1

Chapter 1
Supply Chain Analysis
and Typology
Seyedehnasim Aghili
Amirkabir University of Technology, Iran

Mahdieh Sedghi
Amirkabir University of Technology, Iran

ABSTRACT
In the constantly changing business environment, companies are required to compete against their ri-
vals. In this regard, they should be improved immediately. For that purpose, they need to discover their
status in the market and to monitor it over time regarding their competitors. To understand the status
of the chain, it is necessary to have a general idea of how it works and how efficient/effective it works,
which can be achieved through supply chain analysis. Supply chain analysis is the process of modeling
and performance evaluation with a set of tools and methods. This chapter will discuss the most well-
known tool for the modeling of supply chain, Supply Chain Operations Reference (SCOR). Furthermore,
we will discuss the performance metrics to evaluate how the supply chain is performing. Moreover, a
typology of the supply chain is outlined to help the manager in describing the chain with a collection of
attributes that can affect decision making. It is also a supportive tool for the second level of the SCOR
model or any planning software.

SUPPLY CHAIN ANALYSIS
Supply Chain
A supply chain consists of all parties directly or
indirectly involved in the implementation of a
customers request (Chopra and Meindl, 2007).
The boundaries of the supply chain cover almost
DOI: 10.4018/978-1-61350-504-5.ch001
every actor and/or functions that occur within a
chain. Participants, including suppliers, manufac-
turers, warehouses, traders, transporters and even
customers are connected by information, material
and financial flows. The actions and functions
within a supply chain for a manufacturing orga-
nization include, but not limited to, new product
development, purchasing, storage, marketing,
management of the operations, financial problems
of the chain, distribution and supply of products,

Copyright 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

customer services and etc. In respect to these
functions and activities the main objective of the
chain is to receive and fulfill the customer request.
There are various definitions of supply chain
available in the literature. Christopher (2005, p.
17) defines the supply chain as a network of
organizations that are involved, through upstream
and downstream linkages, in the different pro-
cesses and activities that produce value in the
form of products and services in the hands of the
ultimate consumer.
Each of the participants in the supply chain
may consist of several elements. For example,
manufacturers may have various warehouses,
manufacturing plants and distribution facilities
in different areas (or even countries), as shown
in Figure 1 (Hbner, 2007).
Supply Chain Performance
In recent years, researchers and practitioners have
focused on organizational performance measure-
ment and indicators much more than before. Sup-
ply chain performance reflects the organizations
competitiveness and ability to provide value to
Figure 1. Global supply chain network (Hbner, 2007)
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Supply Chain Analysis and Typology
customers, especially in the amount of availabil-
ity and delivery of products or services in time
(responsiveness).
The role of these measures and metrics for
organizational success cannot be overstated.
They affect strategic, tactical and operational
planning and control. Performance measurements
and metrics have an important role in setting
objectives, performance evaluation, and deter-
mine future courses of action (Gunasekaran and
McGaughey, 2004).
Supply chain introduces a new concept, a chain
of activities and processes to meet the needs of the
end customer who has changed the management
of the organization in many aspects, including
strategic and operational level.
Having changed company strategies, supply
chain management has affected the way manu-
facturing and service companies meet the needs
of their customers. As an exclusive strategic
discipline, supply chain must be managed and
improved to perform effectively and efficiently.
One must have a clear understanding of the cur-
rent chain and how it operates before starting
any improvement actions. Therefore, analysis of
Supply Chain Analysis and Typology
processes and functions of the chain are needed. In
other words, we need to measure how the supply
chain performs. Tools, frameworks and methods
are needed for modeling and performance evalu-
ation of the supply chain.
Supply Chain Analysis
Supply chain analysis is the study of quantitative
models that characterize the various economic
trade-offs in the supply chain (David Simchi-Levi
et al, 2004). Recently, analysis of the supply chain
has been discussed extensively in theoretical
and practical aspects. Due to constant changes
and developments in the business world, sup-
ply chains are always evolving to meet business
requirements. Consequently, understanding the
effectiveness and efficiency of the supply chain
has a great importance.
Conducting an analysis of the supply chain
will evaluate the current condition of the chain,
which is necessary for further improvement. It can
also help to see the trends, gaps between plans
and achievements of the time horizon and to set
new targets more precisely. Moreover, it can be
used as a base or bench mark for later analysis.
A supply chain analysis does not only have to
capture the correct type of the supply chain but
should also reflect this in the performance mea-
sures to be evaluated (Surie and Wagner, 2008).
A proper supply chain analysis should detect
the appropriate type of supply chain and also
should reflect this in the performance measures
to be assessed (Surie and Wagner, 2008). Based
on the facts that supply chains vary depending
on the type of products/services provided by the,
the market environment in which they compete
and typology they use, it is important to note that
each chain has its own competence, actions and
performances. Therefore, it is very important for
supply chain analysis be able to fit these core
competencies and measures them accordingly.
Many scientists and practitioners have worked
in different frameworks and indicators for model-
ing and measuring the quality of the supply chain.
Based on the best concepts in the literature, two
main tasks -process modeling and performance
measurement - should be made for this purpose.
Supply Chain Operations
Reference Model (SCOR) 9.0
Why Choose this Model?
Significant relationship between process model
and the underlying real world as well as between
process model and implementation measures is
crucial (Stadtler and Kilger, 2008). Following
the introduction of the value chain by Porter, the
concept of process-oriented approach has become
more outstanding in the practical and theoretical
context of a functional approach; supply chain
management is a process-oriented. The analysis
of the supply chain must be process-oriented,
although some organizations are still functionally
organized, but practicing supply chain.
When analyzing supply chains with process
oriented approach, the modeling of processes is
the first important issue. To model the processes
of a supply chain, it is necessary to determine
the basic processes and then find how to model
them. Different languages and tools have been
developed to model processes such as process
chain notation (Brause and Kaczmarek, 2001;
Arns and others, 2002)
According to many studies, the most thriving
tool for modeling the supply chain and strategic
decision making is the Supply Chain Operations
Reference (SCOR) model developed by Supply
Chain Council (SC) (Huang and others., 2004).
This section briefly reviews the SCOR as a
tool for modeling and performance measurement
in the supply chain. It also contains other tools
for the Design Chain and Customer Chain, which
will be described later.
3

