BASF’s SCM Learning System
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Transcript of BASF’s SCM Learning System
BASF’s SCM Learning System
APICS Triangle ChapterMay 12, 2009
Alan L. Milliken CFPIM CIRM CSCP CPFBusiness Process Education Manager
BASF Corporation
• 20+ years at major manufacturing sites working in Production, Logistics, Process & Quality Control, Industrial Engineering, Training, and Scheduling
• 14+ years as a Supply Chain Consultant and APICS Instructor including two years in Mexico City helping BASF Mexicana improve their supply chain
• Identified by an independent consulting firm as one of three APICS members who best answer the question, “What is a Supply Chain Manager?”
• Served as an SME (Subject Matter Expert) on the team that developed the new Certified Supply Chain Professional (CSCP) program.
• Served as an SME on the team that developed the new Certified Forecasting Professional (CFP) for the Institute of Business Forecasting (IBF)
• Engineering Degree from Auburn University and MBA from Clemson University
Alan L. Milliken CFPIM CIRM CSCP CPF
• Founded in 1865 as Badische Anilin und Soda Fabric
• The world’s leading chemical company with sales of approximately $80B in 2008
BASF
Shareholders provide Capital
Shareholders receive High ROI
1. Invest in Adding Value to Products & Services
2. Deliver Value to Your Customers
3. Create Value for Your Shareholders
Your Firm
V
AL
UE AD
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DStart Here
And receive Value in Return
Value-Based Management (Business Perspective)
You and Your Firm provide Capital for
Education & Training
You & Shareholders
receive High ROI
1. You Invest in Adding Value to Yourself through Education, Training & Experience
2. You Deliver Value to Your Firm
3. You Create Value for Your Firm’s
Shareholders YOU
V
AL
UE AD
DE
DStart Here
And receive Value in Return
Value-Based Management (Learning & Development Perspective)
Value-Based Management Approach
The company’s definition of success should define the contents of the learning system.
Value can be created by:
increasing Profit and/or
reducing capital employed(e.g., inventories, receivables) Reducing
capitalemployed
Profit
Source: Kurt Bock – Chief Financial Officer – BASF Group
Where Does Value Come From?
TECHNOLOGY
PEOPLE
PROCESS
Triad of Operational Excellence
Which one controls how much “value” the other two generate?
Value Drivers and Associated Metrics Drive Performance
ForecastingImproved Service, Less Inventory, Lower Costs
YES – Marketing,Sales, Operations, SC, Finance
% Error e.g. [(Fcst-Actual)/Actual]
Process Improvements, Education & Training, Better Systems, etc..
Logistics Cost, Production Cost, Delivery Performance, Inventories
SAP R3, Global Reporting System, GIIC
Source: BASF Group Value Based Management Handbook
Analysis of a “Value Driver” in Supply Chain
Market & External Environment Analyses
Identification of Customers, Products, Competition, Socioeconomic Environment
CorporateStrategy
Overall missions & goals of the Organization, Recognition of Distinctive Competencies.
Future Direction (Global Strategy, New Products & Services, etc…)
Competitive Priorities(Cost, Quality, Time,
Price, etc..)
Functional Area Strategies Finance
Marketing Operations
Supply Chain others
Capabilities• current• needed• plans
Functional Strategies Driven by Competitive Priorities Help to Prioritize Learning:
Source: Operations Management, Fifth Edition, Krajewski & Ritzman
Must develop the supply chain
expertise required to plan
& execute strategy.
Learning Priorities must be Linked to the Business Model
CIM: Trader-Transactional Supplier
Product: Commodity Bulk Chemical
Competitive Priorities: Price & On-Time Delivery
Supply Chain Value Drivers: - Supply Chain Costs
- Delivery Reliability
- Inventory Investment
Supply Chain Capabilities: - Accurate Forecasting
- Production Cost Minimization
- Inventory Optimization
SC Competencies Required:- Demand Planning
- Supply Planning
- Inventory Management
Help our customers to be more successful
Ensure sustainabledevelopment
Earn a premium on our costof capital
Form the best team in the
industry
BASF’s Vision
None of these business & functional strategies can be achieved without competent employees who have been provided the necessary capabilities (behavior, knowledge, & skills) to succeed.
