Lean Six Sigma for Supply Chain Performance Essay

Abstractions:

Purpose – The intent of this paper is to clearly understand the maps of Lean Six Sigma. Supply Chain Performance. KPI’s and execution of LSS to detect the effects on supply concatenation public presentation. Design/methodology/approach – Various diaries and documents on six sigma. thin six sigma and supply concatenation public presentation were read/searched. Around 25 documents were searched. Most of them were on thin six sigma. on sig sigma methodological analysiss. on supply concatenation direction. There were really few documents that titled thin six sigma for supply concatenation public presentation or. even thin six sigma methodological analysiss. So this diary has been written by researching on the subjects individually and so complecting the researches based on the demands that have been demanded by the diary subject.

The methodological analysiss on thin and six sigma were interlinked and tried to implement on supply concatenation to understand the execution effects on supply concatenation public presentation. A separate survey on the cardinal public presentation indexs of a supply concatenation public presentation was done to be able to mensurate the betterments in a supply concatenation on implementing thin six sigma methodological analysiss Findings – It was found that both thin and six sigma when integrated as a individual methodological analysis. they complement each other and act as a powerful methodological analysis in influence sweetenings in supply concatenation public presentation.

The KPI’s that were identified from successful supply concatenation public presentation were found to be besides the merchandises of LSS executions. So if LSS is implemented. it brings alterations into the procedures and improves them. Practical deductions –Originality/value – The work in the paper is stretched in three field viz. . LSS. SCP. Implementation. It provides the research from bing literature and an penetration into the execution of LSS for improved supply concatenation public presentation which has non been discussed often. The paper is of information to faculty members and besides to the practicians. Paper type – Research paper

Keywords – Lean. Six Sigma. LSS. KPI’s. Supply concatenation public presentation. SCOR. Research Limitations The frequence of publications on LSS is really low and most of the research has been done late. So it is relatively a new entrant into the industry with the range of presenting betterment methodological analysiss. The research publication frequence has well improved from 2011. Most of the diaries titled LSS discussed Lean doctrine and its advantages individually and six sigma methodological analysis individually. It is non an integrated attack. and it is ever left to the reader how good both the betterment methodological analysiss are integrated and used to suit in what the bing supply concatenation and its public presentation demands for. Since LSS is applicable in all the sectors. the documents available do non discourse in peculiar LSS for supply concatenation public presentation. They normally discuss maintaining the general reader in head with regard to the concern betterments and public presentation.

Introduction:

In today’s dynamic market with of all time altering client demands. administrations and companies should be quick in their operations. This is where the supply concatenation public presentation comes to the image. Pull offing a flexible. dependable and robust supply concatenation is really of import. There are assorted methodological analysiss that will guarantee this and besides provide uninterrupted betterments. One such methodological analysis is Thin six Sigma which aims at cut downing wastes in the supply concatenation and defect rates of the procedure. Therefore doing the terminal to stop supply concatenation effectual and efficient including the peripheral bomber procedures associated with the supply concatenation. Geting the merchandises on clip to the clients and keeping the specifications of the merchandise as per clients demands is all that is expected of a supply concatenation.

This paper discusses the importance of LSS for supply concatenation public presentation. It discusses the integrating of tilt. where the foundation of the thin vision is still a focal point on the single merchandise and its value watercourse and to extinguish all waste in all countries and maps within the system which is the chief mark of thin thought ( Womack and Jones. 1996 ) . The other methodological analysis is six sigma. Underpinned by statistical techniques. it presents a structured and systematic attack to treat betterment. taking for a decreased defect rate of 3. 4 defects for every million chances. or Six Sigma ( Brady and Allen. 2006 ) .

Literature reappraisal on LSS:

Thin and Six Sigma are process betterment methodological analysiss that have been used throughout industries every bit varied as the health care industry to auto fabrication. in order to better their procedures and respond to their customers’ demands ( Hammond & A ; O’donnell. 2008 ) . More writers agree to it being a procedure betterment methodological analysis. The integrating of the two methods has occupied a particular topographic point in heightening public presentations be it in supply concatenation or in administrations. Thin and Six Sigma are popular modern-day procedure betterment methodological analysiss intended for companies endeavoring for operational excellence ( Arnheiter and Maleyeff. 2005 ) . There is small literature available on the integrating of these constructs when looking for a common theoretical account. theoretical compatibility or common content or method. ( Bendell. 2006 ) .

