Along must be able to produce products
Alongwith the current development, more and more companies are established invarious fields of business, from service to industry. This resulted incompetition in the business world is getting tighter and demands the company torearrange its business strategy and tactics. Companies must be able to produceproducts with cheaper cost, faster lead time, and high quality so as not tolose in competition with other companies. Rapid response to consumer demand andcustomer satisfaction should also be taken into account so that consumers donot move to other companies and remain loyal to the company. Supply chainbecomes the key in achieving the success of a company.However,in the implementation of supply chain management there is often uncertaintyfrom various parties such as customer demand uncertainty, supply uncertainty(lead time of delivery, price and quality of raw materials, etc.), and internaluncertainty (engine damage, imperfect machine performance, uncertainty qualityof production).
The uncertainty resulted in the product that is not inaccordance with the customer demand and the delay in the fulfillment of demand.Therefore, evaluation and measurement of supply chain management performance isvery important to know the current supply chain performance and to know theproblems that occur in order to propose correct improvement so that supplychain performance increases. To evaluate and measure the company’s supply chainperformance, a method is needed which is Supply Chain Operations Reference(SCOR).SCOR model has been widely adopted in many companies. Many evidenceand trade journals have reported significant improvements after firms haveadopted the SCOR model. The SCOR model focuses on the supply chain managementfunction from an operational process perspective and includes customerinteractions, physical transactions, and market interactions. According to theSupply Chain Council’s (2010) website, ”While remarkably simple, it SCORmethod has proven to be a powerful and robust tool set for describing,analyzing, and improving the supply chain.” To date, the SCOR model has beenused by companies throughout the world, like Intel the first US corporations touse SCOR model and also Philip lighting.
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The benefits of implementing the SCORmodel included faster cycle times, less inventories, improved visibility of thesupply chain, and access to important customer information in a timely fashion.PT. XYZ is a companyengaged in manufacture that produces electrical products. PT.
XYZ has appliedthe concept of supply chain management to manage the flow of goods ranging fromsuppliers to products that will be hands to customers. However, the company’ssupply chain experiences problems related to production planningincompatibility such as machine problem, less experience operator, andforecasting error. There are also problems in delay on delivery of rawmaterials from supplier to company (Source). This result in production outputcan’t fulfill customer demand so that demand cannot be met on time. Thereforeit is very important for the company to be able to measure the performance ofsupply chain performance to be able to know whether the supply chain is runningefficiently and effectively. PT.
XYZ has not conducted an evaluation related tosupply chain performance yet, because the company considers that supply chainproblems have not brought great impact for the company. Therefore, the purposeof this research is to measure supply chain performance with SCOR method. WithSCOR method, the company can measure the supply chain performance with severalindicators and from those indicators it can be known which activity that causedthe problems in supply chain. After that the problems can be repaired byimmediately proposed the correct improvement.