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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

Supply Chain Performance Measurement Usng Supply Chain

Operation Reference (SCOR) 12.0 Model : A Case Study in A
A Leather SME in Indonesia

E Kusrini1, V I Caneca1, V N Helia1*, S Miranda1

1
Industrial Engineering Department, Faculty of Industrial Technology, Universitas Islam
Indonesia, Yogyakarta, Indonesia
*Email : vembri@[Link]

Abstract. The leather industry is one of the basic ingredients in fashion and
textile/apparel that has good development potential. This can be used to take advantage
of the opportunity for the leather industry which is still importing 60-70%. Supply chain
measurement is needed to determine production capability and moreover to benchmark
for its company, government, and academics. Measurement of supply chain
performance is carried out using the newest-SCOR 12.0 method with a performance and
processes approach. The study was conducted on XYZ SME and limited to bag product
which is one of the largest leather industries in the Bantul area, Special Region of
Yogyakarta. The value of supply chain performance is 54.29, which based on
performance indicators. This value included in the average category. It can be inferred
as the benchmark for the leather industry around areas to improve supply chain
performance.

1. Introduction
The leather industry is one of the basic ingredients in fashion and textile/apparel that has good
development potential. Indonesia still imports the fashion and textile apparel between 60-70%, which
is also an opportunity for the local leather industry and challenges to fulfill the market potential. Then,
the leather industry has challenges to keep growing and developing because of the scale of production
and the high-rate of import. Other challenges are customer behavior by consuming branded,
international products, and also the production level of local leather industries.
Supply Chain defined as entire activities, materials or processes to make products from raw material
(by supplier’s supplier) to the end product (by customer). Another definition from supply chain means
from the upstream to the downstream. The supply chain also means entire processes from the
purchasing, source, production, and distribution with the material and information flow [1]. Based on
the definition and implementation, supply chain management are important activities for a company that
can increase the value of production level in order to deliver products to the customer by managing and
controlling entire the activities.
Supply chain can be measured by many methods. One of the most famous and general method is
Supply Chain Operation Reference (SCOR) Model. SCOR Model measurement established by The
Association for Operations Management (APICS) which deliver SCOR to measure by business process

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

and performance. Both process and performance itself have their own metrices to defined by, such as
process is defined from plan, source, make, deliver, return, and enable activities and performance by
company reliability, responsiveness, agility, cost, and asset management level [2].
The purpose of this research is to measure the performance of supply chain from one of the Small-
Medium Enterprise (SME) XYZ as the leather manufacture industry in Bantul, Special Region of
Yogyakarta Province by using newest-SCOR Model; SCOR 12.0 version. The measurement is done by
the SME process and performance including metrics. The XYZ SME is one of the largest leather
industry in Bantul. Hopefully, the research not only measures the process and performance for its own
company but also benchmarking with other companies, so the government can concern with the
development and its impact to economics.
It has been never done before to measure leather industry supply chain and by using SCOR in previous
research. The previous research with the SME in Indonesia is the research agro-industry [3], and with
the mushrooms products [4]. Although, it is an opportunity to measure the supply chain management
for an SME to help the production level, manage the material and information flow [5]. There are
literature review about how to implement SCOR in manufactur industry [6]. Last, it is an opportunity
to use the newest version of SCOR as the SCOR 12.0 version by APICS especially how it implemented
in SME to gain information and development of that method for future research. By this research, the
purpose is also to define the supply chain score or level in Leather Industry SME. So, the government,
the owner, and the academics can give benefits to local and country economics, develop strategies,
increase production level, and take the export opportunity.

2. Literature Review

2.1. Supply Chain Management

Supply Chain is related to all activities, tools and materials, or steps needed by a product from raw
materials to finished products or semi-finished products to costumers, known as upstream to
downstream. Related to the procurement of raw materials, suppliers, the distribution of raw materials,
purchasing, production, production targets, to distribution is a discussion of the supply chain. Therefore,
supply chain management is a critical activity that needs to be carried out by a company. Supply chain
management is an activity that includes managing and managing the entire process of the flow of goods
and business processes of a company from upstream to downstream [7]. It can be measured based on
the merging of such a qualitative and quantitative approach to an expert or a specialist in a particular
field [8].
Supply Chain Management has a role to determine the quality of performance owned by the
company, and also has other roles in reducing cost, effectiveness and efficiency of resources.
Specifically, it understands the quality of business process performance that applies in a related company
[1].