The countries that LSS is focussed on is summarised in the figure [ see appendix Fig 1. 1 ] The integrating of the two methodological analysiss efforts to supply empowerment even at the higher degree procedure analysis phases. so that employees have true ownership of the procedure ( Pepper & A ; Spedding. 2010 ) . The integrating of thin and six sigma has lead to integrating of the tools and techniques that are used in the two methodological analysiss. So the incorporate LSS consists of a power battalion of tools which will be effectual on assorted procedures and in bettering them. The figure [ see appendix fig 1. 2 ] shows an overall image of an integrated LSS methodological analysis with all its tools and techniques.

Following the treatment from Fundamentalss of thin six sigma category. assorted thin tools were studied and their importance were analysed. This paper tries to reflect the correlativity between the treatment and the bing literature.

Value Stream Mapping: Identifying wastes in the procedures is the premier concern that is dealt in Lean doctrine. To guarantee placing both value adding and non value adding activities in the procedures. Value watercourse mapping emerged for this function ( Rother and Shook. 1999 ) . and continues to supply a dependable qualitative analysis tool. 5S is another of import tool. 5S is seen as cardinal to accomplishing a thin concern and is deemed every bit applicable to the store floor or office ( Bicheno. 2000 ) .

Importance of mensurating supply concatenation public presentation:

Most of the times administrations are perceived to look at the indexs in a fiscal point of position and neglect other indexs of SC public presentation. But it is non ever the fiscal facets that define public presentation. This paper discusses assorted literature and point of positions from many research workers on the cardinal public presentation indexs for specifying the activity of improved supply concatenation public presentation. Effort has been done to specify the constructs of step and prosodies. public presentation measurings. importance of KPI’s. bing public presentation measuring theoretical accounts for supply concatenation in the signifier of literature reappraisal. Some of the definitions and research positions from the bing survey are. Gunasekaran and Tirtiroglu ( 2001 ) says. steps and prosodies are needed to prove and uncover the viability of schemes without which a clear way for betterment and realisation of ends would be extremely hard. In the procedure of measuring some writers go in front with depicting the importance of planning in the procedure.

SCM public presentation measuring or monitoring is the term for a set of prosodies and procedures related to measuring and measuring how accurate the planning is and how good the executing is carried out. ( Chae. 2009 ) . Any measurement method when adopted in a right mode reaps a better consequence. It is all about understanding the terminal to stop supply concatenation and make up one’s minding on factors to mensurate to capture public presentation. Making proper public presentation measuring of a supply concatenation is necessary as it cultivates understanding between member houses in the supply concatenation for public presentation betterment ( Dreyer. 2000 ; Fawcett and Cooper. 1998 ) .

Since times that day of the month back to the supply concatenation public presentation measuring activity. KPI’s have ever been considered the necessities. The ground is due to its lucidity and ability in indicating the factors to look for betterment. Performance prosodies or KPIs offer the overall visibleness of supply concatenation and aid to measure the truth of supply/ demand program like prognosis truth and the executing public presentation like existent gross revenues versus prognosis program. ( Chae. 2009 ) . Once they are identified. the procedure of supply concatenation rhenium designs itself in working towards accomplishing those KPI’s which now transform to the critical success factors. To transport on with this. Importance of specifying functions and duties ( R & A ; R ) of organisational units and members to do KPIs work in pattern Chae ( 2009 ) .

When the research for KPI’s of supply concatenation was being done. the survey showed more than 200 KPI’s for a supply concatenation in the literature and besides few instance surveies. They were in item description and indexs of procedure and widely based. From that merely the most of import and general KPI’s for a supply concatenation irrespective of its sphere was selected and filtered. The KPI’s that are mentioned in this paper are non the lone KPI’s but are the basicss for any supply concatenation. Some of the cardinal KPI’s mentioned are given in the tabular array [ see appendix Table 1. 3 ]

Supply Chain Operations Reference ( SCOR ) theoretical account:

