenance Management Product
ER.6 Manage Return
Transportation
Arrange for Shipping Insurance in Preventative management SR3.4 Schedule Excess
Case Of In-Transit Loss or Damage Product Shipment
Assessing Export/Import Multi-country Export/Import documentation ED.8 Manage Import/Export
Requirements during Time of Product compliance Requirements
Development/Manufacture ES.8 Manage Import/Export
Requirements
Attribute-Based Process Planning Computer aided process planning / recipe EM.1 Manage Production
management Rules
Authorize Each Operation to Assess None identified M3.4 Produce and Test
the Quality of the Previous Operations M2.3 Produce and Test

Automated Configuration Configuration M3.1 Finalize Engineering
Management D2.2 Receive, Configure,
Enter and Validate Order
M3.1 Finalize Production
Engineering
Automated Conformance Monitoring Internal automatic notification of EM.8 Manage Regulatory
And Control conformance, including holding of product Compliance
until requirements are met
Automated Conversion of Engineering None identified M3.1 Finalize Engineering
Drawings into Product Specifications M3.1 Finalize Production
Engineering
Automated Data Entry Scanning with RFID/Bar-codes systems ED.5 Manage Deliver Capital
Assets
ER.5 Manage Return Capital
Assets
Automated Directed Picking A pick list displayed on a handheld device D4.3 Pick Product from
that directs picks and relieves inventory Backroom
from backroom locations
Automated Disposition Instructions for Advanced planning and scheduling ER.5 Manage Return Capital
Returns Based on Data Interchange capability coupled with decision support Assets
with Strategic Providers logic.
Automated Documentation for Transportation Management System (TMS) ES.6 Manage Incoming
International Shipments Maintenance Management Product
ER.6 Manage Return
Transportation
Automated Engineering Specifications Automated Intelligence (Heuristic) - based EM.1 Manage Production
engineering specifications system Rules
Automated Inventory Visibility and Automated inventory planning package SR3.1 Identify Excess
Planning System to Highlight linked to real time demand data and Product Condition
Inventory in Excess of Requirements inventory business rules.
Automated Links To Existing CAD & Electronic hypertext or links to existing EM.1 Manage Production
CAM Information database of detail/parts/setup Rules
sketches/drawings
Automated Notification of Laboratory Interface between production system and M2.6 Release Product to
Regarding Sample Availability LIMS Deliver
Deliver
Deliver
Product to Deliver
Automated Pick List System generated pick-lists based on D4.2 Receive Product at
picking / batching rules. Store
D4.1 Generate Stocking
Schedule
Automated Registry of Inventory None identified SR3.2 Disposition Excess
Return Locations by Item to Speed Product
Identification of Proper Return
Location
Automated Replenishment of Back None identified D4.3 Pick Product from
Stock Based on Minimum Stocking Backroom
Levels
Automated Statistical Process Control None identified S2 Source Make-to-Order
(SPC) Product

Automated Update of Customer - Use trend analysis to influence inventory ER.3 Manage Return Data
Excess Material Return Transaction level decisions. Collection
History
- Web-based alerts to identify update
occurred and when pre-determined
thresholds are exceeded.
Automated Update of Supplier None identified ES.3 Maintain Source Data
Performance Information
Automatic Customer Payment RFID, smart cart or customer self-service D4.6 Checkout
charges goods to card upon store
departure.
Automatic Generation / Configuration Parametric driven (Group Technology - EM.1 Manage Production
Of Tooling / Set-Up Instructions based) manufacturing design system Rules
Automatic Generation And Software specific to industry regulations EM.8 Manage Regulatory
Submission Of Conformance and standards (e.g. may be software to Compliance
Documents produce MSDS documents, or FDA
requirements, etc.)
Automatic Identification Bar Coding & Radio Frequency D2.8 Receive Product from
Communications Source or Make
Source or Make
D1.8 Receive Product at
Warehouse
Source or Make
Automatic Label and Seal Verification Automatic interface to inspection systems M3.5 Package
M2.4 Package
M1.4 Package
Automatic Link to Recipe Seamless application interface to EM.1 Manage Production
Management, PLC Program, CNC manufacturing planning documentation and Rules
Program Systems, Etc., to Deliver CAM systems
New Manufacturing Documentation
Automatic Multi-level Credit Checking: Integrated Order/Financial Management D2.2 Receive, Configure,
Dollar Limits; Days Sales Enter and Validate Order
Outstanding; Margin Testing D1.2 Receive, Enter &
Validate Order
Automatic Notification When to Begin Workflow/Groupware EM.1 Manage Production
and When to Complete Rules
Automatic Reservation of Inventory Integrated order management system that D1.3 Reserve Inventory &
and Dynamic Sourcing of Product for treats each order line as a separate order Determine Delivery Date
Single Shipment to Customer with integration to inventory source and D2.3 Reserve Resources &
status; Real-time inventory management Determine Delivery Date
Available-to-Promise (ATP) Available-to-Promise (ATP) provides an D1.3 Reserve Inventory &
availability and feasibility check concerning Determine Delivery Date
a customer request or a customer order. D2.3 Reserve Resources &
Back Flush Material at Order Flexible back flush logic M1.2 Issue Product
Completion M1.2 Issue Material
Process Product
Process Product
Backhaul Trading Exchange Pooling ES.6 Manage Incoming
Product
ER.6 Manage Return
Transportation

Bar Coding is Used to Minimize - Bar code interface for data collection S3.4 Receive Product
Handling Time and Maximize Data devices S3.5 Verify Product
Accuracy S2.3 Verify Product
- Generate bar coded receiving documents DR1.3 Receive Defective
Product
- Product serial number used as identifier S2.2 Receive Product
- RFID S1.3 Verify Product
DR3.3 Receive Excess
Product
Blanket Purchase Orders Cover None identified P2.4 Establish Sourcing
Period Requirements Plans
Build Load in Stop Sequence Integrated inbound/outbound transportation D3.5 Build Loads
planning (i.e. 1st truck destination loaded D1.5 Plan & Build Loads
last, etc.). D2.5 Plan & Build Loads
D1.5 Build Loads
D2.5 Build Loads
Build Subassemblies to Forecast at None identified M3.2 Schedule Production
Highest Generic Level in Bill of Activities
Material; Maintain Flexibility While
Minimizing Cycle Time and Inventory
Position
Build Subassemblies/Products to None identified M2 Make-to-Order
Forecast at Highest Generic Level to
Minimize Make Cycle Time
Business Intelligence (BI) A data warehouse / data mart is the source P1.3 Balance Supply Chain
of all planning (master) data, business rules Resources with Supply Chain
and transaction data. Analytical tools Requirements
enable the ongoing maintenance and
improvement of the business rules based
on actual data.
Business Rules Are Clearly Convenient availability to business rules ER.2 Manage Performance of
Communicated with the Customer and return criteria. Return Processes
Capability to Run "Simulated" Full- Supply chain modeling and visualization P1 Plan Supply Chain
Stream Supply/Demand Balancing for system EP.6 Manage Integrated
"What-If" Scenarios Supply Chain Transportation
Capability to Run Multiple "Simulated" Supply Chain modeling capabilities, i.e. EP.5 Manage Integrated
Full-Stream Supply/Demand Advanced Planning Systems. Supply Chain Capital Assets
Balancing Against Long-Term EP.4 Manage Integrated
Capacity Plans and Scenarios Supply Chain Inventory
Capability Transfer to Customer None identified S2.4 Transfer Product
Capability Transfer to Organization None identified S1.4 Transfer Product
Capacity and Supply Constraints Are None identified P2.1 Identify, Prioritize, and
Balanced Against Demand during the Aggregate Product
Planning Cycle Requirements
Capacity and Supply Constraints None identified P2.2 Identify, Assess, And
Identified During MPS Schedule Aggregate Product
Process Are Balanced Against Resources
Demand during the Planning Cycle
Capture and Maintain Mode Specific Transportation Management System (TMS) ES.6 Manage Incoming
Data Maintenance Management Product
ER.6 Manage Return
Transportation

Carrier Agreement Carrier agreements are agreements D2.11 Load Product &
between a company and its domestic and Generate Shipping
global carriers (for both, inbound raw Documentation
materials and outbound finished goods) D3.11 Load Product &
specifying service levels, payment terms, Generate Ship Documents
and other conditions. S3.4 Receive Product
ES.2 Assess Supplier
Performance
ES.9 Manage Supplier
Agreements
Network
Generate Shipping
Documentation
Carrier Selection Based on Scheduling, carrier selection, and rating SR2.4 Schedule MRO
Performance Criteria at Least Cost Shipment
SR1.4 Schedule Defective
Product Shipment
SR3.4 Schedule Excess
Product Shipment
Carrier/Route Optimization Based on Route scheduling, carrier selection, and D3.6 Route Shipments &
Continuous Movement and rating Select Carriers
Consolidation/Pooling D3.6 Route Shipments
Categorize 100% of Total Inventory None identified P2.2 Identify, Assess, And
(Active, Usable, Excess, Obsolete) for Aggregate Product
Appropriate Action Resources
Aggregate Product
Requirements
Cellular and Demand Pull Support for cellular and demand pull M2 Make-to-Order
Manufacturing manufacturing execution
Cellular Manufacturing Manufacturing is broken into work cells M3 Engineer-to-Order
M1 Make-to-Stock
Activities
Change in the Demand Signal Event-driven supply chain re-planning P1 Plan Supply Chain
Instantaneously "Reconfigures" the
Production and Supply Plans
Changeover Reduction / Continuous Changeover process flow element EM.5 Manage Equipment and
Improvement Program identification, instructional directions to Facilities
conduct changeover, and measurement ES.5 Manage Capital Assets
tool, which can be used to prioritize and
track results of improvement efforts.
Software to identify operational constraints
to the MAKE processes to assist in directing
resources toward bottleneck functional
areas.
Clarify in Advance Hazardous Overseas packaging, labeling and shipping ER.8 Manage Return
Material Packaging, Labeling and regulatory requirements are given specific Regulatory Requirements
Shipping Requirements attention.
Clarify in Advance If the Product to be Participants at all customer and service ER.8 Manage Return
Returned Requires Specific, Formal provider locations involved clearly Regulatory Requirements
Authorization from the Service understand all regulatory requirements at
Provider per Federal, State or Local each step in the return process .
Regulation, Prior to Returning

Clarify Point of Contact and Return Electronic rules for business relationships SR1.3 Request Defective
Location and transactions. Return Authorization
SR3.3 Request Excess
Collaboration among Operations Supply Chain Advanced Planning Systems P1.4 Establish Supply Chain
Strategy Team Plans
Supply Chain Integration Systems P1.1 Identify, Prioritize, and
Aggregate Supply Chain
Integration between supply chain advanced Requirements
planning and ERP execution systems

Collaborative Planning, Forecasting, Collaborative Planning, Forecasting and P1 Plan Supply Chain
Replenishment (CPFR) Replenishment is a concept that allows
collaborative processes across the supply
chain, using a set of process and
technology models.... (From
www.cpfr.org/intro.html)
Collaborative Planning/Scheduling Interactive, on-line planning/scheduling EM.7 Manage Production
systems. Capacity planning systems with Network
accurate production capability data.
Collaborative Review and Agreement Web based access to current spend data ES.1 Manage Sourcing
of Business Rules Prior to Contract available from enterprise to part level Business Rules
Execution
Combine Consolidation Needs with None identified D1.4 Consolidate Orders
Other Products/Divisions/Companies
Communicate with Customer before None identified DR3.1 Authorize Excess
the Return to Establish What Types of Product Return
Returns Are Acceptable DR1.1 Authorize Defective
Product Return
DR2.1 Authorize MRO
Product Return
Comparative Analysis of Supplier Software application with data analysis ES.2 Assess Supplier
Performance is Used in Sourcing capability Performance
Decisions
Compare Local Customs None Identified ER.8 Manage Return
Requirements to Your Process Regulatory Requirements
Procedures to Ensure All
Requirements Are Accounted for
Before Shipping
Complete Lot History Inventory by lot of sourced/in-process or M1.2 Issue Product
discrete order /usage reporting by lot or M1.2 Issue Material
discrete order M2.2 Issue Sourced/In-
Process Product
Comprehensive History of Customer None identified ED.3 Manage Deliver
Interactions Including Order History, Information
Claims, Problems, Etc.
Concurrent Engineering is Used to None identified S3.1 Identify Sources of
Tightly Link Sourcing into the Product Supply
Development Process Make/Buy
Decision Process (Outsourcing vs. In
Sourcing)
Confirm All Documentation and None Identified ER.8 Manage Return
Inspection Requirements Before Regulatory Requirements
Shipping

Confirm Asset Return Condition None identified SR1.2 Disposition Defective
Codes Are Clearly Understood by All Product
Employees, Especially Those Who
Are New to the Process
Confirm Changes in Condition Code None identified SR1.2 Disposition Defective
Policies Are Promptly Communicated Product
to All Employees and Supply-Chain
Partners.
Consideration of Supplier's Material Digital linkage to supplier quoting, planning, P3.1 Identify, Prioritize, and
Availability in Company's Supply configuration and customer service Aggregate Production
Resources (Including Supplier's applications Requirements
Production Plans & Capability,
Inventory, and Delivery Plans)
Consignment Agreements Are Used Consignment inventory management S1.1 Schedule Product
to Reduce Assets and Cycle Time Deliveries
While Increasing the Availability of S2.1 Schedule Product
Critical Items Deliveries
Deliveries
Consolidate Orders by Customer, Integrated load planning and building with D2.4 Consolidate Orders
Source, Traffic Lane, Carrier, Etc. warehouse management D1.4 Consolidate Orders
Consolidate Shipments Through None Identified ER.6 Manage Return
Cross Docking - Coordinate with Transportation
Other Shipments
Consolidation of Carriers Transportation modeling and rate analysis D3.6 Route Shipments &
Select Carriers
Consolidation of Inbound and Integrated inbound/outbound transportation D1.5 Plan & Build Loads
Outbound Requirements planning D3.5 Plan & Build Loads and
Shipments
D2.5 Plan & Build Loads
D1.5 Build Loads
D3.5 Build Loads
D2.5 Build Loads
Consolidation of Return Carriers Outbound logistics software to assist with SR2.4 Schedule MRO
route. Shipment
Product Shipment
Product Shipment
Continuous Improvement Historical trending, cause and effect EM.3 Manage MAKE
analysis, and Key Performance Indicators Information
Scheduling reviews of processes for
possible improvements
Continuous Improvement and None identified ES.2 Assess Supplier
Development is Driven and Measured Performance
through the Performance Review
Process
Continuous Improvement is Planned Avenue to receive customer comments. ER.2 Manage Performance of
through Process Reviews and Return Processes
Customer Feedback
Continuous Replenishment Programs; Integrated demand/deployment planning to D2.2 Receive, Configure,
Vendor Managed Inventory, customer location driven by POS; Customer Enter and Validate Order
Telemetry to Automatically movement data D1.2 Receive, Enter &
Communicate Replenishment of Validate Order
Chemicals

Cost Accounting System to Determine ABC costing system P5.3 Balance Return
the Best Return Process to Follow Resources with Return
from a Cost of Business Perspective Requirements
Cost Reduction and or Cost None identified ES.2 Assess Supplier
Avoidance Are Opportunities Are Performance
Identified, Implemented and
Measured on a Periodic Basis
Create and Maintain Multiple None Identified ES.7 Manage Supplier
Suppliers and Multiple Supplier Sites Network
to Record Information about
Individuals and Companies from
Whom You Want to Purchase
Catalogue Goods and Services
Cross Training/Certification HR/certification support M1.1 Schedule Production
Activities
Activities
Activities
Cross-Docking Used in many distribution centers (DC) to D1.8 Receive Product from
increase inventory velocity while Source or Make
maintaining shipping efficiency. In a D1.11 Load Vehicle &
traditional DC, the receiving process is Generate Shipping
disjointed from the shipping process and Documentation
storage acts as an intermediary between D1.12 Ship Product
the two processes. Cross docking actively D2.8 Receive Product from
links the receiving and shipping processes. Source or Make
In a DC, both cross docking (no storage) D2.12 Ship Product
and traditional (with storage) operations D2.11 Load Product &
might take place. Generate Shipping
Documentation
Source or Make
D3.12 Ship Product
CRP & VMI Loads Optimized for Integration with CRP/VMI vendor systems D3.5 Build Loads
Utilization D1.5 Plan & Build Loads
D2.5 Plan & Build Loads
D1.5 Build Loads
D2.5 Build Loads
CRP/VMI Integrated Load Building; Routing & D3.6 Route Shipments &
Scheduling with Advanced Ship Notice Select Carriers
(ASN) D2.6 Route Shipments
Customer Access to Online Tracking Internet-enabled package/shipment tracking ED.3 Manage Deliver
of Order Status and Shipping Information
Information
Customer Initiated Package Tracking WEB based Shared systems ED.2 Access Delivery
Performance
ED.2 Assess Delivery
Performance
Customer Profile Drive Recognition None identified D4.6 Checkout
Upon Checkout

Customer Relationship and Digital Tightly integrated supply chain or demand P4.1 Identify, Prioritize, and
Linkages (XML, EDI, Etc.) Provide planning with point of sale and customer Aggregate Delivery
Accurate Visibility into Actual Demand inventory systems Requirements
via Customer Forecasts, Product
Plans, Production Plans, and
Inventory Positions
Customer Relationship Management Software that provides customer input and P1.3 Balance Supply Chain
(CRM) keeps the customer informed about the Resources with Supply Chain
planning of the production and delivery Requirements
process by managing all contacts and
communication with the customer thorough
all channels including internet and
traditional sales and customer service
channels.
Customer Sends Receiving Advanced Electronically link Return authorization, DR3.3 Receive Excess
Shipment Notification Prior to Return schedule and shipping documents. . Product
Shipment DR1.3 Receive Defective
Product
Customer Service Data Validation None identified ED.3 Manage Deliver
Including Geo-Coding Information
Data Accessibility across the Web based access to various levels of ES.3 Maintain Source Data
Enterprise for Visibility by Discrete enterprise data ER.3 Manage Return Data
Business Units Collection
Defective Products Scheduling Utilize electronic links DR1.4 Transfer Defective
Identifies Next Destination (Source, Product
Make, or Deliver) on Return
Authorization
Defined Stocking Levels and Criteria None identified D4.3 Pick Product from
Backroom
Deliveries Are Balanced Throughout None identified S3.5 Verify Product
Each Working Day and Throughout S3.4 Receive Product
the Week S2.3 Verify Product
S1.3 Verify Product
Delivery Schedules Are Web-based access to plant scheduling M2 Make-to-Order
Collaboratively Developed with status, collaborative data-sharing M3 Engineer-to-Order
Customers environment.
Demand Planning, Demand Flow Software that provides multiple data models P1.3 Balance Supply Chain
Leadership including the business rules and metrics for Resources with Supply Chain
the entire supply chain planning process. Requirements
Algorithms use the business rules and
metrics as the drivers for the planning
engine.
Demand Priorities Reflecting Strategic Rules-based distribution planning system P4.3 Balance Delivery
Customer Relationships as Business Resources and Capabilities
Policies Are Automatically Followed in Trading partner agreements with Delivery Requirements
Allocating Resources; First-In-First-
Out (FIFO) is Utilized as the Default
Scheduling Priority
Demand Pull Mechanisms Repetitive scheduling and sequencing M2.1 Schedule Production
Activities
Activities

Demand-Pull Manufacturing, Support of demand-pull mechanisms M1.1 Schedule Production
Including Active Reduction of (Kanban, replenishment signals, etc.) based Activities
Manufacturing Systems Time and on rate schedules and user-defined M3 Engineer-to-Order
WIP Through the Use of Demand-Pull minimum/maximum trigger points M1 Make-to-Stock
Mechanisms and Visual Controls M2.1 Schedule Production
Activities
Demand-Pull Mechanisms; Kanban None identified M1.2 Issue Product
Replenishment Signals from M1.2 Issue Material
Stockroom, Intermediate Products, or M2.2 Issue Sourced/In-
Subassembly Area Process Product
Process Product
Design For Production Table of manufacturing capacities or design EM.1 Manage Production
envelops (capacities; envelop sizes; tank, Rules
vessel or batch sizes)
Design/Upgrade Production Machine productivity and downtime M3.4 Produce and Test
Equipment to Maximize Flexibility and monitoring
Avoid Line Stoppages
Develop and Clarify Mutually Clarification as to who will pay in-bound and SR1.3 Request Defective
Understood Cycle Times to Process out-bound freight cost. Return Authorization
Return Authorizations SR3.3 Request Excess
Develop Local Receiving Process Minimize time spent in product movement. DR3.3 Receive Excess
Close to Repair Product
DR1.3 Receive Defective
Product
Develop Proactive Transit Damage None Identified ER.6 Manage Return
Programs Transportation
Digital Linkage (EDI, XML, Etc.) is None identified P2.4 Establish Sourcing
Used to Provide Real-Time Demand Plans
Information and Handle Routine
Transactions
Digital Links (XML Based, EDI. Etc.) Real-time exchange of supply chain P1.2 Identify, Assess, And
Among Supply Chain Members information between supply chain members Aggregate Supply Chain
collaborative planning systems, Internet Resources
Trading Exchanges, B2B Integration and P1.4 Establish Supply Chain
Application Server Systems Plans
Requirements
Resources
Direct Connection to Customs Electronic documentation submission via ED.8 Manage Import/Export
Clearance EDI and/or internet. Requirements
Requirements
Direct Ship from Factory to Share production status with customers and M3.6 Stage Product
Customer/Channel transportation providers via web-based M2.5 Stage Product
tools. Auto-Tendering for direct ship utilizing M3.6 Stage Finished Product
EDI/XML protocols. M1.5 Stage Product
Direct Transfer of Documents to Electronic documentation submission via ED.8 Manage Import/Export
Recipient and Forwarder EDI and/or internet. Requirements
Direct Transfer of Documents to ES.8 Manage Import/Export
Recipient and Forwarder Requirements

Distinct and Consistent Linkages Bi-directional Digital Links (XML, EDI, etc) P2 Plan Source
Exist to Ensure Disruptions and or Internet procurement networks to P4 Plan Deliver
Opportunities in Material Resources customer service linkage
Are Quickly and Accurately
Communicated and Acted Upon
Distinct and Consistent Linkages Multi-plant supply/demand planning and P3 Plan Make
Exist to Ensure that Disruptions and execution
Opportunities in Production Are
Quickly and Accurately
Communicated and Responses Made
Document Control Control who can create, revise and access EM.1 Manage Production
information Rules
Documents Generated Automatically Electronic documentation submission via ED.8 Manage Import/Export
During Shipment Preparation. EDI and/or internet. Requirements
Requirements
Download P.O. & Advanced Ship Integration with Procurement Systems & D2.8 Receive Product from
Notices for Automated Receiving and Electronic Commerce with Vendors Source or Make
Put Away D3.8 Receive Product from
Source or Make
Warehouse
Source or Make
Drive Deliveries Directly to Stock or Pay on receipt S2.4 Transfer Product
Point-Of-Use in Manufacturing to S1.4 Transfer Product
Reduce Costs and Cycle Time Specify delivery location and time (to the S3.6 Transfer Product
minute)
Specify delivery sequence

Drive Returns Directly to Return Stock Specify return disposition location and time. SR1.2 Disposition Defective
Point of Disposition to Reduce Cost Product
and Cycle Time SR3.2 Disposition Excess
Product
Drum-Buffer-Rope Scheduling (DBR, also referred to as Synchronous M1.1 Schedule Production
Technique Manufacturing or Constraint Management) Activities
A technique used to manage resources to M2.1 Schedule Production
maximize throughput. Activities
Activities
Dunnage Control System data field to specify where the part / EM.4 Manage In-Process
product shipping container should be Products (WIP)
removed. Best practice is to remove the
dunnage as soon as possible unless part /
product damage will result. Reuse of
intermediate WIP containers for finished
goods.
Dynamic Deployment Based on Advanced planning and scheduling logic D2.3 Reserve Resources &
Constraint Based Planning and with constraint, cost, and resource Determine Delivery Date
Optimal Scheduling optimization
Dynamic Location Assignment Real time inventory control, stock locator, D2.8 Receive Product from
Including Lot Control, Zoned Picking, and rules based picking logic Source or Make
Quality Assurance D2.8 Pick Staged Product
D3.7 Pick Staged Product
D1.9 Pick Product
D2.9 Pick Product
D3.9 Pick Product

Dynamic Location Assignment Real time inventory control, stock locator, D3.8 Receive Product from
Including Lot Control, Zoned Put and rules based put away logic Source or Make
Away, Quality Assurance, ABC D1.8 Receive Product at
Frequency of Access Warehouse
Source or Make
Dynamic Return Restocking Dynamic prioritization of restocking plans in P5.3 Balance Return
Management order to rapidly re-sell products that are in Resources with Return
demand thus reducing new inventory Requirements
demand.
Dynamic Simulation of Picking Rules based picking logic and simulation D3.7 Pick Staged Product
Requirements Optimized for Labor, D2.8 Pick Staged Product
Cost, and Time D1.9 Pick Product
D3.9 Pick Product
D2.9 Pick Product
EDI Links between Manufacturing and None identified D1.3 Reserve Inventory &
Distributor to Achieve Visibility of Determine Delivery Date
Complete Finished Goods Inventory
and Expected Shipments
EDI Links Integrate Supplier Inter-company resource planning with P2 Plan Source
Resource Information (Inventory, EDI/Internet communication
Capacity Availability, Etc.) with Own
Resources
Efficient and Effective Benchmarking None identified EP.2 Manage Performance of
Process Leveraging Cross Industry Supply Chain
Metrics and Definitions
Efficient Consumer Response (ECR); Demand Planning, Deployment, Scheduling D1 Deliver Stocked Product
Quick Response
Electronic Catalogues/Malls None identified D1 Deliver Stocked Product
Electronic Commerce (Customer EDI applications and integrated order D2.2 Receive, Configure,
Visibility of Stock Availability, Use of management Enter and Validate Order
Hand-Held Terminals for Direct Order D1.2 Receive, Enter &
Entry, Confirmation, Credit Approval), Validate Order
On-Line Stock Check and
Reservation of Inventory
Electronic Data Interchange Can Be Electronic Data Interchange ES.7 Manage Supplier
Used To Send Rfqs and Technical Network
Information to and from Potential S3.2 Select Final Supplier(s)
Suppliers to Determine Supplier and Negotiate
Capability to Fulfill Requirements So
that They May Be Added to Supplier
Network
Electronic Data Interchange is Used None identified S3.1 Identify Sources of
to Send Technical Information to and Supply
from Potential Suppliers
Electronic Documentation and Graphical display of drawings, diagrams, EM.1 Manage Production
Imaging recipes/formulas, specifications, Rules
instructions, etc., to all users
Electronic Generation and Download None identified D2.11 Load Product &
of Shipping Documents Generate Shipping
Documentation
Generate Shipping
Documentation

Electronic Manifest and Electronic Transportation Management System (TMS) ES.6 Manage Incoming
Billing Maintenance Management Product
ER.6 Manage Return
Transportation
Electronic Matching Between POS Integrated Software Systems P4.1 Identify, Prioritize, and
Data and Store Inventory (Shelves Aggregate Delivery
and Back Room) Requirements
Electronic Material Move Automated process control and/or barcode M1.2 Issue Product
Transactions data collection M3.6 Stage Product
M2.5 Stage Product
M1.2 Issue Material
Process Product
Process Product
M1.5 Stage Product
Electronic Reminders of Possible Pull signals. ER.1 Manage Business Rules
Scheduled Maintenance for Return Processes
Electronic Sourcing and Negotiation Business Rules for electronic sourcing ES.1 Manage Sourcing
process and hierarchy Business Rules
Agreements
Electronic Transfer of Shipment None identified D3.11 Invoice & Receive
Information to Finance Payment
D1.13, Invoice & Receive
Payment
D2.12 Invoice & Receive
Payment
D3.15 Invoice
D2.15 Invoice
D1.15 Invoice
Electronically Track Shipment from None Identified DR3.3 Receive Excess
Customer to Service Provider Product
DR1.3 Receive Defective
Product
Eliminate "Special Deals" Sales to None identified P4.1 Identify, Prioritize, and
Reduce Returns and Improve Aggregate Delivery
Forecast Accuracy (Reduces Requirements
Uncertainty, Lowers Safety Stock
Requirements, Cheaper to
Administer)
Enable Customer-Service Clarification of policy if authorizations are SR1.3 Request Defective
Representatives to Complete the Bill not processed within the expected cycle Return Authorization
Of Lading for the Customer Including time. SR3.3 Request Excess
Carrier Routing, Weight, Description Return Authorization
and Class to Minimize Guesswork &
Wrong Estimates
Enable Real-Time Visibility into None identified D2.2 Receive, Configure,
Backlog, Order Status, Shipments, Enter and Validate Order
Scheduled Material Receipts, D1.2 Receive, Enter &
Customer Credit History, and Current Validate Order
Inventory Positions