Human Resources Logistics/SCM
SAP Training & Support
SAP Business
Integration
• Logistics/SCM HR Operations
• N. A. Learning CoE
• Compensation & Performance Mgmt.
Services
•Supply Chain Council
• BPO Consulting Team
• MM Education & Training Team
• *BSUG Teams (e.g. Matls.
Mgmt.)
•Software Applications
Training Team
• *BSUG Teams (e.g. Matls.
Mgmt.)
•Application Development
Team
The Logistics-Supply Chain Community both provides input to help guide these services and receives outputs from these services.
Virtual Team
Learning System – Virtual Organization
Identifying and Defining Key Personal & Technical Competencies
The “Best Team” can be built by fostering the use of personal and professional competencies. Competencies describe the personal behavior, skills, and knowledge of a person. Competencies differentiate individual performance and contribution to the team. There are two types of competencies:
Adding Value through Individual Competency
Success
Refer to capabilities based on personality, personal
trait, and values.
Describe capabilities in a specific area of knowledge
(e.g. Supply Chain Management) and are based on education & experience.
Competencies enable employees to create value!
Examples of Personal Competencies
Lead to better utilization of resources, improved decision making, more creativity, and the ability to manage change.
Improve your ability to develop and maintain collaborative working relationships (inside & outside the firm) and express facts and ideas in a convincing manner.
Improve your ability to guide and inspire employees to meet their maximum potential and the ability to work on a team.
Sample Definition of a Personal Competency
Once the list of personal competencies is developed, a detailed definition of each is required. For example many supply chain roles require competency in “Analytical Thinking.”
Analytical Thinking is the ability to identify key issues and relationships, patterns and connections buried in a mass of data. A person in a job role requiring this competency should demonstrate:
• the ability to break down problems and identify basic relationships
• see inter-relationships in complex information
• do complex analyses including “what-if” and “if-then” scenarios
BASF 2015 HPO 2006 Required Competencies Training Available
Earn a premium on our cost of capital
Help our customers to be more successful
Form the best team in industry
Ensure sustainable development
Business and Financial Acumen
Customer Focus
Leading Employees to Success/Teamworking
Environmental, Safety and Health Orientation
Value Based Management (Learning Portal)
Working with a virtual team (HMMP)
Marketing Essentials (HMMP)
Focusing on your customer (HMMP)
Marketing Essentials (HMMP)
Marketing & Sales Academy(to be launched in 2nd quarter)
Leading a team (HMMP)
Keeping teams on target (HMMP)
Financial Essentials (HMMP)
The Journey to EH&S Excellence (to be launched in 3rd quarter)
Harvard Mentor Management Program (HMMP) is used to support Global/Personal
Competencies.
Examples of SCM Technical Competencies
Information Technology ERP System
Advanced Systems
PC Skills
General Skills Continuous Improvement
Project Management
Contract Management
Data Analysis
SCM Competencies Demand Planning
Supply Planning
Execution & Control
Inventory Management
Distribution & Transportation
Foreign Trade
Technical Competencies describe capabilities in a specific functional area and are based on education and experience. Each operational function must define those Technical Competencies needed to successfully implement their strategies.
Define Levels of Technical Competency
Competency:Business Applications Knowledge – ERP System
Level 1: Beginning
• Completed ERP Overview Training for SCM
• Know how and where to find and use ERP tip sheets
• Can use ERP online help functions
• Understand basic system operations and/or commands within ERP System
• Can modify a user profile
• Know how to enter master data in your area of responsibility
• Understand how others are impacted by your inputs into the ERP System
• Can enter a Help desk ticket for the ERP System
Once Technical Competencies are identified, definitions of progressive levels are needed to define specific job requirements.