Since KPI’s have proved to be successful factors in measuring public presentation throughout supply ironss. the construct of using them in constructing a public presentation measuring theoretical account was developed. One such good know theoretical account is SCOR which explicitly measures supply concatenation public presentation. Among the extant SCP conceptualisations. the supply concatenation operations mention theoretical account ( SCOR ) developed by the Supply Chain Council ( Stewart. 1995 ) provides a utile model that considers the public presentation demands of member houses in a supply concatenation. ( Lefebvre & A ; Wamba. 2008 ) . SCOR besides acts as a benchmarking procedure for supply concatenation to compare and measure its procedures within itself and besides with the external supply concatenation of the best in category irrespective of the sphere. The measuring standards and indexs of public presentation measuring in SCOR across supply concatenation members. supply a utile model for developing a concept and the corresponding instrument for SCP measuring ( Stephens. 2000 ) . This can be considered as more structured manner of depicting KPI’s in your supply concatenation.

From the figure [ see appendix Fig 1. 4 ] it is really apparent the cardinal public presentation indexs are described at every degree of the supply concatenation that can better the public presentation. This is a typical SCOR theoretical account that explains the public presentation prosodies at each degree of the supply/demand concatenation. The theoretical account besides helps in understanding the procedure better by its clear definition of public presentation indexs at every degree of the concatenation. This enables the administration to concentrate on every degree with lucidity on the country to be measured and improved for accomplishing enhanced public presentations.

Some of the of import KPI’s of supply concatenation that can be identified from the figure are material quality. production quality. production lead clip. on clip bringing. These were mentioned maintaining in head the client satisfaction. End of the twenty-four hours. the supply concatenation is all about equilibrating the demand and supply from and to the clients and executing to satisfy customer’s demands and retaining them.

KPI’s within SCOR:

Further intricate refinement of the supply concatenation public presentation direction can be done by spliting the concatenation into phases and this is achieved through SCOR. The following table [ see appendix Table 1. 5 ] cleanly indicates KPI’s at each phase in the supply concatenation.

From the above tabular array the public presentation indexs show that be aftering rhythm is an of import metric. particularly the short planning rhythm which represents itself as a good index. By following this. supply concatenation shows crisp reactivity. Decrease in the entire stock lists enhances the supply concatenation and it is an of import KPI. Sing the cost factor. CCCT is the fiscal efficiency of any supply concatenation. . As a composite metric it is expected to offer a comprehensive position of one’s supply concatenation ( Vollmann et al. . 2005 ) . Forecast is an indispensable procedure in the supply concatenation. demand prognosis is the most of import of all since it reflects the market positions and client demands and drives the supply concatenation sing production and sourcing the stuffs.

Obtaining the truth in prognosis is the highest public presentation metric. which defines the operational excellence throughout supply concatenation. Estimating and mensurating the stock list degrees at each phase provides indispensable informations for production. gross revenues and distribution. Coming to the sourcing maps which have become the premier procedure in the supply concatenation. the primary KPI is the provider fill rate which evaluates its providers on their procedures and most significantly their dependability. The public presentation of the drawn-out supply concatenation. where clients and sellers are now an built-in portion of it demands enhancement in its public presentation through reception of truth in buying information. stuff information. bringing day of the months.

Benefits of LSS:

Arnheiter and Maleyeff ( 2005 ) discusses on the benefits of LSS by stating. Supplying thin with a more scientific attack to quality. so that through the usage of control charts. procedures can be kept on mark. efficaciously cut downing waste incurred through faulty processing. It provides a structured attack instead than addhoc attack towards the jobs. Strategic attack is instilled in all its operations. Six Sigma complements thin doctrine in every bit much as supplying the tools and cognize how to undertake specific jobs that are identified along the thin journey thin eliminates noise and establishes a criterion ( Wheat et al. . 2003 ) . This suffices the benefits for a noise free supply concatenation.

