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APICS Journey at Ingersoll Rand
Clark Ponthier, CPIM
Vice President, Enterprise SIOP and Materials Management
November 19, 2013
2
Agenda
• Ingersoll Rand Company Overview
• APICS Journey at Ingersoll Rand
• APICS impact beyond education and certification
• Current Status / Keys to Success
• Q&A
3
Advancing the Quality of Life
A World of Sustainable
Progress and Enduring
Results
We advance the quality of life by creating and sustaining safe,
comfortable and efficient environments addressing the world’s
growing critical needs for
• Clean and comfortable air
• Secure homes and buildings
• Safe and fresh food
• Energy efficiency
• Sustainable business practices
4
Ingersoll Rand Overview
• A $14 billion diversified industrial company
• Publicly-held; NYSE:IR
• Operations in every major geographic region
• 67 factories globally
• Strategic brands are #1 or #2 in their markets
• Products and services for commercial, industrial and residential markets
5
Our Path to Premier Performance
• Engaged
Employees
• Delighted
Customers
• Confident
Shareholders
Outcomes of Premier Performance
7
Change was necessary to drive Premier Performance
Journey Starting Point – early 2010
• 4 sectors operated independently with minimal standard work
• Best practice sharing occurred sporadically
• Materials Management talent level was not strong
• Inconsistent Organizational design
• No Materials Management strategy existed company-wide
• Key performance indicators were in poor shape (delivery, turns,
inventory accuracy)
• No “common language” across company regarding materials
management processes
8
What Changed – 2010 ?
• Senior VP of Global Operations and Integrated Supply Chain was
hired
• 4 focus areas: Procurement, Operational Excellence, Materials
Management/SIOP, AME/Quality
• 4 senior leaders hired in early 2010 to drive world-class
performance in each functional area across Ingersoll Rand
• Creation of strong functional leadership team
• Creation of Materials Council with cross sector participation
• Responsible for creation and execution of Ingersoll Rand Materials
Management strategy
• Development and deployment of standard work for IR
• Best practice sharing
9 Company Confidential
Materials Competitive Framework / Gaps - 2010 Under-performing Industry Average Best in Class
Process
Materials processes are
ad-hoc
• inventory control
• replenishment
• scheduling
• buying/planning
Materials process is more
refined
• part classification
• inventory accuracy
• long range forecast
Materials processes are consistently
applied across Enterprise
Lean thinking fully incorporated in materials
processes
Organization
Materials organizations
are non-standardized
Talent level is not
consistently strong
Few materials managers
and staff are APICS
certified
Most materials managers
and staff are APICS certified
Talent level is better, with
pockets of excellence
All materials managers and support staff
are APICS trained/certified
Talent level is consistently amongst the
best
Ingersoll Rand Materials Management processes are below industry average
IR
• Inventory control / visibility
• Tools / process insufficient
• Level pull / Heijunka scheduling
• Talent level
• Lack of global inventory planning
• Production plan doesn’t match forecast
• Supply planning (long term supportability)
• Constraint based production scheduling tools
Gaps
10 Company Confidential
Transform Materials Management to be a core competency in Ingersoll Rand
through education / certification, deployment of standard work, organizational
design and deployment of lean techniques.
Enterprise Materials Management Strategy
Education / Certification
Standard Work
Organizational Design
Lean
• APICS training / certification
• Best practice sharing
• Materials Playbook
• Advanced techniques - future
• Common job titles, descriptions, roles & responsibilities
• Talent acquisition / development
• Push Pull
• PFEP
• Level scheduling
• Materials Gemba Walks
11
Why APICS ?
• Given its size and complexity, Ingersoll Rand needed outside
support to enable materials management to be a core
competency in the company
• APICS recognized as a global leader in Materials Management
with extensive “body of knowledge”
• Ingersoll Rand employees required education and certification
programs that were recognized both inside and outside company
• Ingersoll Rand had existing relationship with APICS, so we were
optimistic about growing that relationship substantially
• We needed early wins to demonstrate impact to the business
12
Key Decisions
• Large commitment by Ingersoll Rand senior leadership
• Ingersoll Rand Executive Leadership Team agreed to fully fund the
education and certification of every Materials Manager (and other
key personnel) globally (initially 100+ employees)
• E- enterprise membership
• Training classes and materials
• Exam cost
• Travel
• Fox Valley Technical College was chosen as our preferred
delivery method for our employees
• All students expected to finish within 18 months of start
• Materials Manager job description rewritten to include CPIM
certification as a requirement
• All new Materials Managers either require CPIM certification or
commit to obtain certification within 18 months of hire date
14
Materials Management Playbook
Enterprise Materials Management June 2012
Process Compliance: 90%Security
Technologies
Climate
Solutions
Industrial
Technologies
Residential
Solutions
Training Complete 100% 100% 100% 100%
ABC Classification 100% 99% 99% 100%
Cycle Counting 88% 77% 70% 100%
ABC/XYZ 100% 95% 100% 100%
Ordering Methods 100% 98% 92% 88%
Safety Stock 95% 91% 86% 100%
Inventory Segmentation 100% 97% 96% 100%
Order Acknowledgement 100% 98% 100% 100%
Shortage Reporting 77% 98% 79% 100%
Receiving Process 100% 100% 100% 100%
Escalation 100% 95% 100% 63%
Input-Output Modeling 46% 27% 89% 0%
Enterprise Total 93% 89% 90% 92%
• Materials “Playbook” was developed in 2011, comprised of core
materials processes
• Materials Council was tasked with development and deployment across
every Ingersoll Rand factory globally
• APICS glossary and practices were used extensively throughout the
development stages
• Governance in place to ensure compliance with IR Standard work
• Results have been very positive
• Playbook content is continuing to
expand
15
Materials Management Org Design
• Prior to 2012, no standard organizational design existed for Materials
Management at Ingersoll Rand
• Job titles, job descriptions, reporting relationships, and
roles/responsibilities varied greatly across sectors/regions
• No process existed to assess functional competency for materials
managers
• Standard org design developed and
deployment will be complete by end of year
• APICS materials assisted in development
of job descriptions and org design
• Role of Materials Manager at Ingersoll Rand
was elevated in many locations
17
Current Status • Early results are very positive
• Delivery improved 85% since early 2011
• Inventory turns improved ~1 turn on average
• Playbook compliance above 90% globally
• Standard org design implementation completed in 2012
• Substantial improvement in inventory accuracy across many factories
• 4 Materials Managers promoted to Plant Manager position in last 6
months
• Education / Certification
• 200+ employees either completed training or in progress
• Fox Valley / Classroom training / Self-study
• 80+ new CPIM certifications in 2 years (project another 35 in next 3
months)
18
Recognition
• Ingersoll Rand journey highlighted in January issue of APICS
magazine
• Recipient of 2013 APICS Corporate Award of Excellence in
Education
19
Key Learnings / Areas for Improvement
• Involvement with APICS goes beyond training and certification of
employees
• Companies undergoing similar transformations need to ensure
governance is in place to track employee progress (certifications)
• Fox Valley Technical College training has been positive overall, but
some employees prefer alternate methods of training
• Improvements required for international students (language, testing
locations, testing dates)
• Whenever possible, give employees time to study during work hours
• Don’t compromise when it comes to “standard work”
• Use of balanced scorecards are key
• More “lean materials” content is required for those companies
undergoing Lean Transformations
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