What is Supply Chain Operations
Reference Model?
Supply Chain Operations Reference (SCOR) mod-
el captures the supply-chain Council consensus
view of the management of a supply chain. This
is a tool for mapping, analysis and configuration
of supply chains. The SCOR model provides a
standard language for describing a supply chains
and not optimizing any part of it. (See http://www.
supply-chain.org).
Since there are different partners involved in the
supply chain and its processes, general language
and clearly defined measures must be utilized. The
motivation of the Supply Chain of the Council for
the development of the Supply Chain Operations
Reference (SCOR) model is the introduction of
a common language between all members in the
supply chain. Under SCOR, a process reference
model includes an analysis of current state (opera-
tions and objectives), quantitative/measurement
of results and comparison with benchmark data.
Figure 2. Process reference model (See http://www.supply-chain.org)
4
Supply Chain Analysis and Typology
What is a Process Reference Model?
As defined by the SCC, process references model
integrates the well-known concepts of the busi-
ness process reengineering, the benchmarking, and
the process measurement into a cross-functional
framework (see http://www.supply-chain.org).
Process reference model includes a standard
definition of processes, a framework to illustrate
the relationship between the standard processes,
metrics for measuring performance of processes,
best management practices, and typical arrange-
ment of the features and functions, respectively
(see Figure 2).
Structure of SCOR Model 9.0
SCOR model (see http://archive.sup-
ply-chain.org/galleries/public-gallery/
SCOR9.0OverviewBooklet.pdf) identifies five
different processes for managing the supply chain
such as, plan, source, make, supply and return.
SCC also recommends that the boundaries of the
supply chain are considered from suppliers sup-
pliers to customers customers. The boundaries of
Supply Chain Analysis and Typology
the SCOR have changed depending on the needs
of Council members during the time. With the
introduction of Return, some parts of post-delivery
services are also covered by the SCOR model.
It must be noted that SCOR model does not
include all processes of the supply chain enterprise,
such as sales, marketing, research and develop-
ment of a new product. Each standard process
is hierarchically divided into at least four levels
where the first three levels are within the scope
of SCOR and fourth level is not:
1. Top Level (Process Types)
2. Configuration Level (Process Categories)
3. Process Element Level (Decompose
Processes)
4. Implementation Level (Decompose Process
Elements) (Because this level and lower are
detailed and specific for each organization,
they are out of the scope of SCOR model.
These levels try to define core practices to
answer the requirements of the changing
business environment.)
Figure 3. SCOR hierarchy (See http://archive.supply-chain.org/galleries/public-gallery/
SCOR9.0OverviewBooklet.pdf)
Each organization uses the SCOR-model to
improve the results should extend the model, at
least to level 4, with its own processes and struc-
tures. In other words, we can show the hierarchy
that comes from the SCOR, as shown in Figure 3.
Level 1: Process Types
The first level covers five basic management
processes in the supply chain as follows:
1. Plan: Demand/Supply Planning and
Management
Plan includes a process to balance aggregate
demand and supply in addition to communicate
Plans to Source, Make, Deliver and Return
to meet resource, production and delivery ca-
pacities appropriately. Other functions within its
scopes are: supply chain measurement, inventory
management, asset management, logistics and
transportation, regulatory requirements and risk
of supply chain.
2. Source: Sourcing Materials/Products and
Services
5

