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A Framework for Defining Organizational Roles in Supply Chain Based on Scor Model

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A Framework for Defining Organizational Roles in Supply Chain Based on Scor Model A FRAMEWORK FOR DEFINING ORGANIZATIONAL ROLES IN SUPPLY CHAIN BASED ON SCOR MODEL J. Razmi, B. Hezarkhani, F. Jolai, and S.A. Torabi Department of Industrial Engineering, Faculty of Engineering University of Tehran Abstract: The different tasks in the Supply Chain should be accomplished by collaboration of the members and functional sections in the organizations. This collaboration must be well defined in order to ensure achieving the goals of Supply Chain management such as tiny cycle times and high competitiveness. For this purpose defining roles and responsibilities for several Supply Chain processes is critical. Defining roles and responsibilities in Supply Chain could be considered as a part of broader concept called Enterprise Architecture. Different methodologies have been raised for Enterprise Architecture. SCC`s Supply Chain Operations Reference (SCOR) model can be used for constructing a Supply Chain focused Enterprise Architecture. One important issue in Enterprise Architecture is the relations between different levels of organization. Roles and responsibilities are essential concept for relating missions, processes and people and systems that must perform certain processes. This paper proposed a framework for defining organizational roles and responsibilities according to SCOR model. Keywords : Supply Chain Management, Supply Chain Operational Reference model (SCOR), Enterprise Architecture, Roles and Responsibilities 1. Introduction A supply chain is ‘‘an integrated process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together in an effort to: (1) acquire raw materials/components, (2) convert these raw materials/ components into specified final products, and (3) deliver these final products to retailers’’ (Beamon, 1998). Supply chain management philosophy is really about getting people to work together better. Whether the problem is people in different functional areas within a company who are working at cross-purposes to each other or people in different companies along the supply chain who don't coordinate well with each other, the underlying point is the same. How people are organized, how their performance is measured, and how they are rewarded are major factors in overall supply chain performance. Behind all the benchmarking, process mapping, reengineering, scenario planning, software design, and related activities that receive so much attention today in supply chain management, there is another fundamental issue: How should all of us who are part of a supply chain be organized to best support achieving the lofty goals of lower costs, faster cycle times, and higher levels of customer service? Lots of barriers in achieving these goals are about unclear and not proper definition of organizational roles and responsibilities, communication, and management within and between organizations in a supply chain network. Since the late 1980s, researchers in various fields have been concerned with developing an understanding of organizations’ abilities to manage, and management in networks of organizations linked by economic exchange (see, for example, Ha°kansson and Snehota 1995; Harland 1996a and 1996b; Jarillo 1987; Johanson and Mattsson 1992; Verwaal and Hesselmans 2004). Much of this body of work focuses on one or both of: (a) creating and sustaining relationships with specific actors in the wider network (Ha°kansson and Snehota 1995; Johnsen et al., 2000); (b) networks of closely bonded actors, often termed ‘strategic networks’ (Jarillo 1988). From the other hand, in current business practice, an integrated approach to business and IT is indispensable. The most important reason for the increasing attention and practice of supply chain management are the possibilities that technology enhancements (especially IT) have generated. Transferring new information technology to practice requires that a company has a clear, integrated vision on the relation between its business and IT. Without such a vision, the IT infrastructure will never adequately support the business, and vice versa, the business will not optimally profit from IT developments (Lankhorst, 2005). Achieving alignment between business and IT requires an integrated approach to all aspects of the enterprise. Organizational effectiveness is not obtained by local optimization, but is realized by well-orchestrated interaction of organizational components (Nadler et al., 1992). Enterprise architecture is an important instrument to address this company-wide integration. It is a coherent whole of principles, methods and models that are used in the design and realization of the enterprise’s organizational structure, business processes, information systems, and infrastructure (Bernus et al., 2003). There is a lot of methods and tools for enterprise architecture (e.g. Mertins and Jochem, 2005). In organizational science, the role concept has been introduced by several researchers. Eriksson et al. defined role concept as a description that tells the actor how to function in a particular context (Erikkson et al., 2000). Ould (Ould, 1995) also uses the organizational role concept. He defined it as an area of responsibility that ranges from concrete things such as organizational posts and functional units (e.g. finance director and finance department) through job titles (e.g. senior engineer) to abstractions such as responsible chemist, customer, expense claimant, and approval of large claims. Marshall (Marshall, 2002) considers organizational roles as decomposition criteria of organizational units from which to define process steps. In the WFMC glossary, the organizational role is as a synergistic collection of defined attributes, qualifications, and/or skills that can be assumed or performed by a workflow participant for the purpose of achieving organizational objectives. Defining roles and responsibilities could be discussed in concept of role in enterprise architecture. This paper proposed a framework for defining certain organizational roles and responsibilities according to supply chain operations reference (SCOR) model, so it can be used in different issues like enterprise architecture, organizational structure or other related fields of interest. 2. Supply Chain Factors Despite management actions in a supply chain, supply chains also needed to be engineered. In other words, total life cycle of that supply chain needs to be considered (Naim et al., 2002). Supply chain engineering includes the conceptualization, design (in steady-state and dynamic terms), implementation, operation and re-engineering of the supply chain (Naim et al., 2000). There are three basic factors of supply chain performance that affect all companies: Supply Chain Goals-Strategy, Supply Chain Design, and Supply Chain Measurement. To complicate matters there are also 5 influencers of performance in supply chain including Your Trading Partners, Your Organization, Your Processes, Your People, and Your Technology. Influencers and Factors can be combined to form a 5 by 3 matrix. (Fig. 1) (Peter Bolstrof, 2003). It is obvious that with synchronization of the matrix's cells, the organizations will be more successful in managing their supply chains. Measurement- Goals - Strategy Design Management Trading Partners 1 2 3 Your Organization 4 5 6 Processes 7 8 9 People - Jobs 10 11 12 Technology 13 14 15 Primary Usage of Proposed Framework in SCM Secondary Usage of Proposed Framework in SCM Fig. 1- SCM Factors Matrix According to this table, the framework for defining roles and responsibilities in organization supply chains can synchronize different cells in this matrix. A framework that helps defining roles and responsibilities in a supply chain, can also helps designing the structural architecture of the organization (cell no. 5). It also helps to better design the processes and people in their jobs (cells no. 8 and 11). Designing the software technologies for supply chain also needs a clear definition of processes and roles of different units in organization, so this framework can helps designing the technologies (cell no.14) this framework can also be a guide for managing and measuring the different aspects of a supply chain (partners, organization, …) and it can be interpreted as the second usage of such framework (cells no. 3, 6, 9, 12 and 15). 3. Supply Chain Operations Reference Model (SCOR) The Supply Chain Operations Reference (SCOR) model is a process reference model that has been developed by the Supply Chain Council (SCC) (www.supplychain.org), a global, not-for-profit trade association with membership open to all organizations interested in applying and advancing state-of-the-art SCM systems and practices. SCOR is one of the best- known guidelines used by companies to examine the configuration of their supply chains, identify and measure metrics in the chain, determine weak links and achieve best practices (SCC 2005). As a cross-industry standard for SCM, the model provides a common supply chain framework, standard terminology, common metrics with associated benchmarks and best practices. SCOR can be used as a common model for evaluating, positioning and implementing supply chain application software. It can also be used by SCC members, suppliers and customers to build inter-enterprise integrated supply chains. Process reference models such as SCOR integrate the well- known concepts of business process reengineering, benchmarking and process measurement into a cross-functional framework (SCC 2005). Fig. 2 - SCOR Model
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