Application of Six Sigma in Supply Chain Management

1978 Words Sep 27th, 2008 8 Pages
Application of Six Sigma in Supply Chain Management

Anoop P. S.

Abstract: This paper hypothesises that, whilst Six Sigma as a change and improvement strategy is delivering significant business benefit to practitioner organisations, it has not been successfully adapted to deliver similar benefits across supply chains. It demonstrates by reference to the literature that most published applications of Six Sigma in supply chains are related to the application of traditional internal Six Sigma methodologies to the internal processes of a supplier to the “Six Sigma Organisation”. In this paper, the issues particular to an application of Six Sigma in a broader supply chain context are discussed, with reference to specific supply chain
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Drug wholesale McKesson, for example, has used Six Sigma to improve a variety of supply chain processes, such as inbound trailer cycle times and pick face replenishment efficiency.

2.1 Adding Value With SCOR

Developed by the not-for-profit Supply-Chain Council, SCOR (Supply Chain Operations Reference) is a model that links process elements, metrics, best practices and features associated with supply chain execution. It helps to identify and quantify critical opportunities for improvements not only within the supply chains of a single company but also between multiple trading partners. It describes a continuum of processes: Plan, Source, Make, Deliver and Return. SCOR works best with companies that have an enterprise information platform that can carefully track this continuum through KPIs and scorecards or at least provide the data so that a qualified enterprise platform can acquire the data, analyze it and surface it to the people who need to see it.

Although rooted in the supply chain realm, SCOR adherents see a role for the methodology as the gatekeeper – identifying the projects most likely to render ROI using SCOR, Lean or Six Sigma. There is already a natural link between Lean and Six Sigma at the program and project execution level. Six Sigma has the project tracking and financial accountability elements. Lean helps “surface the rocks” that become ideal targets for Six Sigma. The two combined provide a powerful results-driven