Source includes processes to procure materials
and services to respond the demand, which consist
of identification of suppliers, assessing suppliers
performance, selections of suppliers, scheduling,
receiving and verifying their deliveries. This scope
also includes management of suppliers network,
inventory management of delivered items, import/
export regulations, supply chain source risk, and
management of contracts and authorization of
payments to suppliers.
3. Make: Make/Production Execution
Make includes the material and semi-finished
products transformation process to the finial
products to meet the planned or actual demands.
Production planning, production, product testing,
packaging, management of facilities, equipment,
productions network, regulatory compliances for
production are also in this aspect.
4. Deliver: Delivery of goods or services to
meet customer demand
Delivery involves a process to provide and
deliver a finished product or service to its custom-
ers to meet actual or planned demand. It contains
processes, such as: order management, loading
products, generating documents and invoices,
warehouse management, transportation manage-
ment (select routes and carriers), shipping and
delivery of products at customerslocation, import/
export regulations, finished products inventory
management and supply chain risks of delivery.
5. Return: Return of the raw materials to sup-
pliers and receiving complaints of goods and
services from costumers.
Return process includes processes related to
the return of raw materials to the supplier or the
receipt of the returned products from customers
(MRO and/or excess product). This field covers
authorization, scheduling and sending data, re-
6
Supply Chain Analysis and Typology
ceiving customer returns, the disposition of return
products, inventory returns management, regula-
tory requirements, managing return performance
and supply chain return risk (see Figure 4).
Level 2: Process Categories
The next hierarchical level of the SCOR model
is the Configuration level, which has three differ-
ent categories of processes, including Planning,
Execution and Enable (formerly infrastructure).
1. Planning: These are processes that support
the allocation of scheduled resources to
meet expected demand requirements. They
balance the demand and supply aggregated
during the planning time range. Usually
performed periodically, and can influence
the response time of the chain the demand
changes.
2. Execution: Processes in this category are
due to planned or actual demand. They
typically include scheduling/sequencing,
transforming materials and services and/or
moving products. Performance Execution
category processes underlying the processes
of supply chain and can usually affect the
order fulfillment time.
3. Enable: Supportive processes for the main
chain processes are categorized as Enable.
They facilitate and maintain/manage pro-
cesses relations and information flow.
The Table 1 summarizes the process configu-
ration.
Level 3: Decompose Processes
At this level the process categories are decomposed
into process elements. Each element of the process
may be associated with other processes and can
have input stream (material or information) and/or
output flows (materials and information). At this
level the model is configured to fit the structure
of real supply chain.
Supply Chain Analysis and Typology
Figure 4. SCOR model (See http://www.supply-chain.org/)
Modeling supply chain using SCOR standard
is delivered in a hierarchical structure. First one
must determine the type of process (Plan, Source,
Make-up, delivery and return). Then the process
category must be determined and finally compo-
nents and flow of information and materials be-
tween them must be identified. For example, P1.2
in the hierarchical structure of the model shows
the third level element. The P, represents plan
process (level 1). 1 represents a category of its
process and indicates that deals with the planning
of the supply chain (level 2). The 2 represents
the process element and when it comes to standard
SCOR it shows the process is Identify, Assess
and Aggregate Supply Chain Resources.
Using SCOR notation helps to explain the
chain in a simple understandable way. It is pos-
sible to customize each organization model in
the fourth level to configure it in a way that best
fits its structure.
Table 1. Process types and categories (http://archive.supply-chain.org/galleries/public-gallery/
SCOR9.0OverviewBooklet.pdf)
SCOR Configuration Toolkit
Process Type Planning P1 P2
Execution S1-S3
Enable EP ES
Design Chain Operations
Reference Model (DCOR 1.0)
As described above, the SCOR model is a tool
for analysis and configuration of all business
processes that meet customer demand. SCOR
model does not include processes such as sales
and marketing, research or product development.
In response to the need of a model for analyzing
the research and product development, Design
Chain Operations Reference model (DCOR)
was officially introduced for the first time at the
Supply Chain World 2006, the organizations
annual global conference, by SCC (http://ar-
chive.supply-chain.org/galleries/public-gallery/
DCOR_1_0_Reference_Guide.pdf).
The generation of DCOR model was not started
by SCC from beginning. SCC developed a draft
by Hewlett-Packard (HP) Company. This initial
model was developed under the supervision of Joe
Francis and Caspar Hunsche in the HP Company,
SCOR Process
P3 P4 P5 Process Cat-
egory
M1-M3 D1-D4 S/DR1-S/DR3
EM ED ER
7

