Every business is unique in terms of needs for smooth and scalable supply chain management practices. With multiple moving parts that need to align perfectly in supply chain management, it becomes a very delicate and pertinent process. At times, an unassuming minor adjustment can have very constructive cost and time-saving implications throughout the end-to-end cycle for organizations. While Lean Six Sigma has been a proven cost optimization tool in the Manufacturing setup, it is being excellently leveraged in other processes of Supply Chain – procurement, warehousing, logistics, and distribution.
Supply chain process optimization is a forever challenge and hence requires specialists that can evaluate and deploy the use of Lean Six Sigma in SCM processes. Today’s manufacturing and SCM businesses are on the lookout for effective and efficient processes and methods that can optimize costs and enhance workforce productivity. For these aspirations and attempts, Lean Six Sigma provides an excellent framework. It also puts the required emphasis on waste reduction and prevention of defects to much lower than acceptable limits.
In the most recent surveys of the company-owned and third-party distribution organization, it was revealed that only about 86% of the orders are completed on time without any outbound transit damages. In effect, there are 14% of orders fail to meet the customer expectations for the first time. For six sigma practitioners, this is an unacceptable situation. For these reasons, lean six sigma is hugely popular, is now a very affable process improvement tool for logistics, procurement, and transportation as well.
Deploying the six sigma techniques can enhance customer satisfaction and reduce costs due to reverse logistics and rework that happens because of defective materials. The lean six sigma has evolved to be able to save logistics and warehousing costs along with minimizing wrong deliveries. This is being achieved by integrating voice recognition and warehouse management applications to recognize and suggest corrections to deviations from the customer orders. When deployed effectively in procurement, inbound and outbound warehousing, six sigma can help in optimizing costs by reducing the order processing cycle time of requisitions, invoice approval, vendor onboarding, or sourcing schedules.
Deploying Lean six sigma in SCM can reduce cases of dead-on-arrival components, enhancing the KPIs of procurement and logistics. With reducing waste, combating defect levels, and improving process performance, the deployment of Six Sigma in SCM has fundamental impacts on the end-to-end processes in terms of efficiency and quality. It is an excellent tool that can eventually result in a stronger bottom line. Thereafter, every team member would be able to focus on delivering their high impact skill sets and enable the business to thrive.
New-age analytics that supplements the six sigma deployments can offer very valuable decision-making insights, to the supply chain managers in the organization. It facilitates to development of the most appropriate RCA (Root Cause Analysis) of defects, which helps to refine and improve the Supply chain processes accordingly.