2.2. Supply Chain Performance Measurement

Supply chain in a company can be measured by a tool or method. Activities in measuring supply chain
performance is called supply chain performance measurement or assessment. Quite number of
practitioners and academics are also focused on developing supply chain performance measurement
theories. This is due to the complexity of the process and material contained in the supply chain, starting
from procurement to distribution to customers [9]. There are several things that are expected in a supply
chain measurement [10], including: (1)Identify goals or companies key performance indicator; (2)
Identify the customer or target market needs; (3) Help an organization or company to understand the
business process, and analyze the elements within; (4) Finding critical points in business process carried,
to identify waste, bottlenecks, and the other; (5) Improve production level or business process based on
data , and (6) Find out the impact of the improvement.

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

2.3. SCOR Model

There are several methods or approaches that can be used to measure the performance of a supply chain
in an industry. SCOR, which is an acronym for the Supply Chain Operations Reference, is a model or
method of approach begun in 1996 which was initiated by the Supply Chain Council called APICS (The
Association for Operations Management). This SCOR Model is a framework that is used to help measure
the performance of supply chains in an industry, help in terms of management, business processes, and
how a company performs with market demand. SCOR Model also changes in the variable and attributes
it had before, this is due to adjustments to the industrial reality or conditions. The latest SCOR Model
is SCOR 12.0 which has several changes compared to the previous version [2]. The SCOR Model
includes the business processes of a company that consists of (Fig.1):
a. Plan, which is the main activity in a supply chain. Regarding production planning, material needed,
finance, scheduling, distribution plan, along with planning to provide value to the customer.
b. Source, related to the activity of procuring raw materials and materials needed for business processes.
Therefore it will be very related to suppliers.
c. Make, is the core stage in providing added value processes to products that will be offered to
customers. This stage includes the production process, work-in-process, until becomes semi-finished
or finished goods.
d. Deliver, related to the stages of distributing both products and services to customers. This stage also
plays an important role in supply chain performance measurement due to its relationship with the
customer which is the core or main point of the product made or offered.
e. Return, is the process of returning the product, either in a condition rejected by the customer or in an
effort to improve the product. This condition occurs in a certain moment, for example dismatch with
market demand or with other conditions.
f. Enable, is a process related to the establishment, maintenance and monitoring of information,
relationships, resources, assets, business rules, suitability, and contracts needed to carry out from
processes in supply chain. This process related to High-Level Management, Finance, HR, IT, Facility
Management, Product Management, Sales Processes and Support.

Figure 1. SCOR Model Framework

Source : The Association for Operations Management (APICS)

2.4. SCOR Model 12.0

In measuring supply chain performance using the SCOR 12.0 model has metrics that are used as the
basis for performance assessment. These metrics are arranged at several levels which have an impact on
the assessment of the supply chain performance. The metric level in question are level 1 (one), level 2
(two), and level 3 (three). Level 1 or also commonly called the Key Performance Indicator (KPI),
describes the key activities contained in the company's business processes. Level 2 is the assessment
criteria used for level 1 metrics. Level 2 can be used to diagnose performance from the performance
found at level 1. Level 3 includes metrics that are also used to diagnose the performance of metrics at
level 2.

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

Based on the levels above, the SCOR model evaluates based on several attributes, including
reliability, responsiveness, agility, assets, and costs. Reliability is the ability to complete or work to
implement in accordance with expectations and criteria that have been previously set. Responsiveness
is the speed in carrying out work that is and distributes in accordance with the customer's expectations.
Agility is the ability to adapt to changes in the external environment that occur, such as fluctuations in
demand that occur in the market. Assets or commonly called assets management efficiency which is
the ability to manage assets or manage expenses with income. Costs are components of costs owned by
the company, such as material costs, transportation, and others.
Normalized Score (Snorm). Having measurement attributes in both performance and process, the data
obtained in the study has unit variants that can be normalized. Data that has been obtained based on each
attribute measurement according to each metric used is normalized using the Snorm de Boer method.
This is done so that all data with various units owned can be used for further calculations. The use of
the Snorm de Boer method can be done using the following formula [11]:

(𝑆𝑖−𝑆𝑚𝑖𝑛)
Snorm = (𝑆𝑚𝑎𝑥−𝑆𝑚𝑖𝑛) 𝑥 100 (1)

Snorm = Normalized Score

Si = Valued Actual Indicator
Smin = Lowest Valued Actual Indicator
Smax = Highest Valued Actual Indicator

