Lean Six Sigma in Supply Chain and Logistics

Lean Six Sigma

Lean Six Sigma helps in improving your production process by streamlining the workflow and eliminating all types of extra costs and wastage. The Six Sigma is indeed a powerful tool which aids in continuous process improvement by reducing the process variance and purging the errors.

Why is Six Sigma needed in Supply Chain and Logistics?

An ideal organization should possess agility and responsiveness towards the changing needs of the customers.  The first step for a perfect supply chain management is to acknowledge the adaptability towards the changing market trends and attuning as per the customer’s needs.

The “define phase” of the Six-Sigma requires the organizations to identify and measure their progress in terms of CTQ i.e. “Critical to Quality”.

The Supply chain organizations which owe high error rates need to learn Lean Six Sigma so as to increase the efficiency of their processes and optimize the workflow management.

For example, There is a technique called “Poka-Yoke” in Six Sigma which eliminates the chances of human error by making the users do their work more accurately and precisely.  This is a 100% mistake –proof procedure.

Lean Six Sigma Green Belt certification helps the organizations in the identification and rectification of the defects and errors encountered during a manufacturing or servicing process. It boosts the efficiency of normal procedures, thereby helping the logistics companies with their ongoing process management.

How Six Sigma improves efficiency?

The Six Sigma improves the quality of the business process outputs by identifying and rectifying the causes of defects/errors, introducing quantifiable parameters and minimizing variability in supply chain and logistics processes.

By enrolling in a Lean Six Sigma Green Belt certification, an organization can reduce the company cost as well as reduce the variance occurring in its workflow.

Let’s see how Six Sigma helps in improving the efficiency of a business:

A. Reducing Order Fulfillment Time

Six Sigma management strategies will help in reviewing the company’s order fulfillment system and analyzing the areas responsible for the high degree of variance and waste. These redundancies can be rectified by automating picking, planned shipping, shipment verification and reducing paperwork. All this will aid in a decreased order fulfillment time.

B. Building a Responsive Supply Chain

As mentioned already, the supply chain and logistics workflow should be agile and responsive as per the customer’s demands. The organization should measure their performance in terms which the customers consider to be CTQ.

C. Reducing Errors to Zero

Apart from Poka-Yoke, there is another 5S Lean principle which helps in reducing the manual errors/defects and eliminating the root cause of waste.

5S stands for “Sort out, Set in order, Shine, Standardize and Sustain”.

The 5S strategy helps in imparting a safe, clean, uncluttered and efficient work environment, thereby, reducing the odds of human error.

D. Optimizing Order Fulfillment

An order is considered to be fulfilled when the products/services arrive on time, have no delivery damage and are backed with full and accurate documentation. Lean Six Sigma helps in optimizing the order fulfillment procedure by optimizing the workflow such as spotting obsolete planning processes, inefficient execution, decreased order fulfillment time etc.

E. Reducing Waste

Lean activities eliminate the inefficient processes which do not add value to the customer experience (waste). This helps in the efficient functioning of supply chain and logistics processes. The main target of the Lean activities is to spot and eliminate problems in the greatest sources of waste like overproduction, transportation and non-value added processing.

Read Also: Learning to Successfully Implement a Quality Management System

Final Words:

An efficient supply chain and logistics help in providing a sustainable competitive edge to the organization.  Apart from improving the performance of the supply chain, it adds to the employer brand value, increases revenue and ROI as well.

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