Manufacturing and service process decisions are very important to firms for at least two reasons. First, they tend to be expensive and far-reaching. The decision to put in a production line, for example, dictates the types of workers and equipment that are needed, the types of products that can be made, and the kinds of information systems that are required to run the business. Because of the financial commitment, it is not a decision that can be easily reversed.
Second, process decisions deserve extra attention because different processes have different strengths and weaknesses. Some processes are particularly good at supporting a wide variety of goods or services, while others are better at providing standardized products or services at the lowest possible cost.
Primary processes address the main value-added activities of an organization. They include activities such as delivering a service and manufacturing a product. These processes are considered “value-added” because some customer is willing to pay for the resulting outputs. In contrast, support processes perform necessary, albeit not value-added, activities. Development processes are processes that improve the performance of primary and support processes.
For many business processes, no single function or supply chain partner has a complete view or complete control of the situation.
The SCOR model looks at a firm’s supply chain activities in three levels of increasing detail. Level 1 of the views SCM activities as being structured around five core management processes; Source, Make, Deliver, Return—Processes associated with returning or receiving returned products for any reason, Plan—Processes that balance aggregate resources with requirements.
Level 2 processes break down level one activity into more detail. Make-to-stock, make to-order, and engineer-to-order manufacturing processes differ with regard to the level of product customization and therefore require very different solutions.
Level 3 processes describe in detail the actual steps required to execute level 2 processes.Manufacturing and service process decisions