If you've ever taken the College Board's SAT or ETS's GRE, you've been one of those customers. Processing those returns and shipping back the outcome of them requires innovative thinking. Educational Testing Service (ETS) has been delivering on that requirement for more than 50 years.
The Challenge
At ETS, it is more than just shipping tests out and getting them back. Diana Cano is chief information officer for ETS's elementary and secondary education divisions whose background included material handling work for General Electric and Honeywell with clients like the U.S. Postal Service and UPS.
"The light bulb that went on in my head when I got into operations for ETS was that shipping is the easy part," she explains. "Imagine having millions of subcontractors. The automotive industry has many suppliers of subassemblies. They farm out the subassembly work, it comes back and it goes into the main product. ETS farms out subassembly work to individual test takers. We send out blank paper and we get back a valuable piece of paper. People are buying the score reports from us, not the test.
"If you think of the supply chain management of that, you're not only sending out millions of tests, you're sending out millions of tests to thousands of locations, and you can think of each of those locations as subcontractors. These millions of test takers are like employees creating value on a subassembly, the test books, and then shipping all those back. It's the management that's tricky because that means 100 percent tracking out the door and 100 percent return at a serial number level."
ETS was founded in 1947 when the American Council on Education, the Carnegie Foundation for the Advancement of Teaching, and the College Entrance Examination Board contributed their testing programs, a portion of their assets, and key employees to form ETS as a full-service operational entity. That means print, publish, ship, receive, score and warehouse. ETS realized that to best serve its test-taking clients, it had to separate commodity logistics activities and entrust them to third parties. Deciding its core competencies lay in test development and psychometric R&D, ETS took a risk. Management knew its competitors kept both sets of skills in-house.
ETS's biggest customer is The College Board. None of what ETS did in material handling could be classified as cutting edge or world class, but it worked. However, as its client list grew, it needed to improve flexibility. That would require adopting bar coding and supply chain management software. Even those advancements weren't enough to help it keep up with customer requirements.
The Innovation
ETS chose to work with Accenture to add the level of technology needed to fill the service gap.
"Most of our competitors have spent their money on automation and kept these functions inside," says Landgraf. "We think [going with a third party] will tighten up our security. Security is essential and the highest priority we have other than effectively developing and scoring the tests. It's the same standard of security you'd have in banking."
Although different technologies can be used to automate the scanning process, ETS tracks manually to make sure no one is taking a test book off the shelf. "We do an error check right on the spot for serial number progression," says Cano. "Most of the tests have a specific administration date, so we know before that date whether any books are missing."
ETS expects radio-frequency identification will soon enter into the picture as Accenture ramps up operations for it.
"RFID tags would let us do a scan without having to go through a machine for counting and reading bar codes," Cano says. "So we are looking at RFID at the test book level and debating how GPS technology would be used."
Being non-profit, ETS does things it wouldn't make sense for a company to do. Cano took the lead in finding a way to achieve customer intimacy and operational excellence.
"We want the quality that is only seen in pharmaceutical companies making the most significant heart medicine," she adds. "We can't get so automated that we can't help the individual test taker where appropriate. The key to traceability is in figuring out which of those packages has the test taker in question in it. If Mary Sue calls our customer service center and says 'I think I left my answer sheet in my test book, I don't think I handed it to the proctor, can you find it for me?,' today's systems can't do that very easily. We believe RFID and a quick serial number tracking system will help."
The complications don't end when test books come back. The books must be scored, the results distributed and the books stored. Distribution is both paper and electronic, depending on the customer's data processing capabilities. And, each test taker can designate a variety of schools to which they want their scores sent.
"Imagine how MIT's needs for a score report might differ from those of a rural elementary school," Cano observes. What ETS does with the completed test booklets varies from client to client.
"For one program we have to save materials for 10 years, and they are extensive," she says. "We store them at two different facilities. We have to be able to locate these tests at any time in subsequent years. I may have to find Mary Sue's, which she submitted five years ago. We can't store these off-site in mega-storage. They have to be accessible at different points of the process. Those are identified by test taker identification numbers."
The Results
Inventory management skills are always important, but they're critical during specific seasons. Seasonality is as critical for ETS as it is for a clothing retailer. Luckily for ETS, its seasons doesn't match those of L.L. Bean. Its seasons are tied to the calendar year for schools. That means a big surge in the fall and in spring.
"The key for us in inventory management is understanding how to shift our inventory so that we bring in the test books as we are packaging up test materials," Cano says. "As you're doing this, you have to be ready to ship materials out. The operational aspects of the inventory are in working with your suppliers. They're printing the material and we have to work with them on when these materials are delivered to our door within enough tolerance for us to be able to deal with increases and decreases in productivity. There can't be too much tolerance or we'll be handling more material than we have space for."
Now Accenture is managing material handling in the ETS facility, and a Peoplesoft ERP package is doing basic inventory management, augmented by customized serial number tracking software. Soon ETS plans to change over to a warehouse management system (WMS) from J.D. Edwards, which is part of Peoplesoft. Accenture will be responsible for implementing and integrating that WMS.
"We'll need to customize the package so that we can track the individual test book and answer sheet," says Cano. "We must ensure we get back every one we send out to be administered. No offtheshelf WMS package exists for the tracking of serial numbers both outbound and inbound. This combination of 100 percent returns and serial number tracking requires some creative approaches to bundling information. Accenture has some experience with this type of customized application.... These material handling functions will better support our overall mission to advance quality and equity in education."
Technology implementation and cost containment are Accenture's deliverables to ETS. Timely, accurate results are what ETS promises its test-taking clients. The innovators are the people at ETS who make sure those two sets of deliverables can coincide affordably and keep them competitive.