as they were faced with the need for a model as-
sociated with design and product development.
DCOR is organized in a hierarchical structure,
and the same as SCOR, contains three levels
of process detail. At the highest level consists
of five basic management processes, including
Plan, Research, Design, Integration and Amend.
Configuration level, the second level, categorizes
processes into three categories: Planning, Execu-
tion and Enable. The third level is the process
element level in which processes are divided into
detailed processes, called by some as functional
activity descriptions. As the SCOR model, DCOR
model can be configured to match the appropriate
structures and organization requirements. Tuning
the model is run on level 3, where elements of
the process has inputs, outputs, indicators and
best practices.
To distinguish between the plan in SCOR and
DCOR and also deliver in SCOR and Design in
DCOR, SCC uses the notations in Table 2.
Customer Chain Operations
Reference Model (CCOR 1.0)
As described before, SCOR and DCOR not cover
post customer support for delivery. So in response
to the needed tool for analyzing and configuring
customer service, SCC presented Customer Chain
Operations Reference Model (CCOR 1.0), which
was originally developed by HP as well as DCOR.
In CCOR the model is structured similar to the
SCOR and DCOR at three detail levels. The high-
est level consists of five main business processes
relating to customer support which are: plan Plan,
Relate, Sell, Contract and Assist. At the next level,
configuration level, processes are categorized
Table 2. SCC notations
Plan in SCOR P Plan is DCOR P (DC)
Deliver in SCOR D Design in DCOR D (DC)
8
Supply Chain Analysis and Typology
as: Planning, Execution and Enable. At the third
level, processes are divided into specific functional
process (http://archive.supply-chain.org/galleries/
public-gallery/CCOR_Quick_Reference.pdf)
Supply Chain Performance
Measurement
For measuring the performance of the supply
chain, it is necessary to calculate the effectiveness
and the efficiency of processes. Effectiveness
measures the level of a customers responded
requirements and efficiency measures the eco-
nomical use of resources by the customers needs
are met. Systems that measure the performance of
the supply chain are a set of metrics to measure
the effectiveness and efficiency of processes.
When we use a range of performance char-
acteristics, we use the basic features of a supply
chain to give us the opportunity of studying and
evaluating a supply chain against other supply
chains in the market. Just as any other object
that would be described by its features, a supply
chain needs a set of standard features that can be
used as criteria for comparison. If we lack these
qualities there is no meaningful way to compare
an organization that provides low-cost prod-
ucts that compete against one of the reliability
and performance.
As described before supply chain analysis
consists of modeling and performance measure-
ment. There are different performance measure-
ment models and metrics that are available. In
this section we will discuss some of these models.
Hugoss Model
Hugoss model (2003) introduces four perfor-
mance categories in each supply chain to be
measured by its participant. It also introduces
performance metrics which can be used in each
of these categories in performance.
As supply chain has its own characteristics
based on the market which it serves, Hugoss
Supply Chain Analysis and Typology
model suggest that for recognition of supply chain
performances, the market should be evaluated.
Hugos introduces a simple model to categorize
the markets and identify the requirements and op-
portunities for supply chain in every market. The
truth is more subtle and more complex model can
represent this model, but it can point you in the
right direction and will guide you through the study
of markets your company serves (Hugos, 2003).
As you can see in Figure 5, the market is cat-
egorized by level of two fundamental components,
supply and demand, into four types of market
(Market Quadrants)
1. Developing market
2. Growth market
3. Steady market
4. Mature market
According to the Hugos model each market
has its own characteristics and capabilities and
any supply chain must try to ensure they are
met with regard to the market opportunities in
Figure 5. Market quadrants require a different mix of performance (Hugos, 2003)
which they serve. Achieving higher profits by
the companies depend on their ability to respond
to market opportunities. Companies that cannot
respond properly will have no chance to compete
with other competitors.
Hugos also introduces four measurement
categories:
1. Customer Service: Customer Service
shows the ability of the supply chain to
meet customer needs. It should be noted
that the expectations of customers, including
product/service availability, quick delivery,
price, etc. are based on market type.
2. Internal Efficiency: It reflects the supply
chain ability to make appropriate level of
profitability. Considering the fact that it is
connected to business and market environ-
ment, appropriate level may be different
among various sort of supply chains.
It reflects the ability of the supply chain to
make an appropriate level of profitability.
Given the fact that it is connected with the
9

