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BASFs SCM Learning
System
APICS Triangle Chapter
May 12, 2009
Alan L. Milliken CFPIM CIRM CSCP CPF
Business Process Education Manager
BASF Corporation
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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
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Founded in 1865 as Badische Anilin und Soda Fabric
The worlds leading chemical company with sales of
approximately $80B in 2008
BASF
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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
ShareholdersYour
Firm
E
Start Here
And receive
Value in Return
Value-Based Management
(Business Perspective)
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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 Firms
Shareholders YOU
E
Start Here
And receive
Value in Return
Value-Based Management(Learning & Development Perspective)
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Value-Based Management Approach
The companys 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
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Where Does Value Come From?
TECHNOLOGY
PEOPLE
PROCESS
Triad of Operational Excellence
Which one controls how much value the other two generate?
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Value Drivers and Associated Metrics
Drive Performance
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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
Analysis of a Value Driver in
Supply Chain
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Market & External
Environment Analyses
Identification of Customers, Products,
Competition, Socioeconomic Environment
Corporate
Strategy
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.
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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
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Help ourcustomers to be
more successful
Ensure sustainabledevelopment
Earn a premiumon our costof capital
Form the bestteam in the
industry
BASFs 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.
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Human
ResourcesLogistics/SCM
SAP Training
& Support
SAP
Business
Integration
Logistics/SCM HR
Operations
N. A. Learning CoE
Compensation &Performance Mgmt.
Services
Supply Chain
Council
BPO ConsultingTeam
MM Education &Training Team
*BSUG Teams
(e.g. Matls.Mgmt.)
SoftwareApplicationsTraining Team
*BSUG Teams
(e.g. Matls.Mgmt.)
ApplicationDevelopment
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
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Identifying and Defining Key
Personal & Technical Competencies
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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!
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Examples of Personal Competencies
Lead to better utilization of resources,improved decision making, morecreativity, and the ability to manage
change.
Improve your ability to develop andmaintain collaborative working relationships(inside & outside the firm) and express
facts and ideas in a convincing manner.
Improve your ability to guide andinspire employees to meet theirmaximum potential and the ability towork on a team.
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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 ofdata. 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
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BASF 2015HPO 2006 Required
CompetenciesTraining Available
Earn a premium on our cost of capital
Help our customers to be moresuccessful
Form the best team in industry
Ensure sustainable development
Business and Financial Acumen
Customer Focus
Leading Employees toSuccess/Teamworking
Environmental, Safety and HealthOrientation
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 belaunched in 3rd quarter)
Harvard Mentor Management Program (HMMP)
is used to support Global/Personal
Competencies.
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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 thoseTechnical Competencies needed to successfully implement their strategies.
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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.
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Developing the Competency Curriculum
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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 otherthan 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.
Major Components of the Technical
Competency Curriculum
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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 IBF
APICS CPIM - Master Planning of Resources Various Various CR, On-Line, SS Yes APICS
Budgeting Self-Paced None Internet Yes Harvard Business School
Finance 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 @ GaTech
World C lass Warehous ing & Mater ials Management 12 Mths . Access $2,800 Internet Optional Log is tics Institute @ GaTech
Third Party Logistics 2 Days $1,260 Classroom No Logistics Institute @ GaTech
Managing Warehouse Operations 2 Days $700 Classroom No WERC
Maximizing Warehouse Space 2 Days $700 Classroom No WERC
Using 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 Institute
17 Seminars - Import, Export, Compliance 2 Days Each $1,000 Classroom Yes W orld Trade Institute
List ofApproved E xternal Providers
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BASICS of SUPPLY CHAIN MANAGEMENT
Philosophies Strategies Targets
Strategic
Management of Resources
Product Demand
Internal Resource
External Resource
Material Plan
Capacity Plan
Supplier Plan
MasterMaster
PlanningPlanning
ofofResourcesResources
ExecutionExecution
&&
ControlControl
ofof
OperationsOperations
DetailedDetailed
SchedulingScheduling
&&PlanningPlanning
APICS CPIM House of Knowledge
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APICS CSCP Body of Knowledge
Four domains of knowledge
Supply Chain Management Fundamentals
Building Competitive Operations Planning andLogistics
Managing Customer and Supplier Relationships
Using Information Technology to Enable SupplyChain Management
CPIMs primary focus is on internal operational excellence
while CSCPs focus is on the entire supply chain (suppliers
supplier to customers customer) with a global emphasis.
