Along order to propose correct improvement so that

Along
with the current development, more and more companies are established in
various fields of business, from service to industry. This resulted in
competition in the business world is getting tighter and demands the company to
rearrange its business strategy and tactics. Companies must be able to produce
products with cheaper cost, faster lead time, and high quality so as not to
lose in competition with other companies. Rapid response to consumer demand and
customer satisfaction should also be taken into account so that consumers do
not move to other companies and remain loyal to the company. Supply chain
becomes the key in achieving the success of a company.

However,
in the implementation of supply chain management there is often uncertainty
from various parties such as customer demand uncertainty, supply uncertainty
(lead time of delivery, price and quality of raw materials, etc.), and internal
uncertainty (engine damage, imperfect machine performance, uncertainty quality
of production). The uncertainty resulted in the product that is not in
accordance with the customer demand and the delay in the fulfillment of demand.
Therefore, evaluation and measurement of supply chain management performance is
very important to know the current supply chain performance and to know the
problems that occur in order to propose correct improvement so that supply
chain performance increases. To evaluate and measure the company’s supply chain
performance, a method is needed which is Supply Chain Operations Reference
(SCOR).

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SCOR model has been widely adopted in many companies. Many evidence
and trade journals have reported significant improvements after firms have
adopted the SCOR model. The SCOR model focuses on the supply chain management
function from an operational process perspective and includes customer
interactions, physical transactions, and market interactions. According to the
Supply Chain Council’s (2010) website, ”While remarkably simple, it SCOR
method has proven to be a powerful and robust tool set for describing,
analyzing, and improving the supply chain.” To date, the SCOR model has been
used by companies throughout the world, like Intel the first US corporations to
use SCOR model and also Philip lighting. The benefits of implementing the SCOR
model included faster cycle times, less inventories, improved visibility of the
supply chain, and access to important customer information in a timely fashion.

PT. XYZ is a company
engaged in manufacture that produces electrical products. PT. XYZ has applied
the concept of supply chain management to manage the flow of goods ranging from
suppliers to products that will be hands to customers. However, the company’s
supply chain experiences problems related to production planning
incompatibility such as machine problem, less experience operator, and
forecasting error. There are also problems in delay on delivery of raw
materials from supplier to company (Source). This result in production output
can’t fulfill customer demand so that demand cannot be met on time.

Therefore
it is very important for the company to be able to measure the performance of
supply chain performance to be able to know whether the supply chain is running
efficiently and effectively. PT. XYZ has not conducted an evaluation related to
supply chain performance yet, because the company considers that supply chain
problems have not brought great impact for the company. Therefore, the purpose
of this research is to measure supply chain performance with SCOR method. With
SCOR method, the company can measure the supply chain performance with several
indicators and from those indicators it can be known which activity that caused
the problems in supply chain. After that the problems can be repaired by
immediately proposed the correct improvement.

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