business and market environment, appropri-
ate level may differ between various sorts
of supply chains.
3. Demand Flexibility: Demand flexibil-
ity shows how the chain meets the market
demand uncertainty. It also contains the
uncertainty in the range of products.
4. Product Development: It shows the ability
of the chain to introduce a new product in a
timely fashion based on market demand.
The importance of each of these four categories
of measurement may vary based on market quad-
rant. The framework proposed by Hugos allows
establishing the market first, and then a combina-
tion of performance measurement required by the
market can be identified.
Hugos also introduce specific metrics for each
of these four categories of measurement. For ex-
ample, to determine the effectiveness of internal
metrics, he suggests inventory value, inventory
turns, return on sales, and cash-to-cash cycle time.
Thanks to these metrics, the chain performance
can be closely monitored.
Beamons Study
Considering the definition of supply chain
analysis, we require a model and then measure
the performance of a supply chain to analyze the
whole supply chain. Based on Beamons review
on 29 papers of different researchers, there are
different measures used in literature to analyze a
supply chain, which can be categorized into two
major groups.
Qualitative Performance Measures
Quantitative Performance Measures
The former refers to a set of metrics that can-
not be measured by a single numerical criterion.
The later one refers to measures to be quantified
numerically.
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Supply Chain Analysis and Typology
Here are some qualitative performances mea-
sures: (Beamon, 1998)
Customer Satisfaction (may refers to inter-
nal/external customers)
Flexibility (responses to demand which
may changes over time)
Supplier Performance (how well--regard-
ing time and quality-- the suppliers procure
the raw materials)
Information and Material Flow Integration
(how much do the communication of infor-
mation and transportation of material oc-
curs through the chain)
Effective Risk Management (minimization
of risks effect available in different parts of
the chain)
The metrics for quantitative performance are
categorized into two major groups and there are
some extra metrics in each group to measure the
performance of a supply chain. These two groups
and their subsets are briefly as below:
Cost Based Measures
Cost Minimization
Sales Maximization
Profit Maximization
Inventory Investment Minimization
Return on Investment Maximization
(Maximization of the ratio of net
profit to capital)
Customer Responsiveness Based Measures
Maximization of the Fill Rate (maxi-
mization of the ratio of orders satis-
fied timely)
Minimization of the Product Lateness
Minimization of the Customer
Response Time (generally external
customers are considered)
Minimization of the Lead Time
Minimization of the Function
Duplication (minimize the number of
Supply Chain Analysis and Typology
business functions that are provided
by more than one business entity)
She tried to cover all the performance measures
of any supply chain by means of these categories.
Furthermore she suggested quantifying some of
the qualitative performance measures.
SCOR Model Metrics
Beside SCOR model as a tool for analysis of sup-
ply chain, SCC also introduces several metrics
to measure its performance. As SCOR models,
performance measures of SCOR have a hierar-
chical structure and are categorized into different
levels. The first level of the measure, the strategic
dimensions, can cross different processes and not
necessarily related to SCOR level 1 process.
Level 1 metrics are divided into two main cat-
egories: the metrics related to customers affairs and
those related to internal affairs. Customer facing
performance characteristics consists of reliability,
response and agility. They effectiveness-related
performance measures represent the quality of
responses to a customer by the supply chain.
Facing internal performance characteristics are
comprised of costs and assets. These are reliability-
related performance measures that show how well
the supply chain operates.
The metrics used to measure the performance
of the supply chain are linked to one of the key
performance characteristics. For more explana-
tion we mention some of the first level metrics
that can be used to support the analysis process
Perfect Order Fulfillment is one of the met-
rics that classified in customer facing performance
attributes and measures the reliability of a supply
chain. Upside Supply Chain Flexibility is an-
other metric of customer facing attribute, which
shows the agility of a supply chain.
Supply Chain Management Cost is another
metric, which categorized in internal facing at-
tributes and will represent the cost factor in
a supply chain. Return on Working Capital
is one of the internal facing attributes that de-
scribes the assets of a supply chain. (See http://
archive.supply-chain.org/galleries/public-gallery/
SCOR9.0OverviewBooklet.pdf)
In a hierarchical structure, level 1 metrics are
calculated using the lower level indicators. Level
1 metrics are primary metrics that may cross mul-
tiple processes. Lower performance level usually
monitor a narrow range of processes.
SCC introduces standard notation for these
metrics in SCOR 9.0 version. This code will make
it easier to identify and recognize specific metrics
in the supply chain. This will eliminate confusion
for similar items. It will help us to benchmark
because it is based on the performance attributes
of the metrics. This format for each indicator is
AA.bc, where AA is the performance attribute
and its value can vary between: RL (Reliability),
RS (Reaction), AG (Agility), CO (Price) and AM
(Asset Management). B is the level of metric and
c is a unique number. For example, it proposes
the following indicators:
Perfect Order Fulfillment RL.1.1
(See http://archive.supply-chain.org/galleries/
public-gallery/SCOR9.0OverviewBooklet.pdf)
SCC also introduces a hierarchical perfor-
mance measurement for DCOR which is similar to
SCOR performance measurement. This measure-
ment structure can be used to analyze and monitor
the performance of the design chain regarding the
competitors in market space.
The performance metrics in DCOR just as
SCOR model are categorized into five perfor-
mance attributes: Reliability, Responsiveness,
Flexibility, Costs and Assets. There are many
metrics that will be used to monitor the DCOR
performance. For example Perfect Product De-
sign shows the reliability, Design Chain Cycle
Time represents the responsiveness and Design
Chain Fixed Assets Value describes the assets of
a design chain. (See http://archive.supply-chain.
11