2.5. Key Performance Indicator

Key Performance Indicators is indicators that determine the value or quality of an industrial, business,
and performance process of an organization. KPI values can be obtained through various discussions,
some complete, qualitative and quantitative, subjective information that provides an assessment based
on individual experience or expertise. In this study the calculations carried out using SCOR 12.0 will be
adjusted to the standard performance indicators, based on the following table:

Table 1. Performance Indicator

System Indicator Performance Indicator
<40 Poor
40-50 Marginal
50-70 Average
70-90 Good
>90 Excellent

3. Methodology
K-Chart is designed to understand the framework in implementing supply chain performance
measurement for the research. It is the stage of the method used in the study. Started based on the type
of product industry as an object of research, namely the textile and fashion apparel industry. Then, the
production system used is MTO (Make To Order). Classification based on economic measurements, to
the method used along with the approach. The method used is SCOR (Supply Chain Operation
Reference) with an approach to Process and Performance. Supply Chain Assessment using SCOR
Model in this study was carried out with several steps as follows :
a. Design a business scope diagram, as an initial step for mapping business processes run by a company
b. Mapping business processes based on processes, starting from the plan to enable
c. Design a business thread diagram
d. Set up of metrices along with performance measurement attributes
e. Performance calculation of supply chain performance
f. Weighting attributes and process

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

Figure K-Chart is the stage of the method used in the study. Started based on the type of product
industry as an object of research, namely the textile and fashion apparel industry. Then, the production
system used is MTO (Make To Order). Classification based on economic measurements, to the method
used along with the approach. The method used is SCOR (Supply Chain Operation Reference) with an
approach to Process and Performance.

4. Result and Discussion

4.1. Business Scope Diagram

The Business Scope Diagram describes in general the business processes that take place at the XYZ
SME. The intended business process starts from the procurement of raw materials from suppliers, the
production process, to arrive at customers who are divided into private and retail, as distributors (Fig.2).

Figure 2. Business Scope Diagram for XYZ SME

4.2. Business Thread Diagram

Business Thread Diagram is a development of business scope diagrams and every stage of business
processes, starting from plan, source, make, deliver, return, and enable. Figure 3 shows the following
activities from second level :
1. P2 (Plan to Source), P3 (Plan to Make), P4 (Plan to Deliver), and P5 (Plan to Return)
2. S2 (Source Make-to-Order)
3. M2 (Make-to-Order)
4. D2 (Deliver Make-to-Order)
5. SR1 (Source Return) and DR1 (Product Return)

Figure 3. Business Thread Diagram for XYZ SME

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

Table 2. Metrics for Supply Chain Assessment

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

4.3. Metrics Set Up According to SCOR 12.0

Based on business scope and business thread diagram measurement attributes can be arranged along
with supply chain metrics in accordance with SCOR 12.0 guidelines. Determination of metrics and
attributes of measuring supply chain performance will be carried out based on the process and
performance in table 2.
So that measurements are made based on process and performance approaches. There are 48 metrics
from the results of business processes in the leather industry for bag product. The metrics, in general,
are found in the leather industry, so not all metrics will have a value on the measurement results in XYZ
SME.

4.4. Supply Chain Performance Measurement

The calculation of supply chain performance based on historical data of XYZ SME that has
normalized data using SNORM. From the data, the total score of each process and the measurement
metric of SCOR 12.0 have been determined. The next step is to determine the total score of each process
by giving weight to the performance attributes. The weighting of performance is given equally towards
all attributes, therefore each attribute, namely reliability, responsiveness, agility, cost, and asset
management has the same weight, which is equal to 0.2. Likewise for weighting the process is given the
same value, which is equal to 0.17 for plan, source, make, deliver, return, and enable. So that the
calculation of the total score of XYZ SME can be seen in table 3.