Developing the Competency Curriculum
APICSCertified in Production & Inventory Management (CPIM) is a BASF global standard for supply chain planners (e.g. Master Schedulers, Demand Planners, Material Planners, etc..). The five CPIM modules are available via the on-line Supply Chain Academy, through local APICS chapters, and through self-study. Certified Supply Chain Professional (CSCP) is recommended for those who already achieved CPIM Certification or persons in supply chain functions other than production & inventory management who meet the eligibility requirements.
SAP R3 TrainingSAP specific concepts, processes and transactions training is available via the SAP Training website.
Supply Chain Academy (SCA)SCA is an on-line education & training tool used at BASF. It contains approximately 200 on-line courses including the APICS CPIM body-of-knowledge, Physical Logistics, and International Trade.
In-House Classes & WebinarsBASF offers in-house classes that focus on supply chain management at BASF in SAP R3.
Major Components of the Technical Competency Curriculum
Learning Curriculum by Technical Competency
Technical Competency Recommended Courses/Seminars Duration Cost Delivery Method Exam Vendor/Source
Demand Planning & Budgeting Certified Professional Forecaster (CPF) 2-3 Days $1,300 Classroom Yes IBFAPICS CPIM - Master Planning of Resources Various Various CR, On-Line, SS Yes APICS
Budgeting Self-Paced None Internet Yes Harvard Business SchoolFinance Essentials Self-Paced None Internet Yes Harvard Business School
Dist. Network Strategy & Design Logistics Optimization (Dist/Transp/Log Modeling) 3 Days $1,730 Classroom No Logistics Institute @ GaTech
Distribution Processes Warehousing Short Course 5 Days $2,780 Classroom No Logistics Institute @ GaTechWorld Class Warehousing & Materials Management 12 Mths. Access $2,800 Internet Optional Logistics Institute @ GaTech
Third Party Logistics 2 Days $1,260 Classroom No Logistics Institute @ GaTechManaging Warehouse Operations 2 Days $700 Classroom No WERC
Maximizing Warehouse Space 2 Days $700 Classroom No WERCUsing Metrics to Achieve Results 2 Days $700 Classroom No WERC
Warehousing Management 6 Mths. Access $750 Internet Optional Institute of Logistics Mgmt.
Foreign Trade (Import/Export) Third Party Logistics 2 Days $1,260 Classroom No Logistics Institute @ GaTechGlobal Logistics Management 6 Mths. Access $800 Internet Optional Institute of Logistics Mgmt.
Export Management 6 Mths. Access $750 Internet Optional Institute of Logistics Mgmt.Import Management 6 Mths. Access $650 Internet Optional Institute of Logistics Mgmt.
Hazardous Materials Compliance 6 Mths. Access $750 Internet Optional Institute of Logistics Mgmt.Law I (Rail and Motor) 6 Mths. Access $750 Internet Optional Institute of Logistics Mgmt.
Law II (Ocean, Air, Intermodal) 6 Mths. Access $650 Internet Optional Institute of Logistics Mgmt.International Transport No Limit $205 Study Guide Optional American Society of Tran & Log
10 Courses - Import, Export, Compliance 10 weeks each $1,000 internet Yes World Trade Institute17 Seminars - Import, Export, Compliance 2 Days Each $1,000 Classroom Yes World Trade Institute
List of Approved External Providers
BASICS of SUPPLY CHAIN MANAGEMENT
Philosophies Strategies Targets
StrategicManagement of Resources
Product Demand
Internal Resource
External Resource
Material Plan
Capacity Plan
Supplier Plan
MasterMasterPlanning Planning
of of ResourcesResources
ExecutionExecution&&
ControlControlof of
OperationsOperations
DetailedDetailedSchedulingScheduling
&&PlanningPlanning
APICS CPIM House of Knowledge
APICS CSCP Body of Knowledge
Four domains of knowledge– Supply Chain Management Fundamentals
– Building Competitive Operations Planning and Logistics
– Managing Customer and Supplier Relationships
– Using Information Technology to Enable Supply Chain Management
CPIM’s primary focus is on “internal operational excellence” while CSCP’s focus is on the entire supply chain (supplier’s supplier to customer’s customer) with a global emphasis.