org/galleries/public-gallery/DCOR_1_0_Refer-
ence_Guide.pdf)
SUPPLY CHAIN TYPOLOGY
In addition to the supply chain analysis using as a
tool for configuring how the supply chain work, a
typology is outlined to understand different aspects
of the supply chain. According to the literature of
the supply chain management, Meyr and Stadtler
(2008) represented a supply chain typology to
help managers in describing their chain by a set
of characteristics that may influence the decision-
making process and the selection of an appropri-
ate APS. Their work inspired us to represent the
typology with additional attributes. This section
dealt with the configuration of the supply chain
from the same viewpoint, but we tried to cover
the additional attributes that may be more ap-
propriate for practical or academic application.
Similar to Meyr and Stadtler (2008), the presented
typology can support the SCOR model in level 2.
We also grouped the configuration of the supply
chain into two main categories, functional and
structural characteristics. Our first category has
some similarities with what Meyr and Stadtler
(2008) work, but the second part is structured
with significant differences.
Functional Attributes
Functional attributes are related to the chain
operational characteristics. Five major type of
operation in the chain are as follow
1. Sale type
2. Purchasing type
3. Inventory type
4. Production type
5. Distribution and transportation type
12
Supply Chain Analysis and Typology
Sale Type
In determining the type of sale, the first charac-
teristic is the demand pattern. Discriminating the
demand pattern is an important step in choos-
ing an appropriate model for demand planning
and forecasting. Some known characteristics of
demand are:
1. Random (unpredictable)
2. Seasonal
3. Trend
4. Intermittency (Slow-move) which can be
regular or irregular
5. Lumpiness (Peaks & Valleys) which can be
erratic or Non-erratic.
Another important attribute associated with
better knowledge of customers is the Type of
Costumer and life cycle. Three known types of
the client in accordance with the literature are:
1. Loyal Customers.
2. Choice Customers.
3. Bargain customers
A Loyal customer is usually the most profitable.
Higher level of service and support is their main
interest. From the perspective of the life cycle,
this group has the longest life cycle. Moreover,
the Choice customers are not interested in high
level of service as those loyal and usually have
a shorter life cycle. Finally, to Bargain customer
relationship is based solely on price and they have
no attachment to the company. Based on this type
of attachment it usually has the shortest life cycle.
After determining the demand pattern and
customer type, it is necessary to collect some
information about products that may affect strate-
gies for selling. The first required one is the type
of products. The chain may offer single product
or multiple products. Moreover, the degree of
the customization may vary from standard to
highly customized products. The next important
Supply Chain Analysis and Typology
information is the bill of material (BOM). A
BOM is a list of necessary parts and components
for building a product. The BOM can be used to
track any changes in the product and serves as an
accurate list of necessary components. Besides
its application in demand planning, it has further
use in production and inventory management.
Finally, information about the products life cycle
stages plays an important role in the process of
decision makings. Based on the presumed length
and the current stage of the products life cycle,
different marketing and productions strategies
can be implemented.
Purchasing Type
The first characteristic is related to Quantity and
Type of Purchased Product. The amount of needed
items and type of production process (from raw
materials to very specific items that need special
process) forms this feature. The next attribute is
the Depletion of The Purchased Products. Products
with shorter life must be refilled with more atten-
tion, based on this fact it is an important factor in
purchasing planning.
After gathering some information about the
products we looked at the supplier. The first attri-
bute is the Ability of Suppliers to Fulfill Orders. For
example, supplier reliability and responsiveness,
which ensure a high level of service received at
the right time, can demonstrate that field. Fur-
thermore, Supplier Lead Time is closely related
to the reliability of the supplier, but because of its
importance, we have it listed separately. Supplier
with a shorter Lead time is usually regarded as a
more reliable.
Another feature is the Sourcing Strategy,
known as single, double or multiple sourcing. In
Single sourcing companies buy from one supplier
and there is close cooperation between them. This
is the easiest strategy from the managerial aspect,
but there is a greater risk of supply interruption
In Double and multiple sourcing each supplier
fulfills a portion of the required amount. As we
may need further information about the supplier,
the last attribute is Suppliers configuration likes
the suppliers capacity, products quality and cost
and also delivery time. These properties can get
exact or general amounts.
Inventory Type
For the classification of inventory type, the first
attribute is the Inventories Quantity and categories
that influence inventory control and management
in several ways. Quantity of inventory varies from
low to high storage level of purchased materials,
WIP (in process) or finished products. Invento-
ries categories are based on analysis of ABC.
A Class inventory often cover items with more
than 80 percent of the total value or 20 percent
of all items. B class list includes 15 percent of
the total value or 30 percent of all items. Finally,
C Class inventory covers the remaining 5% of
the total value or 50% of all items.
The next attribute is the Inventory constrains
and limitations. As silver (1981) remarked, several
possible constraints are:
1. Supplier constraints, such as minimum or-
der sizes, restrictions to certain pack sizes,
maximum order quantities,
2. Marketing restriction, which includes the
desired levels of customer service,
3. Internal constraints, as storage space and
budget limitations.
Moreover, another attribute is Costs informa-
tion which Silver (1981) grouped them in four
categories, namely
1. Replenishment costs,
2. Carrying costs,
3. Shortage costs, and
4. System control costs.
13