Table 3. Final Score XYZ SME based on Process Approach

The measurement of the XYZ SME supply chain performance based on the process approach is
54.29. It includes the average category. Then, the value of supply chain performance measurement
based on performance can be known by calculation in table 4. A low value from the measurement
results can be defined as the following explanation. “Plan”, SME doesn’t have any forecasting method
yet which can improve “plan supply chain”, “plan source”, “plan make”, “plan deliver”, and “plan
return” activities. “Source”, delayed material sourcing can effect the production process which has
below 40 scores compared to performance indicator. “Make”, managing the cost was the biggest impact
for low-make value, knowing that XYZ SME still doesn’t have any warranty cost and other problem
from the production schedule and time. “Deliver”, the biggest problem came from the managing labor
to ship requirements, XYZ SME should manage it efficiently. “Return”, a problem came from return
authorized and deal with customer withdrawal for return activities. “Enable”, XYZ SME still not have

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

any specific and systematic supply chain performances, therefore the enable activities needs covered by
the owner.
From the final score result, it can be seen that the highest score is asset performance. Higher score
of asset performance indicates that the utilization of production facilities and the turnover of inventory
is quite good. This is in line with research from [12] that asset management strengthens the performance
especially for small-medium enterprises and inventory level of the company could increase asset
performance.
Table 4. Final Score XYZ SME based on Performance

On the other hand, the lowest attribute in performance score is agility. This indicates a lack of good
ability to respond to market changes or changes in production capacity. The low level of agility can be
seen from the lack of flexibility in the use of labor that cannot be transferred during overload work.
Agility is one of key success to compete, especially companies that produce innovative product [13;14].
The fashion industry requires strategic flexibility and manufacturing flexibility [15] because it can affect
agility supply chain performance. Flexible strategies affect directly and significantly while
manufacturing flexibility does not. Examples of applying agile and responsive models are quick
response, describe shorter, more flexible, demand driven, and based on process integration and
networking [16]. In addition, supplier innovation is also needed through information sharing so that it
can facilitate collaboration in the supply chain [17].
Reliability, responsiveness, and cost are a performance that have average scor. Responsiveness in
manunfacturing companies can be upgraded by considering fundamental element that are spread into 4
paths, namely (i) Drivers, (ii) Enablers, (iii) Measures, and (iv) Impacts [18]. It is very important for
manufacturing companies to have all elements of responsive in order to survive. Reliability is the ability
to perform tasks as expected. Reliability focuses on the predictability of the outcome of a process [2].
Based on the study of 218 manufacturing SME in Texas [12], it can conclude that reliability strengthens
the performance. Reliablity in this research is measured using metric forecast accuracy, on-time, the
right quantity, and the right quality. The value of reliability is in the average category. This shows that
the accuracy of manufacturing in planning, procurement, and delivery needs to be improved.
Costs in performance measurement are all costs incurred to operate the supply chain [2]. In this
study, the low-cost performance shows that the cost of manufacturing is not yet efficient. The costs in
the supply chain, especially those related to logistics for delivery and return, must consider the
relationship of cost of transportation with the selection of shipping modes and the relationship between
cost and distance and the time of delivery. Where all these indicators are linearly related as examined
[19]. The company needs to consider this model to improve costs, especially the logistics costs of this
company.
The crucial subjects in SCOR are process modeling and performance measurement [20] that different
from many companies to gain competitive advantages. Therefore, this research was conducted by
making a supply chain model and then measuring supply chain performance. So, XYZ SME can
improve their performance based on their low performance and benchmark with other companies to
enhance performance in accordance with the company that has the best performance.

5. Conclusions and Recommendations

Based on the measurement or supply chain assessment using the SCOR 12.0 method, some conclusions
are obtained as follows. It define the value of each XYZ SME process in a based on plan; source; make;

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ICE&ICIE 2019 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

deliver; return; and enable; are 50; 71,08; 57,58; 55.05; 64.44; 27,71. This value indicates that the best
process that is owned is “source” and the lowest is “agility”. Value for the overall supply chain
performance and process of XYZ SME is 54.29. Based on all performance attributes possessed, the best
value is asset management by 80, and the lowest value is agility with a value of 9.09. Based on the table
of performance indicators, the performance value of the XYZ SME supply chain is included in the
"Average" category. It still needs improvement in many sectors. Some of them are making forecasting
on the production process, making collaborate with suppliers, managing by reducing production costs,
logistic cost, clarity in product returns, and managing supply chain performance systematically covered
by the owner. Moreover, XYZ SME Supply Chain Score can be made for another leather manufacture
industry as a benchmark to improve supply chain performance.

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IOP Conf. Series: Materials Science and Engineering 697 (2019) 012023 doi:10.1088/1757-899X/697/1/012023

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Acknowledgments
This research was supported by DPPM (Direktorat Penelitian dan Pengabdian Masyarakat) Universitas
Islam Indonesia, Yogyakarta, Indonesia and Industrial Engineering Department, Faculty of
Technology Industry, Universitas Islam Indonesia, Yogyakarta, Indonesia.

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