1. BASF’s SCM Learning System
APICS Triangle Chapter
May 12, 2009
Alan L. Milliken CFPIM CIRM CSCP CPF
Business Process Education Manager
BASF Corporation

2. Alan L. Milliken CFPIM CIRM CSCP CPF
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

3. BASF Founded in 1865 as Badische Anilin und Soda Fabric
The world’s leading chemical company with sales of approximately $80B in 2008

4. Value-Based Management (Business Perspective)
Start Here
Shareholders receive High ROI
Shareholders provide Capital E A U
3. Create Value for Your Shareholders D
1. Invest in Adding Value to Products & Services L
Your Firm D A E V D
And receive Value in Return
2. Deliver Value to Your Customers

5. Value-Based Management (Learning & Development Perspective)
Start Here
You & Shareholders receive High ROI
You and Your Firm provide Capital for Education & Training E A U
3. You Create Value for Your Firm’s Shareholders D
1. You Invest in Adding Value to Yourself through Education, Training & Experience L
YOU D A E V D
And receive Value in Return
2. You Deliver Value to Your Firm

6. Value-Based Management Approach
Value can be created by:
increasing Profit and/or
reducing capital employed (e.g., inventories, receivables)
Profit
Reducing capital employed
Source: Kurt Bock – Chief Financial Officer – BASF Group
The company’s definition of success should define the contents of the learning system.

7. Where Does Value Come From?
Triad of Operational Excellence
TECHNOLOGY
PROCESS
PEOPLE
Which one controls how much “value” the other two generate?

8. Value Drivers and Associated Metrics Drive Performance

9. Analysis of a “Value Driver” in Supply Chain
Forecasting
Improved 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

10. Functional Strategies Driven by Competitive Priorities Help to Prioritize Learning:
Identification of Customers, Products, Competition, Socioeconomic Environment
Market & External Environment Analyses
Overall missions & goals of the Organization, Recognition of Distinctive Competencies.
Corporate
Strategy
Must develop the supply chain expertise required to plan & execute strategy.
Future Direction (Global Strategy, New Products & Services, etc…)
Competitive Priorities(Cost, Quality, Time, Price, etc..)
Capabilities
current
needed
plans
Functional Area Strategies
Finance
Marketing
Operations
Supply Chain
others
Source: Operations Management, Fifth Edition, Krajewski & Ritzman

11. 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

12. Form the best team in the industry
BASF’s Vision
Form the best team in the industry
Help our customers to be more successful
Earn a premium on our cost
of capital
Ensure sustainable development
None of these business & functional strategies can be achieved without competent employees who have been provided the necessary capabilities (behavior, knowledge, & skills) to succeed.

13. SAP Business Integration
Learning System – Virtual Organization
SAP Business Integration
SAP Training & Support
Human Resources
Logistics/SCM
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
Virtual Team
The Logistics-Supply Chain Community both provides input to help guide these services and receives outputs from these services.

14. Identifying and Defining Key Personal & Technical Competencies

15. Adding Value through Individual Competency
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:
Describe capabilities in a specific area of knowledge (e.g. Supply Chain Management) and are based on education & experience.
Refer to capabilities based on personality, personal trait, and values.
Success
Competencies enable employees to create value!

16. Examples of Personal Competencies
Improve your ability to guide and inspire employees to meet their maximum potential and the ability to work on a team.
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.

17. 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

18. HPO 2006 Required Competencies
Harvard Mentor Management Program (HMMP) is used to support Global/Personal Competencies.
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 & 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)

19. Examples of SCM Technical Competencies
Information Technology
ERP System
Advanced Systems
PC Skills
SCM Competencies
Demand Planning
Supply Planning
Execution & Control
Inventory Management
Distribution & Transportation
Foreign Trade
General Skills
Continuous Improvement
Project Management
Contract Management
Data Analysis
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.

20. Define Levels of Technical Competency
Once Technical Competencies are identified, definitions of progressive levels are needed to define specific job requirements.
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

21. Developing the Competency Curriculum

22. Major Components of the Technical Competency Curriculum
APICS
Certified 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 Training
SAP 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 & Webinars
BASF offers in-house classes that focus on supply chain management at BASF in SAP R3.

23. List of Approved External Providers

24. APICS CPIM House of Knowledge
BASICS of SUPPLY CHAIN MANAGEMENT
Philosophies Strategies Targets
Strategic
Management of Resources
Product Demand
Internal Resource
External Resource
Material Plan
Capacity Plan
Supplier Plan
Master
Planning of
Resources
Execution
&
Control
Operations
Detailed
Scheduling

25. 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
The team of subject matter experts conducted an exhaustive review of the knowledge and resources available in the field. They also met several times to discuss their findings. The outcome was a body of knowledge that encompasses four domains:
Supply Chain Management Fundamentals
Building Competitive Operations Planning and Logistics
Managing Customer and Supplier Relationships
Using Information Technology to Enable Supply Chain Management
One certification, one exam, one study tool
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.

26. 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

27. Sample of Supply Chain Academy (SCA) Courses
Sales & Operations Planning l
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 pr
ovides 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. l
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 op
erations planning
process. It also discusses the roles and responsibilities of ind
ividuals involved in each step. l
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 processe
s. This course explores the
development and validation of the production plan and the measur
ement of the performance of the
production planning process.
S&OP Basic Concepts

28. Sample of In-House Class Agenda

29. Sample Webinar Topics 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

30. 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.

31. Participant Evaluations are Used to Improve the Program

32. Implementing a Competency-Based Process
“Learning is not compulsory... neither is survival.”
W. Edwards Deming ( )

33. 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.
Note: Some competencies are company specific (e.g. Product Knowledge, Manufacturing Knowledge, Internal Business Knowledge, etc..) and education & training must be developed in-house.

34. Sample Curriculum based on Role & Competencies
Curriculum includes progression from fundamentals to advanced and integrates use of systems.

35. Evaluate Individual Needs & Develop Plans
Self Evaluation:
plus
Performance & Development Review with Your Leader
= a Plan

36. Example of an Individual Plan

37. DO HANDOUT EXERCISE

38. Practice Exercise: Response at BASF

39. 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

40. Current Status at BASF
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

41. 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

42. 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.”

43. Final Thought
or FIRM
“Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource.”
John Fitzgerald Kennedy

45. Practice Exercise: Competencies by Job
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.