Enterprise Level Policies/Rules with Web based access to enterprise level ES.1 Manage Sourcing
Local Execution business rules Business Rules
Agreements
SR1.1 Identify Defective
Product Condition
SR3.1 Identify Excess
Product Condition
Enterprise Level Spend Analysis None identified ES.1 Manage Sourcing
Business Rules
Agreements
Establish Designated Processes for None Identified DR3.2 Schedule Excess
Scheduling and Receiving Excess Return Receipt
Inventory
Establishment of Criteria to Rank Utilize supplier delivery, quality, price ES.7 Manage Supplier
Suppliers performance as well as any other criteria Network
such as terms and conditions
Evaluate Supplier Network for Supplier Merge Programs for duplicates ES.7 Manage Supplier
Duplicates Network
Evaluate the Benefits of Out-Sourcing Enables customer to focus on core ER.1 Manage Business Rules
the Excess Material Return Process competencies. for Return Processes
Excess Products Scheduling Utilize electronic links DR3.4 Transfer Excess
Identifies Next Destination (Source, Product
Make, or Deliver) on Return
Authorization
Facility & Equipment Environmental / System software to list checklist items, EM.5 Manage Equipment and
Safety Audit System report results of audit & forward actions to Facilities
be taken ES.5 Manage Capital Assets
Facility Master Plan Automated Item Cubing and Weighting ED.5 Manage Deliver Capital
systems Assets
Factory Floor Electronic Decision Software to capture actual performance EM.5 Manage Equipment and
Making Information System history / costs of operations with capability Facilities
of predicting "best cost action plans"
relating to maintaining equipment and
facilities.
First In - First Out Part / WIP location by date received for EM.4 Manage In-Process
those parts that must be stocked or staged Products (WIP)
in a holding area
Forecasts Are Replaced with Actual B2B Integration and Application Server P4.1 Identify, Prioritize, and
Customer Replenishment Signals and Systems Aggregate Delivery
Orders Where Possible Requirements
Full Internal (And External If Source Intranet and Extranet communications tools P5.4 Establish and
Suppliers Share in the Return Communicate Return Plans
Process Responsibilities) Visibility to
Return Plans
Full Visibility of Credit History by None identified D2.11 Load Product &
Shipping Personnel Generate Shipping
Documentation
Generate Shipping
Documentation
Genealogy Tracking Where-used listing of as-planned vs. as- EM.1 Manage Production
built documentation Rules
Goals / Performance Plans None identified D4.7 Deliver and/or Install
Ideal Stock Position Based on Pilot by Wal-Mart. IT P4.1 Identify, Prioritize, and
Days/Weeks of Supply Aggregate Delivery
Requirements

Identification of Suppliers Who Will Consignment Inventory Management ES.7 Manage Supplier
Participate in Consignment Inventory Network
Programs
Identification of Suppliers Who Will Electronic Kanban Support ES.7 Manage Supplier
Participate in Kanban Programs Network
Identification of Suppliers Who Will None identified ES.7 Manage Supplier
Participate in Procurement Split (Two Network
or More Suppliers Sharing Purchase
Requirements) Programs
Identification of Suppliers Who Will Supplier managed inventories with ES.7 Manage Supplier
Participate in Vendor Managed scheduling interfaces to external supplier Network
Inventory (VMI) Programs systems to replenish
Implement Employee Involvement None Identified M2 Make-to-Order
Programs M1 Make-to-Stock
Incorporates leading practices such None Identified EP.7 Manage Planning
as Efficient Consumer Response, Configuration
Collaborative Planning, Forecasting,
and Replenishment, Vendor Managed
Inventory, and real time point of
consumption reporting.
In-Process Product (WIP) Handling Tracking, genealogy EM.4 Manage In-Process
Rules Products (WIP)
Integrate Return Planning with Both customer and Service Provider DR1.2 Schedule Defective
Maintenance and Inventory Planning departments are alerted at the same time Return Receipt
to Optimize the System and viewing the same information. DR2.2 Schedule MRO Return
Receipt
Integrated Business and Supply- Supply Chain performance dashboard EP.1 Manage Business Rules
Chain Planning Processes Where capability. for PLAN Processes
Cross-Functional Input is Leveraged
to Set Business Rules
Integrated Credit Checking Interface to supplier's shipping system to D2.11 Load Product &
financials Generate Shipping
Documentation
Generate Shipping
Documentation
Integrated Demand and Supply Memory based planning systems provide EP.3 Manage PLAN Data
Planning - Demand Planning, Supply one single data model and data mart Collection
Planning and especially the Supply (including the business rules) for the entire
Plan Execution Are no longer supply chain planning and execution
disconnected. All required planning process. Algorithms use the business rules
and execution data is integrated and as the driver for the planning engine.
shared in between all functional areas
within an organization.
Integrated Edit at Order Entry Time Customer Master Record ED.1 Manage Deliver
Business Rules
Integrated Facility Management None identified ED.7 Manage Product Life
Cycle
Integrated Order Management, Transportation Management System (TMS) ES.6 Manage Incoming
Warehouse Management, and Maintenance Management Product
Transportation Management Systems ED.6 Manage Transportation
View for analysis for all orders and ER.6 Manage Return
shipments the following data: Transportation
Integrated Transportation Visibility - Advanced shipping notices ER.5 Manage Return Capital
Assets
- Real time shipping tracking

Internet Exchanges Internet Exchanges are a hosted, business- ES.7 Manage Supplier
to-business trading network. Exchanges Network
are an open procurement network,
accessible to any buyer and focused on
new Internet-enabled purchasing models
like spot buys or reverse, buyer-driven
auctions. Exchanges will also support more
traditional catalog-based sales.
Internet Ordering None identified D1 Deliver Stocked Product
Inventory Allocation Exception None identified D1.3 Reserve Inventory &
Process is Clearly Defined and Jointly Determine Delivery Date
Owned by Manufacturing and Sales
Inventory is Planned at the Part Level, None identified P2.2 Identify, Assess, And
Based on Supply and Demand Aggregate Product
Variability Resources
Inventory Performance is Measured None identified P2.2 Identify, Assess, And
at the Dollar and Unit Levels Aggregate Product
Resources
Inventory targets Are Reviewed and Digital Linkages using XML standards P3.3 Balance Production
Adjusted Frequently (RosettaNet, eBXML, OAGI) to Resources with Production
automatically query inventory levels. Requirements
Aggregate Production
Resources
P2.2 Identify, Assess, And
Aggregate Product
Resources
Involve Your Other Supply-Chain Utilization of transportation management ER.6 Manage Return
Partners If Possible to Leverage system (TMS) to manage returns. Transportation
Transportation throughout the Chain Maximization of TMS use, both intra and
inter-company within the supply chain.
Item/Shelf Scanning Upon Put-A-Way Scan store shelves / bar codes to confirm D4.4 Stock Shelf
put-a-way.
Items Are Relieved from Inventory RFID, smart cart or customer self-service D4.5 Fill Shopping Cart
When Item is Removed from Shelf reduces system inventory upon item pick.
JIT Environment Schedule visibility, on-line communications EM.7 Manage Production
between source and demand Network
Joint Service Agreements (JSA) Collaborative Planning Systems P1.2 Identify, Assess, And
Resources
P1.4 Establish Supply Chain
Plans
Requirements
Product
S2 Source Make-to-Order
Product
Resources

Joint Service Agreements to Collaborative planning tools with the Source D1.14 Install Product
Document Acceptable Service Levels suppliers D2.11 Test & Install Product
in Terms of Installation Costs, D2.14 Install Product
Installation Cycle Time, Etc.
(This would be effective between customer

and supplier, and between internal
functions such as Field Service,
Manufacturing, Marketing and Order
Management)
Joint Service Agreements with Source Collaborative planning tools with the Source P5.2 Identify, Assess, and
Suppliers to Share Responsibilities suppliers Aggregate Return Resources
and Costs of Returns
Joint Service Agreements with None identified P2 Plan Source
Suppliers Define the Levels of
"Flexibility" or Resource Upside
Available Within Stated Lead Times
and Agreed Upon Conditions
Just-In-Time Demand Flow Demand-pull mechanisms M3.4 Produce and Test
Techniques M1.3 Produce and Test
Labor Scheduling that Matches Workforce management solution with D4.2 Receive Product at
Product Flow flexible rules. Store
D4.1 Generate Stocking
Schedule
Lead Times Updated Monthly None identified P1.2 Identify, Assess, And
Resources
Resources
Lean Manufacturing Use a team based systematic approach to M1 Make-to-Stock
identifying and eliminating wasteful, or non-
value adding activities within your
manufacturing organization
Limit the Number of Carriers, Treat Utilization of transportation management ER.6 Manage Return
Them as Partners and Build a Strong system (TMS) to manage returns. Transportation
Relationship with Each One Geared Maximization of TMS use, both intra and
Toward Continually Improving Service inter-company within the supply chain.
and Lowering Cost
Link Individual Performance to None identified M2 Make-to-Order
Organizational and Divisional Goals M1 Make-to-Stock
Long Term Supplier Electronic rules for business relationships ES.1 Manage Sourcing
Agreements/Partnerships and transactions: Vendor-managed Business Rules
Inventory Agreements, Fab & Hold ES.9 Manage Supplier
Agreements, Just-In-Time Agreements. Agreements
Long-Term Return Agreements / None identified SR1.3 Request Defective
Partnerships Return Authorization
SR3.3 Request Excess
Loyalty Card Data Use for comparison to previous sales D4.5 Fill Shopping Cart
activity/track new consumers, etc.
Maintain Accurate Lot/Batch History Electronic data collection of employee M3.4 Produce and Test
Information actions and sourced/in-process product lot M2.3 Produce and Test
used M1.3 Produce and Test
Maintain Data and System Integrity by Detailed production model that M1.1 Schedule Production
Ensuring Production Data, Inventory synchronizes PLAN and MAKE activities in Activities
Levels, and Schedule Requirements real time. M2.1 Schedule Production
Are 99+% Accurate Activities

Maintaining Repository of Current Electronic subscription and publication of EM.8 Manage Regulatory
Regulatory Requirements conformance documentation. Electronic Compliance
Document Management System features.
Manage Information Across 100% of Transportation Management System (TMS) ES.6 Manage Incoming
Shipments Maintenance Management Product
ER.6 Manage Return
Transportation
Master Production Scheduling None identified P2.1 Identify, Prioritize, and
Reflects Management of Capacity Aggregate Product
and/or Supply Constraints Requirements
Matching Shelf Stock to Expectations A software based system that corrects shelf P4.1 Identify, Prioritize, and
inventory levels based on actual product Aggregate Delivery
present (possible RFID solution). Identifies Requirements
stock-outs from shrinkage or item
misplacement.
Maximize Data Integrity and System None identified M3.2 Schedule Production
Accuracy by Ensuring 99%+ Activities
Accuracy of BOM Configuration,
Inventory Levels, and Schedule
Requirements
Measure Customer Service Advanced Shipping Notices (ASN)Parcel ED.5 Manage Deliver Capital
and Container Routing and Rating Assets
Compliance Labeling Real time shipment
tracking
Measured and Compared with Same DSS or portal tool that shows previous D4.5 Fill Shopping Cart
Activity Previous Period period performance and comparison for
store management (whether it is a year
ago, period ago, etc.).
Measurement of Carrier Performance Transportation Management System (TMS) ES.6 Manage Incoming
for On-time Delivery and Maintenance Management Product
Completeness ED.6 Manage Transportation
ER.6 Manage Return
Transportation
Measurement, Monitoring and None identified D4.7 Deliver and/or Install
Adjustment of Service or Product
Installation
Measuring Process Metrics and Electronic data collection of completion, M1.3 Produce and Test
Feedback to Operators quality, scrap, labor and equipment data
and dissemination of information on factory
floor
Mechanical (Kanban) Pull Signals Are Electronic Kanban support S1.1 Schedule Product
Used to Notify Suppliers of the Need Deliveries
to Deliver Product S2.1 Schedule Product
Deliveries
Deliveries
Merge-in-Transit Merge-in-Transit is a practice to combine D1.8 Receive Product from
items from multiple sources into a single Source or Make
customer shipment. This includes items on D1.9 Pick Product
stock in the distribution center, from which
the shipment is sent, items on stock in other
distribution centers, items on stock
elsewhere (e.g. at a plant or a supplier) as
well as make-to-order items. The items to
be merged are cross-docked from inbound
receipt to outbound shipping. Merging is
usually performed in a shipper's distribution
center (DC) or in a carrier's terminal.

Migrate From Build to Stock to None identified M1 Make-to-Stock
Configure to Order; Build
Subassemblies to Forecast at the
Highest Generic Level in the Bill of
Material/Recipe/Formula
Minimize Capital Assets Required and Outsourcing strategies including the use of EM.5 Manage Equipment and
Maintenance Costs Application Service Providers (ASPs), web- Facilities
based maintenance/diagnostic assistance
and MRO parts.
Minimize Operator Induced Errors Automatic download of production M3.5 Package
equipment with setup parameters Graphical M2.4 Package
display of setup, changeover, or layout M1.4 Package
Minimizing In-Process Product (WIP) WIP Storage Management System Efficient EM.4 Manage In-Process
Space Utilization Implementing Pull Products (WIP)
Systems
Minimum Product Handling Move high frequency used inventory close EM.4 Manage In-Process
to point of use. For example, the system Products (WIP)
should provide the frequency of picks by
part number so that high frequency picks
can be moved to convenient locations or
part pick quantities increased.
MRO Scheduling Identifies Next Utilize electronic links DR2.4 Transfer MRO Product
Destination (Stores or Repair Station)
on Return Authorization
Multi-country Export/Import None identified ED.8 Manage Import/Export
documentation compliance Requirements
Multiple Locations Throughout Store Planned and tracked via a plan-o-gram D4.5 Fill Shopping Cart
system;
Location specific product labeling.

New Items Introductions Are part of None identified EP.7 Manage Planning
the Sales and Operations Planning Configuration
Process at the General Management
Business Team Level
Note and Communicate Shelf Life Hazardous material regulations are given ER.8 Manage Return
Requirements Carefully Before specific attention. Regulatory Requirements
Shipping
Notification of Existing/Future Event None identified D4.6 Checkout
or Promotions
Obsolete Inventory is Reviewed at the None identified P3.2 Identify, Assess, and
Part Number Level Aggregate Production
Resources
P2.2 Identify, Assess, And
Aggregate Product
Resources
Off Peak Stocking The majority of stocking is completed with D4.4 Stock Shelf
minimal impact to or visibility from the
customer.
On Demand Access of Web based access to current ES.3 Maintain Source Data
Supplier/Source Data supplier/source data
On Line Access and Notification of Delivery of tooling and equipment details EM.1 Manage Production
Tooling and Equipment Information drawings Rules
On Line Document Management and ERP ES.7 Manage Supplier
Automated Supplier Approval Network
Processes Can Reduce the Cycle S3.2 Select Final Supplier(s)
Time and Costs Associated With and Negotiate
Managing Supplier Evaluations and
Get Them into the Supplier Network
Faster

On Line RFQ Processes Linked into None identified S3.1 Identify Sources of
the Document Management Process Supply
Reduces Cycle Time and Product S3.2 Select Final Supplier(s)
Management Costs and Negotiate
On-Demand Access of Production Data Collection and Display Systems EM.3 Manage MAKE
Information designed for efficient performance of value- Information
added operations in production. This could
include using PLC, Machine Interface, bar
code, Radio Frequency Communication,
Radio Frequency Identification, Magnetic
Stripe, Smart Cards, etc., to enable data
collection
On-Demand Access to Available to None identified EM.3 Manage MAKE
Promise (ATP), Production Schedules Information
and Inventory Status by Internal
Operations and Customers
On-Line Availability to Supplier Internet web sites for financial evaluation ES.7 Manage Supplier
Financials to Determine Potential Network
Supplier Viability to be Added to S3.2 Select Final Supplier(s)
Supplier Network and Negotiate
Online Real-Time Customer Entry On-line Customer Service Module CRM ED.3 Manage Deliver
and Edit (Customer resource Management) software Information
is getting a big push in the E-Commerce/E-
Business areas and generally provides a
means to fulfill this requirement
On-Line Rule Base None identified ED.1 Manage Deliver
Business Rules
On-Line Visibility of All Supply-Chain Enterprise resource planning system P1 Plan Supply Chain
Demand Requirements and Customer relationship management system
Resources, both Currently Available
and Committed (Pegged)
Operations and Network Analysis None identified ED.7 Manage Product Life
Cycle
Optimize Packing No packing and unpacking time required. EM.4 Manage In-Process
Recyclable or no containers where Products (WIP)
appropriate. No discarded material.
Optimized Supply-Chain Processes, Web based access to preferred and ES.1 Manage Sourcing
Optimized Supplier Count, Supplier recommended suppliers, supplier Business Rules
and Part Rationalization performance data & spend data stratified by ES.9 Manage Supplier
commodity, business unit/site, supplier, part Agreements
type, process type
Order Entry is Organized by None identified D2.2 Receive, Configure,
Customer Segment Customers Enter and Validate Order
Receive Differentiated Service Based
on Volume of Business Customer
Team is Empowered to Fully Service
Customer Requests, Including Formal
Orders and Ad Hoc Requests
Customers Have One Point of
Contact for All Products
Organize to Enhance Flexibility: Few Support for modular skills inventory with M2 Make-to-Order
Job Classifications, Self-Directed links to training databases, compensations M3 Engineer-to-Order
Work Force, Flat Management systems, and operator instructions M1 Make-to-Stock
Structure, Cross-Functional Work
Teams
Outsource If Not a Core Competency Use 4PL to manage and move. ER.5 Manage Return Capital
Assets
Packaging Operation is an Integral None identified M3.5 Package
Part of the Overall Production M1.4 Package
Process M2.4 Package

Paperless Order Tracking and Electronic dispatch and data collection with M1 Make-to-Stock
Customer Visibility of Orders external interface to internet. M2 Make-to-Order
Paperless Production Control Electronic dispatch of operations M3.4 Produce and Test
M3.5 Package
M1.4 Package
M2.4 Package
Paperless Production Order and Electronic dispatch and data collection. M1 Make-to-Stock
Inventory Tracking Allow customer access to production status
and inventories using internet technologies
and web site features.
Partnership with Outside Design None identified D3.1 Obtain and Respond to
Firms to Provide Skills and Capacity, RFP/RFQ
as Needed
Pay on Receipt Electronic Invoice Processing S3.7 Authorize Supplier
Payment
Payment
Payment
Performance Expectations and Web based access / availability to business ES.2 Assess Supplier
Business Rules Are Clearly rules and performance criteria Performance
Communicated Prior to the Initiation
of Business with the Supplier
Performance Results that Are Data warehouse, report writing, real time M1 Make-to-Stock
Compared to Benchmarks (i.e. database and Executive Information
Capacity, Scheduling) and Readily systems that are easily accessible. Use of
Available to Employees web-based technologies for dissemination
of information.
Periodic Review of Metrics and Real time view of data. ED.4 Manage Finished
Strategy with Comparisons to Industry Goods Inventories
Benchmarks ES.4 Manage Product
Inventory
ER.4 Manage Return
Inventory
Periodic Review of Standards Process for establishing and maintaining EM.2 Manage Production
review schedules Performance
Planning and Forecasting Outsourced Collaborative planning and forecasting with P5 Plan Return
Return process RETURN outsourcing partners (3PL,
reverse drop shippers, etc.)
Planogram Flexibility for None identified P4.1 Identify, Prioritize, and
Seasonal/Promotional changes Aggregate Delivery
Requirements
Plans that Violate Business Rules None identified P4.4 Establish Delivery Plans
(e.g. Joint Service Agreements) Are
Addressed Cross-Functionally,
Considering Total Business Impacts
(Revenue, Cost, Quality, Customer
Service, Etc.)
Plans Which Do Not Violate Business None identified P4.4 Establish Delivery Plans
Rules Are Communicated Openly and
Cross-Functionally for Execution
Posted Performance Results Data warehouse, report writing, real time M2 Make-to-Order
data base and EI systems M3 Engineer-to-Order
M1 Make-to-Stock

Postponement Postponement (delayed differentiation) is a D1 Deliver Stocked Product
supply chain concept where a product is D2 Deliver Make-to-Order
kept as long as possible in a generic state. Product
Differentiation of the generic product into a M1 Make-to-Stock
specific end-product is shifted closer to the M2 Make-to-Order
consumer by postponing identify changes, S1 Source Stocked Product
such as assembly or packaging, to the last S2 Source Make-to-Order
possible supply chain location. Product
Postponement and Pre-Kitting Of None identified M1.4 Package
Accessories into Modular Packages M3.5 Package
that Allow Flexibility While Maintaining M2.4 Package
Control
Pre-Certify Supplier Capability to - Push inspection to SOURCE DR3.3 Receive Excess
Send Return Products Correctly to Product
Minimize the Need for Receipt - Receiving quality criteria connected to DR1.3 Receive Defective
Verification ISO 9000 practices Product
Pre-Defined Manufacturing Design Libraries of manufacturing capabilities or EM.1 Manage Production
Rules design envelopes Rules
Predictive Maintenance Monitoring Database for equipment to contain EM.5 Manage Equipment and
(Heat, Noise, Lubrication Composition expected results of analysis, allow entry of Facilities
& Vibration) test readings, and have capability of
generating desired reports, which could
highlight suggested actions based upon
readings obtained, track maintenance
completed, contain a help-file to be
consulted
Priority-Based Inventory None identified D1.3 Reserve Inventory &
Reservations, for Key Customers, Determine Delivery Date
with FIFO Allocation for All Others
Proactive Education of Customers to None identified P4 Plan Deliver
Set Expectations and Encourage
Close Working Relationships
(Knowledge of Long-Lead Items,
Visibility to Supply Resources,
Agreement on Levels of Flexibility)
Produce Products to Unique Order entry specifications linked to M2 Make-to-Order
Customer Requirements manufacturing order
Product Data Management & None identified S3.1 Identify Sources of
Electronic Document Management Supply
Are Used to Manage Technical
Documents and Requirements for
Engineer to Order Product
Product Design Collaboration with On-line design tools facilitated by internet M3 Engineer-to-Order
Customers connections.
Production Level Loading Capacity planning M2 Make-to-Order
M1 Make-to-Stock
Production Reporting/Status Real time monitoring of production status EM.7 Manage Production
and In-Process Product (WIP) Network
Proof of Performance (Promotion Scan store shelves / bar codes to confirm D4.4 Stock Shelf
Management) put-a-way. Scan using handheld and match
with ad.
Provide Continuous Formal Training Examples would be TQM, Six Sigma. M1.3 Produce and Test
to Employees M2 Make-to-Order
M1 Make-to-Stock
Provide Product or Service Training to None identified D4.7 Deliver and/or Install
Employees or FAQ's Online

Provide Scheduling Output Back to Allow dynamic re-synchronization of MAKE M1.1 Schedule Production
Material and Labor Planning Systems activities by tying in real time status Activities
information to scheduler
Provide Single Source of Information Secure E-Commerce Server and integrated ED.3 Manage Deliver
on the Customer (Single Group / Order Management System (OMS) Information
Owner Responsible for Accuracy / Warehouse Management System (WMS)
Quality of Customer Data) and Transportation Management System
(TMS)
Provide Visibility to and Quickly Integrated accounts receivables D3.11 Invoice & Receive
Escalate Delinquent Accounts for Payment
Resolution D2.12 Invoice & Receive
Payment
D1.13, Invoice & Receive
Payment
D3.15 Invoice
D2.15 Invoice
D1.15 Invoice
Publish Return Policy Easy access to return business rules. ER.1 Manage Business Rules
for Return Processes
Push Product on Trailer Arrival System prioritization of items coming off D4.1 Generate Stocking
trucks vs. picked from back room. Schedule
Store
Push-Based Forecasts Are Replaced Standards Based (RosettaNet, eBXML, P1.1 Identify, Prioritize, and
with Customer Replenishment "Pull- OAGI, etc) B2B integration tools and Aggregate Supply Chain
Based" Signals systems Requirements
Quote Capability, without Reserving None identified D2.1 Process Inquiry & Quote
Inventory, Which Can be Converted
into an Order, But Does Not Generate
Build Signal or Reserve Inventory
Capacity
Quote Capability, without Reserving None identified D2.1 Process Inquiry & Quote
Inventory, Which Can Be Converted D1.1 Process Inquiry & Quote
into an Order in a Single Step
Rapid Reconfiguration of Return Use of RETURN tracking and projection P5.2 Identify, Assess, and
Capacity systems and flexible partner agreements Aggregate Return Resources
that allow the rapid addition of RETURN
capacity to match unexpected demand.
Rapid Replenishment, VMI, EDI None identified D1 Deliver Stocked Product
Rapid, Dynamic Reconfiguration of The ability to reset and reconfigure the P5.4 Establish and
Return Process to Meet Demand RETURN process capacity, routings, etc. by Communicate Return Plans
transmitting new requirements and
directives using mathematical models, the
Internet, outsourcing and flexible
partnership agreements. Also requires
integration with the CRM system for real
time redirection of customer returns based
upon cost and capacity.
Real Time Data on Current Status Dynamic calculation of safety stock based ED.4 Manage Finished
on actual sales. Goods Inventories
ES.4 Manage Product
Inventory
ER.4 Manage Return
Inventory
Real Time Feedback from Production, Allow dynamic re-synchronization of MAKE M1.1 Schedule Production
Raw Materials, and Finished Goods activities by tying in real time status Activities
Inventory and Test Activities information to scheduler.

Real Time Package Tracking Tracking and tracing ED.2 Access Delivery
Performance
ED.2 Assess Delivery
Performance
Real Time Performance Systems to collect production information EM.2 Manage Production
Measurement Reporting Systems online generate reports upon request by Performance
operators, and track progress against
schedule and standards.
Real Time quality control techniques Electronic collection of quality data and on- M3.4 Produce and Test
line SPC. M2.3 Produce and Test
Real Time Return Anticipation Having real time data on return demand P5.1 Assess, and Aggregate
and including it in the plan and forecast. Return Requirements
Requires a connection with customers, call
centers or CRM system, possibly to the
store level with retail returns. The return
demand needs to be included in the
production plan as soon as possible
because upon repair it may be the next
piece of serviceable inventory to satisfy
demand.
Real Time Statistical Control Electronic collection of defect data and on- M3.4 Produce and Test
Techniques line SPC. M1.3 Produce and Test
Real-Time Optimized Shipment Transportation Management System (TMS) ES.6 Manage Incoming
Method Selection (Air Parcel, Ground Maintenance Management Product
Parcel, LTL, etc.) Based on Customer ED.6 Manage Transportation
Service Requirements ER.6 Manage Return
Transportation
Real-Time Shipment Tracking, (via Transportation Management System (TMS) ES.6 Manage Incoming
internet) Maintenance Management Product
ER.6 Manage Return
Transportation
Re-Balancing of Full-Stream Enterprise-wide planning system customer P1 Plan Supply Chain
Supply/Demand on a Daily Basis, Relationship Systems
Including Source-Make-Deliver
Resources and Requirements from
"Customers' Customer to Suppliers'
Supplier"
Receivers on the Dock Communicate Buyer's name for every receipt is clearly DR3.3 Receive Excess
Directly with the Buyer to Efficiently visible on Receiver. Product
Resolve Any Discrepancies DR1.3 Receive Defective
Product
Receiving Equipment and Packaging Include packaging materials in inventory DR3.4 Transfer Excess
Materials to Transfer Product Are management system and treat as any other Product
Planned for In Advance and Readily inventory to minimize potential of stock-out. DR1.4 Transfer Defective
Available When Needed Product
Reduce Chances of Operator Error Automatic download of production M2.3 Produce and Test
equipment with batch recipes/part programs M1.3 Produce and Test
Reduce In-Process Product (WIP) Reduction of WIP handling through EM.6 Manage Transportation
Handling automation (i.e. AGVs and ASRS) and
process improvement (i.e. reduction of
handling steps, shorter move paths)
Reduce Non-Value Added Activities, Use principals of Lean Manufacturing. M3.4 Produce and Test
Including Queue, Move, and Set-Up M2.3 Produce and Test
Times M1.3 Produce and Test

Reduce Non-Value Added Paperwork Electronic data collection of completion, M1.3 Produce and Test
While Still Measuring Process Metrics quality, lot tractability, scrap, and labor data M3.4 Produce and Test
M3.5 Package
M2.4 Package
M1.4 Package
Reliable Continuous Improvement None identified EP.2 Manage Performance of
Process and Methodology. Supply Chain
Remote (Sales, Customers) Order None identified D2.2 Receive, Configure,
Entry Capability Enter and Validate Order
D1.2 Receive, Enter &
Validate Order
Removal of Obsolete Capital Assets Automated Calculation of ABC Velocity ES.5 Manage Capital Assets
Movement
Removal of Obsolete Stock Automated Calculation of ABC Velocity ED.5 Manage Deliver Capital
Movement Assets
Re-Planning Process Exists in Multi- Business to business Internet capability to EP.9 Align Supply Chain Unit
Levels of the Supply-Chain between share common data. Plan with Financial Plan
Business Enterprises
Re-Planning Process Links the None identified EP.9 Align Supply Chain Unit
Supply Chain Operation with the Plan with Financial Plan
Business Strategy and the Marketing
Strategy
Responsiveness and Flexibility Are Integrated process modeling and software P1 Plan Supply Chain
Emphasized By Developing Expertise reconfiguration tools
in Making Business Processes Re-
Programmable, Re-Configurable and
Continuously Changeable
Return Process Electronically Tracks Utilize Bar coding DR3.4 Transfer Excess
Transfer from Station to Station Product
DR1.4 Transfer Defective
Product
Review Batch Records by Exception Electronic batch records linked to process M2.6 Release Product to
plans/recipes and exceptions flagged Deliver
Deliver
Product to Deliver
Deliver
Review Product Profitability ABC and cost modeling. P1.2 Identify, Assess, And
Resources
Review Transfer Cycle Time Trends Periodic review of capital asset plan to DR3.4 Transfer Excess
and Determine If Equipment Capacity determine if additional equipment, if Product
is Properly Balanced with Projected needed, can be funded. DR1.4 Transfer Defective
Usage Product
RFID and Other Tagging POG software/field force P4.1 Identify, Prioritize, and
Aggregate Delivery
Requirements
Sales and Operations Agree to Limits None identified P2.1 Identify, Prioritize, and
of Short Term Flexibility Aggregate Product
Requirements