SAP Training & Documentation
• Training is organized by process/role (e.g. Prod. Plng, WM, TM, C. S., etc…)
• Step-by-Step includes SAP screenprints
• Training & Documentation linked directly to SAP Transactions
• Company experts maintain concepts & reference docs
Sales & Operations Planning
SCA Sales and Operations Planning Concepts (MFG107) Self-Study .5 Hour – The sales and operations planning process is impacted by various elements of the business
environment, integrates the multiple plans of a business, and provides direction for subsequent more detailed and near-term planning. This course explores the concepts that impact the sales and operations planning process and the ways that the process can be adapted to fit various environments.
SCA Sales and Operations Planning Process (MFG108) Self-Study 1 Hour– This Online Self-Study course explores the five primary steps in the sales and operations planning
process. It also discusses the roles and responsibilities of individuals involved in each step.
SCA Developing and Validating the Production Plan (MFG201) Self-Study 1 Hour– The production plan is a key output of the sales and operations planning process that sets product family
production volumes for all subsequent priority planning processes. This course explores the development and validation of the production plan and the measurement of the performance of the production planning process.
Sample of Supply Chain Academy (SCA) Courses
S&OP Basic Concepts
Sample of In-House Class Agenda
Basic-Intermediate SAP R3 Materials Management Workshop - Agenda
Course Name Course Description
Breakfast & IntroductionsSC Overview with ERP Integration Supply Chain Management at BASF enabled by SAP R3
Wheel of Jeopardy Game
Setting up Articles in SAP Who-What-When-How for creating articles in SAP R3.SAP Material Masters Emphasis on key planning factors and how to determine what they should be.
Material Master Word Puzzle
BreakfastBOM's, Recipes, Resources in SAP Emphasis on proper setup and how used in planning processes.
Use of MD04/MD06 Proper setup and use of Stock Status, Orders, and Exception Messaging in SAP R3Planning Purchases (RM's & imports) Managing PO's via SAP and the import system.
Process Orders & Prod Schdlg. Use of Repetitive Manufacturing & Discrete Batch functionality in SAP R3.ATP and Allocation in SAP How to setup and use availability checks in SAP R3.
Materials Management Word Scramble
BreakfastReporting & Analyses Using SAP Demo of helpful reports and analyses and hands-on practice by participants.
Support of Transportation Planning Monitoring product availability to support transportation schedule. Using Product Groups How to select, setup and use Product Groups to streamline planning & manage aggregates.
All Sessions Questions & Answers, Interactive Exercises, Comprehensive Assessment
• Supply Chain Event Management (SCEM)
• When and how to use Re-order Points
• Basics of Inventory Management
• Use of Transfer Orders in TMS
• How to determine Safety Stocks
• How to set Inventory Targets
Sample Webinar Topics
Assessments of Learning – Key Points
• All courses should include post-assessment (e.g. review quiz, simulation of knowledge, etc..).
• Major courses (e.g. >4 hours in duration) should also include pre-assessment to help in determining focus areas and periodic reviews to reinforce learning throughout the course.
• Thresholds to pass internal assessments (not external certifications) should be set relatively low to motivate and reward participation.
• Assessment results should always be kept confidential and only the highest score should be stored when multiple attempts are required.
