Steven Brown explains how a Lean Six Sigma project helps balance demand, factory and supplier lead times, and customer service levels across the supply chain.
- There's an old saying that if you don't take care of the customer, someone else will. Acknowledging this, every Lean Six Sigma project touches the final customer in some manner, usually quality or cost or time. Today's applications for Lean Six Sigma have gone far beyond the factory walls, spanning functional boundaries across the company and extending throughout the entire supply chain. In finding solutions and improvements, your projects touch different aspects of the supply chain. Let me use inventory management as an example, because Lean Six Sigma projects for supply chain management commonly focus on some aspect of inventory management. The purpose of having inventory is to meet demand from your customers. If you discover a problem with meeting a particular customer's orders, you may launch a project to determine why you are having this problem and to implement a solution for your customer. You know up front that you don't have the right inventory in the right place at the right time, because in this situation you are not delivering to the customer as promised. Perhaps there's a poor forecast of demand, creating a general inventory shortage. Or maybe there's a problem with one of your suppliers for this particular product. There could be a capacity problem at the factory. Or the problem could be with the trucking company you hired to deliver those orders. Every business has a supply chain to manage. A Lean Six Sigma inventory project must balance such things as demand, factory and supplier lead times, and customer service levels across the supply chain. This goes beyond the classic cross-functional team. You need a cross-organizational team. You need experts not only from different parts of your company, but also experts from key suppliers of materials and services, because the solution lies somewhere in your supply chain and not necessarily within your own company. Clearly, Lean Six Sigma is not just for manufacturing anymore. A process map of the supply chain and an understanding of the key performance indicators are both very important first steps. And remember, your company has many supply chains. In this example of an on-time delivery problem, you must know the supply chain for this particular product and this particular customer. Suppliers, for example, may be quite different for this product. Here are some typical Lean Six Sigma projects that could extend along the supply chain: strategic gaps in performance discovered through benchmarking other companies, cost reduction and cost avoidance, customer issues, regulatory issues, or safety issues. One important thing to remember here is that successful projects should be replicated throughout the company and its supply chain. Replication is a key to success. Perhaps you are having a customer service issue or a specific inventory control problem. This is a really good application for a Lean Six Sigma project. But before you begin, make sure you draw a comprehensive process map, because you could be going on a trip along your entire supply chain and it is good to know that up front.
Steven outlines the process stages in Six Sigma (define, measure, analyze, improve, and control), along with the Lean toolkit: the 5s principles, kanban (scheduling), downtime, poka-yoke (error proofing), and kaizen (continuous improvement). He also explains how leadership works within Lean Six Sigma, the principles of project execution, and how Lean Six Sigma is applied to the service sector and supply chain management. Make sure to watch the "Next steps" video at the end of the course for further resources.
- List the three main focuses of Six Sigma.
- Explain why lean is an important element of the Six Sigma approach.
- Summarize why Control is the most important step in the Six Sigma process.
- Analyze variables to determine if they are a good performance measurement.
- Describe three typical methods of improving supply chain functions.
- Identify three things you will need in order to lead a Lean Six Sigma project effectively.