Lean and six sigma is a very effective strategic approach in a dynamic business and SC environment. It can’t bring the full potential of improvement if you implement it in isolation. A combination of Lean and six sigma would make sure significant improvements. They help you to improve process variations and decrease waste in a process. Today, we’ll discuss six sigma in supply chain management; its definition, various steps involved, benefits, and certifications.
What is Six Sigma in Supply Chain Management?
Supply chain management optimization is a continuous process, and businesses and companies are finding out efficient strategies and processes. Lean and six sigma offer you a great framework that focuses on decreasing waste and preventing defects. However, businesses and companies employ lean and six sigma strategic approaches to amplify their supply chain testing performance.
The strategic approaches of Lean and six sigma have evolved over the years, and they play a significant role in the growth of businesses and companies. The combination of both of these strategies would develop a practical and rational strategy to launch process improvement within the organization. However, it follows a multi-facet approach towards problem-solving by resolving value chain blockages and making sure of the regular delivery of quality goods and solutions.
Six Sigma in SCM – Steps
Some of the main steps involved in the six sigma SCM process are as follows;
Defining
As the name implies, it is the stage where you clearly define your objectives and goals. It is significant that you should have a project charter; a blueprint document for the specific six sigma project. However, it comprises the following information;
- Estimate benefits
- Timelines
- Resources
- Project scope
- Goal statement
- Problem statement
- Business case
Measuring
It is the stage where you measure various process variables. It comprises gathering process data; receiving the base and metrics and then making a comparison with the final performance metrics. Here you have to obtain the process capabilities.
Analyzing
It is the stage where you perform the root cause analysis. It is a bit difficult and complicated analytical tool to launch, and it helps you to recognize the root causes of the defects. Some of the main tools that would help you to recognize the root causes are as follows;
- Fishbone diagrams
- Pareto charts
- Histograms
You can conduct and perform various types of hypothetical tests to verify and validate root causes like Chi-square, Anova Test, Viz Regression Test, and others.
Improving
After recognizing the final root cause, you should develop a solution or relevant tool to amplify the process. Removing the root causes is the main step of this stage and they comprise recognizing, testing, launching, and implementing the solution. However, some of the main strategies that would help you to amplify the performance of the process are as follows;
- Prototypes
- Designs of experiments
- Simulation studies
Controlling
After launching and implementing the solution, it is significant that you record the performance of the solution. You should have a proper control system to analyze the performance of the post-improvement; develop a responsive plan to deal with the failure of the solution.
Some of the main elements of this stage are process standardization through work instructions and control plans. The control charts would exhibit the performance of the process. It is significant to discuss and verify the project benefits against the estimated ones. The main objective of this stage is to make sure that you are holding gains.
Benefits of Six Sigma in SCM
Some of the main benefits of six sigma in supply chain management are as follows;
SC Flexibility
The performance of SC processes needs a quick response to the changes in supply and demand with the ups and downs of the business cycles. Companies with quick SC processes would make adjustments to the needs and wishes of customers. It is significant to develop CTQ (critical to quality) customers requirement while defining Six Sigma stages; it helps businesses and companies to establish flexibility and customer focused in their supply chains.
Lower Order Fulfillment Cycle Time
Six Sigma analyzes the order fulfillment systems of the company and recognizes the problems that need resolution. The analysis would result in the form of improvement, and those improvements would require the following;
- Limited paperwork
- Automated shipment verification
- Automated shipping planning
- Picking automation
- System Integration
Perfect Order Fulfillment
You can measure and analyze the percentage of fulfilled order delivery performance with accurate and complete documentation. The six sigma strategy would help you to amplify order fulfillment by recognizing potential problems like inefficient implementation systems and obsolete planning processes.
Zero Errors
Any SC process that is losing efficiency because it contains a lot of errors in the system; it needs lean improvement. The mistake-proof lean approach would help you to avoid mistakes by compelling users to perform one task at a time.
5S Lean Strategy
It is significant to implement 5S lean strategies like sustain, standardize, shine, set in order, and sort out. it would help you to decrease errors by offering an uncluttered, efficient, safe, and clean environment.
Zero Waste
Lean and six sigma strategies would help you to decrease waste by defining activities that don’t add any value to the customers and the product. It allows the efficient operations of SC functions by removing non-valued added processes.
Over Production
When the production of goods increases ahead of demand based on demand forecasting, then it amplifies inventory cost. It allows you to decrease the over-production of goods.
Transportation
The unused flow of material amplifies the cycle time and production cost. Lean and six sigma would help you to decrease the unnecessary transportation cost.
Non-Value Added Processing
Poor production and manufacturing facilities would add no value to the product and amplify the overall cost. Lean production helps you to achieve efficiency in your SC processes.
High Revenue
Lean six sigma helps you to perform various SC processes efficiently and offers valuable products and services to the customers. Reliable services would help you to increase revenue, pricing power, and satisfied customers.
Six Sigma Certifications in SCM
Some of the main certifications of Six Sigma in SCM are as follows;
- Master Black Belts
- Black Belts
- Green Belts
- White Belts
- Yellow Belts
Conclusion: Six Sigma in Supply Chain Management
After an in-depth study of Six Sigma in supply chain management; we have realized lean and Six Sigma strategies are highly significant for your business. If you are learning about Six Sigma in SCM, then you should keep in mind the abovementioned steps and benefits.
References
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