Arguments on the grounds why thin six sigma should be implemented for improved supply concatenation public presentation:

Procedure betterments have been the cardinal involvement in implementing LSS in assorted administrations irrespective of their spheres. The organisation adopted LSS either to better their procedures or modify them to increase efficiency and productiveness Irfan et Al ( 2012 ) . Supply concatenation is a combination of many procedures. Hence LSS which is dedicated in procedure betterment. For accomplishing an overall public presentation in the supply concatenation by implementing thin. it is foremost indispensable that the peripheral webs of the supply concatenation are besides trained on the doctrine. Since supply concatenation public presentation is measured non as a concatenation but as a web. Sing the status of a web. Chrysler used resources to widen in house preparation of thin doctrine to its major providers. underscoring the committedness needed from all parties in order to set up thin. and gain the full potency for everyone involved ( Fitzgerald. 1997 ) .

Thin doctrine and six sigma when implemented individually lacks the holistic attack which fits every state of affairs. This is the job with administrations that implement either one of the methodological analysis. A solution therefore is to implant a consistent systems doctrine that integrates civilization with a scientific attack through a incorporate hard/soft systems believing doctrine ( Pepper & A ; Spedding. 2010 ) . The civilization here can be explained as thin doctrine and the scientific attack is utilizing six sigma and its statistical techniques in cut downing the defect rates and in bend taking for uninterrupted procedure betterments. Antony ( 2006 ) emphasises the importance of alining undertakings to concern aims. This is really of import for understanding and mensurating the public presentation prosodies of the supply concatenation of an administration.

The defects that are observed in the supply concatenation through the execution of LSS should be good defined and prioritised. The definition ever varies and alining the demands of bettering the public presentation with regard to the concern aims is of import. A defect may be defined as anything which does non run into client demands or outlooks. It would be unlogical to presume that all defects are every bit good when we calculate the sigma capableness of a procedure ( Antony. 2006 ) . Furthermore. it is non merely the decrease of defects in supply concatenation but besides maintaining a balance in heightening public presentation and increase the value for the clients.

The balance lies in making sufficient value from the customer’s point of view. so that market portion is maintained. while at the same clip cut downing fluctuation to acceptable degrees so as to take down costs incurred. without over-engineering the procedures ( Pepper & A ; Spedding. 2010 ) . With LSS. the simplistic jobs identified which are categorised as a non value adding activity like unneeded motion. store floor designs. longer lead times in a supply concatenation can be addressed by thin doctrine and issues in demand direction. planning can be dealt with six sigma.

Impacts of the execution of LSS on the supply concatenation public presentation: Synergy of LSS offering Supply concatenation and its public presentation. Become faster and more antiphonal to clients. Strive for Six Sigma capableness degree. operate at lowest costs of hapless quality. Achieve greater flexibleness throughout the concern ( Antony et al. . 2003 ) .

Implementing LSS will decidedly do drastic alterations in the 5 phases of supply concatenation Internet Explorer. . program. beginning. do. present. It has its ain challenges but it is undeniable that supply concatenation public presentation shoots up. The construct of LSS is placing the root cause of any job. work outing it through assorted statistical techniques and implementing uninterrupted betterments through many good structured attacks. This is precisely what is required for supply concatenation for its enhanced public presentation and it rests most significantly in the planning subdivision which to a greater extent indirectly removes most of the non value adding activities further in the supply concatenation. LSS synergy preaches development effectual leading which can so manage the planning and driving the operations to guarantee the ultimatum from the clients.

LSS is data driven. and this consequence in any administration implementing LSS to keep every record of informations and activities. This procedure in bend will ensue in accurate prediction and demand rating and direction which have been studied as the most of import KPI’s in the supply concatenation public presentation. These procedure betterment methods will guarantee that effectivity and efficiency of the procedures are continuously maintained so that the summing up of these procedures leads to decrease in defect rates. quality jobs. longer lead times. unneeded WIP stock list. supply concatenation rhythm times.

DMAIC- Define Measure Analyse Improve that is practiced in LSS is a great manner of heightening supply concatenation irrespective of the web complexnesss and brings in operational excellence. The Thin Six Sigma procedure is broken down into five interrelated phases: Define. Measure. Analyse. Improve and Control ; abbreviated to DMAIC ( Harris & A ; Betsi. 2002 ) . ( Sewing. A et Al. 2008 ) . The chief demand of this is the support and strong committedness from the direction and the apprehension of every procedure in an terminal to stop supply concatenation. LSS defines every activity that happens in the procedure built supply concatenation and this captures all the inside informations for an effectual determination devising. Specifying involves SIPOC diagrams which clarifies the possible blockers and the several determination points.