List three things you learned from the workshop?
interpretation, analysis, ability in SAP
- I learned how to check the status of a Purchase Ordes through CBIS transaction. - I learned how is managed the demand in SAP. - I learned how to adjust parameters better when
ATP, Reports, MB5B, etc, the main is the importance to re-schedule the past due in SAP, to keep it running well
Tips on how to optimized the use of SAP, ATP functionality, Creation of groups of materials
1. How to establish an Inventory Strategy for each article; 2. How to configure SAP for each article; 3. How to improve planning process
Material Master Definitions / MB5T (Stock in Transit) / Supply Chain Event Manager (SCEM)
Would you recommend this course to a colleague?
Yes, of course Yes, of course To all material planers Yes Yes Yes
Why or Why Not?
It is very important to know the tools we daily use for our work, in this case SAP; we have to know in detail how it works and how it can help us to reach our objectives, for better
Because you can improve and complement your knwoledge of MM module in SAP
It´s logical to know the process and share the best practices.
This is an importan course for all the material planners, it gives you a better approach in how to control de operation and inventories
Because there are a lot of contents that can be place fast in the day to day routine and make remarkable improvements.
It was very informative for Planners with responsibility for maintaining proper system settings.
Participant Evaluations are Used to Improve the Program
Implementing a Competency-Based Process
“Learning is not compulsory... neither is survival.” W. Edwards Deming (1900 - 1993)
Prioritize Competencies by Position/Role
In order to determine what education & training an employee needs, Competencies must be prioritized by job. Review of existing job descriptions, review of current objectives for the position, and surveys of experts, incumbents, and leaders can be used to prioritize Competencies.
Position/Role Personal Competencies Technical Competencies
Master 1 Analytical Thinking 1 Business Applications Knowledge (ERP)Production 2 Customer Focus 2 Manufacturing Planning & ControllingScheduler 3 Business & Financial Acumen 3 Demand Planning & Budgeting
4 Work Management 4 Inventory Management5 Communication & Interpersonal Understanding 5 Manufacturing Process Knowledge6 Team Leadership and Collaboration 6 Product Knowledge
7 BASF Business Knowledge8 Business Applications Knowledge (PC)
Note: Some competencies are company specific (e.g. Product Knowledge, Manufacturing Knowledge, Internal Business Knowledge, etc..) and education & training must be developed in-house.
North American Technical Competency Curriculum by RoleCourse Cost
Function Job/Role Global Competency Mandatory Required Courses Delivery Hours (USD)
Supply Chain Demand Planner Supply Chain Fundamentals YES APICS Basics of SCM (SCA APX10100) SS On-Line 27.5 $460.00or APICS BSCM In-House Class IL On-Line 20 $120.00
Supply Chain Plng. (Generic) YES APICS MPR (SCA APX10200) SS On-Line 15.75 $460.00or APICS MPR In-House Class IL On-Line 20 $120.00
SC Plng. In SAP R3 at BASF YES Basics of SCM in SAP R3 at BASF Classroom 20 $500.00**NO Advanced SCM in SAP R3 at BASF Classroom 20 $500.00
Forecasting Demand YES DP-SOP In-house Course IL On-Line 20 None
SAP APO Application Trng. YES Provided by Accelerator Implementation TBD TBD
Inventory Management YES APICS Basics of SCM (SCA APX10100) SS On-Line 27.5 $460.00or APICS BSCM In-House Class IL On-Line 20 $120.00
**Note: The Advanced Class should be mandatory for Supply Planners.
Sample Curriculum based on Role & Competencies
Curriculum includes progression from fundamentals to advanced and integrates use of systems.
Master Production Scheduler: Self-Evaluation Form
Desired My Current Proficiency LevelPosition Technical Competencies Proficiency 1 2 3 Diff.