Sales and Operations Planning A process to develop tactical plans that P1 Plan Supply Chain
(S&OP) provide management the ability to
strategically direct its businesses to achieve
competitive advantage on a continuous
basis by integrating customer-focused
marketing plans for new and existing
products with the management of the
supply chain. The process brings together
all the plans for the business (sales,
marketing, development, manufacturing,
sourcing, and financial) into one integrated
set of plans. It is performed at least once a
month and is reviewed by management at
an aggregate (product family) level. The
process must reconcile all supply, demand,
and new-product plans at both the detail
and aggregate levels and tie to the
business plan. It is the definitive statement
of the company's plans for the near to
intermediate term, covering a horizon
sufficient to plan for resources and to
support the annual business planning
process. Executed properly, the sales and
operation planning process links the
strategic plans for the business with its
execution and reviews performance
measurements for continuous improvement.
(From APICS online dictionary.)
Scan Displays for Promotion D4.4 Stock Shelf
Conformance
Scan Displays for Promotion None identified
Conformance
Schedule Includes Preventative Interface between maintenance M1.1 Schedule Production
Maintenance Program management system and scheduling Activities
system M2.1 Schedule Production
Activities
Activities
Schedule Minimizes Changeover Algorithms that manage set up times/costs, M3.2 Schedule Production
Costs between Products cleaning times, and ideal job sequences Activities
(e.g., color sequencing light to dark)
Schedule Optimizes Use of Shared Scheduling utilizing optimization techniques M1.1 Schedule Production
Resources Such as Tooling and Required production resources included in Activities
Production Equipment routing/process instructions M3.2 Schedule Production
Activities
Activities
Schedule Reflects Current Plant Schedule undated by on line reporting and M1.1 Schedule Production
Status (Equipment Availability, Other status systems and re-sequence activities Activities
Jobs and Resource Availability) On M3.2 Schedule Production
Line Activities
Activities
Segregate In-Bound Carcass Return None Identified ER.6 Manage Return
Cost from Other Transportation Costs Transportation

Select Carriers by Least Cost per Rules based carrier selection and actual D3.7 Select Carriers and Rate
Shipment and Rate Using Actual rate database Shipments
Rates Prior to Release to Billing D3.6 Route Shipments &
Select Carriers
Shipments
Shipments
Service Provider Utilizes Web-Based Continuously updated authorized repair ER.7 Manage Return Network
Communicate to Identify New and sites Configuration
Discontinued Repair Sites to
Customers
Set Up Electronic or Pre-authorized None identified DR3.1 Authorize Excess
Returns Product Return
DR1.1 Authorize Defective
Product Return
DR2.1 Authorize MRO
Product Return
Shipment Tracking None identified D1.12 Ship Product
D2.12 Ship Product
D3.12 Ship Product
Product by Customer
Generate Shipping
Documentation
Product by Customer
Shipment Tracking and Tracing Satellite communications, GPS, RFID D3.6 Route Shipments &
Select Carriers
SR2.5 Return MRO Product
SR1.5 Return Defective
Product
Short Move Paths Software that allows for input of the EM.6 Manage Transportation
distance that particular parts/WIP need to
be moved. This software then need to
provide a report based on the cubic feet of
material times distance moved by part
number.
Single Data Source for Decision A data warehouse/data mart is the source EP.3 Manage PLAN Data
Support and Business Rules of all planning (master) data, business rules Collection
and transaction data. Analyzing tools
enable the ongoing maintenance and
improvement of the business rules based
on actual data.
Single Point of Contact for All Order None identified D2.1 Process Inquiry & Quote
Inquiries (Including Order Entry) D1.1 Process Inquiry & Quote
SKU Rationalization None identified EP.7 Manage Planning
Configuration

Sound Project Management Process None identified EP.2 Manage Performance of
and Methodology Supply Chain
Specific Changes to the Plan Are None identified P4.4 Establish Delivery Plans
Agreed to Cross-Functionally,
According to Defined Business Rules
Stage Product or Service Adoption None identified D4.7 Deliver and/or Install
Staging Based on In-store Zones Items are staged for re-stocking based on D4.3 Pick Product from
zones within the store. This minimizes Backroom
restocking effort.
Standard Inventory Policy to None Identified ER.1 Manage Business Rules
Determine Excess for Return Processes
Standard Operating Procedures and None identified ED.5 Manage Deliver Capital
Methodology Assets
ED.7 Manage Product Life
Cycle
Standards and Measurements Internal/external benchmarking, industry EM.2 Manage Production
Aligned to Maximize Supply Chain standards, customer/supplier alignment Performance
Performance agreements, visibility of key performance
indicators
Statistical Test Count The Statistical Test Count (STC) process is EM.4 Manage In-Process
a method of validating inventory on-hand Products (WIP)
values by physically counting and ED.4 Manage Finished
reconciling a statistical sample of the entire Goods Inventories
inventory population. This sample is then ES.4 Manage Product
extrapolated across the inventory Inventory
population, which provides an indicative ER.4 Manage Return
measure of entire inventory population. Inventory
Furthermore, with extrapolation the net and
gross percentage of error is determined.
Stocking is Completed in Zones Each area of the store has its own stocking D4.4 Stock Shelf
plan and items are routed specifically to that
area.
Storage and Configuration Product data management (PDM) or EM.1 Manage Production
Management for Release and Electronic Data Management (EDM) feature Rules
Revision Control of Final Documents set
Storage Location Zoning Automated or Optimized Slotting (Storage ED.5 Manage Deliver Capital
Location) Systems Assets
Strategic Safety Stock of Selected Use of safety stock algorithms to minimize M1.2 Issue Product
Materials, Items, or Subassemblies to stock levels. M1.2 Issue Material
Decouple Sourced Product Issuance M2.2 Issue Sourced/In-
Cycle Time from Supplier Lead Time Process Product
Process Product
Strategic Sales and Operations None identified EP.9 Align Supply Chain Unit
Planning Process in Place and Plan with Financial Plan
Managed at the Executive Level
Substitution Trained staff or automated systems D4.5 Fill Shopping Cart
(Internet) that recommend up-sell, cross-
sell, and/or substitution
See Up and cross selling

Supplier "Cost of Nonconformance" Software application to automate data ES.2 Assess Supplier
Data is Collected, Analyzed and Used collection and reporting Performance
in Performance Reporting
Supplier and Material Rationalization Web based access to supplier/source data ES.3 Maintain Source Data

Supplier Certification Programs Are Skip lot/sampling inspection logic S3.5 Verify Product
Used to Reduce (Skip Lot) or S3.4 Receive Product
Eliminate Receiving Inspection S1.3 Verify Product
S2.3 Verify Product
Supplier Certification Programs Can None identified ES.7 Manage Supplier
Reduce the Cycle Time for Certifying Network
Existing Suppliers to Provide New S3.2 Select Final Supplier(s)
Technologies and Negotiate
Supplier Delivers Directly to Point of Electronic Tag tracking to Point of Use S3.5 Verify Product
Use (POU) destination S2.3 Verify Product
S1.3 Verify Product
Supplier Delivers Directly to Point of Electronic Tag tracking to Point of Use S3.4 Receive Product
Use - (Dock to Line or End (POU) destination S1.2 Receive Product
Destination) S2.2 Receive Product
Supplier Delivery to Production EDI link to supplier's sales order and M1.2 Issue Product
Process at Point of Use inventory systems M1.2 Issue Material
Process Product
Process Product
Supplier Development Programs Are None identified S3.1 Identify Sources of
Used to Get Local Suppliers to Invest Supply
in Developing New Technologies
Supplier Managed Inventory of Parts E.D.I. linkage of Inventory Information EM.5 Manage Equipment and
Facilities
Supplier Performance Assessment “Assess Supplier Performance” is the ES.2 Assess Supplier
System process of measuring actual supplier Performance
performance against internal and/or
external standards, providing feedback to
achieve and maintain the performance
required to meet the customers’ business
and/or competitive needs.
Supplier Performance Data is Web based relational database / ES.2 Assess Supplier
Collected, Analyzed and Reported to management application Performance
Suppliers Online and Real-Time
through Extranet Applications
Supplier Replaces Defective Material Electronic Tag tracking to Point of Use S3.5 Verify Product
at Customer's Facility with Good (POU) destination S1.3 Verify Product
Product as Required S2.3 Verify Product
Suppliers Are Evaluated, Selected None identified ES.2 Assess Supplier
and Qualified with Criteria Matched to Performance
Business Requirements and
Competitive Needs
Suppliers Share Responsibility for None identified P2.3 Balance Product
Balancing Supply and Demand Resources with Product
through Joint Service Agreements Requirements
Supply Chain Advance Planning Collaboration among Supply Chain partners P1.4 Establish Supply Chain
System extends outwards to customers, spanning Plans
the supply chain. P1.1 Identify, Prioritize, and
Planning Requirements
Re-planning
Business Rules
Plan Changes

Supply Chain is Designed to Have None identified P1 Plan Supply Chain
Supply Flexibility Equal to Demand
Volatility
Supply/Demand Process is Highly Integrated supply chain planning system P1 Plan Supply Chain
Integrated from Customer Data with interfaces to all supply/demand data
Gathering to Order Receipt, through sources through public and private digitally
Production to Supplier Request enabled supply networks.
Systematic Disposition Of Equipment Rules for deciding appropriate disposition. EM.5 Manage Equipment and
Facilities
Systems Support Accurate On-Line Advance Planning and Scheduling System P1.4 Establish Supply Chain
Visibility of Full-Stream Demand Plans
Requirements and Priorities as Well
as Resource Utilization and
Availability
Systems Support Accurate On-Line Advance Planning and Scheduling System P1.1 Identify, Prioritize, and
Visibility of Full-Stream Demand Supply Chain Event Management Software Aggregate Supply Chain
Requirements and Priorities Requirements
The Demand Plan is Updated None identified P2.1 Identify, Prioritize, and
Frequently to Reflect Actual Aggregate Product
Consumption or Customer Forecast Requirements
Information
To Address Conditions which Cannot None identified P4.4 Establish Delivery Plans
be Adequately Satisfied During the
Current Planning Period, Each
Functional Area Develops Prioritized
Recommendations for the
Subsequent Planning Period
Tools Support Balanced Decision Supply chain planning optimization system P1 Plan Supply Chain
Making (e.g., Trade-Off between
Service Level and Inventory
Investment)
Total Preventative Maintenance Automatically generated TPM repair EM.5 Manage Equipment and
Program schedules integrated with MRP systems, Facilities
electronic equipment repair history, parts ES.5 Manage Capital Assets
listings, part stores inventory & reorder
points, automatic store room parts
purchases, Shop floor access to electronic
data base of equipment line drawings,
electrical wiring diagrams, parts listing
reference guide and part cost lists.
Transportation Modeling and Rate None identified SR2.4 Schedule MRO
Analysis Shipment
Product Shipment
Product Shipment
Two-Bin Floor Stock Located at Work None identified M3.3 Issue Sourced/In-
Center for "B" And "C" Components - Process Product
Controlled by Operators and
Replenished When One Bin is Empty
Unique Identifier Tag for Each Asset management software using bar ER.4 Manage Return
Repairable Asset code, RFI tag, etc. Inventory
Unplanned Orders Are Accepted and Digital Linkages using XML standards P3.4 Establish Production
Scheduled Only When There is No (RosettaNet, eBXML, OAGI) to Plans
Detrimental Impact on Overall automatically query production capacity and P4.1 Identify, Prioritize, and
Product Delivery Plan ATP and schedule unplanned orders. Aggregate Delivery
Requirements
Up and Cross Selling and/or Trained staff or automated systems D4.5 Fill Shopping Cart
Substitution (Internet) that recommend up-sell, cross-
sell, and/or substitution.

Up-to-Date Shop Packet/Specification Electronic Work Instructions M3.5 Package
for Each Unique Production M1.4 Package
Event/Demand M2.4 Package
Up-to-Date Shop Electronic work instructions M2.3 Produce and Test
Packet/Specifications M1.3 Produce and Test
Use an Exchange System Where None identified DR1.1 Authorize Defective
Customer is Issued a Serviceable Product Return
Item Upon Submitting an DR2.1 Authorize MRO
Unserviceable Item Product Return
Use Demand Planning Demand Planning Systems to forecast P5 Plan Return
returns, predict yield rates for reusable
products or components, determine
demand in a resale market, and project a
revenue stream.
Use Historical Based Return Rate None identified P5.1 Assess, and Aggregate
Forecasts Return Requirements
Use of CAD/CAE Applications to None identified D3.1 Obtain and Respond to
Simulate Design, Cost and RFP/RFQ
Manufacturing Process
Use of Cross Functional Teams to None identified EP.5 Manage Integrated
Execute the Process of Developing Supply Chain Capital Assets
Long-Term Capacity and Resource EP.6 Manage Integrated
Plans Supply Chain Transportation
Use of Platform Teams in the New None identified EP.7 Manage Planning
Product Development Process Configuration
Use of Speed Racks for Automated None identified D2.9 Pick Product
Material Handling D1.9 Pick Product
Utilize Concurrent Engineering with Internet, EDI, FAX ES.7 Manage Supplier
Suppliers to Allow Them to Provide Network
Engineering and Product
Performance Test Data to Qualify as
Part of Potential Supplier Network
Utilize Concurrent Engineering with None identified S3.2 Select Final Supplier(s)
Suppliers to Allow Them to Provide and Negotiate
Engineering and Product
Performance Test Data
Utilize EDI and EFT for Payment to EDI transaction and network services D1.13, Invoice & Receive
Speed Closing of Receivables and to Payment
Reduce Processing Costs D2.12 Invoice & Receive
Payment
D3.11 Invoice & Receive
Payment
D3.15 Invoice
D2.15 Invoice
D1.15 Invoice
Utilize EDI Transactions to Reduce EDI interface for 830, 850, 856 & 862 S1.1 Schedule Product
Cycle Time and Costs transactions Deliveries
Deliveries
Deliveries
Utilize Enterprise Information Enter, Process, and Deliver information EM.3 Manage MAKE
Systems about the manufacturing process to Information
management using information systems
that span the enterprise
Utilize Internet-Based Freight Bidding None Identified ER.6 Manage Return
Built Around Shared Shipping Volume Transportation
Projections

Utilize Invoice-less Freight Payment None Identified ER.6 Manage Return
Transportation
Utilize Real-World Cases in Employee None Identified ER.1 Manage Business Rules
Training for Return Processes
Utilize Web-Based Collaboration Total return asset visibility throughout the ER.7 Manage Return Network
between Asset Manager and Repair network Configuration
Sites Regarding Capacity and
Scheduling
Utilize Web-Based Collaboration Shared return forecasts ER.7 Manage Return Network
between Customer and Service Configuration
Provider on In-Bound Return
Forecasts and Asset Tracking
Utilize Web-Based Collaboration to Shared knowledge of resource availability ER.7 Manage Return Network
Identify Potential New Repair Sites and bottlenecks Configuration
Prior to Their Selection
Value Pricing Based on "Cost to Activity Based Costing; Integrated Order D2.2 Receive, Configure,
Serve"; EDLP; Cost Plus Pricing Management by Customer by Line Item Enter and Validate Order
D1.2 Receive, Enter &
Validate Order
Vendor Managed Inventory VMI is a concept for planning and control of D1.5 Build Loads
inventory, in which the supplier has access D1.6 Route Shipments
to the customer’s inventory data and is D2.6 Route Shipments
responsible for maintaining the inventory D3.5 Build Loads
level required by the customer. Re-supply P1 Plan Supply Chain
is performed by the vendor through S3.4 Receive Product
regularly scheduled reviews of the on-site EM.4 Manage In-Process
inventory. The on-site inventory is counted, Products (WIP)
damaged or outdated goods are removed, S2.2 Receive Product
and the inventory is restocked to predefined S1.2 Receive Product
levels. ES.4 Manage Product
Inventory
M1 Make-to-Stock
Aggregate Delivery
Requirements
View for Analysis for All Orders and Transportation Management System (TMS) ED.6 Manage Transportation
Shipments the Following Data: Maintenance Management ER.6 Manage Return
Logistics, Product, Cost, GL Charging Transportation
Wave picking A practice used in many DC operations to D1.9 Pick Product
increase labor picking productivity and
reduce the labor cost per pick. In some
DC’s, orders are scheduled to be picked
when they are received. Wave picking
consolidates orders into “waves” where
multiple orders with similar characteristics
are picked at one time. Orders can be
consolidated by customer, geography, or
any other criteria that makes sense for the
DC operation.

INPUTS AND OUTPUTS
INPUT / OUTPUT DEFINITION
Actual Sales History Amount of past sales spanning any specified period of time (weeks, months,
years, etc.) and expressed in any specified increments (per day, week,
month, year, etc.)
Actual Shrink Reductions of actual quantities of items in stock, in process, or in transit.
The loss may be caused by scrap, theft, deterioration, evaporation, etc.
Advanced Ship Notice An EDI notification of shipment of product.
Air, Ground....Carrier Rate Tables Rates charged by common carriers to move goods, or freight.
Approved Contract Acceptance of an agreement between two or more competent persons or

companies to perform or not to perform specific acts or services or to deliver
merchandise. A contract may be oral or written.
Approved Item Master The "master" record for an item. Typically, it contains identifying and
descriptive data and control values (lead times, lot sizes, etc.) and may
contain data on inventory status, requirements, planned orders, and costs.
Item records are linked by bill of material records (or product structure
records), thus defining the bill of material.
Assorted by Shelf Order The function of physically separating a homogeneous subgroup from a
heterogeneous population of items
Authorization to Return to Service Permission to return to service an item that has been repaired and found to
be within specifications and operable.
Authorization to Scrap Permission to scrap material or item outside of specifications and possessing
characteristics that make rework impractical.
Available to Promise Date The uncommitted portion of a company's inventory and planned production
maintained in the master schedule to support customer-order promising. The
ATP quantity is the uncommitted inventory balance in the first period and is
normally calculated for each period in which an MPS receipt is scheduled. In
the first period, ATP includes on-hand inventory less customer orders that
are due and overdue
Benchmark Data A set of measurements (or metrics) that is used to establish goals for
improvements in processes, functions, products, and so on Benchmark
measures are often derived from other firms that display "best in class"
achievement
Bill of Materials The Bill of Materials is a structured list of all the materials or parts needed to
produce a particular finished product, assembly, subassembly, manufactured
part, whether purchased or not.
Booked Order The process of accepting and translating what a customer wants into terms
used by the manufacturer or distributor. The commitment should be based
on the available-to-promise line (ATP) in the master schedule. This can be
as simple as creating shipping documents for finished goods in a make-to-
stock environment, or it might be a more complicated series of activities,
including design efforts for make-to-order products
Budget Constraints A plan that includes an estimate of future costs and revenues related to
expected activities. The budget serves as pattern for and a control over
future operations.
Budgets A plan that includes an estimate of future costs and revenues related to
expected activities. The budget serves as a pattern for and a control over
future operations.

Business Plan A document resulting from a process of linking the long-range strategy with
objectives usually accompanied by budgets, projected balance sheet, and a
cash flow statement.
Business Rules for Return Processes Rules for conducting business, i.e. developing and maintaining customer and
channel performance standards of an return processes such as service
levels, given service requirements by supply chain stakeholders/trading
partners. Business rules align Return process policies with business
strategy, goals, and objectives.
Business Rules for Source Processes Rules that are translated into guidelines and policies for conducting business
within the enterprise and other legal entities. Sourcing business rules
include: supplier selection and negotiation processes, fulfillment and delivery
performance and relationship definition for specific levels of collaboration and
partnership.
Capacity Constraints A capacity constraint is said to exist when the available capacity at a
resource may be insufficient to meet the workload necessary to support the
desired throughput. A capacity constraint is often a bottleneck.
Capacity Requirements The resources needed to produce the projected level of work required from a
facility over a time horizon. Capacity requirements are usually expressed in
terms of hours of work or, when units consume similar resources at the same
rate, units of production.
Capital Assets Physical objects that are held by an organization for its production potential
and that costs more than some threshold value (APICS)
Completed Proposal A document submitted in response to the a request for proposal from a
customer with all the terms and conditions of sale of a product or service
Configuration Rules The rules for the management of product configuration, which includes the
management of critical sub processes needed to manage the life cycle of
individual item numbers including item masters, routings, rationalization, and
bill of materials.
Conformance Plan Courses of action and processes that are established to meet the
Conformance Rules An affirmative indication or judgment that a product or service has met
criteria translated into rules for meeting external regulatory requirements
Consistently High Adoption Rates Indication of product and service quality, i.e. customer satisfaction.
Consolidated Orders The process of analyzing orders to determine the groupings that result in
Consolidated Product Packages and lots that move from suppliers to a carrier terminal and are
sorted and then combined with similar shipments from other suppliers for
travel to their final destination.
Continuous Improvement Process A process that identifies opportunities for performance improvement and
facilitates their realization through the use of metrics, process development
methodologies/approaches, project management principles, and reporting
tools that support strategic and business plans.
Contract Carrier Rates The rates charged by a carrier that does not serve the general public, but
provides transportation for hire for one or a limited number of shippers under
a specific contract.

Contract Status Customer profile, which include address data, credit and purchase histories,
customer preferences including shipping, status, and delivery requirements,
etc.
Contract Terms All the provisions and agreements of a contract.
Contractual Obligations A promise in a contract that binds one to a specific course of action. These
promises maybe made by either the buyer of seller.
Corporate Objectives and Strategies Corporate objectives are the goals and mission of an organization.
Cost to Produce The cost to produce and item during a given period of time. Includes: the
amount of direct materials, direct labor, and allocated overhead.
Credit Exchange Options The options available on the return of a repairable item, credit for the cost of
the item, repair of the repairable item, receipt of a serviceable item from
stock.
Credit History Report that portrays a potential customer's payment history and debt,
indicating the ability to pay in a timely manner in the future.
Credit/ Exchange Options The options available on the return of a repairable item, credit for the cost of
the item, repair of the repairable item, receipt of a serviceable item from
stock.
Current Inventory Source Data Data which will provide measurement of actual supplier performance against
internal and or external standards to provide feedback to achieve and
maintain the performance required to meet the customer's needs.
Customer Address Data Customer profile, which include address data, credit and purchase histories,
customer preferences including shipping, status, and delivery requirements,
etc.
Carrier Contracts (Customer) Contracts that customers have with specific freight carriers through which
suppliers have to work for the delivery of products. Customer manages
carrier selection, shipment of purchased product, and payment of carrier.
Customer Data (preference) Customer profile, which includes history, customer preferences, status, and
Customer Inquiry General customer inquiries for information concerning products, availability,
cost, and requests for quotes.
Customer Loyalty / Recurring Visits Input to customer profile, frequency of visits, recurring, time frame, what
purchased, numbers and rings. Measure of customer satisfaction with
products and service.
Customer Master Database/Up to This database contains all information relative to customers as a group or
Date singly and is updated when ever new information is received about a
customer, includes customer profiles.
Customer Order An order from a customer for a particular product or a number of products. It
is often referred to as an actual demand to distinguish it from a forecasted
demand.
Customer Order Size, Weight, and Coupled with cube and route, these criteria determine type of carrier and
Freight Class cost of shipment
Customer Profile/Data Customer profile, which includes history, customer preferences, status, and

Customer Quote A statement of price, terms of sale, and description of goods or services
Customer Replenish Signal A requirement for product from a distribution location to a source location.
Customer Requirements The part of the supply chain requirements related to the customer's needs,
including sales forecasts and actual orders and backorders
Customer Service Requirements Supply chain requirements related to the customer's needs, including service
requirements, sales forecasts and actual orders/backorders.
Daily Replenishment Requirements Resources needed to meet Item stocking schedule requirement.
Daily Shipment Volume Daily Shipment Volume categorized by customer, source, traffic lane, carrier,
etc.
Data About Return Capabilities Information required in the process of integrating and maintaining the
accuracy of return execution.
Data Cleansing Procedure The procedure that outlines the cleansing of return data to insure its validity
and accuracy during the return process.
Data System Requirements List of requirements of the data system that insure cleansed data is
compatible and usable, or the data system requirements to fully automate
the return process.
DC/Vendor Lead Time The amount of time that normally elapses between the time an order is
received and the time the order is shipped.
DC/Vendor Transit Time A standard allowance that is assumed on any given order for the movement
of items from one operation to the next.
Defective Product Disposition The customer request for disposition instructions for a defective product from
Request the appropriate source.
Defective Product Return The customer request for disposition instructions for a defective product from
Authorization Request the appropriate source.
Defective Product Return The approved or disapproved Return Product Authorization (RPA) for excess
Authorization Response inventory, unserviceable products and/or serviceable or obsolete products as
defined by the terms and conditions of a customer/supplier contract.
Defective Products Maintenance, Repair and Overhaul spare parts used to support of operations
and maintenance.
Deliver Contract Terms The process of making a delivery commitment. For make-to-order products,
this usually involves a check of uncommitted material and availability of
capacity, often as represented by the master schedule available-to-promise.
Deliver Return Requirements A determination or projection of the requirements the supply chain must meet
in the handling and execution of returns. (i.e. quantity, mix, timing)
Delivered End Items Products that have been acknowledged as received by the customer.
Delivery Date Those stocks or items on hand used to support production (raw materials
operating supplies), and customer service (finished goods and spare parts).
Determination of the time required from the receipt of the order until the item
should be delivered.

Delivery Performance The process of measuring actual supplier performance against internal
needs.
Delivery Plans A plan for a course of action over specified time periods that involves a
projected appropriation of supply resources to meet delivery requirements.
Delivery Requirements As a whole with constituent parts, all sources of demand in the delivery of a
product or service.
Delivery Resources and Capabilities As a whole with constituent parts, all things that add value in the delivery of a
product.
Duty Drawback Claims Claims for the refund of duties as a result of a ruling by the a government
agency.
Engineering Design Final drawings, specifications, formulas, part programs, etc.that describe
requirements of a product. The design process consists of translating a set
of functional requirements into an operational product, process, or service.
Enterprise Distribution Model Model of the distribution enterprise including the flows, processes, inputs,
outputs, metrics, and best business practices.
EOQ/ESQ's Economic Order Quantity - Result of a calculation that determines the most
cost effective to quantity to order or produce. Economic Shipping Quantity -
Result of a calculation that determines the most cost effective quantity to
ship.
Equipment and Facilities Equipment and facility traits and specifications required to meet external
Characteristics entities requirements.
History and facilities including required repairs, alterations, calibration, servicing,
Equipment and Facilities Monitoring Data gathered by measuring, examining, testing, or gauging one or more
Information characteristics of equipment and facilities and comparing it to planned.
Equipment and Facilities Actions relating to the planning, financing and disposition of capital outlays
Replacement and Disposition Plans for such purposes as the purchase of new equipment, the introduction of new
product lines, and the modernization of plant facilities
Equipment and Facilities Schedules Time-phased plans of present and future load (capacity required) on all
and Plans resources (Equipment and Facilities) based on the planned and released
ETO Proposal A proposal that may contain final drawings, specifications, formulas, part
programs, etc.that describe requirements of a product
ETO Request for Proposal A document used to solicit vendor responses when the functional
requirements and features are known.
ETO Spec or Design A clear, complete and accurate statement or drawing of the technical
requirements of a material, item or service, and of the procedure to
determine if the requirements are met.
Excess Product Disposition Request Request disposition instructions for an excess item from the Supplier.

Excess Product Return Authorization The process of a customer requesting authorization from a service provider,
Request for the return of excess. In addition to discussing the excess, the customer
and service provider would discuss enabling conditions such as return
replacement or credit, packaging, handling, transportation and import / export
requirements to facilitate the efficient return of excess to the service provider.
The customer may need to go through several return authorization iterations
with multiple service providers before authorization is received.
Excess Product Return Authorization The process of a customer obtaining authorization, from a service provider,
Response for the return of excess product
Excess Products Material in excess of the current requirements.
Existing Inventory Data Available data that characterizes and quantifies raw material, work in
process, and finished goods inventories
External Regulatory Information Documentation and process standards set by external entities (i.e.
government, trade officials, etc.)
Finish Goods Inventory Target Levels In a min-max inventory system, the equivalent of the maximum. The target
inventory is equal to the order point plus a variable order quantity.
Finished Goods Inventory Location The physical storage location where Finished Product inventory is held in
stock prior to use or shipment.
Finished Product Release The authorization to ship a finished product that has been ordered.
Full Cart (Empty Cart) Completion of customer checkout, sale of the selected goods, cart transitions
from full to empty.
Full Cart Ready for Checkout Customer selected goods transferred to the point of sale.
Full Shelf Locations Determination of the best retail locations for implementation of full shelf
equipment.
Government Constraints Requirements established by a government which must be met before

allowing the shipping, delivery of a product or manufacture of an item.
Government Regulations Documents the implement law and requirements concerning the import and
export of items and the manufacture of item.
High Customer Services Satisfaction Indication of product and service quality.

Levels
Historical Return Rates A judgmental forecasting technique based upon the a return history that is
analogous to a present situation, such as the return history on a similar
Requirements established by a government or trading areas (i.e EU, NAFTA

etc) which must be met before allowing the shipping or delivery of a product
Import/Export Requirements across national boundaries.
Data concerning product on order and due to be delivered to location agreed
in the order.
Incoming Product Information
The flow of information back into the control system so that actual
Information Feedback performance can be compared with planned performance.
Data arranged or presented from a set of logically related tasks or activities
performed to achieve a defined business outcome; so that the data yields an
Information from Business Processes understanding not available from any single data element.

