October 1996 € Volume 6 € Number 10
October 1996 € Volume 6 € Number 10
Editor's Note: This article makes mention of the Principles of Materials Management course as providing preparation for the Certified in Production and Inventory Management (CPIM) program. Beginning in 1997, this course&emdash;now revised and renamed the Basics of Supply Chain Management (Basics)&emdash;will become the seventh module in the CPIM course of study. An article providing more information about the Basics course appears in the APICS Report .
How do you inspire people to develop the skills necessary to meet business objectives? Our story at Emerson Power Transmission Corp. (EPT) in Maysville, Ky., is not unusual. We have multiple manufacturing sites with too many product lines for those in planning but not enough for those in marketing. All of the products are geared to mature markets. Production processes vary in complexity, ranging from engineer-to-order to make-to-stock, and use several manufacturing systems. EPT is a division of Emerson Electric that has very high performance expectations.
How do we make major performance improvement happen? How do we prepare for the future knowing that there will be many systems changes and significant growth?
APICS gives us the solutions to our challenges. To improve inventory performance, we looked toward our employees. Organizationally, we had numerous job descriptions in the traditional production and inventory control departments. Many of our manufacturing sites are in rural areas but have experienced work forces. Company service averages 17 years. Many systems were homegrown and full of local quirks. Our troops needed new tools, and they needed the education to be able to use them to improve working capital investment yearly. That's when we turned to APICS.
We had long known about APICS. Our membership was company-sponsored, but many were "passive members." Very few were certified. We wanted to bring the body of knowledge to everyone who was involved in planning and have as many certified planners as possible.
Our first step was in-house education during work hours provided by qualified instructors from outside the company who could give us an extrinsic view of materials management. The first class was production activity control, which seemed logical because we believed that almost everyone in the group knew about bills of material and routings. The concept of input/output control should come rather easily. Thirty individuals participated in 40 education hours. EPT paid for testing fees, and exams were taken during work hours. Results: 10 percent passed the certification exam. Obviously, it was time to re-evaluate. What was missing?
To find out, we organized an education strategy team made up of a plant manager who was pursuing certification, a certified production and inventory control supervisor who had been a planner, and the certified divisional materials manager. The team concluded that many of the planners were not ready for certification because they needed fundamental education. In addition, we had a serious lack of motivation. Some employees saw the program as a phase that would run its course. How could we overcome this enigma?
For core education, we turned to the Principles of Materials Management course developed by Tony Arnold, CFPIM, CIRM, and Lloyd Clive, CFPIM, as the foundation for certified in production and inventory management (CPIM). This class became our internal prerequisite for the classes covering the six CPIM modules. It also introduced supply chain management to those who wanted broad education without the depth needed for certification. Several production supervisors and employees from finance and purchasing took the course for its broad educational value. Overwhelmingly positive responses resulted, and we plan to provide it on an ongoing basis.
To increase motivation, we changed the strategy from passive to active support with expectations and rewards established. Job descriptions were rewritten to incorporate APICS certification, with the number of modules increasing with the more senior the position. A new planner position requiring certification was added to provide an advancement opportunity. Believing that completion of each module deserved recognition, cash incentives were given for each exam successfully completed. Full certification was rewarded with an incremental cash incentive and a company-paid trip to the APICS International Conference and Exhibition. We believe that instructors make a big difference in the success of a class. In addition to teaching fees, they were financially rewarded for each student who passed an APICS exam. Managers were given status reports to track the progress of individuals and the overall class success.
Demand for the classes increased so much that we worked with the Maysville Community College branch of the University of Kentucky to provide classes on the school campus, thereby making them available to all businesses in the community. We currently have five participating companies and 45 students. We have covered four certification modules, each providing about 28 instructional hours and the Principles of Materials Management course has been taught three times.
Our class success rate on the certification exams has increased from 10 to 67 percent in one year. Two individuals have completed certification, including the plant manager on the strategy team. Many of the others have completed at least 50 percent of the certification requirements and two individuals have received promotions. Inventory turns improved 7.5 percent, customer service fill rates and credibility maintained or improved, and excess and obsolescence has decreased.
Our planners head up the cause for improved inventory investment, developing inventory strategies to achieve objectives for inventory turns. They are beginning to understand the relationships between supply and demand, lead time and capacity, throughput and cost and inventory and profitability. There is new awareness of the theories and concepts that drive their job and how these tasks are connected. Professional pride has increased tremendously as they have become the experts of resource management.
The investment in people pays off and it will continue as we embrace our future. Our education strategy has expanded to other manufacturing sites, and we will continue to provide CPIM certification courses. We look toward certified in integrated resource management (CIRM)&emdash;our first CIRM class is scheduled for this fall.