Replenishment costs relate to expenses that
win every time a replenishment action is taken.
It consists of two main parts:
1. Fixed component, usually called setup costs
2. Variable part, that depends on the size of the
replenishment.
Carrying or holding costs covers different
parts such as:
1. The cost of used capital,
2. Warehouse operation costs,
3. Insurance,
4. Taxes,
5. Potential spoilage or obsolescence.
Shortage costs are incurred by the customer
unsatisfied demand, leading to costs of backorder-
ing and/or sales lost profit. Finally, system control
costs includes expenses of acquiring basic data
for the selected rules decision rules, the compu-
tational costs, and other costs of implementation
such as possible adverse behavioral effects of a
new system (Silver (1981)). The latter attribute is
the Replenishment policy, like installation stock
(Q, ri), Kanban, order up-to-S, Echelon stock or
visual review systems such as two bin.
Production Type
Production planning and scheduling is based pri-
marily on the structure of the process flow. The
structure of the flow process can be outlined by
the following factors:
A range of products and services: it can
vary from multiple products to a single
specific one.
Quantity: ranging from low quantity to
high quantity such as mass production.
Production flow: the movement of items
through the manufacturing process can
14
Supply Chain Analysis and Typology
vary from one specific to the various pos-
sible ways.
Capital investment in equipment: from
low cost general equipment to expensive
specific ones.
Process flexibility: the ability of the man-
ufacturing process to adapt to change can
vary from low to high.
Labors expertise: ranging from a high
degree of physical or mental required skill
to lower one
Another planning attribute is the identifica-
tion of the manufacturing costs such as setup and
production variable costs. Production resources
limitation is relating to the resources that cannot
be stored from period to period. This limitation
can cause bottleneck in the process. Final at-
tributes are time period and planning horizon,
which is a delicate issue in production planning.
Time periods can be grouped into big and small
bucket. In a big bucket time period multiple items
are produced but in the small bucket at most one
item is produced in the time period. Finally, we
grouped planning horizon into two general group
of finite and infinite.
Distribution and Transportation Type
The first attribute is the distribution structure
which describes the network of links between
the supplier (factory or warehouse) and the
customer(s). As Meyr and Stadtler (2008) noted
a one-stage distribution structure exists if the
goods are delivered directly from the supplier to
the costumers. By incorporating one or two layers
(that can be central or regional warehouses) to
the link, two or three stage distribution structure
is formed.
The Distribution strategy is the method of
delivering goods from supplier (factory or ware-
house) to costumers. The two main methods are
direct-shipment (separate loads to each customer)
Supply Chain Analysis and Typology

and peddling-shipping (dispatching carriers deliv- supply chain. The first attribute is related to the
ering goods to more than one customer per load). supply chain networks. Network attributes can
As regards transportation Constraints and be listed as
limitation can be divided into two main categories:
Number of tires,
1. Objects related constraints, such as Form of network structure, which can be
Capacity limit of transportation serial, convergent, divergent or the mixture
modes, of them (Meyr and Stadtler (2008)).
Consistency between elements of
goods in transportation, Another attribute is the degree of globalization
Human resources constraints such that Meyr and Stadtler (2008) defined that as the
as the limitation on drivers working domain of the supply chains operation which
hours, can be ranged from single to multiple countries.
Loading restriction, like full-truck
requirement.
2. Links related constraints, like the consistency
between types of goods and transportation
modes
Table 3.Functional attributes
The final attribute is the Delivery relevant costs Categories Attributes
that can ranges from high transportation cost (such Demand type Demand pattern
as transportation means fixed and variable cost Type of Costumer and life cycle
Types of products
and travel time related costs) to low ones. Firms Degree of customization
usually try to find a trade -off between transporta- Bill of materials (BOM)
tion and inventories costs (see Table 3). Product life cycle different stages
Purchasing type Quantity and Types of procured product
Depletion of the Products
Structural Attributes Supplier ability to fulfill orders
Supplier Lead time
Sourcing Strategy
Structural attributes are representing the supply Suppliers configuration
chain structures. We have mentioned three major Inventory type Inventories Quantity and categories
attributes that form the supply chain structure Inventory constrains and limitations
Costs information
(see Table 4). Replenishment policy
Production type Structure of process flow
Topological structure Range of products and services
Quantity
Informational structure Production flow
Organizational structure Capital investment on the equipment
Process flexibility
Labors expertise
Each structure is described in the following. Manufacturing costs
Production resources limitation
Time period and planning horizon
Topological Structure
Distribution and Distribution structure
transportation type Distribution strategy
The topological structure can be defined as struc- Transportation constraints and limita-
tion
ture relating to the geographical attributes of the Delivery relevant costs