It is good pattern for an drawn-out supply concatenation which integrates providers and clients into its value concatenation. Measure activity gathers info on the bing velocity. quality. and costs of the procedures and so they are summed up to analyze the current procedure status. This information is in correlativity with the defined aims. Subsequently comes the analyse portion which considers all the mensural factors to deduce at the frequence of the fluctuations doing non value adding activities in the supply concatenation. Prioritising of the jobs can be done here with the proposed solutions through six sigma methodological analysiss.

Bringing in construction and standardizing the procedures through root cause and failure analysis. Then the solutions are implemented and improved sporadically with the aid of kaizen and other execution tools. This non merely designed to better the procedures but besides refines people who are involved in the operations to execute the best in what they are assigned. Training makes them efficient and leads to decrease in human mistakes. Automation of certain activities can be considered at this phase. with the vision of decrease of fluctuations and defect rates. The concluding stage of control proctors all the executions sporadically. This keeps the supply concatenation flow smooth with necessary flexibleness and a rigorous control on quality.

Results of the execution reflecting in SCP:

Having a strong visibleness. optimisation and control on the supply concatenation is more of import for its public presentation. This is supported by the tools that are used in LSS. One such tool VSM helps in understanding the present and future provinces of the supply concatenation and helps in redefining schemes by associating information to the stuff flow ( Rother & A ; Shook. 1999 ) . LSS makes sweetenings in the production efficiencies by cut downing wastes with the aid of existent clip informations. This in bend enhances public presentation of the supply concatenation where the procedure tends to run smoother with decreased stock lists. considerable intimacy in supply demand lucifer. Statistical procedure control that is involved in LSS eliminates risk factors that are associated with the procedures. which can be a major inspection and repair.

Linear interlingual rendition of implementing levelling. standardizing. sequencing. FMEA. JIT. mechanization. pull production takt clip. critical to quality. defect rate decreases. SPC is seen in improved bringing of merchandises with decreased entire supply concatenation rhythm clip. improved dependability. increased capacity uses. accurate demand and forecast direction. stock list handling and more significantly successful gross revenues and distribution operations.

The consequences reflect a quality throughput in footings of client service. merchandise profile. procedure profile. uninterrupted betterment techniques. and employee engagement. These are the factors which defines supply concatenation public presentation. Concentrating and picking the best methods from both thin and six sigma provides nice sum of flexibleness and hardiness in supply concatenation. Involvement and preparation of employee is really of import for all these activities and this is taken attention by six sigma execution.

Harmonizing to LSS all the focal point on job designation. job work outing. uninterrupted betterment Idaho achieved so that consequences in improved procedure flow with extinguishing non value adding activities and enhances value for clients by polishing its activities throughout its supply concatenation.

Discussion on restrictions:

Every activity and methodological analysiss have its ain set of pros and cons. With LSS the chief restriction in its execution is about its model. Since it is an incorporate system. there has been no official model that has been established in its execution methodological analysis. This has triggered other jobs that are considered as restrictions by practioners. One of them is. apprehension of tools and the procedure which demand the use. One major job apart from its model is perception attitude of the direction. The table [ see appendix Table 1. 6 ] lists some of the often written about restrictions. Antony et Al. ( 2003 ) suggest that the job of deficiency of betterments in an administration when the methodological analysiss are applied in isolation is because. thin rules missing a directed cultural substructure as can be seen with the Six Sigma attack.

Decisions:

With the execution of LSS to better supply concatenation public presentations quality. efficiency and effectivity of the procedure are improved with structured methods of root cause analysis and uninterrupted betterments. LSS will guarantee the supply concatenation of provider development. decrease in procedure fluctuations. optimizations. cooperation and leading. riddance on non value adding activities. decrease in lead times. merely in clip. These are the cardinal consequences from LSS which any supply concatenation can obtain with the execution.

LSS focuses on making client value watercourse. onslaughts WIP stock list. procedure control & A ; planning. application of statistical tools and techniques to better the public presentation. It is of import that the direction implement the incorporate methodological analysis for obtaining a supply concatenation which has greater control. visibleness and has achieved optimization throughout and has been the best provider to its clients.