Editor’s Note: Eaton was the recipient of ASCM’s 2021 Award of Excellence — Learning and Development, which recognizes an organization’s commitment to productivity and advancement based on the effective and ongoing application of educational concepts, competencies and best practices from ASCM performance-driven team training and the APICS body of knowledge. The company partnered with ASCM to implement a superior learning process across its regions and businesses, enabling members of the Eaton supply chain function to communicate with a common language and address business challenges with outstanding results. To learn more about the ASCM Awards of Excellence ascm.org/awards.
Our world needs more power. As global economic development increases, the U.S. Energy Information Administration predicts that the world’s power needs will increase by nearly 50% within the next 30 years. Likewise, the demand for knowledge at power-management company Eaton is also on the rise.
The Dublin-based company creates power-management technologies and services to help its customers effectively manage electrical, hydraulic and mechanical power. Its products include engines, actuators, controllers, pumps, transmissions, filtration solutions, backup power solutions and more. The Materials teams within Eaton’s seven businesses drive the company’s value creation and ensure Eaton remains a preferred supplier. These professionals manage the day-to-day connections between Eaton’s manufacturing operations and Eaton suppliers and customers, respectively, to ensure information and materials flow efficiently. In addition, they are responsible for optimizing performance while maximizing the value for customers and shareholders. Eaton’s materials managers, demand and supply planners, master schedulers, and buyers make the decisions that affect critical key performance indicators including on-time delivery, days of inventory on hand, amount of excess and obsolete inventory, and sales and operations planning effectiveness, as well as inventory management and supplier management.
Eaton leaders decided to invest in ASCM education for its Materials teams to raise their levels of maturity and ensure deep levels expertise. In addition, the supply chain knowledge would help employees understand the interactions and interdependencies across functions. ASCM’s educational offerings stood out to Eaton for many reasons. “ASCM is the leading provider of supply chain training, and its certifications provide international recognition, which adds value to both Eaton and our employees,” says Marielle Cage, global lead for supply chain design and total cost of ownership. “ASCM instructors are world-class working professionals who bring with them real-life scenarios, which enables our employees to learn from practical examples and experiences. In addition, the training content from ASCM is based on industry standards, and the content is constantly upgraded with new theories based on the current market and industry trends.”
Eaton selected ASCM’s Certified in Planning and Inventory Management (CPIM) program to give employees the knowledge they need to effectively evaluate and manage supply chain activities. Leaders were asked to nominate their best-in-class employees from all over the world for the initial training. The candidates were grouped by region and location for local training with in-region instructors. After passing a screening process, participants committed to a two-year training cycle to train and test for CPIM Part 1 and CPIM Part 2. Eaton leaders and the ASCM instructors believed this would give the employees ample time to learn the content, prepare for the tests and earn their designations. Candidates received CPIM learning systems one month before training and received prepaid exam credits during the last week of training. Program participants were expected to take the CPIM exams within 60 days of completing the corresponding training session.
Eaton also set up a Materials Excellence learning and development team to manage the educational program. Cage manages Eaton’s relationship with ASCM, while the company’s global supply chain center of excellence in India plans activities and tracks progress.
The first training sessions of 2019 took place on-site and were kicked off by a senior leader. During the pandemic, training pivoted to virtual sessions three times a week. Students in similar time zones were able to connect, and instructors were specifically selected for their ability to maintain engagement and participation.
“Our post-training survey results showed that more than 95% of students felt that the quality of the training and instructors was excellent, helped enhance their knowledge, and adequately answered their questions,” Cage says.
The Materials Excellence group also created a Microsoft Teams group so that participants could share and discuss theories and concepts. Leaders celebrated achievements and success stories across multiple internal platforms, including Yammer and SharePoint.
Now, Materials team members from each of Eaton’s seven businesses participate in a rolling training cycle to educate more employees. Most trainings still are happening online. Eaton has also expanded the learning and development program to include ASCM’s Foundations of Supply Chain Management (formerly Principles On Demand) online learning platform, which features multiple mini courses organizations can choose from to create a program that meets their educational needs. For instance, the Materials Excellence team chose topics such as inventory planning and control, material requirements planning, and managing sales and operations planning. Cage notes that selecting learning programs that are most relevant to the company’s manufacturing operations has been critical for making the educational investment worthwhile.