A plan outlining the processes required for managing, collecting, maintaining,
and communicating information and masterdata to support planning and
Information Infrastructure Plan execution processes.
Interrelated computer hardware and software along with people and
Information Needed to Create and processes designed for the collection, processing, and dissemination of
Maintain IT information for planning, decision making, and control.
Specifying the inputs, files, processing, businesss rules and outputs for a
new system, but without expressing computer alternatives and technical
Information Needs Analysis details.
The process of preparing, testing and installing the product at the customer
Installed Product may be requirment for subseqent integration.
Communication of courses of action over the appropriate time-defined
planning horizon and interval, representing a projected appropriation of
supply chain resource and input material to meet supply-chain requirements
Integrated Supply Chain Plan as they affect the customer.
The organic capability of an organization to produce output per time period.
Internal Capacity
In business management, inventory consists of a list of goods and materials
held available in stock. Also, those stocks or items used to support
production (raw materials and work-in-process items), supporting activities
(maintenance, repair, and operating supplies), and customer service
Inventory (finished goods and spare parts)
Those stocks or items on hand used to support production (raw materials
Inventory Availability operating supplies), and customer service (finished goods and spare parts).
Those stocks or items on hand used to support production (raw materials
operating supplies), and customer service (finished goods and spare parts).
Determination of the time required from the receipt of the order until the item
Inventory Availability/Delivery Date should be delivered.
Maximum rate of output for the inventory managment and warehouse
Inventory Capacity process
Stored products or service parts ready for sale, as distinguished from stores,
Inventory in Stock which are usually components or raw materials.
The rules that determining the desired levels of items, whether raw materials,
work in process, or finished products including order quantities and safety
Inventory Rules stock levels.
A periodic report showing the inventory on hand and usually showing the
inventory on order and some sales or usage history for the products that are
Inventory Status covered in the stock status report.
The total supply chain inventory strategy. Contains the plan for total
inventory limits or levels (including Raw Material, Work In Process, Finished
and Purchased Finished Goods) including replenishment models, ownership,
Inventory Strategy product mix, and stocking locations, both inter and intra company.
A record of specific information for each product, which defines the system
parameters with which to effectively plan and execute using ERP (MRP, etc)
Item Master systems.
A document that lists the material to be picked to meet the schedule for the
Item Pick Sheet for Stocking planned movement of material from a bulk storage area to an order pick
Schedule storage area.
The activities and techniques of determining the desired levels of items,
whether raw materials, work in process, or finished products. Demand for
inventory maybe dependant or independent. Inventory functions are
Item Stocking Requirements transportation (pipeline), an service parts.
Information relative to a load that is built and shipped, i.e. customer, items,
Load Information destinations, weight, etc

The function that performs tasks for the outgoing shipment of parts,
components, and products. It includes packaging, marking, weighing, and
Load, Shipping, Verify, and Credit loading for shipment. Also, verify the shipment and customer credit
Information information.
Loaded Retail Cart or Pallet Customer selected retail finished goods transferred to the point of sale.
Customer profile, which includes address and location data, credit and
purchase histories, customer preferences including shipping, status, and
Location of Customers delivery requirements, etc.
Carrier selection and management for inbound or outbound shipments
Logistics Selection (linked to terms of delivery)
On-line orders that are missing due to internet, software, or hardware
malfunctions.
Lost or Dropped Shopping Carts
Low Rates of Failure Indication of quality in workmanship and design.
Loyalty Customer Profile Changes More units, higher average ring, etc.
The output of the process used to determine whether a demand will be
supplied with internal capacity or purchased through contract manufacturing
Make/Buy Decision and/or contracted services externally.
Manage Integrated Supply Chain Managing the flow of raw materials and products in a supply chain based on
Inventory Information uncertain demand for the finished products
Manage Regulatory Return Policy The process of identifying and complying with regulatory documentation and
process standards set by external entities (i.e. government, trade officials,
etc.) when planning for the Return and Recovery of Assets.
Management Process Reports Reports which provide management with the process information required to
evaluate prescribed activities to ensure that the stated objectives of a project,
manufactured good, or service are achieved.
Manufacturer's Recommended The scheduled activities, including adjustments, replacements, and basic
Maintenance Schedules & cleanliness, that are recommended by the manufacturer to forestall machine
Specifications breakdowns.
Markdown Plans Part of the Market Plan, which establishes an allowance or deduction,
granted by the seller to the buyer, usually when the buyer meets certain
stipulated conditions that reduce the price of the products purchased. For
example, based upon paying early, buying in quantity, etc.
Merchandise Category/Classification The categorization of goods based upon the range of specifications met
during the manufacturing process.
Merchandising Plan (SUPPLIER) The merchandising plan includes the current market position, opportunity
and issue analysis, merchandising objectives and strategies, action plans,
programs, projects, budgets, and pro forma profit and loss statement and
management controls.
Methods, Procedures, Processes Methods, procedures and processes required to produce distinct items, such
as parts that retain their identity through the transformation process and are
intended to be completed after receipt of a customer order, including custom
products that are designed, developed, and produced in response to a
specific customer request.
MRO Disposition Request Request disposition instructions for an MRO item from the Supplier.
MRO Parts Availability The on-hand MRO inventory balance minus allocations, reservations,
backorders, and (usually) quantities held for quality problems.
MRO Product Return Capabilities See “Product Return Capagilities”

MRO Products Maintenance, Repair and Overhaul spare parts used to support of operations
and maintenance.

MRO Return Authorization Request The process of a customer requesting authorization from a service provider,
for the return of an MRO product. In addition to discussing the MRO issue,
the customer and service provider would discuss enabling conditions such as
return replacement or credit, packaging, handling, transportation and import /
export requirements to facilitate the efficient return of the MRO product to the
service provider. The customer may need to go through several return
authorization iterations with multiple service providers before authorization is
received.
MRO Return Authorization Response The process of a customer obtaining authorization, from a service provider,
for the return of an MRO product
On-demand Replenishment Requirements for the triggering of material movement to a work center only
Requirements when that work center is ready to begin the next job.
On-Order/Backorder An unfilled customer order or commitment. A backorder is an immediate (or
past due) demand against an item whose inventory is insufficient to satisfy
the demand.
Optional Payment Payment at the time of order, maybe partial or in full.
Order Backlog Orders that have been received and entered into the order processing
system and are in a queue waiting to be processed and shipped.
Order Information The function encompasses receiving and entering all data necessary on
orders, so the order can be finalized and entered into the order system.
Order Quote (CUSTOMER) A statement of price, terms of sale, and description of goods or services
Order Rules Rules for the function that encompasses receiving, entering, and promising
orders from customers, distribution centers, and interplant operations.
Order Signal Reserved inventory and/or planned capacity and delivery date for a specific
order.
Outsource Plan A plan that describes how a company will utilize third party business partners
to provide products and services which the company chooses not to provide
with internal capacity. Outsource Plans can vary in detail from simple policy
statements to highly detailed plans with specifics about the third party
business partners, specifications for products and services, performance
expectations, and contract considerations.
Parts and Services Consumed The items and services utilized to manufacture a product.
Payment Receipt of payment for goods and services per contract or purchase order.
Payment Terms The process of authorizing payments and paying suppliers for product or
issuance of checks.
Plan and Build Loads Information Transportation modes are selected and efficient loads are built.
Planning Data Execution information necessary to plan the balance of supply chain
resources to demand requirements at both the highest aggregate and lowest
SKU planning levels.
Planning Decision Policies Any company policies that affect how a planning process is defined,
approved, and performed.
Plan-o-gram Data Data required to develop and build a Plan-O-Gram display to help minimize
setup time by showing specific placement of all items, by product number, on
the display.
Point of Sale Data (Daily) The relief of inventory and computation of sales data at the time and place of
the sales, generally (may be manual) through the use of bar-coding, or
magnetic media and equipment.
Preventative Maintenance and Planned and scheduled activities, including adjustments, replacements, and
Calibration Schedule basic cleanliness, that forestall machine and facility breakdowns. Also, the
established frequency to change and maintain parts, based on failure
consequences, with frequency set per part or machine type. (Well cared for
equipment and facilities will last longer and cause fewer problems.)
Process Procedures A planned series of actions or operations that advances returns from one
stage to another, or established procedures to manage and execute all

Procurement Signal (Supplier) Any signal that indicates when to produce or transport Items in a pull
Product The end object of a transformation process that includes physical objects,
Product Availability Availability of a product by location that is reserved, scheduled or available
for sale, or the number of products ready to be or planned to be shipped to
the specific customer or market at the specific time.
Product Data (linked/related SKU's) The properties and characteristics of a product (e.g. the part number and a
text description of the product) and the relationships to other items in the
product family and linked / related SKU's.
Product Design The product design is the translation of a set of functional requirements into
expectations.
Product Design/Claims The product design is the translation of a set of functional requirements into
expectations. Claims are marketing information provided as to performance,
etc. Claims from the users of the product indicate a need to change the
product design
Product Design/Quality A product design approach that uses quality measures to capture the extent
to which the design meets the needs of the target market (customer
attributes), as well as its actual performance, aesthetics, and cost.
Product Inventory Location The physical storage location where product inventory is held in stock prior to
use or shipment.
Product Inventory Target Levels The target for the total product inventory, including e.g. raw material, work in
progress and finished goods.
Product Location Information Attributes of the product's storage location.
Product Mix and Plans The proportion of individual products that make up the total production or
sales volume and plan that authorizes the factory to manufacture a certain
quantity of a specific item, or the portfolio of products the company has to
cover the targeted customer need and the plans of how to manage that
portfolio.
Product On Order Product on order with a selected source.
Product Requirements As a whole with constituent parts, all sources of demand for a product or
service in the supply chain.
Product Return Capabilities The capability of a system or resources to produce a quantity output in a
particular time period; and, any element or factor that constrains the system
or resources from achieving a higher level of performance in respect to its
goal. The ability the supply chain has to return products in a valid and
accurate way.
Product Routings Product routings represent the way products are made and are integrated
with the Bill of Materials. Key elements of proper Routings include proper
Product Sources As a whole with constituent parts, all material and other resources used to
add value in the supply chain for a product or services.
Product/Category Lifecycle The time from initial research and development to the time at which the sales
and support of the product to customers are withdrawn.
Production Capacity (JN list calls The highest, sustainable output rate which can be achieved with the current
Capability) product specifications, product mix, worker effort, plant, and equipment.
Production Orders Planned A statement of the output of a production facility for a specified period,
comparing planned to actual production.
Production Plans A master production plan used to allocate capacity among manufacturing
resources and schedule finite manufacturing activities or executing the

Production Quality and Policies The operational techniques and planned and systematic activities used to
fulfill requirements for quality in the production process, or the quality of the
Production Resources As a whole with constituent parts, all things that add value in the creation of a
product or performance of a service.
Production Rules The rules directing or regulating the movement of goods through the entire
Production Schedule A plan that authorizes the factory to manufacture or repair a certain quantity
of a specific item.
Production Status Feedback on the production schedule allowing for corrective action to a
production problem, or an indication of how far in the production process a
Projected Delivery Requirements The company's goal for the time to ship the product after the receipt of a
customer's order. The policy is sometimes stated as "our quoted delivery
time," or an estimate of the customer delivery requirements of a product or
Projected Internal and External An estimate of the amount of product or service a particular part of the
Capacity business (internal capacity) or a third party business partner (external
capacity) is capable of producing over a particular period of time when all
factors that control the production processes are working optimally.
Promotion Event Calendar Time phased promotion / event tasks where the product offering is
communicated to the customer and includes public relations, advertising,
sales promotions, and other tools to persuade customers to purchase the
product offering during the year.
Promotion/Event Plans Promotion activities - other than advertising, publicity, and personal selling -
that stimulate, interest, trial or purchase by final customers or others in the
marketing channel.
Promotional Plan The plan for a promotional product offering and how it is communicated to
the customer and includes public relations, advertising, sales promotions,
and other tools to persuade customers to purchase the product offering
Purchase History The amount of purchased products for a certain time in history per specific
intervals
Quality and Delivery Performance The process of measuring actual supplier performance against internal
needs.
Or, the extent to which the supplier delivers according to quality specification
(e.g. product quality, logistic quality) and to delivery specification (in time,
correct packaging etc). Sometimes these two metrics are connected in one.
Rated Carrier Data Contract rates and tariffs from carriers by commodity, lane, mode, etc. for
shipments.
Rated Shipments Shipments subject to defined and established rates
Receipt Data A collection of related receipt data records organized in a specific manner.
Receipt Discrepancy Notification Notification of a discrepancy relating to a receipt, including: damage,
packaging, quantity, etc.
Receipt Verification Acknowledgement that the product received conforms to specified
Regulatory Requirements Requirements dictated by process standards set by external entities (i.e.
government, trade officials, etc.).
Replenishment Quantities In a fixed-reorder quantity system of inventory control, the fixed quantity that
should be ordered each time the available stock (on-hand plus on-order) falls
to or below the reorder point.
Replenishment Signal Any signal that indicates when to produce or transport Items in a pull
replenishment system.
Reports, Information, and Documents Collecting data and organizing, arranging or presenting the data so that they
yield an understanding not available from any single data element.

Resource Availability The capability of a system or resource to produce a quantity of output in a
particular time period, or the available resources at a point in time able to
generate an output.
Return Benchmark Data Data relative to the return process utilized to compare the company's actual
results to selected values identified as reference.
Return Inventory Availability Inventory relative to return process available for use.
Return Inventory for Transfer Inventory relative to return process available for transfer to other destination.
Return Inventory Targets The goals and approach to the management of return inventories.
Return Inventory Transfer Data The process of receipt and verification of the returned item against the return
Return Network Configuration The business rules that govern the flow of unserviceable material through the
network, i.e. the network configuration.
Return Performance Performance measurement information for the Return Process (the actual
value of measured for the criterion).
Return Plans Courses of action over specified time periods that represent the projected
appropriation of required return resources and or assets to meet the return
Return Process Capabilities The capability of a system or resources to produce a quantity output in a
particular time period
Return Process Workflow Definition Definition and maintenance of the information flow about the Returns supply
and Policies chain network for a group of similar or complimentary items through out their
life cycle
Return Product Authorization Permission to accept an excess product return for the designated return
center, after communicating with the customer.
Return Product History The return history of product including failure rates, failure causes, etc.
Return Product Location The physical location where the returned product inventory is held prior to
disposition
Return Production Requirements As a whole with constituent parts, all sources of demand in the creation of a
product or service.
Return Regulatory Requirements Return requirements dictated by process standards set by external entities
(i.e. government, trade officials, etc.).
Return Requirements As a whole with constituent parts, all sources of demand for the return of a
product.
Return Resources All resources that add value to, execute, or constrain the processes for the
return of a product.
Return Rules and Policies Rules and Policies for conducting business, i.e. developing and maintaining
customer and channel performance standards of return processes such as
stakeholders/trading partners. Rules and policies align the Return process
with the organization's business strategy, goals and objectives.
Return Schedule Instructions A list of operations and procedures for scheduling the return of product.
Return Transportation Guidelines, Guidelines, policies and agreements for the transportation activities around
Policies, & Agreements return process.
Returned Defective Product Product being returned that is in a defective condition.
Returned Excess Product Product being returned as defined by the terms and conditions of a
customer/supplier contract as available inventory and disposition excess not
usable for sale.
Returned MRO Product Product being returned for maintenance, repair, or overhaul.
Returned Product Information Data concerning the return and disposition of defective products, excess
inventory and/or serviceable or obsolete products, or MRO product.
Returned Product Location The storage location of those items being returned.
Returns Data The properties, characteristics and information relating to returns, including
failure information, excess, obsolete, MRO, customer, etc.
Revised Aggregate Forecast and An update to the aggregate Supply-Chain Forecasts of Demand by Product
Projections Family supporting the Market/Channel Plans. Corresponding Projections,
supporting Make, Source, Deliver, Inventory and Response Time Plans
through the Supply-Chain are produced from these Forecasts Together, they
represent balanced Supply and Demand.

Revised Business Assumptions An update to the expected cause and effect statements that are the base for
the Revised Aggregate Forecast and Projections. These are reviewed
periodically with actual results to verify the linkage of actual cause and effect.
Revised Capital Plan A revision to plan for capital expenditures necessitated by either changes in
specific business plans or factors and assumptions affecting a business plan.
RFQ/RFP Request for Quote - A document used to solicit vendor responses when a
product has been selected and price quotations are needed from several
vendors. Request for Proposal - A document used to solicit vendor
responses when the functional requirements and features are known but no
specific product is in mind.
Routing Guide Information used to select modes, transportation lanes, available carriers,
etc. Listing or routes, carriers & rates.
Satisfied Customer Customers who are satisfied with the product or service delivered by the
suppliers, including the aspects such as time, quality, cost, etc.
Scheduled Defective Product Return Planned or scheduled returning of material deemed defective for some
certain time or times
Scheduled Deliveries The required or agreed time or rate of delivery of goods or services
Scheduled Excess Product Return Planned or scheduled returning of material deemed in excess of current
requirements for some certain time or times.
Scheduled Installation The process of evaluating the design and build schedules relative to
customer requested installation date to determine installation schedule.
Scheduled MRO Return Planned or scheduled act of installing something for some certain time or
times.
Scheduled Receipts Product due to arrive.
Scrap Authorization Permission to scrap material or item outside of specifications and possessing
characteristics that make rework impractical.
Service Levels Performance targets in service related measures (i.e. delivery performance,
lead times, etc.) compared to the established service requirements. Service
levels are established by balancing requirements against operational
strategy.
Service Requirements A set of minimum acceptable values that describe service requirements of a
particular industry, channel, and/or customer segment.
Shipment Documents Legal documentation of the contents of a shipment (e.g. way bill, bill of
Shipment Routes Routes for shipping by consolidating loads.
Shipments Transactions related to sending the product to the customer.
Shipping Documents Legal documentation of the contents of a shipment (e.g. way bill, bill of
Shipping Export Parameters and Shipping and documentation requirements established by a government
Documentation which must be met before allowing the shipping or delivery of a product
across national boundaries.
Shipping History The transaction history of the physical shipment of an item to another internal
location or to a customer.
Shipping Parameters and Shipping parameters, such as weight, size, cube and route decide carrier
Documentation and cost. Legal documentation of the contents of a shipment (e.g. way bill,
bill of lading, export papers, etc.) are required.
Shipping Preferences (Customer) Customer preferences including shipping, status, and delivery requirements,
etc., and customer profile, which includes address data, credit and purchase
histories,
Shipping Schedules (internal or 3PL) Scheduling of direct deliveries of material to a specified location on a plant
floor near the operation where it is to be used.
Ship-to Data Data about the destination of a retun delivery.
Source Execution Data Data which will provide measurement of actual supplier performance against
internal and or external standards to provide feedback to achieve and
maintain the performance required to meet the customer's needs.
Source Return Requirements All sources of demand in the Source Return of a product or service.
Sourcing Plans An aggregate material requirements plan used to schedule material
deliveries to meet production plan.

Standard Practices/Rules Industry established common practices, rules, and methods of doing
business.
Stocking Requirements The activities and techniques of determining the desired levels of items,
whether raw materials, work in process, or finished products. Demand for
inventory may be dependant or independent. Inventory functions are
transportation (pipeline), and service parts.
Stocking Schedule A timetable for the planned movement of material from a bulk storage area to
Stock-out History History of a lack of materials, components, or finished goods that are
ordered.
Store Allocation Instructions A list of operations and procedures for allocating storage needs for items in
inventory.
Store Shelf Inventory Counts The determination of inventory quantity by actual count. Physical inventories
can be taken on a continuous, periodic or annual basis.
Strategic Plan A longer range, high-level plan that describes how a company intends to
conduct business. Improve its market and competitive position, and increase
its earnings performance.
Successful Installation / Live System The installation of product is completed at the customer site, and the product
is fully functional.
Supplier Agreement An agreement between supplier and purchaser to perform or not to perform
specific acts or services or to deliver merchandise, such as purchase order
Supplier Data Data or information about the supplier. This data can be organizational ,
product, information , financial. Structured supplier data is needed to set up
Supplier Performance The results of measuring the actual supplier performance on cost, quality,
engineering, purchasing, and so on, based on an agreed set of
measurements.
Supply Chain Execution Data Information necessary to plan the balance of supply chain resources to
demand requirements at both the highest aggregate and lowest SKU
planning levels.
Supply Chain Performance A plan that describes goals and objectives for a supply chain and the steps
Improvement Plan that will be taken to reach those goals and objectives from the current
performance levels.
Supply Chain Plans Courses of action over specified time periods that represent a projected
Supply Chain Requirements Sources of demand for the integrated supply chain of a product or service at
the appropriate level, horizon and interval.
Supply Chain Resources As a whole with constituent parts, all sources of supply that are required to
add value in the supply chain of a product or service at the appropriate level,
horizon and interval.
Supply-Chain Performance Metrics Standard measures that indicate how well a supply chain performs within
certain categories of performance known as Performance Attributes, e.g.
management.
Systems Capability The capability of a system to perform its expected function
Tariffs and Duties (External) Charges established by a government which must be met before allowing the
shipping or delivery of a product across national boundaries.
Transferred Product Product being tranferred to the appropriate stocking location within the
supply chain.
Transportation Capacity The capability of a trasportation system to perform it's function.
Valid Returns Request Requests for returns that are valid.
Validated Order An order that has had the instructions / requirements validated i.e. the
information that the order contains is accurate, consistent with previous
Note 1 - this does not make the order "committed" there may be other tasks
to be performed before a commitment can be made.
Note 2 - this order could be customer, internal, purchase or production.

Validated Return Material A validated and approved Return Product Authorization (RPA).
Authorization
Vendor Merchandising / Co-op The plan for a promotional product offering and how it is communicated to
advertising agreements the customer and includes public relations, advertising, sales promotions,
and other tools to persuade customers to purchase the product offering.
Vendor/DC inventory availability Vendor/DC inventory available to a customer to supply demands. (Where the
customer has access to the supplier's inventory and the supplier has access
to the customer's requirements and inventory or vendor managed inventory).
Warehouse Operating Constraints Warehouse constraints are those storage items that impact on the supply
chain efficiency, including material handling equipment and personnel,
equipment maintenance, building maintenance, and security personnel.
Warranty Data All data relevant to a warranty claim for a customer for replacement, repair or
credit because the product received did not meet a commitment, either
expressed or implied, concerning a certain fact regarding the product
WIP Handling Rules, Move The rules for handling WIP items in the production and repair process.
Information and Methods These rules include the movement and accounting for in-process items
WIP Inventory Location Location of inventory that is specified as "work in progress". This can be
intermediate storage in a manufacturing facility prior to final packaging or can
be a class of materials waiting final transformation to finished products.
WIP Location Rules The process and rules for establishing and maintaining in-process item
WIP Move Information and Methods The process of recording and tracking the movement of WIP items through
the production and repair process. This process includes item stocking and
accounting requirements.
Year-to-Year for Like SKU/Subclass The sales or demand history that is analogous to the present situation for
similar products, a SKU / Subclass.

APPENDIX A
METRICS
Performance Attributes and Associated Level 1 Metrics

Performance Attribute Performance Attribute Definition Level 1 Metric
Supply Chain The performance of the supply chain in Perfect Order Fulfillment
Reliability delivering: the correct product, to the correct
place, at the correct time, in the correct
condition and packaging, in the correct
quantity, with the correct documentation, to the
correct customer.
Supply Chain The speed at which a supply chain provides Order Fulfillment Cycle Time
Responsiveness products to the customer.
Supply Chain The agility of a supply chain in responding to Upside Supply Chain Flexibility
Flexibility marketplace changes to gain or maintain Upside Supply Chain Adaptability
competitive advantage. Downside Supply Chain Adaptability
Supply Chain Costs The costs associated with operating the supply Supply Chain Management Cost
chain. Cost of Goods Sold
Supply Chain Asset The effectiveness of an organization in Cash-to-Cash Cycle Time
Management managing assets to support demand Return on Supply Chain Fixed
satisfaction. This includes the management of Assets
all assets: fixed and working capital.
Performance Attributes and Level 1 Metrics

Level 1 Metrics are primary, high level measures that may cross multiple SCOR processes. Level 1 Metrics do not
necessarily relate to a SCOR Level 1 process (PLAN, SOURCE, MAKE, DELIVER, RETURN).
Performance Attributes
Level 1 Metrics Customer-Facing Internal-Facing
Reliability Responsiveness Flexibility Costs Assets
Perfect Order Fulfillment x
Order Fulfillment Cycle Time x
Upside Supply Chain Flexibility x
Upside Supply Chain Adaptability x
Downside Supply Chain x
Adaptability
Supply Chain Management Cost x
Cost of Goods Sold x
Cash-To-Cash Cycle Time x
Return on Supply Chain Fixed x
Assets
Return on Working Capital x

Key to Template for Appendix A
Specification:
This template was used to develop the hierarchical structure between SCOR level 1, 2, and 3 metrics.
Metric Definition
Intended to provide clear, concise, benchmarkable, definitions of the metric.
Hierarchical Metric Structure

These diagrams express the hierarchical structure of metrics from different levels by digraph. A causal link (arrow)
from one metric A to another metric B means that metric A could affect metric B.
For a level 1 metric, it needs to drill down to level 2 metrics.
For a level 2 metric, it needs to drill down to level 3 metrics, and also, should roll up to level 1 metrics (dashed link).
* The dashed line boxes represent optional metrics associated with the Level 3 processes.
Qualitative Relationship Description

If the relationships between metrics cannot clearly quantitatively expressed by mathematical equations, qualitative
description of the relationships is required.
Quantitative Relationship (optional, if calculable)

Lists the quantitative relationships between metrics by mathematical equations, if calculable.
Calculation
Provides an operable method to calculate the metric, typically a formula.
Data Collection
Illustrates how to collect data for metric calculation.
Discussion
Additional descriptions which are necessary.

Performance Attribute: Supply Chain Reliability
Level 1 Metric: Perfect Order Fulfillment
Metric Definition
The percentage of orders meeting delivery performance with complete and accurate documentation and no
delivery damage. Components include all items and quantities on-time using the customer’s definition of
on-time, and documentation – packing slips, bills of lading, invoices, etc.
Level 1 Perfect Order Fulfillment
% of Orders Delivered in Full Perfect Condition
Level 2
Delivery Performance to Documentation Accuracy
Customer Commit Date

• An order is considered perfect if the products ordered are the products provided and the quantities
ordered match the quantities provided (% In Full).
• A delivery is considered perfect if the location, specified customer entity and delivery time ordered
is met upon receipt (Delivery Performance to Customer Commit Date).
• Documentation supporting the order line is considered perfect if it is all accurate, complete, and on
time (Accurate Documentation).
• The product condition is considered perfect if the product is delivered / faultlessly installed (as
applicable) on specification, with the correct configuration, with no damage, customer ready, and is
accepted by the customer (Perfect Condition)
Calculation
[Total Perfect Orders] / [Total Number of Orders] x 100%
Note, an Order is Perfect if the individual line items making up that order are all perfect.
The Perfect Order Fulfillment calculation is based on the performance of each Level 2 component of the
order line to be calculated (product & quantity, date & time & Customer, documentation and condition). For
an order line to be perfect, all of the individual components must be perfect.
The calculation of line item perfect order line fulfillment is based on the Level 2 components:
• Each component receives a score of 1 if it is judged to be perfect.
• It receives a score of 0 if not perfect.
If the sum of the scores equal the number of components (in this case, 4) the order line is perfectly fulfilled.
Data Collection
Data for the components that are used to drive the calculation of supply chain performance are primarily
taken from Deliver and impact Deliver Enable process elements. These are primarily associated with the
original commitment (Customer Order Processing – D1.2, D 2.2, D3.3) and the satisfaction of that
commitment (Receipt and Installation (as appropriate) – D1.11, D1.13, D1.14, D1.15, D2.11, D2.13, D2.14,
D2.15, D3.11, D3.13, D3.14, D3.15). In addition, the documents necessary for support of the supply chain
process should be scored across the set of Deliver process elements. The Enable Deliver Process Element
- Assess Delivery Performance (ED.2) should be updated from metrics derived.

Discussion
The performance of the supply chain is considered “perfect” if the original commitment made to a customer
is met through the supply chain.
An order is defined as a collection of one or more order lines representing a request to deliver specified
quantities of goods or to render specific services. The order can further be defined as a request (with a
specific identifier as a reference) to deliver specified items or to render specific services with specific prices,
dates, and quantities. Commitments are made to a customer at the order line level, where an order line is
defined as a line representing a commitment on a sales order. An order line always references a product or
service.
For an order to be considered perfect the following standards must be met:

• Delivered complete; all items on the order line are delivered in the quantities specified
• Delivered on time to the initial commitment date, using the customer’s definition of on-time delivery
• Documentation supporting the order including packing slips, bills of lading, invoices, quality
certifications, etc., is complete and accurate
• Faultlessly installed (as applicable), correct configuration, customer-ready and accepted, no
damage, on specification
Orders canceled by the customer are excluded from the metric. Order changes initiated by the customer
and agreed to by the supplier supersede initial commitments and form a new comparative basis for the
metric.
Often for date and quantity issues (and occasionally product), a range rather than a strict value is used.
This is acknowledged as a standard practice; in those situations the standard measured is considered to be
met perfectly if the range specified is satisfied.
The term “customer-ready” for the perfect condition standard may imply a subjective component based on
the customer’s satisfaction. Although condition may not be as rigorously measured as time or quantity it
should be considered as a component if available, especially since this attribute measures performance of
the supply chain which is, of course, ultimately measured by its customers.
It should also be noted that a corresponding evaluation of suppliers’ performances could be determined by
extending these standards to each supplier’s ability to source products.

Level 2 Metric: % of Orders In Full
Metric Definition
Percentage of orders which all of the items are received by customer in the quantities committed
Level 2 % of Orders Delivered in Full
Level 3 Delivery Item Accuracy Delivery Quantity Accuracy

An order is considered delivered “in full” if:
• All items ordered are the items actually provided, and no extra items are provided
• All quantities received by the customer match the order quantities (within mutually agreed
tolerances)
Calculation
[Total number of orders delivered in full] / [Total number of orders delivered] x 100%
Data Collection
Data for the components that are used to drive the calculation of % In Full are primarily associated with the
original order processing step of ‘Reserve inventory and Determine Delivery Date’ (D1.3, D2.3 & D3.3),
inventory availability (M1.1, M2.1, M3.1) including inventory location accuracy, (ED.4), and the satisfaction
of that commitment through the shipment and customer receiving processes (D 1.12, D1.13, D2.12, D.2.13,
D3.12, D3.13)
Discussion
Order quantities are based on item / quantity original commitments agreed to by the customer. Orders
canceled by the customer are excluded from the metric. Order changes initiated by the customer and
agreed to by the supplier supersede original commitments and form a new comparative basis for the metric.
This metric has no “timing” element, such that orders deliberately split by the supplier should still be
considered “in full” so long as all metric criteria are met. In some cases, such as for supplying bulk
materials, committed quantities refer to a range that is acceptable to the customer rather than a strict value.
Several SCOR diagnostic metrics exist that can be used to focus “% In Full” improvement efforts. Some of
these include:
• % Orders Scheduled to Requested Quantity
• Schedule Achievement
• Yield variability
• Planned Shipment Fill Rate (not yet defined)
• % Stock Outs (not yet defined)
• Inventory Cycle Count Accuracy (not yet defined)
Orders may not be filled completely to the customer’s original request quantity due to the inability to

schedule to the initial request. Breakdown may also occur from the inventory availability (including stock
outs for MTS and schedule achievement for MTO and ETO) and inventory location accuracy. Lastly, a
deviation from the shipment plan may lead to inability to fulfill an order completely.