Master Production Scheduler Business Applications Knowledge (ERP) 3Manufacturing Planning & Controlling 3Demand Planning & Budgeting 2Inventory Management 2Manufacturing Process Knowledge 2Product Knowledge 3BASF Business Knowledge 2Business Applications Knowledge (PC) 3
Evaluate Individual Needs & Develop Plans
Self Evaluation:
plus
Performance & Development Review with Your Leader
= a Plan
EDUCATION & TRAINING PLAN
EMPLOYEE NAME: Sample Plan YEAR: 2008
COURSE TARGET FORTECHNICAL COMPETENCY COURSE DESCRIPTION DURATION COST($) COMPLETION
Business Applications (ERP) Advanced Matl. Mgmt. Course 24 Hours N/A June, 2008
Manufacturing Planning & Controlling APICS CPIM MPR 24 Hours $300 Sept., 2008APICS CPIM MPR Exam 2 Hours $100 Oct., 2008
COURSE TARGET FORPERSONAL COMPETENCY COURSE DESCRIPTION DURATION COST($) COMPLETION
Customer Focus Focusing on Your Customer 2 Hours N/A April, 2008
Teamwork/Teambuilding Working with a Virtual Team 2 Hours N/A Nov., 2008
Grand Totals= 54 Hours $400
Example of an Individual Plan
DO HANDOUT EXERCISE
Directions: Assign each Competency to only one of the two positions.
Competencies SC/Logistics Mgr. Master Prod. Schdlr.
Analytical Thinking XXXXX
Customer Focus XXXXX
Strategic Thinking XXXXX
Financial Acumen XXXXX
Work Management XXXXX
Leadership XXXXX
Change Management XXXXX
Teamwork XXXXX
ERP System XXXXX
Network Strategy XXXXX
Manufacturing Processes XXXXX
Continuous Improvement XXXXX
Distribution Processes XXXXX
BASF Bus. Knowledge XXXXX
Practice Exercise: Response at BASF
Key Performance Indicators (KPIs)
KPI’s can be used to measure participation and confirmation of learning. Examples include:
• No. of Education & Training Hours Taken per Year
• No. & Percent of Employees Participating
• Number of Exams Passed
• Certifications Received
• 175 employees have participated in on-line CPIM classes in 2008/09.
• 38 employees participating in an on-line CSCP class.
• 150 employees participated in 2.5 Day SAP-MM Workshop
• 106 CPIM’s and 15 CSCP’s Globally
• 100 CPIM Exams taken in 2008 (28 outside US)
• 224 APICS Members via Enterprise Membership
• 100+ SCA Users taking 400+ Hours per Year
Current Status at BASF
Summary of the Learning System
Prioritize Competencies by Position
Identify & Define Global (Personal) Competencies
Identify & Define Technical (SCM) Competencies
Develop Curriculum by Competency
Assess Individual Needs based on Position
Develop Individual Education & Training
Plans
Monitor Progress and Provide Feedback
Competitive Priorities & Value Drivers
Alan’s Perspective on Education’s ROI
Alan has just completed a presentation to the Group Vice-president and his staff regarding the need for supply chain education in their business.
Director’s Question to Alan:
“Alan, what if we educate & train all our supply chain employees and they leave.”
Alan’s Response to Director:
“More importantly, what if we do not educate and train them and they stay?
GVP’s Response:
“Alan, all of my units will be participating in the program.”
Final Thought
“Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource.”
John Fitzgerald Kennedy
or FIRM
Directions: Assign each Competency to only one of the two positions.
Competencies SC/Logistics Mgr. Master Prod. Schdlr.
Analytical Thinking
Customer Focus
Strategic Thinking
Financial Acumen
Work Management
Leadership
Change Management
Teamwork
ERP System
Network Strategy
Manufacturing Processes
Continuous Improvement
Distribution Processes
BASF Bus. Knowledge
SC/Logistics Mgr. – the person responsible for planning, organizing, and controlling supply chain/logistics activities.
Master Production Scheduler – the person charged with establishing, managing, reviewing, and maintaining a master schedule.
Practice Exercise: Competencies by Job