Six Sigma and its close relative Lean Six Sigma have been important supply chain performance improvement methodologies for many years now. There are some who question whether these types of program are still relevant in the mid-second decade of the 21st century, but that’s a debate I’ll save for a future blog post.
For now though, I thought I’d share some general information about the benefits of implementing Six Sigma for supply chain performance improvement.
Six Sigma: You Get What You Pay For
By all means you can apply some aspects of Six Sigma in your organisation, without implementing a full program, which admittedly requires a high degree of commitment and no small amount of investment. However, the more fully you adopt the Six Sigma model, the more effective it’s likely to be for supply chain performance over the long term.
That said, here are a few specific points about the ways in which, implemented properly, Six Sigma can make a difference to performance in your supply chain.
Six Sigma and Productivity Improvement
As an example of how Six Sigma might help supply chain performance improvement by raising productivity, imagine you are responsible for a chain of warehouses (perhaps you are). By using Six Sigma techniques to investigate process defects and inefficiencies, the identification of just one or two small process hiccups, training issues, or factors that contribute to picking errors, can make a big improvement to productivity when the necessary corrections are applied in each of your warehouses.
Use Six Sigma to Improve Cost-effectiveness
Six Sigma advocates the use of what’s known as the DMAIC cycle. DMAIC stands for Define; Measure, Analyse, Implement and Control. This framework for process improvement has been used to impressive effect by many companies that have embraced Six Sigma for supply chain performance improvement.
One of the areas in which it has proved most successful is in defect reduction, which in turn brings down operational costs. In short, by removing the causes of process-defects, Six Sigma can help your company to operate more cost-effectively.
Six Sigma Helps Lift Customer Service
Much like the lean methodology, one of the Six Sigma principles is to improve supply chain performance by reducing waste. Where Six Sigma differs a little, is in its emphasis on the customer perspective towards value.
Six Sigma focuses outwardly, seeking to reduce processes or steps that add no value for customers. When used successfully, this provides the double benefit of improving efficiency and raising service levels to increase customer satisfaction.
Raising Commercial Performance With Six Sigma
Finally, by helping your company to improve productivity, cost-effectiveness and customer service, Six Sigma can generate a positive bottom line impact and strengthen relationships with customers—both of which are factors contributing to improved competitiveness and the acquisition of market share.
Like any continuous improvement theory or methodology, the effectiveness of Six Sigma will depend upon what you can invest in adopting and sustaining it.
Early gains can be dramatic, but tend to tail off after the low-hanging fruit has been picked. However, continued use of Six Sigma really can help you chip away at inefficiencies in your supply chain, directly improving operational performance and supporting long-term commercial growth.