Level 2 Metric: Delivery Performance to Customer Commit Date
Metric Definition
The percentage of orders that are fulfilled on the customer’s originally scheduled or committed date
Level 2 Delivery Performance to

Customer Commit Date
Customer Commit Date Achievement Time Delivery Location Accuracy

Level 3 Customer Receiving

An order is considered delivered to the original Customer commitment date if:
• The order is received on time as defined by the customer
• The delivery is made to the correct location and Customer entity
Calculation
[Total number of orders delivered on the original commitment date] / [Total number of orders delivered]
x 100%
Data Collection
Data for the components that are used to drive the calculation of Delivery Performance to Customer
Commit Date are primarily associated with the original order processing step of ‘Reserve inventory and
Determine Delivery date’ (D1.3, D2.3 & D3.3), and the satisfaction of that commitment through the
shipment and customer receiving processes (D 1.12, D1.13, D2.12, D2.13, D3.12, D3.13).
Discussion
Order delivery performance from a timing perspective is based on original commitments agreed to by
the customer. The acceptable window for delivering on time should be defined in the customer’ service
level agreement. Orders canceled by the customer are excluded from the metric. Order changes
impacting the timing of a delivery that are initiated by the customer and agreed to by the supplier
supersede original commitments and form a new comparative basis for the metric. The original
commitment date can refer to a range, rather than a strict date and time, that is acceptable to the
customer (e.g. advanced shipments). This metric has no “In Full” element, such that partial deliveries
can still be considered as meeting the Customer Commit Date so long as all metric criteria are met.
Measuring the frequency of accepting the customer’s original request date, vs. commit date, can be an
important measure of customer satisfaction.
Several SCOR diagnostic metrics exist that can be used to focus delivery performance improvement
efforts. Some of these include:
• % Orders Scheduled to Request
• % Orders Shipped on time (not yet defined)
• Carrier Performance Reliability (not yet defined)
Orders may not be delivered to the Customer Commit Date due to breakdowns in the order fulfillment
and shipment process (e.g. Transportation availability). Orders may also be delivered late due to carrier
delivery performance / issues.

Level 2 Metric: Perfect Condition
Metric Definition
Percentage of orders delivered in an undamaged state that meet specification, have the correct
configuration, are faultlessly installed (as applicable), and accepted by the customer
Perfect Order Fulfillment

Level 1
Perfect Condition
Level 2
Warranty & Returns

Orders Delivered Damage Free
Conformance
Level 3
% Orders % Faultless Installations
Received
Orders Delivered Defect Free Damage Free
Conformance

An order is considered to be delivered in perfect condition if all items meet the following criteria:
• Undamaged
• Meet specification and has correct configuration (as applicable)
• Faultlessly installed (as applicable) and accepted by the customer
• Not returned for repair or replacement (within the warranty period)
Calculation
[ Number of orders delivered in Perfect Condition ] / [Number of orders delivered ] x 100%
Data Collection
Data for the components that are used to drive the calculation of “Perfect Condition” are primarily
associated with the receipt, installation (as applicable) and satisfaction of the order commitment (D1.13,
D1.14, D2.13, D2.14, D3.13, D3.14). The Enable Deliver Process Element - Assess Delivery Performance
(ED.2) should be updated to reflect this metric and its components.
This data is typically available from a complaints, claims, or warranty/returns database.

Discussion
This metric, calculated at the order level, assesses the quality of products delivered through the supply
chain from the customer’s perspective. Justified and non-justified product quality issues, claims and returns
within the warranty period are included and count against this metric. Improving this metric lowers the
supply chain cost associated with claims and returns.
Several SCOR diagnostic metrics exist that can be used to focus Perfect Condition improvement efforts.
Some of these include:
• Cost of Noncompliance
• Damage and Shrinkage
• Scrap Expense
• Warranty Costs
• Yield Variability

Level 2 Metric: Documentation Accuracy
Metric Definition
Percentage of orders with accurate documentation supporting the order, including packing slips, bills of
lading, invoices, etc.
Level 2 Documentation Accuracy
Shipping Documentation Accuracy Payment Documentation Accuracy
Level 3
Compliance Documentation Accuracy Other Required Documentation Accuracy

An order is considered to have accurate documentation when the following are accepted by the customer:
• Shipping documentation
• Payment documentation
• Compliance documentation
• Other required documentation
All documentation must be complete, correct, and readily available when and how expected by the
customer, Government and other supply chain regulatory entities.
Calculation
[Total number of orders delivered with accurate documentation] / [Total number of orders delivered] x
100%
Document supporting the order includes:

• Shipping documentation:
o Packing slips (Customers)
o Bill of lading (Carriers)
o Government or Customs documentation / forms
• Payment Documentation:
o Invoice
o Contractual outline agreement
• Compliance documentation
o Material Safety Data Sheets
• Other required documentation
o Quality certification

Data Collection
Data for the components that are used to drive the calculation of Accurate Documentation are primarily
associated with the Deliver processing step of ‘Load Product & Generate Shipping Documentation’ (D1.11,
D2.11, D3.11), and ‘Invoice’ (D1.15, D2.15, D3.15).
The data collection step is part of Assess Delivery Performance (ED2) and Manage Deliver Information
(ED3)
Discussion
This metric is calculated at the order level. The timeliness and quality of the documentation is measured
from the perspective of the customer, Government, and other regulatory entities. Documentation may be
late or incomplete due to the inability to prepare / process the correct documentation on time. Inaccurate or
late shipping documentation may prevent the product to be loaded or shipped, increase the customs delay,
and delay the customer’s acceptance of the order. Inaccurate or late invoices may also lead to the inability
to fulfill the customer request.
The definition encompasses On time and Accurate documentation. However, on-time documentation
implies a scheduled ship date and scheduled invoice date.
Accurate documentation metrics are similar to what exists for SOURCE process metrics
Possible diagnostic metrics that can be used to focus Accurate Documentation improvement efforts include:
• % orders documentation (shipping and invoice) processed on time
• % faultless invoices

Performance Attribute: Supply Chain Responsiveness
Level 1 Metric: Order Fulfillment Cycle Time
Metric Definition
The average actual cycle time consistently achieved to fulfill customer orders. For each individual order,
this cycle time starts from the order receipt and ends with customer acceptance of the order.
Level 1 Order Fulfillment Cycle Time
Level 2 Source Cycle Time Make Cycle Time Deliver Cycle Time

Order Fulfillment Cycle Time ≈ Source Cycle Time + Make Cycle Time + Deliver Cycle Time
Calculation
[Sum Actual Cycle Times For All Orders Delivered] / [Total Number Of Orders Delivered]
Data Collection
Data for the components that are used to drive the calculation of responsiveness are taken from the Source,
Make and Deliver process elements.
Discussion
The order fulfillment cycle time as captured from the moment a customer places the order to the moment
the order is fulfilled is considered to be a ‘gross’ cycle time. It represents all the time passed between these
two events, regardless of whether this represented cycle time for the activities performed by the
organisation to fulfill the order (both value-add and non-value-add) or dwell time because the order was
placed well in advance by the customer. As such, this gross order fulfillment cycle time does not truly reflect
the responsiveness of the organisation. Take for example an organisation that needs six days to fulfill a
certain customer order. If the customer places the order one day in advance, the gross order fulfillment
cycle time will be seven days. If the customer places the order 3 months ahead (pre-ordering), the gross
fulfillment cycle time will be 96 days. However, the fact that the customer pre-orders does not reduce the
responsiveness of the organisation. On the contrary, one can argue that it may increase the ability of the
organisation to meet that order as it allows the organisation to plan ahead and fulfill the order in a more
optimal way.
The responsiveness of the organisation is determined by the cumulative cycle time for all activities that are
required to fulfill the order, but should exclude any dwell time where no activity takes place.
Therefore the definition of Order Fulfillment Cycle Time consists of a ‘gross’ component and a ‘net’
component named Order Fulfillment Process Time, according to the following formula: Order Fulfillment
Cycle Time = Order Fulfillment Process Time + Order Fulfillment Dwell Time. Note that dwell time will equal
0 for companies who do not utilize this metric, so Order Fulfillment Cycle Time will equal Order Fulfillment
Process Time.
Order fulfillment dwell time is defined as ‘any lead time during the order fulfillment process where no activity
takes place, which is imposed by customer requirements’. Note that this dwell time is different from ‘idle
time’ or ‘non-value-add lead time’, which is caused by inefficiencies in the organization’s processes and
therefore ultimately under responsibility of the organisation. This kind of idle time should not be deducted

from the gross order fulfillment cycle time.
Dwell time is mostly associated with the ordering process, where a customer may place an order in advance
to reserve capacity/materials etc, but where the actual steps in the order fulfillment process take place later
on. It is also common in the delivery process where the organisation may be in principle ready to ship the
product/service, but is requested by the customer to wait (for example to follow a certain shipment
schedule).
Note that for those organisations where dwell time does not play a role, the dwell time can be taken as zero
days which results in the net order fulfillment cycle time to be equal to the gross order fulfillment cycle time
For benchmarking purposes it is recommended to use the Order Fulfillment Process Time, as this is the
cycle time reflecting most accurately the responsiveness of the organisation. It will also ensure that those
organisations in industries where dwell time is a factor can be benchmarked against organisations in
industries where dwell time does not play a role.
The concept of dwell time applies not only to the level 1 metric, but also to all lower level metrics. This
means that each lower level metric can have a gross component, consisting of the net component and dwell
time. Because the lower level metrics are hierarchical (the cumulative sum of cycle times at level 2 or 3
should be equal to the cycle time at level 1), the cumulative sum of dwell times at level 2 or 3 should total up
to the dwell time at level 1.

Level 2 Metric: Source Cycle Time Process Numbers: S1, S2, S3
Metric Definition
The average time associated with Source Processes.
Level 2 Source Cycle Time
Identify Sources of Supply Cycle Time Authorize Supplier Payment Cycle Time
Select Supplier and Negotiate Cycle Time Transfer Product Cycle Time
Level 3 Schedule Product Deliveries Cycle Time Verify Product Cycle Time
Receive Product Cycle Time
* The dashed line boxes represent optional metrics associated with the Level 3 processes. (The same hereinafter)

Source Cycle Time ≈ (Identify Sources of Supply Cycle Time + Select Supplier and Negotiate Cycle Time) +
Schedule Product Deliveries Cycle Time + Receive Product Cycle Time + Verify Product Cycle Time +
Transfer Product Cycle Time + Authorize Supplier Payment Cycle Time
Calculation
Data Collection
Discussion
Metrics in Level 3 that are used to drive the calculation of ‘Source Cycle time’ are taken from the Source
process elements, depending on the possible strategies deployed by companies to fulfill orders such as
make-to-stock, make-to-order or engineer-to-order. When make-to-stock or make-to-order strategy is
deployed, the dashed optional metrics ‘Identify Sources of Supply Cycle Time’ and ‘Select Supplier and
Negotiate Cycle Time’ are not used in the calculation.

Level 2 Metric: Make Cycle Time Process Numbers: M1, M2, M3
Metric Definition
The average time associated with Make Processes.
Level 2 Make Cycle Time
Schedule Production Activities Cycle Time Release Finished Product To Deliver Cycle Time
Issue Material/Product Cycle Time Stage Finished Product Cycle Time

Level 3
Produce and Test Cycle Time Package Cycle Time
Finalize Production Engineering Cycle Time

Make Cycle Time ≈ (Finalize Production Engineering Cycle Time) + Schedule Production Activities Cycle
Time + Issue Material/Product Cycle Time + Produce and Test Cycle Time + Package Cycle Time + Stage
Finished Product Cycle Time + Release Finished Product To Deliver Cycle Time
Calculation
Data Collection
Discussion
Metrics in Level 3 that are used to drive the calculation of ‘Make Cycle time’ are taken from the Make
deployed, the dashed optional metric ‘Finalize Production Engineering Cycle Time’ is not used in the
calculation. And also, the data for the calculation of Level 3 metrics may also depends on different make
strategies, e.g., when make-to-stock strategy is deployed, the metric ‘Issue Material/Product Cycle Time’
means the time for issuing material; while when make-to-order or engineer-to-order is deployed, it will be a
measure for calculating the cycle time for issuing sourced or in-process product.
In Make Cycle Time, there may be overlaps in the processes, so the “least amount of time” should be
applied rather than the total sum.

Level 2 Metric: Delivery Cycle Time Process Numbers: D1, D2, D3
Metric Definition
The average time associated with Deliver Processes.
Order Fulfillment Cycle Time

Level 1
Delivery Cycle Time

Level 2
Receive, Configure, Enter and Validate Order Cycle Time
Reserve Resources & Determine Delivery Date Cycle Time Schedule Installation Cycle Time
Consolidate Orders Cycle Time Pick Product Cycle Time
Level 3 Build Loads Cycle Time Pack Product Cycle Time
Route Shipments Cycle Time Load Vehicle & Generate Shipping Documentation Cycle Time
Select Carriers and Rate Shipments Cycle Time Ship Product Cycle Time
Receive Product from Make/Source Cycle Time Receive & Verify Product Cycle Time
Install Product Cycle Time

Delivery Cycle Time ≈ MAX {[Receive, Configure, Enter and Validate Order Cycle Time + Reserve
Resources & Determine Delivery Date Cycle Time + (Consolidate Orders Cycle Time + Schedule
Installation Cycle Time) + Build Loads Cycle Time + Route Shipments Cycle Time + Select Carriers and
Rate Shipments Cycle Time], Receive Product from Make/Source Cycle Time} + Pick Product Cycle Time +
Pack Product Cycle Time + Load Vehicle & Generate Shipping Documentation Cycle Time + Ship Product
Cycle Time + (Receive & Verify Product Cycle Time) + (Install Product Cycle Time)
*The MAX function above is to indicate that Dx.3-Dx.7 may be in parallel with Dx.8and whichever takes
longer should determine the cycle time.

Calculation
Data Collection
Discussion
Metrics in Level 3 that are used to drive the calculation of ‘Deliver Cycle time’ are taken from the Deliver
deployed, the optional metric ‘Schedule Installation Cycle Time’ is not used in the calculation, otherwise the
metric ‘Consolidate Orders Cycle Time’ will not be used.
And also, the data for the calculation of Level 3 metrics may also depends on different make strategies, e.g.,
when make-to-stock strategy is deployed, the metric ‘Receive, Configure, Enter and Validate Order Cycle
Time’ may not include the Configure process.

Level 2 Metric: Delivery Retail Cycle Time Process Numbers: D4
Metric Definition
The average cycle time of the processes used to acquire, merchandise, and sell finished goods at a retail
store.

Level 1
Delivery Retail Cycle Time

Level 2
Generate Stocking Schedule Cycle Time Fill Shopping Cart Cycle Time
Receive Product Cycle Time Checkout Cycle Time
Level 3
Pick Product Cycle Time Install Cycle Time
Stock Shelf Cycle Time

Delivery Retail Cycle Time ≈ Generate Stocking Schedule Cycle Time + Receive Product Cycle Time + Pick
Product Cycle Time + Stock Shelf Cycle Time + Fill Shopping Cart Cycle Time + Checkout Cycle Time +
Install Cycle Time
Calculation
Data Collection
Discussion

Performance Attribute: Supply Chain Flexibility
Level 1 Metric: Upside Supply Chain Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in quantities delivered.
Note - 20% is a number provided for benchmarking purposes. For some industries and some organizations
20% may be in some cases unobtainable or in others too conservative.
Note - component metrics (Upside Source Flexibility, Upside Make Flexibility, etc) can be improved in
parallel and as a result, this calculation requires the result to be the least amount of time to achieve the
desired result).
Level 1 Upside Supply Chain Flexibility
Upside Source Upside Make Upside Deliver Upside Source Upside Deliver
Level 2 Flexibility Flexibility Flexibility Return Flexibility Return Flexibility

Calculation: Total elapsed days between the occurrence of the unplanned event and the achievement of
sustained plan, source, make, deliver and return performance.
Note: Elapsed days are not necessarily the sum of days required for all activities as some may occur
simultaneously.
Upside Source Flexibility: The number of days required to achieve an unplanned sustainable 20% increase
in quantity of raw materials.
Upside Make Flexibility: The number of days required to achieve an unplanned sustainable 20% increase in
production with the assumption of no raw material constraints.
Upside Deliver Flexibility: The number of days required to achieve an unplanned sustainable 20% increase
in quantity delivered with the assumption of no other constraints.
Upside Source Return Flexibility: The number of days required to achieve an unplanned sustainable 20%
increase in the return of raw materials to suppliers.
Upside Deliver Return Flexibility: The number of days required to achieve an unplanned sustainable 20%
Calculation
The calculation of supply chain flexibility requires the calculation to be the least time required to achieve the
unplanned sustainable increase when considering Source, Make, and Deliver components.
For example, if it requires 90 days achieve a 20% increase in raw material volume, 60 days for adding
capital to support production, and no time to increase the ability to deliver, upside supply chain flexibility
would be 90 days (if production changes can run concurrently with material acquisition activities) or as much
as 150 days if production changes and material acquisition changes must run sequentially.

Data Collection
Data for the components that are used to drive the calculation of supply chain flexibility are taken from the
actual planning activities incurred in devising the actions to be taken and the execution activities
themselves. Neither the complete set of activities nor any given subset of those activities can be identified
except in either contingency plans (in which case they are hypothetical), special analytical simulations
conducted for the purpose of predicting total elapsed time, or after the fact (when they have actually
occurred and are unlikely to reoccur in the same combination).
Flexibility measures are assumption based or based on historic events. Some elements can be measured
and taken as a basis for further considerations, e.g.
Discussion
Certainly enterprises deal with change all the time. In most cases, these changes are minor deviations from
the “norm” or fleeting “blips” in the marketplace. Also, certainly, most supply chains move through these
changes almost effortlessly and, in this regard, demonstrate equivalent flexibility. In many extreme cases,
however, it is possible that a particular supply chain has reached a condition of relative rigidity (say, at
capacity or rigid, constraining agreements with partners) and a seemingly minor increase in production
requirement can consume much time and effort as the supply chain struggles to restore its capability to
perform.
It is evidenced that enterprises engaged in appropriate business risk and competitive contingency planning
activities will usually be in a better position to optimize overall supply chain performance and these activities
are presented as best practices later in this document.
When change is known in advance (such as Wal-Mart requiring RFID devices on all delivered cases, or a
major sourcing change is planned to occur), and is incorporated in the enterprise’s operating plan, then the
time incurred to undertake the adaptation isn’t necessarily a reflection of the supply chain’s flexibility. While
flexibility is still addressed, it is frequently clouded by other considerations in the operating plan. Unplanned
change is the primary consideration in measuring the supply chain’s flexibility.

Performance Attribute: Upside Supply Chain Flexibility
Level 2 Metric: Upside Source Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in quantity of raw materials.
Note: This is a planning activity normally considering constraints to increase delivery that results in an estimate.
Possible constraint factors are included in this section.
Upside Source Flexibility

Level 2
Current source volumes Additional source volumes
Productivity-purchase orders per FTE Procurement staff availability
Current capital requirements Time needed to recruit/hire/train additional staff
Current on-hand inventories (Raw, Purchased FG) Capital availability

Constraint
Factors
Current sourcing/supplier constraints Time needed to obtain additional capital
Current purchase order cycle times Additional demand sourcing - supplier constraints.
Time needed to increase inventory for additional order fulfillment (Raw, Purchased FG)
Time to reach and sustain current purchase order cycle time

Least time to pursue all necessary activities.
Calculation
Data Collection

Discussion
Source: Input
Current elements needed to fully understand future requirements, to establish 20% gap, based on the
question “How long will it take for the company to sustain a 20% increase in quantities sourced?”. These
elements are mainly output metrics from other attributes . . . responsiveness, reliability, cost, asset
management.
Demand
o Current source volumes
Ö Amount of each item purchased
Staffing
o Staff needed to meet current demand
Ö Productivity-purchase orders per FTE
Ö Needed, but may be underutilized
Capital
o Current capital requirements
Ö Credit line
Ö Cash on hand
Ö Accounting procedures
Materials
o All else equal in make, deliver, return, current inventory on hand (raw material and purchased
finished goods), including safety stock required to sustain current order fulfillment.
Ö Assuming optimized inventory practices (no excess inventory)
o Current sourcing/supplier constraints
Ö Current contract terms.
Ö Nature of items; commodity/sole source.
Cycle Time
o Current procurement cycle time
Ö Time to place a purchase order
Ö Supplier lead time
Source: Resource Availability Assessment & Ramp-up/Lead Time

Elements needed to establish 20% delta in resources and what is required to meet the 20% delta based on
the question “How long will it take for the company to sustain a 20% increase in quantities sourced?”
Demand:
o Additional source volume
Staffing
o Staff availability in procurement (underutilized FTE’s)
o Amount of time needed to recruit/hire/train additional staff to fill gap between underutilized FTE’s
and staff needed to sustain 20% increase in quantities delivered
Capital
o Current capital availability
Ö Credit line
Ö Cash on hand
o Amount of time needed to obtain capital to fill gap between current capital availability and capital
needed to sustain 20% increase in quantities ordered
Materials
o Sourcing Constraints
Ö Time required in negotiating new source/volume contracts/terms
Ö Time required to find/obtain additional sources
o All else equal in make, deliver, return, amount of time needed to obtain, deliver and phase in
inventory (raw material and purchased finished goods) for order fulfillment, including safety stock to
sustain 20% increase in quantities sourced.
Cycle Time
o Amount of time needed to reach and sustain current procurement cycle time

Level 2 Metric: Upside Make Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in production with the
assumption of no raw material constraints.
Level 2 Upside Make Flexibility
Current make volume Additional make volume
Direct labor availability

Productivity-units/orders produced per FTE
Percent of labor used in manufacturing, not used in direct activity
Internal and External manufacturing equipment Time needed to recruit/hire/train additional labor
capacity needed for current make volume
Current internal equipment capacity utilization
Internal and External facilities/, storage

capacity needed for current make volume Current internal facility/storage capacity utilization
Capital availability
Constraint Current capital requirements
Factors
Time needed to obtain additional capital
Current inventory on hand (WIP, FG)
Time needed to obtain additional equipment
Current manufacturing order cycle time
Time needed to obtain additional internal space
Supplemental outsource/lease availability
Time needed to obtain supplemental outsourced or leased resources or facilities
Time needed to increase inventory (WIP, FG) for additional order fulfillment
Time to reach and sustain current manufacturing order cycle time



Calculation
Data Collection
Discussion
Make: Input
question “How long will it take for the company to sustain a 20% increase in quantities produced?”. These
management.
Demand
o Current make volumes
Ö Amount of each item manufactured
Labor
o Labor needed to meet current demand
Ö Productivity-units/orders per FTE
Capital/Assets
o Internal and External (outsourced) capacity needed for current demand throughput
Ö Facilities, space
Ö Manufacturing equipment, materials handling and packaging equipment, etc.
Ö Credit line
Ö Cash on hand
Ö Finance Procedures (outsource vs. in-source, make vs. buy, lease vs. purchase)
Materials
o All else equal in source, deliver and return, current inventory on hand (WIP and finished goods),
including safety stock required to sustain current order fulfillment.
Cycle Time
o Current manufacturing cycle time (all else equal including procurement order cycle time and
supplier lead time)
Make: Resource Availability Assessment & Ramp-up/Lead Time

the question “How long will it take for the company to sustain a 20% increase in quantities produced?”
Demand:
o Additional make volume
Labor
o Direct labor availability and percent of labor used in manufacturing, not used in direct activity
(underutilized FTE’s)
o Amount of time needed to recruit/hire/train additional labor to fill gap between underutilized FTE’s
and labor needed to sustain 20% increase in quantities manufactured
Capital/Assets
o Current Internal Capacity utilization
Ö Credit line
Ö Cash on hand
Ö Finance Procedures (outsource vs. in-source, lease vs. purchase)
o Amount of time needed to obtain capital to fill gap between underutilized asset capacity and assets
needed to sustain 20% increase in quantities delivered
o Amount of time needed to obtain assets/capacity to fill gap between underutilized asset capacity
and assets needed to sustain 20% increase in quantities delivered

Outsourcing Alternatives to capital
o Supplemental Outsource/lease availability
Ö Facilities, lease building, etc.
Ö Lease manufacturing equipment, materials handling and packaging equipment, etc.
Ö Co-packers
o Amount of time needed to obtain supplemental outsourced or leased resources or facilities to
sustain 20% increase in quantities made
Materials
o All else equal in source, deliver and return, amount of time needed to receive and phase in raw
material inventory for manufacturing and make WIP and FG inventory, including safety stock to
sustain 20% increase in quantities manufactured)
Cycle Time
o Amount of time needed to reach and sustain current manufacturing cycle time (all else equal
including procurement order cycle time and supplier lead time)

Level 2 Metric: Upside Deliver Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in quantity delivered with the
assumption of no other constraints.
Upside Deliver
Level 2 Flexibility
Current delivery volume Additional delivery volume

Productivity-orders shipped per FTE
Percent of labor used in logistics, not used in direct activity
Internal and External (3PL) equipment capacity Time needed to recruit/hire/train additional labor
needed for current delivery volume
Internal and External (3PL) storage capacity

needed for current delivery volume Current internal storage capacity utilization
Constraint
Current capital requirements
Factors
Current inventory on hand (FG)
Current logistics order cycle time
Time needed to obtain supplemental outsourced (3PL) or leased resources or facilities
Time needed to increase inventory (FG) for additional order fulfillment
Time to reach and sustain current logistics order cycle time

Calculation
Data Collection
Discussion
Deliver: Input
question “How long will it take for the company to sustain a 20% increase in quantities delivered?”. These
management.
Demand
o Current delivery volume
Ö Number of orders shipped
Labor
Ö Productivity-orders per FTE
Capital/Assets
o Internal and External (3PL) capacity needed for current demand throughput
Ö Fleet equipment, outside carrier loads, materials handling equipment, etc.
Ö Credit line
Ö Cash on hand
Materials
o All else equal in source, make, return, current finished goods inventory on hand (including safety
stock required to sustain current order fulfillment)
o Assuming optimized inventory practices (no excess inventory)
Cycle Time
o Current logistics order cycle time (all else equal including procurement order cycle time, supplier
lead time, manufacturing cycle time, etc.)
Ö Customer order processing cycle time (logistics only)
Ö Dock-to-stock cycle time
Ö Pick-to-ship cycle time
Ö Transit time
Deliver: Resource Availability Assessment & Ramp-up/Lead Time

the question “How long will it take for the company to sustain a 20% increase in quantities delivered?”
Demand:
o Additional delivery volume
Labor
o Direct labor availability and percent of labor used in logistics, not used in direct activity
o Amount of time needed to recruit/hire/train additional labor to fill gap between underutilized FTE’s
and labor needed to sustain 20% increase in quantities delivered
Capital/Assets
Ö Fleet equipment, materials handling equipment, etc.

