Role of Lean Six Sigma in Supply Chain Management

28-Jan-2021

What is Lean Six Sigma?

Lean Six Sigma is a set of methodologies and guidelines which are intended to optimize business processes. The lean six sigma approach is to streamline the entire operation chain of a business. This is done by identifying unnecessary steps or information gathering or information processing, known as ‘cruft.’ The lean six sigma practioners remove this cruft systematically and as a result the business becomes more streamlined or ‘learner.’ They also identify risks in the business processes which can cause certain business stages to fail. Such factors which can bring the entire system down are identified and addressed systematically and methodically. This methodical and efficient approach has made Lean Six Sigma very popular globally and this is why individuals are seeking a Lean Six Sigma Green Belt Certification nowadays.

Lean six sigma also has a major emphasis on identifying which steps or methods in a business add value to the business and which don’t add value, or even detract value from a business. So Lean six sigma revolves around upgrading and adding to the value adding steps or methods and redesigning the steps or methods which detract value. In this way a business process becomes augmented with highly effective steps or methods. One can learn to add value to a company in this way by undergoing lean six sigma black belt training online.

What is Supply Chain Management?

Supply Chain Management, or SCM, is the set of all business processes which lead to the transformation of raw materials into final products. Supply Chain Management is a field which as a whole aims to accelerate and streamline the flow of goods and services as much as possible. Supply chain management represents an effort by the suppliers to improve the journey of the raw materials to the final products in a way which adds more value to the lives of customers and gives companies a competitive advantage in the marketplace. Supply chains are very extensive and include everything from production to the development of the product to information gathering to feedback and reporting systems.

Advantages in SCM after adopting Lean Six Sigma

1. The amount of waste reduces dramatically -

There are 8 potential ways that resources can be wasted in a supply chain. They are -

• Defects
• Overproduction
• Waiting
• Non-utilized talent
• Transportation
• Inventory
• Motion
• Extra processing

A supply chain analyst has to determine which steps of the business process fall into one of these categories and either redesign and modify them or eliminate them from the supply chain entirely. Using the Lean Six Sigma methodology it becomes very simple to identify defects in the supply chain. Similarly, one can determine which parts of the product are being produced over the required quota or over the acceptable limit. Thus, one can reduce these wasteful steps and remove these drains on customer value from the supply chain. To become effective at the task of waste reduction, one should undergo lean six sigma training.

2. One can remove defects from the supply chain easily -

Identifying and removing defects from a business process is a particular speciality of the Lean Six Sigma methodology. In fact, Six Sigma was originally invented to prevent and counter defects in the manufacturing units’ processes. So it was especially designed to provide detailed insights into the operation chains of manufacturing and production departments.

With the in-depth analysis that lean six sigma brings to the table, one can easily make a comprehensible and understandable list of the interconnected web of business processes and see which ones are interlinked with the others. Then it is a simple matter of running simulations and tests in order to discover the defects in the business processes. In a lean six sigma green belt certification, this kind of meticulous mapping is taught to all the learners.

3. One can improve the performance of the business processes -

With Lean six sigma one gains the tools one needs to objectively measure performance and glean insights which can directly lead to improved performance. The procedure is straightforward and can be implemented even by beginners to lean six sigma. It does not required a very advanced level of training. One should be well-versed with statistics and scientific precision. With lean six sigma tools in hand, one can set about evaluating all the different business processes and measuring their outputs and the time they take to run through one whole production phase. Once they have gathered this basic data they can start to apply the statistical methods of Lean six sigma to calculate the optimum and actual production levels and rates.

Lean Six Sigma provides two approaches to tackle the problem of optimization. They are -

• DMAIC - Define, Measure, Analyze, Improve, and Control
• DMADV - Define, Measure, Analyze, Design, and Verify

These two approaches form the basis of all the core concepts taught in Lean six sigma black belt training online.

4. One can build a responsive supply chain -

The most important factor in determining the effectiveness of a supply chain is the value it provides to the customers. The needs of the customers are the paramount criteria according to which a supply chain should be designed. If one has a sterling quality supply chain but it fails to fulfill the needs of the customers, there is not much to be said about that supply chain. In fact, it can largely be considered to be a waste of resources and planning. So the needs of the customers should be put first in designing a supply chain.

One vital point to note about customers’ needs is this – they change a lot. So a supply chain should be agile and highly responsive to the shifting and fluctuating needs of the customers. Lean Six Sigma provides very well thought out and meticulous feedback, monitoring, and reporting systems through which a company can stay attuned to their customers’ needs. This connection to the customers will enable them to design fast, agile, and responsive supply chains which will have a high CTQ or Critical to Quality rating. Any decent lean six sigma training will teach the learners how to design such agile and responsive supply chains.

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