Foundations of Supply Chain Management offered Eaton an ideal opportunity to expand its learning and development program across the organization. “While the APICS certification program requires significant engagement and time commitment from participants, Foundations of Supply Chain Management offers a more flexible supply chain education program that can be accessed by a broader group of employees who are eager to strengthen their supply chain knowledge in specific areas related to their roles at Eaton,” Cage says. “This is the perfect complement to the more rigorous APICS curriculum. … We have added another 300 employees globally to this learning program, offering a solid continuous learning opportunity tailored to their needs and specific priorities.”
Eaton currently has about 200 employees around the world regularly accessing some or all of the 20 available courses. In addition, the CPIM program has trained more than 370 participants from 25 different countries. More than 185 of those have passed the CPIM Part 1 exam, and more than 95 have earned the CPIM designation.
Resources to be proud of
After completing the hours of coursework, studying and exams, CPIM program participants graduated from the educational program with a strong sense of pride.
“APICS CPIM has not only contributed to my professional life, but also makes me so proud of holding such a well recognized certification,”says Andrea Karaszi, assortment specialist, Electrical Sector EMEA. “It makes me feel grateful to work for such a company that supports you to pursue more knowledge and promote your professional development.”
Overall, Eaton leaders noticed that, after employees completed APICS trainings, they were more confident, collaborated more, and effectively applied their new knowledge in the workplace to improve productivity and achieve the company’s strategic objectives.
“Although I have been working in planning and inventory management for 11 years, the APICS education system has immensely improved my knowledge of the fundamentals of planning and inventory management,” says Atul Mane, manager of the Materials Excellence program in India. “After earning my certification, every concept is precise and crystal clear..”
In addition, the course materials have proved to be an excellent reference tool for improving operations. “I’m constantly referring back to the material that we covered in the APICS CPIM program,” says Rob Miller, materials, supply chain management, and sales and operations planning manager for Eaton Vehicle Group North America. “I treat the material as a benchmark for the industry standard and compare where our site stands in comparison. For example, we use min-max inventory replenishment strategy a lot here, and I refer to the calculations and process from APICS as a means of holding our plant to that standard to make sure we are managing our inventory efficiently and effectively. I apply this to other areas as well, such as managing inventory within a make-to-stock manufacturing strategy, single sourcing versus dual sourcing suppliers, supplier risk and continuous improvement.”
Fuel for future challenges
With an increasing number of certified professionals in inventory and production management, Eaton’s Materials Excellence function has achieved a number of improvements related to inventory reporting and optimization, sales and operations planning deployment, enterprise resources planning health, forecasting, network optimization, assortment approaches, and total cost of ownership. Through strategic initiatives and targeted materials projects, Eaton inventory was reduced by 10% by the end of 2020, and it is on track to achieve a 20% reduction on current days of inventory on hand by the end of 2022. In the businesses and regions that have certified workers, the organization is continuously reducing slow-moving and excess inventories and freeing up working capital.
The APICS body of knowledge provides a solid foundation of best practices and key concepts in supply chain management that can be broadly shared by employees as a common reference to review Eaton processes and identify opportunities for greater improvement. The shared knowledge has helped the Materials teams communicate in a common language and address business challenges with improved results. The information also has enabled Eaton leaders refine job responsibilities for supply chain roles and standardize how they review competencies and progression ladders.
The initiative also boosted employee engagement and satisfaction. On its latest employee survey, 81.2% of participating employees gave favorable responses. As part of its 10-year sustainability strategy, the company aims to consistently achieve favorable responses from 80% or more of employees. “We know that when employees are engaged in their work, they are more likely to make a difference,” Cage says.
Possibly most critically, the knowledge gained has helped the company address all of the recent supply chain disruptions, including material and labor shortages and logistics capacity constraints. “These competencies make an even bigger difference on how we manage and mitigate those disruptions with increased maturity across the organization,” Cage says. “Redefining our main category strategies, addressing supply chain resilience, strengthening multi-sourcing, increasing supplier collaboration and connecting our end-to-end supply chain are some of the topics that have come center stage across our organization, requiring highly skilled supply chain professionals to drive those initiatives.”
Eaton’s partnership with ASCM also ensures that the company will be prepared for challenges in the future. The company has built an even stronger foundation of supply chain excellence and is poised to keep pace with the rapidly evolving global market and expanding power needs of the world.
Read the Eaton Case Study to learn more about how Eaton leveraged ASCM educational offerings to expand supply chain knowledge company-wide.