Ö Credit line
Ö Cash on hand
needed to sustain 20% increase in quantities delivered
and assets needed to sustain 20% increase in quantities delivered
Ö 3PL facilities, lease building, etc.
Ö Full service lease fleet, materials handling, etc. equipment
Ö Outside carriers
sustain 20% increase in quantities delivered
Materials
o All else equal in source, make, return, amount of time needed to increase finished inventory for
order fulfillment (time to receive/stock inventory, including safety stock to sustain 20% increase in
quantities delivered)
Cycle Time
o Amount of time needed to reach and sustain current logistics order cycle time (all else equal
including procurement order cycle time, supplier lead time, manufacturing cycle time, etc.)
Ö Transit time

Level 2 Metric: Upside Source Return Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in the return of raw materials
to suppliers.
Upside Source Return

Level 2 Flexibility
Current source return volume Additional source return volume
Productivity-orders returned per FTE Procurement staff/Logistics labor availability
Time needed to recruit/hire/train additional staff / labor

Internal and External (3PL) equipment capacity
needed for current return volume

needed for current return volume Current internal storage capacity utilization
Factors
Current supplier return order cycle time
Time to reach and sustain current supplier return order cycle time



Calculation
Data Collection
Discussion
Source Return: Input
Assuming no supplier constraints, current elements needed to fully understand future requirements, to
establish 20% gap, based on the question “How long will it take for the company to sustain a 20% increase
in quantities returned to suppliers?” These elements are mainly output metrics from other attributes . . .
responsiveness, reliability, cost, asset management.
Demand
o Current return volume
Ö Number of orders returned
Staff / Labor
o Procurement Staff / Logistics Labor needed to meet current returned volume
Ö Productivity-orders returned per FTE
Capital/Assets
o Internal and External (3PL) capacity needed for current return throughput
Ö Credit line
Ö Cash on hand
Cycle Time
o Current supplier return order cycle time
Ö Supplier return order processing cycle time (procurement and logistics)
Ö Transit time
Source Return: Resource Availability Assessment & Ramp-up/Lead Time

Assuming no supplier constraints, elements needed to establish 20% delta in resources and what is
required to meet the 20% delta based on the question “How long will it take for the company to sustain a
20% increase in quantities returned to suppliers?”
Demand:
o Additional supplier return volume
Staff / Labor
o Procurement staff / Logistics labor availability (underutilized FTE’s)
o Amount of time needed to recruit/hire/train additional staff / labor to fill gap between underutilized
FTE’s and staff / labor needed to sustain 20% increase in quantities returned to suppliers
Capital/Assets
Ö Credit line
Ö Cash on hand
needed to sustain 20% increase in quantities returned to suppliers
and assets needed to sustain 20% increase in quantities returned to suppliers

Ö Outside carriers
sustain 20% increase in quantities returned to suppliers
Cycle Time
o Amount of time needed to reach and sustain current supplier return order cycle time
Ö Transit time

Level 2 Metric: Upside Deliver Return Flexibility
Metric Definition
The number of days required to achieve an unplanned sustainable 20% increase in the return of finished
goods from customers.
Upside Supply Chain Flexibility

Level 1
Upside Deliver Return

Level 2 Flexibility
Current deliver return volume Additional deliver return volume
Productivity-orders returned per FTE Customer Service staff/Logistics labor availability
Time needed to recruit/hire/train additional staff / labor


Constraint
Factors Current capital requirements
Current customer return order cycle time
Time to reach and sustain current customer return order cycle time


Calculation
Data Collection
Discussion
Deliver Return: Input
Assuming no customer constraints, current elements needed to fully understand future requirements, to
establish 20% gap, based on the question “How long will it take for the company to sustain a 20% increase in
quantities returned from customers?” These elements are mainly output metrics from other attributes . . .
Demand
Staff / Labor
o Customer Service Staff / Logistics Labor needed to meet current returned volume
Capital/Assets
Ö Credit line
Ö Cash on hand
Cycle Time
o Current customer return order cycle time
Ö Customer return order processing cycle time (customer service and logistics)
Ö Transit time
Ö Return processing and disposition cycle time
Deliver Return: Resource Availability Assessment & Ramp-up/Lead Time

Assuming no customer constraints, elements needed to establish 20% delta in resources and what is required
to meet the 20% delta based on the question “How long will it take for the company to sustain a 20% increase
in quantities returned to suppliers?”
Demand:
o Additional customer return volume
Staff / Labor
o Customer Service staff / Logistics labor availability (underutilized FTE’s)
o Amount of time needed to recruit/hire/train additional staff / labor to fill gap between underutilized
FTE’s and staff / labor needed to sustain 20% increase in quantities returned from customers
Capital/Assets
Ö Credit line
Ö Cash on hand
needed to sustain 20% increase in quantities returned from customers
o Amount of time needed to obtain assets/capacity to fill gap between underutilized asset capacity and
assets needed to sustain 20% increase in quantities returned from customers

Ö Outside carriers
o Amount of time needed to obtain supplemental outsourced or leased resources or facilities to sustain
20% increase in quantities returned from customers
Cycle Time
o Amount of time needed to reach and sustain current customer return order cycle time
Ö Transit time

Level 1 Metric: Upside Supply Chain Adaptability
Metric Definition
The maximum sustainable percentage increase in quantity delivered that can be achieved in 30 days.
Note: 30 days is an arbitrary number provided for benchmarking purposes. For some industries and some
organizations 30 days may be in some cases unobtainable or in others too conservative.
Note: Component metrics (Upside Source Adaptability, Upside Make Adaptability, etc) can be improved in
parallel and as a result, this calculation requires the result to be the least increase in quantity sustainable in
30 days
Level 1 Upside Supply Chain Adaptability
Upside Source Upside Make Upside Deliver Upside Source Upside Deliver
Adaptability Adaptability Adaptability Return Return
Level 2 Adaptability Adaptability

Note: The calculation of Supply Chain Adaptability requires the calculation to be the least quantity
sustainable when considering Source, Make, Deliver and Return components.
Upside Source Adaptability: The maximum sustainable percentage increase in raw material quantities that
can be acquired/received in 30 days.
Upside Make Adaptability: The maximum sustainable percentage increase in production that can be
Upside Deliver Adaptability: The maximum sustainable percentage increase in quantities delivered that can
be achieved in 30 days with the assumption of unconstrained finished good availability.
Upside Source Return Adaptability: The maximum sustainable percentage increase in returns of raw
materials to suppliers that can be achieved in 30 days with the assumption of unconstrained finished goods
availability.
Upside Deliver Return Adaptability: The maximum sustainable percentage increase in returns of finished
goods from customers that can be achieved in 30 days.

Upside Source Adaptability + Upside Make Adaptability + Upside Deliver Adaptability
Calculation
Data Collection
Adaptability measures are assumption based or based on historic events. Some elements can be measured
and taken as a basis for further considerations. Adaptability measures are based on the actual number of
returns compared to the maximum number of returns which can be achieved within 30 days. The weakest
component determines the overall volume.

Discussion
The calculation of Supply Chain Adaptability requires the calculation to be the least quantity sustainable
when considering Source, Make, Deliver and Return components.
P&L Impact
Ö Revenue
Ö COGS
Ö SGA
Balance Sheet Impact
Ö Inventory

Level 2 Metric: Upside Source Adaptability
Metric Definition
The maximum sustainable percentage increase in raw material quantities that can be acquired/received in 30
days.
Upside Source
Level 2 Adaptability
Additional source volumes obtained in 30 days

Current source volumes
Procurement staff availability

Productivity-purchase orders per FTE
Amount additional staff recruited/hired/trained in 30 days

Constraint
Current on-hand inventories (Raw, Purchased FG)
Factors
Additional demand sourcing - supplier constraints.
Current sourcing/supplier constraints
Amount additional capital obtained in 30 days
Current purchase order cycle times
Amount of inventory (Raw, Purchased FG) obtained in 30 days
Purchase order cycle time reestablished and sustain in 30 days

Least quantity sustainable when considering all components
Calculation
Data Collection

Discussion
Source: Input
Current elements needed to fully understand future requirements, to establish the volume delta that can be
sustained based on the question “How much of an increase in quantities sourced (expressed as a
percentage) can the company sustain, given 30 days?” These elements are mainly output metrics from
other attributes . . . responsiveness, reliability, cost, asset management.
Demand
Staffing
Capital
Ö Credit line
Ö Cash on hand
Materials
Cycle Time
Source: Resource Availability Assessment & Ramp-up/Lead Time
Elements needed to establish delta in resources and what can be ramped up and sustained within 30 days
based on the question “How much of an increase in quantities sourced (expressed as a percentage) can the
company sustain, given 30 days”
Demand:
o Additional source volume to be determined given ramped up resources below
Staffing
o How much staff can be recruited/hired and trained fill gap between underutilized FTE’s and FTE’s
needed to increase and sustain quantities sourced given 30 days
Capital
Ö Credit line
Ö Cash on hand
o How much capital can be obtained to increase quantities sourced given 30 days
Materials
Ö Time required to find/obtain additional sources
o All else equal in make, deliver, return, how much inventory (raw material and purchased finished
goods) can be obtained, delivered and phased in and sustained for order fulfillment, including safety
stock given 30 days.
Cycle Time
o Procurement order cycle time reestablished and sustained for increased quantities sourced given
30 days.

Level 2 Metric: Upside Make Adaptability
Metric Definition
The maximum sustainable percentage increase in production that can be achieved in 30 days with the
assumption of no raw material constraints.
Level 2 Upside Make Adaptability
Current make volume Additional make volume

Internal and External manufacturing

equipment capacity needed for current make Amount additional labor recruited/hired/trained in 30 days
volume

Factors
Current inventory on hand (WIP, FG)
Amount additional equipment obtained in 30 days
Amount additional internal space obtained in 30 days
Amount supplemental outsourced or leased resources or facilities obtained in 30 days
Amount additional inventory (raw) received and made (WIP, FG) in 30 days
Manufacturing cycle time reestablished and sustained in 30 days


Calculation
Data Collection
Discussion
Make: Input
sustained based on the question “How much of an increase in quantities produced (expressed as a percentage)
can the company sustain, given 30 days?” These elements are mainly output metrics from other attributes . . .
Demand
Labor
Capital/Assets
Ö Credit line
Ö Cash on hand
Materials
Cycle Time
o Current manufacturing cycle time (all else equal including procurement order cycle time and supplier
lead time)
Make: Resource Availability Assessment & Ramp-up/Lead Time

based on the question “How much of an increase in quantities produced (expressed as a percentage) can the
company sustain, given 30 days”
Demand:
o Additional make volume to be determined given increased resources below
Labor
o How much labor can be recruited/hired and trained fill gap between underutilized FTE’s and FTE’s
needed to increase and sustain quantities produced given 30 days
Capital/Assets
Ö Credit line
Ö Cash on hand
o How much capital can be obtained to fill gap between underutilized asset capacity and assets needed
to increase and sustain quantities produced given 30 days
o How much assets/capacity can be obtained to fill gap between underutilized asset capacity and assets

needed to increase and sustain quantities produced given 30 days
Ö Co-packers
o How much supplemental outsourced or leased resources or facilities can be obtained to increase and
sustain quantities produced given 30 days
Materials
o All else equal in source, deliver and return, how much raw material inventory can be received and
phased into manufacturing and produced into WIP and FG inventory, and sustained for order fulfillment,
including safety stock given 30 days.
Cycle Time
o Manufacturing cycle time reestablished and sustained for increased quantities produced given 30 days.

Level 2 Metric: Upside Deliver Adaptability
Metric Definition
The maximum sustainable percentage increase in quantities delivered that can be achieved in 30 days with
the assumption of unconstrained finished good availability.
Upside Deliver
Current delivery volume Additional delivery volume

Internal and External (3PL) equipment Amount labor recruited/hired/trained in 30 days

capacity needed for current delivery volume

Constraint
Factors
Amount of additional equipment obtained in 30 days
Amount of additional internal space obtained in 30 days
Amount supplemental outsourced or leased resources or facilities obtained in 30 days
Amount increase in inventory (FG) obtained in 30 days
Logistics order cycle time reestablished and sustained in 30 days


Calculation

Data Collection
Discussion
Deliver: Input
sustained based on the question “How much of an increase in quantities delivered (expressed as a
Demand
Labor
Capital/Assets
Ö Credit line
Ö Cash on hand
Materials
Cycle Time
Ö Transit time
Deliver: Resource Availability Assessment & Ramp-up/Lead Time

based on the question “How much of an increase in quantities delivered (expressed as a percentage) can
the company sustain, given 30 days”
Demand:
o Additional delivery volume to be determined given increased resources below
Labor
o How much labor can be recruited/hired and trained fill gap between underutilized FTE’s and FTE’s
needed to increase and sustain quantities delivered given 30 days
Capital/Assets
Ö Credit line
Ö Cash on hand
o How much capital can be obtained to fill gap between underutilized asset capacity and assets
needed to increase and sustain quantities delivered given 30 days

o How much assets/capacity can be obtained to fill gap between underutilized asset capacity and
assets needed to increase and sustain quantities delivered given 30 days
Ö Outside carriers
o How much supplemental outsourced or leased resources or facilities can be obtained to increase
and sustain quantities delivered given 30 days
Materials
o All else equal in source, make, return, amount of how much finished goods inventory can be
received/stocked, including safety stock to sustain quantities delivered given 30 days
Cycle Time
o Logistics cycle time reestablished and sustained for increased quantities delivered given 30 days
(all else equal including procurement order cycle time, supplier lead time, manufacturing cycle time,
etc.)
Ö Transit time

Level 2 Metric: Upside Source Return Adaptability
Metric Definition
The maximum sustainable percentage increase in returns of raw materials to suppliers that can be achieved in
30 days.
Upside Source Return

Current source return volume Additional source return volume
Productivity-orders returned per FTE Procurement staff/Logistics labor availability
How much additional staff/labor recruited/hired/trained in 30 days additional staff / labor


Constraint
Factors
How much additional capital obtained in 30 days
Current supplier return order cycle time
How much additional equipment obtained in 30 days
How much additional internal space obtained in 30 days
How much supplemental outsourced (3PL) or leased resources or facilities obtained in 30 days
Supplier return order cycle time reestablished and sustained in 30 days

The component which is the bottleneck determines the least volume for the increase of returns within 30
days. Least quantity sustainable when considering all components
Calculation
Data Collection
Discussion
Source Return: Input
Assuming no supplier constraints, current elements needed to fully understand future requirements, to
establish the volume delta that can be sustained based on the question “How much of an increase in
quantities returned to suppliers (expressed as a percentage) can the company sustain, given 30 days?”
These elements are mainly output metrics from other attributes . . . responsiveness, reliability, cost, asset
management.
Demand
Staff / Labor
o Procurement Staff / Logistics Labor needed to meet current returned volume
Capital/Assets
Ö Credit line
Ö Cash on hand
Cycle Time
o Current supplier return order cycle time
Ö Transit time
Source Return: Resource Availability Assessment & Ramp-up/Lead Time

Assuming no supplier constraints, elements needed to establish delta in resources and what can be ramped
up and sustained within 30 days based on the question “How much of an increase in quantities returned to
suppliers (expressed as a percentage) can the company sustain, given 30 days”
Demand:
o Additional supplier return volume to be determined given increased resources below
Staff / Labor
o Procurement staff / Logistics labor availability (underutilized FTE’s)
o How much procurement staff/logistics labor can be recruited/hired and trained fill gap between
underutilized FTE’s and FTE’s needed to increase and sustain quantities returned to suppliers given
30 days
Capital/Assets
Ö Credit line
Ö Cash on hand

needed to increase and sustain quantities returned to suppliers given 30 days
assets needed to increase and sustain quantities returned to suppliers given 30 days
Ö Outside carriers
and sustain quantities returned to suppliers given 30 days
Cycle Time
o Source return cycle time reestablished and sustained for increased quantities returned to suppliers
given 30 days
Ö Transit time

Level 2 Metric: Upside Deliver Return Adaptability
Metric Definition
The maximum sustainable percentage increase in returns of finished goods from customers that can be
achieved in 30 days.
Upside Deliver Return

Current deliver return volume Additional deliver return volume
Productivity-orders returned per FTE Customer Service staff/Logistics labor availability
How much additional staff/labor recruited/hired/trained in 30 days
Internal and External (3PL) equipment capacity Current internal equipment capacity utilization
Current internal storage capacity utilization

needed for current return volume Capital availability
Constraint
Factors
Current capital requirements How much additional capital obtained in 30 days
Current customer return order cycle time How much additional equipment obtained in 30 days
How much additional internal space obtained in 30 days
How much supplemental outsourced (3PL) or leased resources or facilities obtained In 30 days
Customer return order cycle time reestablished and sustained in 30 days

The component which is the bottleneck determines the least volume for the increase of returns within 30
days. Least quantity sustainable when considering all components
Calculation
Data Collection
Discussion
Deliver Return: Input
Assuming no customer constraints, current elements needed to fully understand future requirements, to
establish the volume delta that can be sustained based on the question “How much of an increase in
quantities returned from customers (expressed as a percentage) can the company sustain, given 30 days?”
These elements are mainly output metrics from other attributes . . . responsiveness, reliability, cost, asset
management.
Demand
Staff / Labor
o Customer Service Staff / Logistics Labor needed to meet current returned volume
Capital/Assets
Ö Credit line
Ö Cash on hand
Cycle Time
o Current customer return order cycle time
Ö Transit time
Deliver Return: Resource Availability Assessment & Ramp-up/Lead Time

Assuming no customer constraints, elements needed to establish delta in resources and what can be
ramped up and sustained within 30 days based on the question “How much of an increase in quantities
returned from customers (expressed as a percentage) can the company sustain, given 30 days”
Demand:
o Additional customer return volume to be determined given increased resources below
Staff / Labor
o Customer Service staff / Logistics labor availability (underutilized FTE’s)
o How much customer service staff/logistics labor can be recruited/hired and trained fill gap between
underutilized FTE’s and FTE’s needed to increase and sustain quantities returned from customers
given 30 days
Capital/Assets
Ö Credit line
Ö Cash on hand

needed to increase and sustain quantities returned from customers given 30 days
assets needed to increase and sustain quantities returned from customers given 30 days
Ö Outside carriers
and sustain quantities returned from customers given 30 days
Cycle Time
o Deliver return cycle time reestablished and sustained for increased quantities returned to suppliers
given 30 days
o Customer return order processing cycle time (customer service and logistics)
Ö Transit time

Level 1 Metric: Downside Supply Chain Adaptability
Metric Definition
The reduction in quantities ordered sustainable at 30 days prior to delivery with no inventory or cost
penalties.
Note: 30 days is an arbitrary number provided for benchmarking purposes. For some industries and some
organizations 30 days may be in some cases unobtainable or in others too conservative.
Level 1 Downside Supply Adaptability
Level 2 Downside Source Downside Make Downside Deliver

Adaptability Adaptability Adaptability

The calculation of downside supply chain adaptability requires the calculation to be based on the least
reduction sustainable when considering Source, Make, and Deliver components.
Downside Source Adaptability: The raw material quantity reduction sustainable at 30 days prior to delivery
with no inventory or cost penalties.
Downside Make Adaptability: The production reduction sustainable at 30 days prior to delivery with no
Downside Deliver Adaptability: The reduction in delivered quantities sustainable at 30 days prior to delivery
with no inventory or cost penalties.

Downside Source Adaptability + Downside Make Adaptability + Downside Deliver Adaptability
Calculation
Data Collection
Adaptability measures are assumption based on historic events. Some elements can be measured and
taken as a basis for further considerations.
Discussion
The calculation of Supply Chain Adaptability requires the calculation to be the least quantity sustainable
when considering Source, Make, Deliver and Return components.
P&L Impact
Ö Revenue
Ö COGS
Ö SGA
Balance Sheet Impact
Ö Inventory

Level 2 Metric: Downside Source Adaptability
Metric Definition
The raw material quantity reduction sustainable at 30 days prior to delivery with no inventory or cost penalties.
Downside Source
Adaptability
Level 2
Current source volumes Reduced source volumes accomplished in 30 days
Productivity-purchase orders per FTE Procurement staff availability
Current capital requirements Amount of staff that can be laid-off in 30 days
Current on-hand inventories (Raw, Purchased FG) Capital availability

Constraint
Factors
Current sourcing/supplier constraints Current Capital requirements (accounting policy)
Current purchase order cycle times Demand sourcing - supplier constraints.
Amount decrease in inventory (Raw, Purchased FG) obtained in 30 days
Purchase order cycle time reestablished and sustained in 30 days

Least quantity reduction sustainable when considering all components
Calculation
Data Collection

Discussion
Source: Input
sustained based on the question “How much of a reduction in quantities sourced (expressed as a
Demand
Staffing
Capital
Materials
Cycle Time
Source: Resource Availability Assessment & Ramp-down/Lead Time

Elements needed to establish delta in resources and what can be ramped down and sustained at 30 days
prior to delivery based on the question “How much of a decrease in quantities sourced (expressed as a
percentage) can the company sustain without inventory or cost penalties, given 30 days notice prior to
delivery”
Demand:
o Reduced source volume to be determined given ramped down resources below
Staffing
o How much staff can be laid-off or diverted to other activities, without cost penalty, to ramp down to
decreased quantities delivered given 30 days notice
Capital
Ö Accounting procedures for selling/diverting/recycling assets
Materials
Ö Time required to ramp down supplier inventory
o How much inventory (raw material and purchased finished goods) can be returned, sold or diverted
without cost penalty to ramp down to decreased quantities delivered given 30 days notice
Cycle Time
o Procurement order cycle time reestablished and sustained for decreased quantities sourced given
30 days.

Level 2 Metric: Downside Make Adaptability
Metric Definition
The production reduction sustainable at 30 days prior to delivery with no inventory or cost penalties.
Level 2 Upside Make Adaptability
Current make volume Reduced make volume

Internal and External manufacturing

equipment capacity needed for current make Amount labor that can be laid off in 30 days
volume

Capital Requirements (Acct/Finance Policy)

Factors
Amount of equipment recycled, diverted or sold in 30 days
Amount internal space subleased or sold in 30 days
Current inventory on hand (WIP, FG) Supplemental outsource/lease termination ability
Amount supplemental outsourced or leased resources or facilities terminated in 30 days
Amount reduced in inventory made (WIP, FG) in 30 days
Manufacturing cycle time reestablished and sustained in 30 days

Calculation
Data Collection
Discussion
Make: Input
Current elements needed to fully understand future requirements, to establish the volume delta that can
be sustained based on the question “How much of a reduction in quantities produced (expressed as a
Demand
Labor
Capital/Assets
Materials
Cycle Time
o Current manufacturing cycle time (all else equal including procurement order cycle time and
supplier lead time)
Make: Resource Availability Assessment & Ramp-down/Lead Time

prior to delivery based on the question “How much of a decrease in quantities produced (expressed as a
delivery”
Demand:
o Reduced make volume to be determined given ramped down resources below
Labor
o How much labor can be laid-off or diverted to other activities, without cost penalty, to ramp down
to decreased quantities delivered given 30 days notice
Capital/Assets

Ö Finance Procedures (outsource vs. in-source, make vs. buy, lease vs. purchase) and
their effect upon ability to terminate leases or sell capital equipment assets.
o How many capital equipment assets can be recycled, diverted or sold or subleased without cost
penalty, to ramp down to decreased quantities delivered given 30 days notice
Ö Co-packers
o How much supplemental outsourced or leased resources or facilities can be terminated to ramp
down to decreased quantities delivered given 30 days notice
Materials
o All else equal in source, deliver and return, how much manufacturing quantities (WIP and FG
inventory), including safety stock can be ramped down to decreased order fulfillment quantities
given 30 days notice.
Cycle Time
o Manufacturing cycle time reestablished and sustained for decreased quantities produced given
30 days.

Level 2 Metric: Downside Deliver Adaptability
Metric Definition
Downside Deliver Adaptability = The reduction in delivered quantities sustainable at 30 days prior to delivery with
no inventory or cost penalties.

Downside Supply Adaptability
Level 1
Downside Deliver
Current delivery volume Reduced delivery volume

Internal and External (3PL) equipment capacity Amount labor that can be laid off in 30 days
needed for current delivery volume

Capital Requirements (Acct/Finance Policy)

Factors Amount of equipment recycled, diverted or sold in 30 days
Amount internal space subleased or sold in 30 days
Supplemental outsource/lease termination ability
Amount supplemental outsourced or leased resources or facilities terminated in 30 days
Amount decrease in inventory (FG) obtained in 30 days
Logistics order cycle time reestablished and sustained in 30 days

Calculation
Data Collection
Discussion
Deliver: Input Elements
Current elements needed to fully understand future requirements, to establish what can be ramped down
and sustained at 30 days prior to delivery, based on the question “How much of a decrease in quantities
delivered (expressed as a percentage) can the company sustain without inventory or cost penalties, given
30 days notice prior to delivery?” These elements are mainly output metrics from other attributes . . .
Demand
Labor
Capital/Assets
Materials
Cycle Time
Ö Transit time
Deliver: Availability Assessment & Ramp-down/Lead Time

prior to delivery based on the question “How much of a decrease in quantities delivered (expressed as a
delivery”
Demand:
o Reduced delivery volume to be determined given ramped down resources below
Labor

o How much labor can be laid-off or diverted to other activities, without cost penalty, to ramp down to
decreased quantities delivered given 30 days notice
Capital/Assets
o Facilities, space
Ö Finance Procedures (outsource vs. in-source, make vs. buy, lease vs. purchase) and their
effect upon ability to terminate leases or sell capital equipment assets.
o How many capital equipment assets can be recycled, diverted or sold without cost penalty, to ramp
down to decreased quantities delivered given 30 days notice
Ö Outside carriers
o How much supplemental outsourced or leased resources or facilities agreements can be terminated
to ramp down to decreased quantities delivered given 30 days notice
Materials
o All else equal in source, make, return, how much inventory can be shipped or diverted without cost
penalty to ramp down to decreased quantities delivered given 30 days notice (all else equal in
source and make, includes safety stock)
Cycle Time
o Logistics cycle time reestablished and sustained for decreased quantities delivered given 30 days
(all else equal including procurement order cycle time, supplier lead time, manufacturing cycle time,
etc.)
Ö Transit time

Performance Attribute: Supply Chain Costs
Level 1 Metric: Total Supply Chain Management Cost
Metric Definition
The sum of the costs associated with the SCOR Level 2 processes to Plan, Source, Deliver, and Return.
Note - Cost of Raw Material and Make Costs are generally accounted for in COGS. It is recognized
that there is likely to be overlap/ redundancy between supply chain management costs and COGS.
Level 1 Total Supply Chain Management Cost
Cost to Plan Cost to Make Cost to Return

Level 2
Cost to Source
Cost to Deliver

TSCMC = Cost to Plan + Source + Make + Deliver + Return
Calculation
TSCMC = Sales – Profits – Cost to Serve (e.g., marketing, selling, administrative)
Data Collection
Resource expenses (e.g., salaries, supplies, etc.) are initially captured in the organization’s general ledger
accounting system. Then these expenses are traced and assigned (i.e., distributed) to the organizations
“horizontal” core processes based employee time and non wage-related factors (drivers; e.g., # of units
consumed). Data for these expense distribution assignments are collected from (1) employee time collection
systems (or % split estimates), and (2) operational systems (e.g., enterprise resource planning [ERP]
systems).
Discussion
Collecting transactional information, primarily resource expenses and operational “drivers”, is now
commonplace. The challenging task is to logically transform these expenses into calculated costs of the
“horizontal” processes based on cause-and-effect relationships without the temptation of using broad
averages or arbitrary factors.

Level 2 Metric: Cost to Plan Process Number: P1, P2, P3, P4, P5
Metric Definition
The sum of the costs associated with Plan.
Level 1 Total Supply Chain Management Cost (TSCMC)
Level 2 Cost to Plan
Cost to Plan Source Cost to Plan Make
Level 3 Cost to Plan Deliver Cost to Plan Return
Cost to Plan Supply Chain

Cost to Plan = Sum of Cost to Plan (Plan + Source + Make + Deliver + Return)
Calculation
Data Collection
systems).
Discussion

Level 2 Metric: Cost to Source Process Number: S1, S2, S3
Metric Definition
The sum of the costs associated with Source.
Level 2 Cost to Source
Supplier Management Material Acquisition Management

(See processes under Source) (See processes under Source)
Level 3

Cost to Source = Sum of Cost for (Supplier Management + Material Acquisition Management)
Calculation
- Supplier Management = material planning + planning procurement staff + supplier negotiation and
qualification + etc.
- Material Acquisition Management = bidding and quotations + ordering + receiving + incoming
material inspection + material storage + payment authorization + sourcing business rules and rqmts. +
inbound freight and duties + etc.
Data Collection
systems).
Discussion

Level 2 Metric: Cost to Make Process Number: M1, M2, M3
Metric Definition
The sum of the costs associated with Make.
Level 2 Cost to Make
Level 3 See “Cost of Goods Sold”
Calculation
Data Collection
Discussion

Level 2 Metric: Cost to Deliver and/or Install Process Number: D1, D2, D3
Metric Definition
The sum of the costs associated with Deliver and/or Install
Level 2 Cost to Deliver
Sales (order) Management Customer Management

Level 3 (See processes under Deliver) (See processes under Deliver)

Cost to Deliver = Sum of Cost of ( Sales order management + Customer Management )
Calculation
- Sales order management = inquiry & quotations + order entry & maintenance + channel
management + order fulfillment + distribution + transportation + outbound freight and duties +
installation + customer invoicing / accounting + new product release / phase-in + etc.
- Customer Management = financing + post-sales customer service + handling disputes + field
repairs + enabling technologies + etc.
Data Collection
systems).
Discussion

Level 2 Metric: Cost to Return Process Number: SRx, DRx
Metric Definition
Cost to Return Defective Product - The sum of the costs associated with returning a defective product to the
supplier.
Cost to Return Excess Product - The sum of the costs associated with returning excess product to the
supplier.
Cost to Return MRO Product - The sum of the costs associated with returning MRO product to the supplier.
Level 2 Cost to Return
Cost to Source Return Cost to Deliver Return

Level 3

Cost to Return = Sum of Cost to Return ( to Sources + from Customers )
Calculation
- Cost to Return to Source (SRx) = Verify Defective Product Costs + Disposition of Defective Product
Costs + Identify MRO Condition Costs + Request MRO Return Authorization Costs + Schedule
MRO Shipment Costs + Return MRO Product Costs + etc.
- Cost to Return From Customer (DRx) = Authorization Costs + Schedule Return Costs + Receive
Costs + Authorize MRO Return Costs + Schedule MRO Return Costs + Receive MRO Return Costs
+ Transfer MRO Product Costs + etc.
Data Collection
systems).
Discussion

Level 1 Metric: Cost of Goods Sold
Metric Definition
The cost associated with buying raw materials and producing finished goods. This cost includes direct
costs (labor, materials) and indirect costs (overhead).
Level 1 Cost of Goods Sold (COGS)
Cost to Make
Level 2

Cost of Goods Sold (COGS) = Cost to Make
Calculation
COGS = direct material costs + direct labor costs + indirect costs related to making product
Data Collection
systems).
Discussion

Level 2 Metric: Cost to Make Process Number: M1, M2, M3
Metric Definition
The sum of the costs associated with Make.
Level 1 Cost of Goods Sold (COGS)
Level 2 Cost to Make
Direct Material Cost Direct Labor Cost
Level 3
Indirect Cost Related to Production

Cost to Make = Sum of Direct Material, Direct Labor, and Direct non-Material Product-related Cost
(equipment) and of Indirect Product-related Cost
Calculation
Data Collection
systems). In some cases, (1) direct material data is maintained at the “unit level” in bills of material (BOMs)
or recipe formulas; and (2) direct labor and direct non-material product (equipment) data is maintained at
the “unit level” in labor/machine routings or process sheets.
Discussion
commonplace. The challenging task is to logically transform these expenses into calculated costs of (1) the
“horizontal” processes (referenced in Lean environments as “value-stream mapping”), and (2) products (or
intermediate outputs) – with both types of calculations based on cause-and-effect relationships without the
temptation of using broad averages or arbitrary factors.