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SAP Training & Documentation
Training isorganized byprocess/role (e.g.Prod. Plng, WM,TM, C. S., etc)
Step-by-Stepincludes SAPscreenprints
Training &Documentation
linked directly toSAP Transactions
Company expertsmaintain concepts& reference docs
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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 businessenvironment, integrates the multiple plans of a business, and provides direction for subsequent moredetailed 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 planningprocess. 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 familyproduction volumes for all subsequent priority planning processes. This course explores thedevelopment and validation of the production plan and the measurement of the performance of theproduction planning process.
Sample of Supply Chain Academy
(SCA) Courses
S&OP Basic Concepts
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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
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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.
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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 dailyuse 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 canimprove and
complement your
knwoledge of MM
module in SAP
Its logical to know the
process and share the
best practices.
This is an importan
course for all thematerial planners, it
gives you a better
approach in how to
control de operation and
inventories
Because there are a lotof contents that can be
place fast in the day to
day routine and make
remarkable
improvements.
It was very informativefor Planners with
responsibility for
maintaining proper
system settings.
Participant Evaluations are Used to
Improve the Program
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Implementing a Competency-BasedProcess
Learning is not compulsory... neither is survival.
W. Edwards Deming (1900 - 1993)
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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 Person l Competencies ec nic l Competencies
Master 1 Analytical Thinking 1 Business Applications Knowledge (ERP)
Production 2 Customer Focus 2 Manufacturing Planning & Controlling
Scheduler 3 Business & Financial Acumen 3 Demand Planning & Budgeting
4 Work Management 4 Inventory Management
5 Communication & Interpersonal Understandin 5 Manufacturing Process Knowledge
6 Team Leadership and Collaboration 6 Product Knowledge
7 BASF Business Knowledge
8 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.
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North American Technical Competency Curriculum by Role
Course 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 $120.00
**Note: The Advanced Class should be mandatory for Supply Planners.
S a m p le C u r ric u lu m b a s e d o n R o le &
C o m p e t e n c i e s
Curriculum includes progression from fundamentals to advanced and
integrates use of systems.
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M r r r r
D r M C rr r
C r D
M R
M C
DM
M
C
I N &
D
Self Evaluation:
plus
Performance & Development
Review with Your Leader
= a Plan
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EDUCATION & TRAINING PLAN
EM L EE NAME: Sampe Plan EAR: 2008
COURSE TARGET FOR
TECHNICAL COMPETENCY COURSE DESCRIPTION DURATION COST($) COMPLETION
us ness Applica ions (ERP) Ad ancedMa l. Mgm . Cou se 24 Hou s N/A June 2008
Manu actu ing Planning & Controlling APICS CPIMMPR 24 Hours $300 Sept., 2008
APICS CPIMMPR Exam 2 Hours $100 ct., 2008
COURSE TARGET FOR
PERSONAL COMPETENCY COURSE DESCRIPTION DURATION COST($) COMPLETION
Customer Focus Focusing on Your Customer 2 Hours N/A April, 2008
eam ork/Teambuilding Working witha Virtual Team 2 Hours N/A Nov., 2008
rand Totals= 54 Hours $400
Exampleofan Individual Plan
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DO HANDOUT EXERCISE
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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
PracticeExercise:Response at BASF
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Key Performance Indicators (KPIs)
KPIs 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
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175 employees have participated in on-line CPIMclasses in 2008/09.
38 employees participating in an on-line CSCP class.
150 employees participated in 2.5 Day SAP-MMWorkshop
106 CPIMs and 15 CSCPs 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
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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
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Alans Perspective on Educations ROI
Alan has just completed a presentation to the Group Vice-president andhis staff regarding the need for supply chain education in their business.
Directors uestion to Alan:
Alan, what if we educate & train all our supply chain employees andthey leave.
Alans Response to Director:
More importantly, what if we do not educate and train them and they stay?
GVPs Response:
Alan, all of my units will be participating in the program.
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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
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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/logisticsactivities.
Master Production
Scheduler the person
charged with
establishing, managing,
reviewing, andmaintaining a master
schedule.
Practice Exercise: Competencies by ob