15

Table 4. Structural attributes
Categories Attributes
Topological struc- Network attributes
ture Degree of globalization
Informational Different types of information
structure The degree or amount of shared
information
The scope of information
Intensity of relationship
Organizational Formalization
structure Centralization
Complexity
Informational Structure
Information structure plays an important role in
supply chain integration and coordination. For in-
stance, the process of applying a certain coordina-
tion mechanism, which might be used to improve
chains performance, has a close relationship to
the characteristic of information structure.
First attribute is the Different types of informa-
tion. Supply chain Members can share various
types of information such as Demand, inventory,
capacity, and production schedules information.
The next three attributes are based on three
measures that have been used in literature to as-
sess types of information sharing (Samaddar et
al (2006)).
The Degree or Amount of Shared Information
Gavirneni et al. (1999) noted three different de-
grees for information sharing in the supply chain.
No information sharing,
Partial information sharing
Full information sharing
In no information sharing policy that usually
is called as the traditional one, each member only
has limited information and must utilize historical
date for the planning. In this case, there is poor
coordination between the members. However,
16
Supply Chain Analysis and Typology
In partial information sharing every member has
further information about the others demand
distribution and inventories policy. Finally, in full
information sharing instantaneous information
are available for every member.
The Scope of Information
Seidmann and Sundararajan (1998) identified
four levels for information sharing existing in an
organization that is virtually integrated.
Transactional,
Operational,
Strategic,
and Strategic and Competitive
The lowest level, which is named as the trans-
actional, includes sharing of only transactional
information such as prices and order quantity.
At this level, because of its focus on logistic
process improvement information sharing has
no advantage for the independent firms. One of
the technical systems that can be utilized in this
level is EDI.
The next level, operational information, is as-
sociated with situations where one member can
utilize another members possessed information
more effectively. One of its examples is VMI
system in which the responsibility for inventory
management is transferred from buyer to supplier.
Information sharing can lead to additional ben-
efits in the third level. Strategic benefits usually
occur in situations which the shared information
has minimal value to the owner but can provide
strategic benefits to another member. At this level
the sharing of information also has operational
benefits for the donator.
Finally, the highest level is strategic and com-
petitive information sharing. In this case, informa-
tion can have minimal benefits for members if it is
not shared. Furthermore, it has both strategic and
competitive benefits for the receiving members.
Supply Chain Analysis and Typology
Intensity of Relationship
Intensity can be characterized by two dimension,
strategic importance and relationship complexity
between members. The strategic importance is
similar to the four level discussed previously. The
sharing relationship ranges from having coopera-
tion (low strategic importance, low complexity) to
fully collaborative case (high strategic importance,
high complexity).
Organizational Structure
In this part we are trying to describe the supply
chain organizational characteristics by three ge-
neric attributes of organizational structures men-
tioned in literature. These attributes are named,
formalization, centralization, and complexity.
Formalization
This attribute is closely related to standardization
of procedures and rules along with norms and
values. Formalized activity assures organization
from stability of output over time. These actions
can take place in two form of written and unwritten.
Centralization
Centralization in supply chain management refers
to the form of control and decision making. If
one individual has the authority of the control
the structure is called centralized. Conversely, in
decentralized structure the decision-making au-
thority is distributed among many individuals. This
attribute is closely related to the form of control
and ownership ranging from tight control or total
ownership to looser control and partial or quasi-
ownership of the supply chain activities. Based
on the form of control and ownership, integration
flexibility of the chain can be characterized.
Complexity
Complexity in an organization is associated with
the variety and differentiation in its structure.
For instance, numbers of subsystems or variety
of goals that compete in an organization define
its complexity. Three types of complexity are
mentioned in Daft (1989).
Horizontal complexity,
Vertical complexity,
Spatial complexity.
Number of different entities in the same ech-
elon can be referred as horizontal complexity.
Vertical complexity is related to the number of
levels in the chain, and the numbers of operating
locations represent the spatial complexity (Daft
(1989); Price and Mueller (1986)).
CONCLUSION
In this chapter we explained what the supply
chain analysis means and how can we model a
supply chain by using SCOR model as the most
prominent modeling tool for supply chains. Fur-
thermore, we introduced DCOR and CCOR as
two practical instruments for any design chain
or customer chain in business environment. To
analyze a supply chain, its first required to model
it and then represent a system to measure how the
chain performs.
The Integrated Business Reference Framework
is also introduced as an integrated framework for
any company to illustrate all its value chains. In
addition, a supply chain typology is also presented
to classify different attributes of the chain and help
managers in decision making processes.
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