Performance Attribute: Supply Chain Asset Management
Level 1 Metric: Cash-to-Cash Cycle Time
Metric Definition
The time it takes for an investment made to flow back into a company after it has been spent for raw
materials. For services, this represents the time from the point where a company pays for the
resources consumed in the performance of a service to the time that the company received payment
Cash-to-Cash Cycle Time

Level 1
Days Payable Outstanding

Days Sales Outstanding
Level 2
Inventory Days of
Supply

The longer the cash-to-cash cycle, the more current assets needed (relative to current liabilities) since it
takes longer to convert inventories and receivables into cash. In other words, the longer the cash-to-cash
cycle, the more net working capital required.
The Cash-to-Cash Cycle time is measured by converting into days the supply of inventory in stock and the
number of days outstanding for accounts receivable and accounts payable. The inventory days of supply is
added to the days outstanding for accounts receivable. The accounts payable days outstanding is subtracted
from this total to determine the cash-to-cash cycle time.
Calculation
Cash-to-Cash Cycle Time = Inventory Days of Supply + Days Sales Outstanding – Days Payable Outstanding
Level 2 Metrics:
Inventory Days of Supply = the amount of inventory (stock) expressed in days of sales. The [5 point rolling
average of gross value of inventory at standard cost] / [annual cost of goods sold (COGS) / 365]
Example: If 2 items a day are sold and 20 items are held in inventory, this represents 10 days’ (20/2) sales in
inventory.
(Other names: Days cost-of-sales in inventory, Days’ sales in inventory)
Days Sales Outstanding = the length of time from when a sale is made until cash for it is received from customers.
The amount of sales outstanding expressed in days. The [5 point rolling average of gross accounts receivable
(AR)] / [total gross annual sales / 365].
Example: If $5000 worth of sales were made per day and $50,000 worth of sales were outstanding, this would
represent 10 days’ ($50,000/$5000) of sales outstanding.
(Other names: Days sales in Accounts receivables)

Days Payable Outstanding = the length of time from purchasing materials, labor and/or conversion resources
until cash payments must be made expressed in days. The [5 point rolling average of gross accounts payable
(AP)] / [total gross annual material purchases / 365].
(Other names: Average payment period for materials, Days purchases in accounts payable, Days’ outstanding
in accounts payable)
The “5 point rolling average” calculation uses a combination of both historical and forward-looking
data. This means that the rolling average value has to be calculated based on the average over the
four previous quarters and the projection for the current or next quarter.
The 5 point rolling average calculation is:

[Sum of the 4 previous quarters + projection for next quarter) / 5]
Data Collection
Unlike the other SCOR attributes, where data requirements are specified, typically all of the cash-to-cash cycle
time source data is already captured by business operating systems:
- general ledger system
- accounts receivable system
- accounts payable system
- purchasing system
- production reporting system
- customer relationship management system
As a result, information is ‘calculated’ by importing data from these systems and transforming them into the
prescribed analytics/information. The transformation is accomplished using business rules.
Discussion
Cash-to-cash Cycle Time is a value metric used to measure how efficiently a company manages its working
capital assets.
This metric is a generally accepted Supply Chain metric within many industries and is used to benchmark
supply chain asset management performance.
The term “5 point annual average” can be confusing in that it can imply a measure over a year’s period of time
when the data points are taken over 5 quarters. The intent of the approach is to smooth the seasonal peaks and
valleys over time and to balance projected data with historical data. The measurement can be taken quarterly
or at any given consistent time frame.

Performance Attribute: Supply Chain Asset Management
Level 1 Metric: Return on Supply Chain Fixed Assets
Metric Definition
Return on Supply Chain Fixed Assets measures the return an organization receives on its invested capital in
supply chain fixed assets. This includes the fixed assets used in Plan, Source, Make, Deliver, and Return.
Return on Supply Chain Fixed Assets

Level 1
Supply Chain Revenue Supply Chain Management Costs

Level 2
Cost of Goods Sold Supply Chain Fixed Assets
Source Fixed Asset Value
Make Fixed Asset Value
Deliver Fixed Asset Value

Level 3
Return Fixed Asset Value
Plan Fixed Asset Value

The return on supply chain fixed assets is measured by monetizing the supply chain revenue, cost of goods sold
and supply chain management costs to determine the profit from the respective supply chain. This amount is
divided by the supply chain fixed assets to determine the return generated from the respective supply chain.
Calculation
Return on Supply Chain Fixed Assets = (Supply Chain Revenue – COGS – Supply Chain Management Costs) /
Supply-Chain Fixed Assets
"Supply Chain Revenue" is used in the metric rather than just Net Revenue. SC Revenue is calculated as:
Supply Chain Revenue - COGS - Total Supply Chain Management Costs. This provides the revenue generated
through the supply chain less the total costs associated with the supply chain.
There is a need for a more specific “revenue” number than “Net Revenue” for use in the “Supply Chain

Revenue" level 2 metric. Net Revenue could include revenue from sources other than the supply chain, such as
investments, leasing real estate, court settlements, etc... Supply Chain Revenue will be used and will be only the
portion of Net Revenue that is generated by the specific supply chain being measured and analyzed.
Level 2 Metrics
Supply-Chain Revenue
Operating revenue generated from a supply chain. This does not include non-operating revenue, such as leasing
real estate, investments, court settlements, sale of office buildings, etc...
COGS
Calculation - Refer to the section for COGS in the Attribute for Costs.
Supply Chain Management Costs

Calculation - refer to the section for Supply-Chain Management Costs in the Attribute for Costs.
Supply Chain Fixed Assets

Source Fixed Asset Value +
Make Fixed Asset Value +
Deliver Fixed Asset Value +
Return Fixed Asset Value +
Plan Fixed Asset Value
Level 3 Metrics
Plan Fixed Asset Value- The current value of the supply chain assets used in supply chain integration
(See EP.5)
Source Fixed Asset Value - The current value of the supply chain assets used in the Source process.
(See ES.5)
Make Fixed Asset Value- The current value of the supply chain assets used in the Make process. (See EM.5)
Deliver Fixed Asset Value - The current value of the supply chain assets used in the Deliver process.
(See ED.5)
Return Fixed Asset Value - The current value of the supply chain assets used in the Return process.
(See ER.5)
A Revised Capital Plan is an output of the Manage Integrated Supply Chain Fixed Assets (EP.5) process
element and would contain supply chain capital asset information that could be used in measuring the Supply
Chain Fixed Assets.
Data Collection
Unlike the other SCOR attributes, where data requirements are specified, typically all of the return on working
capital’s source data is already captured by business operating systems:
- fixed asset system
- purchasing system
- labor reporting system
In order to measure Return on Supply Chain Fixed Assets, the investment in supply chain capital assets needs
to be known. This requires a clear understanding of what is a “supply chain fixed asset”. SCOR Ex.5 process
elements were used since these are all focused on managing SC capital assets. It is the assets managed in these
Enable processes that comprise Supply Chain Fixed Assets. The value of these assets is the denominator of the
metric.

Discussion
Range of fixed assets used in an organization that have the character of permanency rather than being rapidly
replaced (or expensed); examples include land, warehouse, trucks, buildings, investments, and plant and
machinery.
Fixed assets used to operate the Supply Chain in each of the categories (P, S, M, D, R) are tracked within the
Ex.5 process elements. A Revised Capital Plan is an output of the Manage Integrated Supply Chain Fixed
Assets (EP.5) process element and would contain supply chain capital asset information that could be used in
measuring the Supply Chain Fixed Asset Value.

Performance Attribute: Supply Chain Asset Management P1, P2, P3, P4, S1, S2,
Level 1 Metric: Return on Working Capital S3, M1, M2, M3, D1,
D2, D3, D4
Metric Definition
Return on working capital is a measurement which assesses the magnitude of investment relative to a company’s
working capital position verses the revenue generated from a supply chain. Components include accounts
receivable, accounts payable, inventory, supply chain revenue, cost of goods sold and supply chain management
costs.

Level 1
Level 2
Supply Chain Revenue

Accounts Receivable
(Sales Outstanding)
Inventory
Accounts Payable Cost of Goods Sold

(Payables Outstanding)
SC Management Costs

The return on working capital is measured by monetizing the supply chain profit and dividing into the calculated
amount the supply chain working capital position.
Calculation
Return on Working Capital = (Supply Chain Revenue – COGS – Supply Chain Management Costs) / (Inventory +
Accounts Receivable – Accounts Payable)
Level 2 Metrics:
Supply-Chain Revenue
Operating revenue generated from a supply chain. This does not include non-operating revenue, such as leasing
real estate, investments, court settlements, sale of office buildings, etc...
COGS
Calculation - Refer to the section for COGS in the Attribute for Costs.
Supply Chain Management Costs

Calculation - refer to the section for Supply-Chain Management Costs in the Attribute for Costs.
Inventory = the amount of inventory (stock) expressed in dollars. The [5 point rolling average of gross value of
inventory at standard cost]

Sales Outstanding = the amount of accounts receivable outstanding expressed in dollars. The [5 point rolling average
of gross accounts receivable (AR)]
Payables Outstanding = expressed in dollars, the amount of purchased materials, labor and/or conversion resources
that are to be paid (accounts payable). The [5 point rolling average of gross accounts payable (A/P)]
The “5 point rolling average” calculation uses a combination of both historical and forward-looking
data. This means that the rolling average value has to be calculated based on the average over the four
previous quarters and the projection for the current or next quarter.
The 5 point rolling average calculation is: [Sum of the 4 previous quarters + projection for next quarter)
/ 5]
Data Collection
Unlike the other SCOR attributes, where data requirements are specified, typically all of the return on working
capital’s source data is already captured by business operating systems:
- accounts receivable system
- accounts payable system
- purchasing system
- labor reporting system
Discussion
"Supply Chain Revenue" is used in the metric rather than just Net Revenue. SC Revenue is calculated as: Supply
Chain Revenue - COGS - Total Supply Chain Management Costs. This provides the revenue generated through the
supply chain less the total costs associated with the supply chain. There is a need for a more specific “revenue”
number than “Net Revenue” for use in the “Supply Chain Revenue" level 2 metric. Net Revenue could include
revenue from sources other than the supply chain, such as investments, leasing real estate, court settlements, etc...
Supply Chain Revenue will be used and will be only the portion of Net Revenue that is generated by the specific
supply chain being measured and analyzed.

APPENDIX B
Best Practices
Definition of a Best Practice

A current, structured, proven and repeatable method for making a positive impact on desired operational results.
Current - Must not be emerging (bleeding edge) and must not be antiquated
Structured - Has clearly stated Goal, Scope, Process, and Procedure
Proven - Success has been demonstrated in a working environment.
Repeatable - The practice has been proven in multiple environments.
Method
Used in a very broad sense to indicate: business process, practice, organizational strategy, enabling technology,
business relationship, business model, as well as information or knowledge management.
Positive impact on desired operational results
The practice shows operational improvement related to the stated goal and could be linked to Key Metric(s). The
impact should show ether as gain (increase in speed, revenues, quality) or reduction (resource utilizations, costs,
loss, returns, etc.).
(Defined by SCC Best Practices Team, 2003)

Best Practice Available-to-Promise (ATP)
SCOR Process(es) D1.3 (Reserve Resources and Determine Delivery Date)
Best Practice Description
Available-to-Promise (ATP) provides an availability and feasibility check concerning a customer request or a
customer order whereas three outputs can be distinguished:
1. the soonest delivery date concerning the customer request,
2. the confirmation of desired delivery date, item quantity, and item configuration
3. the selection of alternative, but deliverable product variants in case the desired delivery parameters can
not be fulfilled.
ATP is applicable over multiple sites in a global environment. Essentially, it is based on the extrapolation of
the available inventory in all relevant locations over time:
ATP is the uncommitted portion of a company’s inventory and planned production maintained in the master
schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the
first period and is normally calculated for each period, in which an MPS (Master Production Schedule) receipt
is scheduled.
Best Practice Need and Suitability Indicators
ATP is particularly suitable for environments where customers require on-time and fast deliveries.
Additional Comments
Three methods of ATP calculations are used: discrete ATP, cumulative ATP with look-ahead, and cumulative
ATP without look-ahead.
Discrete available-to-promise is calculated based on beginning inventory, planned production according to the
master production schedule (MPS) and customer commitments. For the first period, the available-to-promise is
the sum of the beginning inventory plus the planned production for the first period minus customer
commitments for the first period and all periods following the first period up to, but not including, the next
period for which production has been scheduled in the MPS. For the following periods, there are two
possibilities:
If a master production quantity has been scheduled for the period the available-to-promise is the
quantity scheduled minus all customer commitments for the period and for all following periods up to
but not including, the next period for which a master production quantity has been scheduled.
If no master production quantity has been scheduled for the period the available-to-promise is zero,
even if deliveries in the period have been promised. The promised shipments often are shown as
backlog (customer commitments) in the period with the most recent production (MPS).
Cumulative available-to-promise is a calculation based on the available-to-promise (ATP) figure in the master
schedule. Two methods of computing the cumulative available-to-promise are used, with and without look-
ahead calculation. The cumulative with look-ahead ATP equals the ATP from the previous period plus the MPS
of the period minus the sum of the differences between the backlogs and MPSs of all future periods until, but
not to include, the period where point production exceeds the backlogs. The cumulative without look-ahead
procedure equals the ATP in the previous period plus the MPS, minus the backlog in the period being
considered.

Impact on Supply Chain Performance Attributes/Metrics
Attribute Experienced Impact
improves on-time delivery resulting in a higher service level

Reliability
(to commit date).
reduces cycle times of certain administrative processes

Responsiveness
(e.g. definition of delivery date, order placement)
allows to determine whether flexibility is appropriate to cover future demand fluctuations and to
Flexibility
prioritize activities accordingly.
Costs None (except for less contract penalties caused by late deliveries)
Visibility of demand vs. production schedule and available inventory can result in better
Asset Management
inventory planning and lower inventory levels.
Key Best Practice Success Factors
Technology
Available-to-promise requires implementation in an ERP-/SCM-/APS-software solution.
Features
Other Success
Appropriate data management guarantees exact ATP quantities.
Factors
Additional Resources
Cox, J. F.; Blackstone J. H. (2004): American Production and Inventory Control Society (APICS) Dictionary, 11th
edition, APICS – The Educational Society for Resource Management, Alexandria, VA
Schönsleben, P. (2003): Integral Logistics Management – Planning & Control of Comprehensive Supply Chains,
St. Lucie Press, Boca Raton, FL, p. 233-235

Best Practice Carrier Agreements
S1.2, S2.2, S3.2 (Receive Product), ES.2 (Assess Supplier Performance), ES.7 (Manage
SCOR Process(es) Supplier Network ), ES.9 (Manage Supplier Agreements), D1.11, D2.11, D3.11 (Load
Vehicle & Generate Shipping Documentation)
Carrier agreements are agreements between a company and its domestic and global carriers (for both, inbound
raw materials and outbound finished goods) specifying service levels, payment terms, and other conditions.
Such agreements can be established as part of a larger initiative to decrease raw material and finished goods
inventory, while improving customer service.
Contractual partnership requirements can include:

Perfect Order Fulfillment (as a primary goal),
equipment condition
shipping condition
pick-up and delivery times,
documentation.
Carrier performance in these fields is measured with immediate feedback and monthly formal reports. By
measuring all carriers on a regular basis, trends of performance can be seen. This provides the opportunity to
replace carriers performing “poorly” with those performing “exceptionally”.
Furthermore, a transportation service agreement is signed with all domestic and global carriers. Contract line
items specify on-time delivery, plus the payment requirements for services rendered.
Any company receiving or shipping materials using common or contract carriers such as trucking, shipping,
and airline companies. Also includes internal transportation providers (company owned transportation group).
Additional Comments
The top performance of carriers is due to a thorough knowledge of the industry and the requirements of a
company, as well as the contract that is used with the carriers. Without a competent transportation manager,
the contract, alone, would be of little value. The combination of trained, competent personnel and written
agreements result in superior performance.

Better partnerships with and management of carriers typically results in improved on time
Reliability
deliveries.
Carrier agreements often improve the ability to quickly book and execute transportation,
Responsiveness
reducing lead times.
Partnerships tend to work both ways, leading carriers to make additional capacity available to
Flexibility
partners when needed, improving the ability to respond quickly to demand increases.
Carrier agreements provide a tool for both shipper and carrier to identify and take advantage of
Costs
mutual cost savings.
Asset Management More efficient use of transportation assets to move customer orders.
From the carrier side, their tracking systems support performance measurement to a different
Technology
degree (EDI, web-enabled carriers). Continuous on line tracking of shipment would be
Features
beneficial.
Anyone interfacing with the carrier needs to be familiar with the carrier agreement
specifications.
Other Success
Factors Formal recognition of carriers, for example, they can be certified on basis of six months
reliability/compliance to the agreement. Formal feedback on monthly performance and
immediate feedback on failures to comply with specifications.
None

Best Practice Collaborative Planning, Forecasting and Replenishment (CPFR)
SCOR Process(es) P1 (Plan Supply Chain)
The CPFR reference model provides a general framework for the collaborative aspects of planning, forecasting
and replenishment processes. The model is considered a “guideline” for trading partner collaboration, which
should be tailored specially for the industry and company readiness and maturity.
CPFR defines eight collaboration tasks:

Collaboration Arrangement is the process of setting the business goals for the relationship, defining
the scope of collaboration and assigning roles, responsibilities, checkpoints and escalation
procedures.
The Joint Business Plan then identifies the significant events that affect supply and demand in the
planning period, such as promotions, inventory policy changes, store openings/closings, and product
introductions.
Sales Forecasting projects consumer demand at the point of sale.
Order Planning/Forecasting determines future product ordering and delivery requirements based upon
the sales forecast, inventory positions, transit lead times, and other factors.
Order Generation transitions forecasts to firm demand.
Order Fulfillment is the process of producing, shipping, delivering, and stocking
products for consumer purchase.
Exception Management is the active monitoring of planning and operations for out-of-bounds
conditions.
Performance Assessment calculates key metrics to evaluate the achievement of business goals,
uncover trends or develop alternative strategies.
Based on this general framework, CPFR discusses collaboration scenarios (like replenishment collaboration or
collaborative assortment planning), collaboration roles (who of the two partners involved is responsible for
collaboration tasks), and organizational implications within partner companies.
The CPFR industry standard is sponsored by VICS, the Voluntary Inter-industry Standards body and the
Uniform Code Council, UCC. The standard has also been adopted by the Global Commerce Initiative, GCI.
Companies that heavily rely on demand forecast accuracy and high volume replenishment are primary
beneficiaries of the standard.
Additional Comments
CPFR has primarily been adopted by the retail and consumer package goods industry. Wal-Mart was the
founding company of the process and recently announced adoption by 1,200 of its suppliers. The process has
also been adopted by the grocery industry as well as the chain drug store industry.

Better Store in stock 2% - 8%

Reliability
Better customer service 2% - 8%
Responsiveness Faster Replenishment Cycle Times 12% - 30%
Flexibility Forecast improvement 20% - 40%
Costs Lower Logistics Cost 3% - 4%
Asset Management Inventory Reduction 10% - 40% (AMR)
VICS CPFR interoperability technology standards documented and published by the CPFR
Technology
Working Group. Standards support EDI 830, EDI 852, and XML Interoperability. Standards
Features
published for data modeling.
Other Success Careful selection of trading partners. Having a joint front-end agreement to refer back to when
Factors the project gets off track.
www.cpfr.org
is the official website for the VICS CPFR Working group. This site contains multiple publications on CPFR as
well as the actual CPFR process mapping guidelines, data model formats, and CPFR presentations.
Suleski, Janet (2001): Beyond CPFR: Retail Collaboration Comes of Age, AMR Research, April 1, 2001.
www.globalscorecard.net
The Global Scorecard. This site provides a Capability Assessment Tool designed to give you a detailed
understanding of your ECR (Efficient Consumer Response) capability and highlight specific improvement
opportunities for your company. ECR was an early foundation for CPFR.
www.drummondgroup.com
The Drummond Group on CPFR interoperability has certified technology companies. Test results are available
on their web site.

Best Practice Co-Located Procurement Representatives
Regionalized Procurement Representatives are positioned in local markets to support corporate / procurement
goals. Companies realize support is needed when cost and delivery objectives are not consistent with
organizational goals. This leading practice involves identifying local procurement personnel to assist in
creating a supply base to meet internal and external product requirements. These local representatives will
perform all procurement related activities for the organization. Co-located procurement personnel bring the
knowledge of the local supply base, understand their organizations demand and supply signals, and
communication capability to work with company global commodity leadership.
For companies expanding their sourcing scope and distance, having personnel local to the market is a crucial
element to maintaining supply chain performance. Local personnel are used to support the understanding of
the demand and supply signals, production and logistics decisions. Companies that have sourced globally,
but have not added local resources find challenges that diminish supply chain response time. Listed are some
of the major factors: 1.) Communication (time, language, cultural) 2.) Lead time, 3.) Hidden Costs (taxes, tariffs,
etc.), 4.) Quality Returns and Repairs, 5.) Political and Geography Risks, 6.) Units of Measure.
Cost is the huge driver in this Best Practice. For example, decisions affecting the supply chain can be made
more accurately and in a timelier manner by experts in the field who can experience the day-to-day activities.
The best practice is most of all suitable for companies that source a large portion of their procurement volume
in low-wage countries with a different culture.
Additional Comments
Regular meetings at least once a year among peers should be organized to share priorities and to align
processes and reapplication opportunities.

Reliability Increase Order Fill Rates
Reduction in Product Lead-Time

Responsiveness Improved Supply Chain Response Time
Improved Source/Make Cycle Time
Improved Production Plan Achievement

Flexibility
Reduced Inventory Obsolescence
Impacts Purchase Order Costs

Costs
Reduced Quality Returns
Increase Capacity Utilization

Asset Management
Decrease Inventory Obsolescence
Accessibility, accuracy, timeliness and visibility of enterprise-wide procurement information.

Technology Features Commercial software (of varying degrees of sophistication) is available to support the
procurement and planning processes.
Other Success
None
Factors
None

Best Practice Convergence of SCOR, Six Sigma and Lean Methodology
SCOR Process(es) affects any SCOR process
SCOR, a cross-industry top-down standardized process analysis model, enables the efficient and effective end-
to-end evaluation of supply chains. By capturing operational baselines and comparing to industry peers and
competitors, SCOR level one metrics provide a balanced measure of performance linked to the bottom line. Metrics
and Best Practices steer teams to proven solutions, and the building block design provides a common language
for both internal and external elements of a supply chain. SCOR therefore serves as a strategic project
identification and prioritization engine for Lean and Six Sigma teams and provides the means to measure
business impact.
The strength of Six Sigma and Lean is producing results. These powerful methodologies can be used to gain
efficiency and construct valuable processes because these disciplines, by their nature, look down at finite
areas, cells, or processes to improve. They cannot look upward at organizational goals and select the best
project on which to work.
SCOR also helps introduce the concepts of Six Sigma and Lean to transactional (non manufacturing) areas not
normally associated with productivity or quality initiatives. With its cross functional makeup a SCOR project
team will focus on reducing variability and eliminate waste in areas such as accounting, customer service, and
sales.
Need to prioritize lean and six sigma project according to their effects on organizational goals.
Additional Comments
This Venn Diagram highlights tools of each methodology:

TOOLS SIX SIGMA
PFMEA ANOVA
(Examples Gage R&R SPC Process Simulation
only) Multi-Vari Analysis Regression Analysis
DOE (Design of Experiments)
Control Plans COPQ/Financial Analysis

7 Basic Quality Tools: Program Mgmt
Pareto Multi-Level
Cause & Effect Pareto Analysis/
Histograms SIPOC
Kaizen Project Mgmt Decomposing
Control Charts Metrics
Kanban Process Mapping/
Scatter Diagrams GAP Analysis
Single Minute Value Stream Mapping/
Graphs Voice of the
Exchange of Geographic Mapping/
Check sheets
Die (SMED) Thread Diagram Customer
PDCA/
Takt Time QFD (Quality Function
SDCA
Poke Yoke Deployment)
Standardized Work/
Best Practices
Reference Model
7 Mgmt Tools: Organization Map
Relations Diagram Supplier/Customer SCORcard – Level One
Affinity Diagram Performance Scorecards Operational Process
Tree Diagram Inter-Company Metrics – Level Two
Matrix Diagram Kanban Diagnostic Metrics – Level
Matrix Data-Analysis CPFR Three
Arrow Diagram
PDPC
LEAN SCOR

Reliability
Responsiveness
Convergence of SCOR, Six Sigma and Lean Methodology (with SCOR as a strategic project
identification and prioritization engine) enables organizations to improve the right
performance attributes, which can be any set of SCOR level one metrics.
Flexibility
See other SCOR Best Practices and especially the Best Practices “Six Sigma” and “Lean
Methodology” for possible impacts.
Costs
Asset Management
Technology Features None
Other Success
None
Factors
There is a Supply Chain Council Special Interest Group on this Best Practice. Please contact the group, if you
would like to contribute to the convergence of SCOR, Six Sigma and Lean Methodology.

Best Practice Cross Docking
D1.8 (Receive Product from Source or Make),
SCOR Process(es) D1.11 (Load Vehicle & Generate Shipping Documentation),
D1.12 (Ship Product)
Cross docking is used in many distribution centers (DC) to increase inventory velocity while maintaining
shipping efficiency. In a traditional DC, the receiving process is disjointed from the shipping process and
storage acts as an intermediary between the two processes. Cross docking actively links the receiving and
shipping processes. In a DC, both cross docking (no storage) and traditional (with storage) operations might
take place.
Cross docking minimizes the need to put incoming inventory into storage and the number of “touches” for
each order. To accomplish this, the receiving activity is linked with open order status. Each inbound shipment
has a planned outbound already scheduled. When an item is received, the system will look to the open order
file to find its outgoing order. The item is moved from receiving directly to the order staging area, order pick
area, or into an outbound vehicle.
Three common types of cross docking are:

1. Trans-shipment: The order received is already packaged for delivery to the customer
Ship
A
Customer A
Receive Move
A B C B
Customer B
C
Customer C
2. Flow-through: Some sortation or break bulk is needed when the order is received
Pick Ship
Receive Allocate Customer A
Customer B
Customer C
3. Merge-in-transit: Current inventory in storage at the DC is added to the incoming order (see separate
Best Practice).
Pick Ship
Storage
Allocate
Receive Customer A
Customer B
Customer C
(Courtesy: Robert Novack, Penn State University, University Park)

Small shipment sizes (economies of scale through bundling shipments)

Constrained distribution center capacity
Perishability of products
Additional Comments
Suppliers usually need to make some type of investment (customized bar codes, special overpacks, or unique
pallet patterns) to participate in cross-docking.

Reliability None
Responsiveness None
Flexibility None
Reduces transportation costs (compared to transportation without cross-dock), because de-

Costs
consolidation at cross-dock for multiple receivers allows shippers to deliver larger shipments
Asset Management Reduces average inventory level and (as a consequence) working capital invested in inventory
Cross docking requires the use of a Warehouse Management System (WMS), which needs to
interface with the order management system. Bar codes and RF scanners will allow the
receiving function at the DC to become more productive.
Technology
Features
The use of EDI messages, especially of ASN´s (Advance Ship Notices) is highly beneficial. The
shipper sends an ASN to the receiver as a notice that a shipment has been sent, allowing the
receiving facility to more productively schedule order picking and outbound deliveries.
Other Success
None
Factors
None

Best Practice Drum-Buffer-Rope Scheduling Technique
M1.1 (Schedule Production Activities) , M2.1 (Schedule Production Activities), M3.2
SCOR Process(es)
(Schedule Production Activities)
Drum-Buffer-Rope (DBR, also referred to as Synchronous Manufacturing, or Constraint Management) is, in the
Theory of Constraints (TOC), a technique used to manage resources to maximize throughput.
The Drum is the system’s constraint (or bottleneck) that sets the pace for the entire organization. Such a
bottleneck determines the final output of the system regardless of the excess capacity that might be available
on the other resources. (In DBR terminology, the drum is also the schedule of the constraint.)
The Drum Buffer is a time offset (raw material will be released earlier than expected by the conventional lead
time) that helps exploit the drum’s capacity. Placing the buffer in front of the drum we reduce/absorb the
impact of uncertainty along the production chain from the gating operations all the way to the constraint. The
drum buffer can be seen as a powerful tool in helping us prevent the drum from starving.
The Rope is the material release schedule tied to the drum. With the rope we make sure that no material is
released to the shop floor without the “prior approval” of the drum. The shop floor has a virtual rope tying the
drum to the gating operations, each time the drum finishes a lot it will pull this rope to ask for more material to
be released. This powerful concept (global management vs. localized approach) has an immediate impact on
both lead time and WIP. Release only what is needed when it is needed!
High Work-in-progress (WIP) with deteriorating throughput

Unpredictable manufacturing lead times (e.g. due to many prioritized production orders)
Mature serial or mass production running at a fixed rate
The technique is mainly suitable for machine-limited capacities.

Additional Comments
In the application of Drum-Buffer-Rope (DBR), the effectiveness of the pace setting operation (drum) is critical
for maximizing throughput. The Overall Equipment Effectiveness (OEE) is the single metric that reflects that
effectiveness. OEE is the result of multiplying
Availability (up-time)
Run time divided by scheduled time (also 1 minus downtime)
Quality Rate (first pass yield)
First-pass good units produced divided by total units produced
Performance Efficiency
Theoretical cycle time by the actual cycle time. Theoretical cycle time should be that, which was
promised by the production equipment’s manufacturer. (In practice theoretical cycle time often is
“downgraded” by industrial engineers applying factors such as personal fatigue and delay to derive a
“standard cycle time”, which is used to cost the product and provide planning an attainable capacity
quantity.)
The difference between the OEE value and 1.0 indicates the percentage of production lost to ineffective
operations. Examining the components of OEE will enable root cause analysis and direct corrective action.

Increases perfect order fulfillment, as manufacturing lead time

Reliability
gets more predictable
Responsiveness Increases with decreasing manufacturing lead time
Flexibility None
Costs Higher equipment effectiveness reduces cost of goods sold
Asset Management Reduces WIP, leads to a higher equipment effectiveness
Technology
None
Features
Other Success
None
Factors

edition, APICS – The Educational Society for Resource Management, Alexandria, VA, USA
Goldratt, E. M., Cox, J. (1992): The Goal – A Process of Ongoing Improvement”, North River Press, Norwich,
CT, USA
Spencer, M. S.; Cox, J. F. (1997): The Constraints Management Handbook, The St. Lucie Press/APICS Series on
Constraints Management.
Umble, M.; Mokshagundam L. S. (1995): Synchronous Manufacturing – Principles for World Class Excellence,
Spectrum Publishing Company.
Hansen, R. C. (2002): Overall Equipment Effectiveness, Industrial Press, New York, NY, USA.
Mondher, B.-H.: Synchronous Manufacturing Quick Reference Guide, Supply Chain Strategy and Solutions,
BearingPoint, Inc.

