Introduction to SCOR (Supply Chain Operations Reference) April

Introduction to SCOR (Supply Chain Operations Reference) April 2012 Enrico Camerinelli Sr. Analyst Page 1 Page 1 2012 Aite Group LLC.

Enrico Camerinelli Sr. Analyst at Aite Group Current research focuses on Global Transaction Banking, Cash & Trade Management, and Supply Chain Finance Formerly Executive Director of the Supply Chain Council VP for Enterprise Applications at META Group Pre-sales marketing manager at J.D. Edwards Supply Chain and Plant Manager at Lear Corporation and Arvin Exhaust Co-Founder of the Supply Chain Finance Council and member of the Italian delegation of UN/CEFACT Page 2 2012 Aite Group LLC.

Agenda The SCOR model SCOR and BSP face-to-face Linking the physical and the financial valuechains Page 3 2012 Aite Group LLC.

SCC Organization - Chapters SCORboard Greater China, Shanghai Japan Chapter Tokyo, Japan North America Chapter Washington D.C. European Chapter Brussels, Belgium South East Asia Chapter Singapore Brazil Chapter Australia/New Zealand Chapter Sydney, Australia Page 4 Southern Africa Cape Town, South Africa 2012 Aite Group LLC.

Supply Chain Operations Reference-Model (SCOR ) Overview Page 5 2012 Aite Group LLC.

SCOR 5 distinct Management Processes Plan Deliver Source Return Return Suppliers’ Supplier Make Source Deliver Return Make Deliver Return Supplier Source Return Return Your Company Internal or External Make Deliver Source Return Return Customer Customer’s Customer Internal or External SCOR Model Processes Metrics Page 6 Best Practices 2012 Aite Group LLC.

SCOR Framework Levels Supply Chain Plan Level-1 Sets Scope and Context, Geographies, Segments and Products Source Make Deliver Return M2 Make Build to Order M1 Make Build to Stock M3 Make Engineer to Order Level-2 Identifies Major Configurations within Geographies, Segments and Products Level-3 Identifies key business activities within a configuration M2.01 Schedule Production Activities M2.02 Issue Product M2.03 Produce & Test M2.04 Package Page 8 M2.05 Stage Product M2.06 Release Product to Deliver 2012 Aite Group LLC.

Example of SCOR utilization Page 9 2012 Aite Group LLC.

SCOR Process Modeling – Mapping AS-IS material flows Manufacturing company that Produces against a 15-days forecast Supplies raw materials in bulks from the Far East against a monthly forecast Manufacturing Company RM Supplier European Supplier of components Warehouse Pulls components from France based on production volumes Page 10 Ships weekly finished goods to a Distribution Warehouse based in Central Europe. 2012 Aite Group LLC.

SCOR Process Modeling – Mapping AS-IS material flows Manufacturing company that Produces against a 15-days forecast M1 Manufacturing Company S2 European Supplier of components D2 Supplies raw materials in bulks from the Far East against a monthly forecast D1 S1 RM Supplier D1 S1 Warehouse Pulls components from France based on production volumes Page 11 Ships weekly finished goods to a Distribution Warehouse based in Central Europe. 2012 Aite Group LLC.

SCOR Metrics Page 12 2012 Aite Group LLC.

SCOR Best Practices Page 13 2012 Aite Group LLC.

SCOR and BSP face-to-face Page 14 2012 Aite Group LLC.

SCOR and BSP Plan Make Source Deliver Return BUY SHIP Page 15 PAY 2012 Aite Group LLC.

SCOR and BSP Plan Source Make Deliver Return BUY SHIP Page 16 PAY 2012 Aite Group LLC.

SCOR and BSP Page 17 2012 Aite Group LLC.

SCOR-Plan Plan Source Make Deliver Return Page 18 2012 Aite Group LLC.

SCOR-Source Plan Source Make Deliver Return Page 19 2012 Aite Group LLC.

SCOR-Make Plan Source Make Deliver Return Page 20 2012 Aite Group LLC.

SCOR-Deliver Plan Source Make Deliver Return Page 21 2012 Aite Group LLC.

SCOR-Return Plan Source Make Deliver Return Page 22 2012 Aite Group LLC.

Linking the physical and the financial value chains Page 23 2012 Aite Group LLC.

Physical and financial value chain metrics Page 24 2012 Aite Group LLC.

Physical and financial value chain metrics Page 25 2012 Aite Group LLC.

End-to-end physical value chain processes Value Chain Processes Source-to-Pay Source suppliers Select supplier and goods Negotiate sales terms Purchase order request Purchase order approval Send purchase order Order-to-Cash Transport Send invoice Turn into sales order and confirm Ship goods Receive order Fulfill-to-service Prepare to load shipment Produce goods Manage inventory Source-to-Pay Receive goods Offload, inspect, and store goods Receive invoice Return Generate and send payment Order-to-Cash Reconcile and account Collect payment Page 26 Process payment advice Receive payment advice 2012 Aite Group LLC.

Extracting Liquidity From Value Chain Processes Applying SCF Components and Extracting Liquidity Source-to-Pay Commodity finance Purchasing card Buyer finance Order-to- Cash ECA supplier financing Purchase order commitment Guarantees Letter of credit Post- shipment finance Fulfill-to- Service Leasing Warehouse finance Forfaiting Warehouse finance Buyer- driven payables Confirming Invoice financing/discounting BPO Reverse factoring RETURN Warehouse finance Asset- based lending Project finance Source-to-Pay Cash on delivery Pre- shipment finance Distribution finance Order-to- Cash Invoice financing/discountin Page 27 Receivables purchase 2012 Aite Group LLC.

Aite Group: Partner, Advisor, Catalyst Aite Group (pronounced eye-tay) is an independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry. Enrico Camerinelli- Senior Analyst [email protected] 39.039.21.00.137 www.aitegroup.com Page 28 2012 Aite Group LLC.