Supply chain core

Supply-Chain Core

Shared model for the supply-chain cluster. Planning, make, deliver, and return spokes all optimize the same objective with different levers — keep the trade-off, the units, and the escalation rules consistent here so no spoke contradicts another.

1. The decision this cluster turns on

Every supply-chain choice is the same trade-off: protect the customer promise at the lowest total landed cost, given a binding constraint.

maximize  Service (OTIF / fill rate / on-time)
minimize  Total landed cost (unit + freight + duty + inventory-holding + risk)
subject to  the binding constraint of the stage (capacity · bottleneck · lead time · duty · demand variability)
buffered by  a deliberate reserve (safety stock · capacity slack · lead-time pad · QA hold)

• Service is the promise you must not silently break — measured as OTIF, fill rate, on-time delivery, or quality acceptance.
• Total landed cost is the whole cost, not unit price: freight, duty, holding, expedite, scrap, and the cost of a stockout. Cheaper-per-unit that blows up landed cost or service is a false saving.
• The binding constraint differs by stage — name it before you optimize, because you can only buy service by spending on the active constraint.
• The buffer is how you absorb variability. Every buffer (safety stock, capacity reserve, lead-time pad, inspection hold) is a priced decision: more buffer = more service + more cost. State it.

Rule: never move service for unit-cost (or unit-cost for service) without saying so; always identify the binding constraint first; treat any buffer change as a cost-and-risk decision worth naming.

2. The SCOR backbone (which spoke owns the stage)

PLAN ───────> SOURCE ──────> MAKE ──────────> DELIVER ─────────> RETURN
 │              │              │                 │                  │
inventory-    energy-        production-       carrier-relationship-  returns-
demand-       procurement    scheduling   +    management +           reverse-
planning      (utilities)    quality-         logistics-exception-    logistics
                             nonconformance    management +
                                               customs-trade-compliance

• Plan sets the demand signal and buffers that everything downstream consumes.
• Source secures inputs (materials via the buyer; utilities via energy-procurement).
• Make converts inputs (sequence + bottleneck via scheduling; conformance via quality).
• Deliver moves goods (capacity + rates; in-transit recovery; cross-border clearance).
• Return brings goods back and recovers value (disposition, refund, warranty).

3. Shared conventions & units

• Service metrics: OTIF (on-time-in-full) is the default promise; fill rate for inventory; on-time % for transit; first-pass yield / acceptance for quality. Quote the metric, not a vibe.
• Cost: always total landed cost (unit + freight + duty/tariff + holding + risk/expedite). Inventory holding ≈ 18–28%/yr of value unless told otherwise.
• Time: lead time = order → receipt; cycle time = start → finish of one unit/job; quote mean and variability — buffers exist to cover the variability, not the mean.
• Buffers: safety stock (inventory), capacity reserve (make), lead-time pad (deliver), QA/inspection hold (quality). One word for the same idea: deliberate slack against variability.
• Hard stops (never trade away): restricted-party / sanctions hits, safety or regulatory quality holds, missing legally-required documentation. These are gates, not optimizations.

4. Cross-cutting matrix (stage × constraint × buffer × spoke)

Stage	Typical binding constraint	The buffer you tune	Service metric	Spoke
Plan	Demand variability	Safety stock	Fill rate	inventory-demand-planning
Source (utilities)	Price/tariff exposure	Hedge / contract term	$/unit stability	energy-procurement
Make — schedule	Bottleneck capacity	Capacity reserve, WIP	Schedule attainment	production-scheduling
Make — quality	Defect/escape rate	Inspection / QA hold	First-pass yield	quality-nonconformance
Deliver — capacity	Carrier capacity	Backup carriers, slack	Tender acceptance, OTIF	carrier-relationship-management
Deliver — recovery	Exception/dwell time	Lead-time pad, expedite	On-time recovery	logistics-exception-management
Deliver — cross-border	Duty / clearance time	Broker, FTA, bonded buffer	Clearance on-time	customs-trade-compliance
Return	Recovery value vs cost	Disposition policy	Recovery rate, cycle	returns-reverse-logistics

5. Escalation discipline (shared)

Each spoke defines its own thresholds; the shared rule is escalate before you absorb risk quietly. Trip an escalation when: a buffer breaches its floor (stockout imminent, no backup carrier, capacity overcommitted), a hard stop fires (compliance/quality/safety), landed cost or service deviates beyond plan tolerance, or a single decision exceeds the function's authority (rate increase, write-off, disposition value, duty exposure). State the trade-off and the constraint when you escalate — the decision is the same shape regardless of stage.

6. Shared guardrails

• Protect the promise: don't trade OTIF/fill-rate for unit savings without naming it (and vice versa).
• Name the binding constraint before optimizing — you can only buy service on the active constraint.
• Price every buffer: safety stock, capacity reserve, lead-time pad, QA hold are cost-and-risk decisions, not free.
• Total landed cost, always — never let cheaper-per-unit hide freight, duty, holding, or stockout cost.
• Honor hard stops: restricted-party, safety/quality holds, regulatory docs are gates, not trade-offs.
• Escalate on threshold breach, don't absorb risk silently; carry the trade-off + constraint into the escalation.