Best Practice Lean Methodology
"Lean" is a term coined in 1990 in the book "The Machine that Changed the World" by MIT researchers to
describe the effectiveness and efficiency of the Toyota Production System in comparison to the traditional mass
production approach to manufacturing. "Lean" practices actually date back to the early 1900's when Sakichi
Toyoda introduced jidoka (autonomation) into his loom operations. The modern understanding of "lean" comes
from the Toyota Production System developed by Taiichi Ohno, which was inspired by Henry Ford's River
Rouge moving assembly line. "Lean" thinking is a focus on creating process "flow" through the reduction of
waste. The waste reduction in production environments is typically targeted at the seven wastes:
overproduction, waiting, transportation, inappropriate processes, inventory levels, unnecessary motion, and
defects. Lean Thinking is applicable to all processes.
The typical enabler for lean improvement is through the use of Value Stream Mapping (VSM). VSM is the
process of walking and drawing the process steps (material and information) for one product family from
beginning to end, typically within a single facility, to create a current state map. Current state maps are
designed to highlight the process flow of an item through the value stream. Following the current state map, a
future state map is created. Future state maps are then developed to identify process improvements that
eliminate waste. Finally, a detailed implementation plan is developed to transition from the current state to the
future state, typically within an 8-12 month period. VSM can also be applied similarly across suppliers to create
supply chain value stream maps.
While lean excels at improving process efficiency, there are some limitations to lean application. Lean
implementations are typically limited by the inability to systematically identify and prioritize lean projects,
measure the effects of changes on the supply chain system’s bottom line, and align and communicate activities
across organizations. See the Best Practice on “Convergence of SCOR, Six Sigma and Lean Methodology” to
overcome this limitation.
Need for process cycle efficiency improvements

Need to reduce process cycle times
Elimination of non-value added process steps
Need to build a culture of lean thinking throughout
Additional Comments
Lean is a methodology and way of thinking to transform organizations into new levels of efficiency, supported
by a toolset for executing improvement projects that reduce process cycle time and increase process cycle
efficiencies. Execution is enabled through people, and must become the way work is done within the
organization. Application of lean tools is based on the effective use of value stream mapping. This
methodology relies heavily on the ability to record all steps throughout processes and to determine value added
versus non-value added activities. Lean is a methodology supported by a toolset that is generally limited by the
inability to strategically select projects that provide the greatest value to the overall organization.

enables organizations to determine how current process steps and cycle efficiencies affect
Reliability
overall supply chain reliability. Details can be displayed through value stream mapping.
Process cycle-time decreases (typically by around 70%) through eliminating non-value added
Responsiveness process steps. Lean organizations have the worker flexibility and adaptability to respond to
surges and shocks in production.
Lean creates process flow and allows for quick changeover between functions, tools, and
Flexibility processes. Lean facilities typically have considerable cross training, which creates highly
flexible teams of people and organizational layouts.
Cost reduction is a typical impact of lean as non-value added processes are removed and
Costs efficiency increases. Response times are also reduced which result in faster cash flow
cycles.
Lean typically reduces inventory levels and ensures the efficient use of assets with regard to
Asset Management customer demand. Suppliers are likewise encouraged to improve cycle efficiencies to
increase their available inventory for customers to pull from.
Lean is people-oriented and can be successfully employed with minimal technological

Technology Features requirements. Some technology (e.g. a data warehouse with data extracted from an ERP
source system) could potentially support an organization’s application of lean.
The successful transformation to lean is marked by the change in the way people address
Other Success
their work. Lean thinking must become a part of how work is done within an organization to
Factors
be have sustainable continuous improvement.
Womack, J. P., Jones, D. T. (1996): Lean Thinking – Banish Waste and Create Wealth in Your Corporation, Simon
& Schuster, New York, NY
Suzaki, K. (1987): The New Manufacturing Challenge – Techniques for Continuous Improvement, Simon &
Schuster, New York, NY
Keyte, B., Locher, D. (2004): The Complete Lean Enterprise – Value Stream Mapping for Administrative and
Office Processes, Productivity Press, New York, NY
Liker, J. (2004): The Toyota Way – 14 Management Principles From The World's Greatest Manufacturer, McGraw-
Hill, New York, NY
Marchwinski, C., Shook, J., (2004): Lean Lexicon – A Graphical Glossary for Lean Thinkers, Lean Enterprise
Institute, Brookline, MA
http://www.lean.org (Lean Enterprise Institute), http://www.lean.mit.edu (Lean Aerospace Initiative),

http://www.superfactory.com (Superfactory)

Best Practice Merge-in-Transit
SCOR Process(es) D1.8 (Receive Product from Source or Make), D1.9 (Pick Product)
Merge-in-transit is a practice to combine items from multiple sources into a single customer shipment. This
includes items on stock in the distribution center, from which the shipment is sent, items on stock in other
distribution centers, items on stock elsewhere (e.g. at a plant or a supplier) as well as make-to-order items. The
items to be merged are cross-docked from inbound receipt to outbound shipping (see Best Practice on Cross-
Docking, type three). Merging is usually performed in a shipper’s distribution center (DC) or in a carrier’s
terminal.
Merge-in-transit allows the shipper to reduce its inventory levels on selected items in its DC’s while still
maintaining complete order integrity and reliable delivery. The practice increases overall delivery times,
though. To keep delivery reliability to customers, supply chain information systems are required, which
integrate among the shipper, its suppliers, and its carriers.
For make-to-order (MTO) products, the order lead time should be greater than the manufacturing lead time.
Otherwise, the products should be manufactured and stocked prior to the shipment. The point is emphasized
here to ensure that the proper business policy is adopted around defining MTO versus MTS (make-to-stock)
products.
Customer orders require commingling of products from different sources into a single shipment
Order lead time is sufficient to allow collect products from their source locations
Additional Comments
Merge-in-transit is a “Place Postponement” (see Best Practice on Postponement) for parts of the supply chain.

Reliability Delivery reliability is at risk, information technology is required to keep it.
Responsiveness Delivery time and as a consequence order fulfillment time increases
Allows flexibility in a make-to-order manufacturing environment, if manufacturing lead time is

Flexibility shorter than order lead time. DC flexibility improves because of ability to cross-dock selected
inbound items.
Costs None
Inventory level (and as a consequence working capital) is lower, as products are kept on stock in
Asset Management
fewer locations.
This practice will require the use of some type of warehouse management system (WMS), bar
code or RF scanner technology, and EDI (or some other technology that would allow the
Technology
transmission of data between supply chain partners). It might also require the integration of MRP
Features
or other scheduling technology with the WMS. All will need to interface with the order
management system.
Agreements with suppliers and carriers on:

Delivery time requirements
Inventory policies at the supplier locations and DC’s
Packaging items to produce the combined shipment, including generation of packing
Other Success slips and other documentation are required.
Factors
All involved parties must agree on the types and timing of information exchange. Since DC’s will
have lower inventory levels as a result of using this practice, extended stock-outs at suppliers or
unreliable delivery times by carriers would negatively impact the customer delivery experience.
None

Best Practice Postponement
S1 (Source Stocked Product) , M1 (Make to Stock),
SCOR Process(es)
D1 (Deliver Stocked Product)
Postponement (delayed differentiation) is a supply chain concept where a product is kept as long as possible
in a generic state. Differentiation of the generic product into a specific end-product is shifted closer to the
consumer by postponing identity changes, such as assembly or packaging, to the last possible supply chain
location.
This allows keeping safety stock of one generic product instead of multiple specific end-products. Especially
in cases where the split of demand into specific end-products is uncertain, postponement with its risk pooling
effect leads to less safety stock required and to a lower risk of obsolescence of end-products. Furthermore, as
less value has been added to the generic product than to the specific end-product, less capital is bound in
each stocked unit.
There are three ways to implement postponement:
Product postponement
A modular structure of the product allows late differentiation,
e.g. adding country-specific power plugs shortly before shipment.
Place postponement
Safety stock is kept in one central warehouse instead of regional warehouses.
Time postponement
Processes which let the product become differentiated (e.g. coloring, flashing an EPROM with software)
take place as late as possible.
Significant number of variants of an end product with an uncertain split of demand on variants.
Delivery time requested by customers must allow value-adding steps after receipt of
customer orders (or reliable demand forecast).
Additional Comments
Product postponement leads to economies of scale in procurement and production as well, since the generic
product will be produced in larger amounts than its variants.

Reliability With the same safety stock, fill rate will typically increase.
Order fulfillment cycle time increases, if value-adding steps are carried out after receipt of a
Responsiveness
customer order (see need indicators)
Increases, because a wide range of specific end-products can be derived from the stocked
Flexibility
generic product.
Costs None (except from economies of scale, see additional comment)
Asset Management A lower safety stock level (without effect on fill rate) reduces fixed assets.
Technology Features None
For product postponement, an intelligent, modular product structure is a pre-requisite, so that

logistics and/or supply chain management have to be involved in the product development
Other Success
process. To support the development process, logistics/supply chain management has to
Factors
provide a clear estimation of the effects of product design (especially the number of variants)
on production and logistics costs.
edition, APICS – The Educational Society for Resource Management, Alexandria, VA, USA
Simchi-Levi, D.; Kaminsky, P.; Simchi-Levi, E. (1999): Designing and Managing the Supply Chain: Concepts,
Strategies, and Cases, McGraw-Hill/Irwin, p. 56

Best Practice Sales and Operations Planning (S&OP)
Sales and operations planning (S&OP) is a process to develop tactical plans that provide management the
ability to strategically direct its businesses by integrating customer-focused marketing plans for new and
existing products with the management of the supply chain.
The process brings together all the plans for the business (sales, distribution, inventory, production,
procurement) into one integrated set of plans. This set of plans typically covers – at an aggregate (product
family) level – a period of 8 to 18 months with monthly periods and further years with half-year periods. S&OP is
revised on a regular basis, most commonly monthly, but at least twice a year.
The process must reconcile all supply, demand, and new-product plans at both the detail and aggregate levels
and tie to the business plan. It is the definitive statement of the company’s plans for the near to intermediate
term, covering a horizon sufficient to plan for resources and to support the annual business planning process.
Typically, Sales and Operations Planning includes four key monthly meetings:
1. Demand review (to align the sales forecasts for the next months)
2. Rough cut capacity planning review (to determine the available facilities and assess the feasibility of the
production plans)
3. Pre-top Management review (to agree upon points to be escalated to top management)
4. Top Management review (to get plans authorized, issues fixed and financial plans committed).
Variability or misbalance in demand and/or supply, need to balance supply and demand across the
supply chain.
Conflicting measures and behavior in various departments
Inventory unbalanced across the supply chain
Asset Utilization below industry norms
Especially important if operations are to a large extend planned to forecasts
Additional Comments
None.

Effective S&OP plans will allocate resources such that inventory is in place at the correct
Reliability locations at the correct time so that when customer orders come in they can be fulfilled within
normal procedures/processes
S&OP points out where the supply chain has lead-time issues. It raises the visibility of lead-time
Responsiveness
problems.
The S&OP process makes potential issues visible early, so that changes can be made to
Flexibility
accommodate the dynamics of the supply chain.
In particular, S&OP helps reduce the number and impact of expedites and “rush production
Costs
orders” – both of which have a negative impact on supply chain costs.
S&OP allows an enterprise to operate much closer to target production and inventory plans, and
Asset Management
thus leads to lower inventory levels and more efficient use of assets.
S&OP is essentially a PEOPLE process that can be achieved with minimal technology support.
Technology In some cases, Excel spreadsheets are adequate. Accessibility, accuracy and timeliness of
Features aggregate enterprise-wide data are critical, though. Ideally strategic external data (e.g. customer
forecasts, co-packer capacity/costs) would be an important asset to the S&OP process.
Managers should have visibility to the plans of all departments. They should also understand the
Other Success impact of their deviations from plan on the other departments and the enterprise as a whole.
Factors Performance to plan should be measured. Top Management sponsorship and involvement is
essential for the success of S&OP.
Civerolo, J.; Rice, D.: Sales and Operations Planning Handbook, Gray Research.

Best Practice Six Sigma
Six Sigma is based on a philosophy of driving for near perfect process performance (3.4 defects per million
opportunities for a defect) in order to satisfy customer needs and improve financial performance. Individuals can be
trained in the various roles of Six Sigma, including Deployment Champions, Black, Green, and Yellow Belts.
These practitioners then lead project teams made up of people from the operation through the use of the
methodology to define and solve problems.
Six Sigma improvements are enabled through a rigorous methodology referred to as DMAIC (named for the
phases of Define, Measure, Analyze, Improve, and Control). The DMAIC methodology for problem solving
utilizes both process and statistical analyses to improve product/process quality and drive reduction of defects
and variation. The methodology generally provides a systematic way to define the problem being addressed
from both a process and financial impact perspective, identify potential factors impacting performance, narrow
to the critical few root causes of defects or variation, and then establish procedures to implement sustained
performance improvements.
A couple of apparent limitations with Six Sigma are the lack of alignment of priorities, understanding the
interdependency between projects, i.e., incremental process improvements versus process redesign, and the
lack of methods to develop future projects once the "initial hit lists" (pet-pains) become exhausted. See the
Best Practice on “Convergence of SCOR, Six Sigma and Lean” to overcome this limitation.
Need for significant improvements for Product Quality or defect reduction

Need to reduce process variability
Additional Comments
Six Sigma provides a standard toolset for executing improvement projects to increase product quality and
reduce defects and process variability. Execution is enabled based on the Six Sigma steps of Define, Measure,
Analyze, Improve, and Control (DMAIC). Relies heavily on statistical data gathering and root cause analysis.
Six Sigma is a toolset and generally lacks an organized method for project identification. Training in this
methodology generally requires a costly investment.

Suppliers and customers focusing on defect and variability reductions will increase product
Reliability
quality product and perfect order fulfillment as a consequence.
Improve order fulfillment cycle time by reducing number of defective products produced,
Responsiveness held in inventory or shipped and returned for warranty. Very important for new Product
development deliveries.
Flexibility None.
Reduces cost as process variability is minimized or removed. Reduces product return due to
Costs
defects.
Asset Management None.
Technology A data warehouse (with data extracted from ERP source system) and electronic exchange of
Features quality data with suppliers is useful.
Teams should be set up with strong participation of the people directly working in the
Other Success
examined process. Six Sigma implementation should start with a small, controllable scope.
Factors
Incremental learning prepares the organization for larger projects.
Tennant, Geoff (2000), “Six Sigma: SPC and TQM in Manufacturing and Services”
Pande, Peter S., Neuman, Robert P., Cavanagh, Roland R. (2000), “The Six Sigma Way: How GE, Motorola, and
Other Top Companies are Honing Their Performance”
Pande, Peter S., Holpp, Lawrence (2001), “What Is Six Sigma?”
Snee, Ronald D., Hoerl, Roger (2002), “Leading Six Sigma: A Step-By-Step Guide Based on Experience with GE
and Other Six SIGMA Companies”
Eckes, George (2003), “Six Sigma for Everyone”
http://www.isssp.com/
International Society of Six Sigma Professionals (ISSSP)

Best Practice Statistical Test Count
ES.4 (Manage Product Inventory), ES.5 (Manage Capital Assets), ED.4 (Manage Finished
SCOR Process(es)
Product Inventories), ED.5 (Manage Deliver Capital Assets)
The Statistical Test Count (STC) process is a method of validating inventory on-hand values by physically
counting and reconciling a statistical sample of the entire inventory population. This sample is then
extrapolated, which provides an indicative measure of entire inventory population. Furthermore, with
extrapolation the net and gross percentage of error is determined.
One of the primary benefits of this process is a significant reduction in the time and manpower required to
perform an audit – control over data gained with STC meets or exceeds all requirements of both internal and
external auditors. In contrast to physical inventory and cycle count methods STC creates virtually no disruption
to receiving/shipping. Interim reporting allows for monitoring of early results.
STC provides a snapshot of piece count and inventory value accuracy level. Measurable results on both are
achieved that can be benchmarked year-to-year, facility-to-facility, and network-to-network. Benchmarking is a
proactive driver for inventory accuracy improvement.
Statistical Test Count is particularly beneficial in high SKU count environments.
Additional Comments
The Statistical Test Count process is based on validated statistical theorems that meet independent auditor
annual inventory validation requirements.

Through constant measurement and root cause analysis, use of the STC process promotes
Reliability
greater inventory accuracy to support perfect order fulfillment.
Unlike cycle count and physical inventory methods, STC does not impede daily operations and
Responsiveness
does not require warehouse shut-down.
The STC process requires a low volume of counts that can be executed during off-peak times
Flexibility
as resource availability allows.
Significant cost avoidance as a result of decreased time and manpower to perform a physical
Costs audit – implementing STC typically delivers up to a 90% cost reduction over physical
inventory/cycle count methods.
The diagnostic capabilities of Statistical Test Count identify opportunities to recover against
Asset Management
previous inventory shrinkage (balance sheet implications).
STC uses part cost and other SKU characteristics to select a statistical sample that is indicative
of the entire inventory population. STC also uses confidence intervals and other statistical tools
Technology to manage application of the program over time.
Features
STC does not require high investments in technology. It can be implemented with common
spreadsheet software, for example.
The STC process delivers the greatest value in an environment of strong process discipline and
commitment to continuous improvement.
Other Success
Factors
Results of the STC process should embedded in established process disciplines to address any
unexpected deficiencies through adjusted sample size and root cause analysis.
Statistical Test Count is currently not well documented in literature. The following books deal with inventory
accuracy in general:
Wild, T. (2004): Improving Inventory Record Accuracy: Getting your stock information right.
Brooks, R.B.; Wilson, L.W. (1995): Inventory Record Accuracy: Unleashing the Power of Cycle Counting

Best Practice Supplier Performance Assessment System
SCOR Process(es) ES2 (Assess Supplier Performance)
“Assess Supplier Performance” is the process of measuring actual supplier performance against internal and/or
external standards, providing feedback to achieve and maintain the performance required to meet the
customers’ business and/or competitive needs.
The supplier management program at a representative company has six elements:

1. Viability of supplier
Financial credit rating via D & B, Risk rating associate with overall financial health.
2. Supplier Capability
Quality of supplier deliveries in PPM for Engineering programs and Production parts
3. Dependability
On time delivery for Engineering programs and Production deliveries, number of stock outs, average
days of stock out
4. Responsiveness
Part lead time, inventory turns
5. Competitiveness
YTD part cost savings, number of parts on pull processes (JIT), electronic data exchange
6. Technical ability
Global reach, Engineering ability, Technology roadmaps
Each month, the source data is extracted from an ERP software for each supplier. A report card is created and
communicated to suppliers. Performance data is monitored by commodity managers with the expectation that
supplier responds to any variance to goals or expected results.
This supplier performance data can be used to select suppliers for a preferred supplier program. Preferred
suppliers are given preference for all new business awards and supporting Engineering development programs.
Significant expenses for raw material and semi-finished products

(compared to own value-add)
Need to reduce number of suppliers
Additional Comments
Suppliers are an external extension of the manufacturing process. In today’s competitive environment,
processes rely on dependable supply streams that react quickly to variability in demand.

Source data is from transactions logged in ERP system. No arguments concerning their data
vs. our data. Variance to goals is trigger for supplier to present corrective actions. Supplier and
Reliability
customer can focus on performance vs. data integrity. Detail data on delivery and quality are
used to identify chronic performance issues for improvement.
Improve reaction time for demand inside of lead-time. Mind share is maintained due to monthly
Responsiveness
performance scorecard. Very important for New Product development deliveries.
Since new business is awarded to suppliers that perform well, suppliers are in a continuous
Flexibility
improvement mode.
Costs Not an event, but expected throughout the year.
Suppliers are encouraged to improve inventory turns by implementing pull systems for their
Asset Management
parts.
Technology A data warehouse (with data extracted from ERP source system) and electronic exchange of
Features performance data with suppliers is useful.
Supplier Management Process, Supplier Survey and Evaluation process, and Supplier
Performance Measurement process have to be defined;
Other Success
Source of data, and performance expectations need to be communicated to suppliers and
Factors
stakeholders in the company (buyers, engineers). For critical suppliers, a qualification process is
recommended to align the operational standards with the company’s requirements.
None

Best Practice Vendor Managed Inventory (VMI)
SCOR Process(es) P1, P2, P4, S1.1, S2.1, S3.3, ES.7, D1, D1.5, D1.6, D2.5, D2.6, D3.5, D3.6
VMI is a concept for planning and control of inventory, in which the supplier has access to the customer’s
inventory data and is responsible for maintaining the inventory level required by the customer. Re-supply is
performed by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is
counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels.
The supplier takes responsibility for the operational management of the inventory within a mutually agreed
framework of performance targets, which are constantly monitored and updated to create an environment of
continuous improvement.
Different styles of VMI agreements exist.

Re-supply need not be on a scheduled basis. It can be more flexible to occur within defined conditions,
e.g. any day normal business hours.
The customer can be included in the “approval” process: The supplier could propose a replenishment
(quantity, date) and the customer has to approve the order.
Often (but not necessarily) VMI is combined with consignment. The supplier owns items until they are
taken from the VMI and used, i.e. items are to be paid when they are used.
Similar to conventional MRP planning of inventory, VMI implies manual planning and control tasks, but shifts
these tasks to the supplier. This manual effort should be invested in such items, which are valuable and for
which demand is unsteady or sporadic. For less valuable items with a continuous demand order point
technique and kanban are more suitable.
Additional Comments
VMI works well, where demand and inventory data is readily available, systems are integrated, and economies
of scale exist with large customers. Jointly Managed Information (JMI) is a derivation of VMI to use when and
where VMI is not operationally or commercially practicable.
Jointly-Managed Information is the automated collection, management, and integration of POS and inventory
data into supplier inventory/materials management algorithms, independent of physical movements into the
retail channel. This achieves many of the same benefits as VMI when there exists a free flow of information
among retail channel partners, without introducing what can be sensitive financial relations between the parties.
Retail partners often cannot or will not allow a vendor to automatically replenish them.

VMI helps to assure the availability of items thereby helping to ensure better on-time delivery
Reliability
performance as well as greater fill rates.
Less time is spent waiting for items, allowing the production to operate more smoothly and
Responsiveness quickly. With visibility of the demand cycle, you can agree to an official lead time, which can be
reduced, and be predictable. Kraft, for example, realized a 15-20% reduction in lead times.
The supplier gains flexibility, when to re-supply, and – as a consequence – when and how much
Flexibility
to manufacture.
Inventory level decreases by up to 20% leading to lower inventory costs. The supplier gets a
Costs clear view of demand and flexibility (see above), so that he can achieve lower variable
manufacturing costs
Transfer of ownership of inventory and payment terms vary depending on the VMI agreement.
Asset Management VMI has a focus on working capital, with the goal being both parties experiencing a working
capital reduction. The effect will vary depending on the details of the VMI agreement.
Specific capabilities must be in place for VMI to succeed. These include:

Forecasting capability
Replenishing capability
Load building/order creation (at supplier)
Reporting capability
Electronic commerce infrastructure
Technology The addition of technology such as ERP and SCM applications will enhance these capabilities
Features and hence the success of the VMI initiative. Depending on the company size, the number of
suppliers and the number of items partners, technology may even be a prerequisite. In most VMI
programs, technology plays a major role. Adding technology increases the complexity and cost
of implementation, though.
Access to data such as inventory levels, demand and demand forecasts is essential to a
successful VMI program. VMI works very well in conjunction with CPFR – Collaborative
Planning, Forecasting and Replenishment.
Other Success
None
Factors
http://www.cpfr.org/documents/ppt/VMI_vs._CPFR.ppt (VMI vs. CPFR)

Best Practice Wave Picking
SCOR Process(es) D1.9 (Pick Product)
Wave picking is a practice used in many DC operations to increase labor picking productivity and reduce the
labor cost per pick. In some DC’s, orders are scheduled to be picked when they are received. In contrast to
that, Wave picking consolidates orders into “waves” where multiple orders with similar characteristics are
picked at one time. Orders can be consolidated by customer, geography, or any other criteria that makes
sense for the DC operation. In an operation where freight consolidation for shipping is important, wave picking
can help consolidate less-than-truckload (LTL) shipments into truckload (TL) shipments.
Many times wave picking is performed in conjunction with batch picking. Batch picking aggregates similar
items across orders into a single pick. For example, assume that the DC has 15 orders each containing Item A.
In a single order pick environment, the order picker would make 15 separate trips to the location containing
Item A. In batch picking, the order picker would make 1 trip to the location of Item A and pick 15 units. Most
wave picking attempts begin with small batch picking initiatives. The combination of batch and wave picking
provides the most productivity.
Wave picking, in conjunction with batch picking, increases the total travel time for each order picker, but the
total time per item picked is reduced. This also allows the DC more flexibility when scheduling its order
picking crew. If multiple waves are picked during the day, care must be taken to balance the number of orders
across each wave as equally as possible. Waves can be planned based upon the estimated time required to
complete the wave. For example, if picker productivity is 120 units per hour and the shift consists of 10
pickers, the system can release work in 1 hour blocks to make management more efficient. This makes the
operation more predictable and measurable.
Wave picking increases DC picking and shipping productivity substantially. If managed appropriately,
customers should receive more consistent deliveries. Wave picking
Low distribution center (DC) labor productivity

High DC order pick costs
High transportation costs
Ideally suited for environments where many customers place large numbers of similar orders.
Demand is fairly stable throughout the operating period (also be used where seasonality temporarily
increases volume in a DC).
Not too practical in a pallet pick environment
Works best with single line orders with the same SKU going to multiple customers.
Frequently seen in the retail sector where a single DC has many shipping locations, each receiving a
similar product mix.
Automated picking and conveyor systems make this practice more efficient.
Additional Comments
Waves must match the business environment for which they are being planned. Direct-to-consumer
businesses might schedule waves specific to days of delivery or might have a “clean-up” wave to catch all
next day orders not waved throughout the day.

Wave picking can increase perfect order fulfillment since there are fewer opportunities to
Reliability
mis-pick product.
Delivery times to customer might increase (consolidation of orders into waves requires
Responsiveness
holding them for a period of time before they are picked).
Increases, because a wide range of specific end-products can be derived from the stocked
Flexibility
generic product.
Costs None (except from economies of scale, see additional comment)
Asset Management A lower safety stock level (without effect on fill rate) reduces fixed assets.
Efficient wave picking requires some type of Warehouse Management System (WMS)
software to prioritize orders and allocate them to an appropriate wave. This practice also
requires some type of interface with the firm’s order management system and its
Transportation Management System (TMS).
Technology Features
Batch picking is best accomplished with an integrated sortation device that takes the results
of the batch pick and creates individual orders. This is more costly from a capital investment
perspective but greatly reduces operating cost and increases the consistency of throughput.
Acceptable lead times must be defined between the DC and its customers. This will facilitate
the allocation of orders into waves.
Other Success Training of DC workers is necessary to implement the wave picking process. Also, training
Factors will be required for sortation as a result of the batch picking process.
Most implementations begin with a small group of customers or geographic locations.

Normally, these groups should provide some level of stable demand.
None

Supply Chain Operation (SCOR-8)

Enviado por

Dados do documento

Descrição original:

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Supply Chain Operation (SCOR-8)

Enviado por

Direitos autorais:

Formatos disponíveis

Supply Chain Operations

© Copyright 2006 Supply-Chain Council, Inc.

© Copyright 2006 Supply-Chain Council, Inc.

© Copyright 2006 Supply-Chain Council, Inc. June 2006

© Copyright 2006 Supply-Chain Council, Inc. 1 June 2006

Plan Plan Plan Plan

Deliver Source Make Deliver Source Make Deliver Source

© Copyright 2006 Supply-Chain Council, Inc. 2 June 2006

SCOR Contains Three Levels of Process Detail

Level 1 defines the scope and content for the

2 A company’s supply chain can be

3 Level 3 defines a company’s ability to

Companies “fine tune” their Operations

4 Implementation Companies implement specific supply-

Figure 2 - SCOR is a hierarchical model with specific boundaries in regard to scope.

© Copyright 2006 Supply-Chain Council, Inc. 3 June 2006

Business Process Benchmarking Best Practices Process Reference

Capture the “as-is” state

Figure 3 - SCOR is a business process reference model.

© Copyright 2006 Supply-Chain Council, Inc. 4 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 5 June 2006

Figure 4 - SCOR Performance Attributes and Level 1 Metrics

© Copyright 2006 Supply-Chain Council, Inc. 6 June 2006

Performance Performance Attribute Definition Level 1 Metric

© Copyright 2006 Supply-Chain Council, Inc. 7 June 2006

In Version 8.0, there are no changes to the Level 1, 2, or 3 Processes.

Barcoding add RFID

© Copyright 2006 Supply-Chain Council, Inc. 8 June 2006

Inputs and Outputs

© Copyright 2006 Supply-Chain Council, Inc. 9 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 10 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 11 June 2006

The Category P1 includes four Level 3 Elements:

The sales forecast is comprised of the following concepts: sales

The process of developing a time-phased course of action that commits

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 12 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 13 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 14 June 2006

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 15 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 16 June 2006

Metrics (see Appendix A for metrics attributes):

Production Plan includes production capability.

© Copyright 2006 Supply-Chain Council, Inc. 17 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 18 June 2006

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 19 June 2006

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 20 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 21 June 2006

The Category P2 includes four Level 3 Elements:

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 22 June 2006

Metrics (see Appendix A for metrics attributes):

*monitoring the delta of Forecast Accuracy over measured time periods

© Copyright 2006 Supply-Chain Council, Inc. 23 June 2006

Production Plan includes production capability.

© Copyright 2006 Supply-Chain Council, Inc. 24 June 2006

Metrics (see Appendix A for metrics attributes):

© Copyright 2006 Supply-Chain Council, Inc. 25 June 2006

© Copyright 2006 Supply-Chain Council, Inc. 26 June 2006

Metrics (see Appendix A for metrics attributes):