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Impact of Lean Six Sigma on Supply Chain Management
Joseph Gruber
Embry-Riddle Aeronautical University
Abstract
Lean Six Sigma is an effective waste elimination methodology that seeks to improve organizational processes. Through statistical analysis, information technology, and time-proven techniques organizations can work to define and measure waste, analyze and improve the process to eliminate the waste, and control the process in the future to prevent future waste from entering into the process. Implementing Lean Six Sigma into the Supply Chain process can allow an organization to improve demand management forecasts through an increased understanding of the supply chain flow, reduce operating costs by removing waste from the supply chain, and increase customer service levels, both internal and external, through a removal of activity that does not add value to the supply chain process.
Impact of Lean Six Sigma on Supply Chain Management
Overview of Lean Six Sigma
Lean Six Sigma is not a business strategy in and of itself but instead a marriage between Six Sigma and Lean manufacturing. Six Sigma became well known in the late 1980’s due to General Electric’s CEO Jack Welch using it extremely efficiently in order to turn around a period of decline at General Electric. But to find the origins of Six Sigma and how it interacts with Lean one must look to the early 1920’s when Walter Shewhart “showed that three sigma (σ) from the mean is the point where a process requires correction.” (iSixSixgma, 2012) However, during the mid-1980’s three sigma still was not enough granularity for Motorola engineers and their quality management system. By demanding that defects would be measured per million opportunities, Motorola was able to create a new standard with greater accuracy and granularity and termed it Six Sigma – a trademark Motorola still holds to this day. The Six Sigma system strives to create business processes and strategies that focus on identifying and...
Joseph Gruber
Embry-Riddle Aeronautical University
Abstract
Lean Six Sigma is an effective waste elimination methodology that seeks to improve organizational processes. Through statistical analysis, information technology, and time-proven techniques organizations can work to define and measure waste, analyze and improve the process to eliminate the waste, and control the process in the future to prevent future waste from entering into the process. Implementing Lean Six Sigma into the Supply Chain process can allow an organization to improve demand management forecasts through an increased understanding of the supply chain flow, reduce operating costs by removing waste from the supply chain, and increase customer service levels, both internal and external, through a removal of activity that does not add value to the supply chain process.
Impact of Lean Six Sigma on Supply Chain Management
Overview of Lean Six Sigma
Lean Six Sigma is not a business strategy in and of itself but instead a marriage between Six Sigma and Lean manufacturing. Six Sigma became well known in the late 1980’s due to General Electric’s CEO Jack Welch using it extremely efficiently in order to turn around a period of decline at General Electric. But to find the origins of Six Sigma and how it interacts with Lean one must look to the early 1920’s when Walter Shewhart “showed that three sigma (σ) from the mean is the point where a process requires correction.” (iSixSixgma, 2012) However, during the mid-1980’s three sigma still was not enough granularity for Motorola engineers and their quality management system. By demanding that defects would be measured per million opportunities, Motorola was able to create a new standard with greater accuracy and granularity and termed it Six Sigma – a trademark Motorola still holds to this day. The Six Sigma system strives to create business processes and strategies that focus on identifying and...