5 Ways Lean Six Sigma Can Work it’s Magic on SCM

Lean Six Sigma plays a pivotal role in advancing the supply chain production processes. Lean Six Sigma’s dedicated focus on eliminating waste and eradicating defects makes it a powerful tool in the area of continual improvement of processes. Many organizations use Lean Six Sigma for variance reduction when it comes to processes in their supply chains. All in all it can easily be said that Lean Six Sigma increases business efficiency in many ways.

1. Decreasing order fulfillment time

When you use Lean six sigma for the purpose of reviewing the organization’s order fulfillment needs, it helps point out areas that have a high concentration of variance as well as waste.  Once these inefficiencies are spotted, they can be corrected by automating processes such as picking and shipping, verification of shipment and reducing paperwork.

2. Building a responsive supply chain

With the rise in demand and the ever changing needs of customers, an organization’s supply chain must be flexible and responsive to them. Organizations that accommodate to the changing needs of customers complete a significant first step by creating a supply chain that specifically fulfills the needs of consumers. The organizations have to measure what customers find critical to quality (CTQ). It has to be a requirement in the defining phase of Lean Six Sigma.

3. Reducing errors to zero

There are a multitude of supply chains that work inefficiently solely due to the methodology that has been put in place. Supply chains that suffer from high error rates are in dire need of lean six sigma. Lean six sigma involves a technique known as Poka-Yoke. This error-proofing procedure eradicates human error by making the user complete the task accurately.

The 5S Lean principle also deals with decreasing errors. This is done by eradicating the wastes that cause them in the first place.

This is what the 5S method stands for:

• Sort out
• Set in order
• Shine
• Standardize, and
• Sustain. 

The method aids in creating an efficiently clean, uncluttered and regulated environment that vastly helps reduce the chances of human error. 

4. Optimizing order fulfillment

Successful order fulfillment takes place when the orders are delivered on time, along with complete and accurate documentation. It should also be free from any damages during delivery. Lean Six Sigma plays a part in optimizing order fulfillment by pointing out errors in the system such as ineffective execution and outdated planning.

It also helps in reducing waste and improving order fulfillment. 

5. Reducing waste

The efficiency of using lean six sigma is exemplified by its methodology of eradicating any activity that denies the addition of value to the customer. It does this by getting rid of processes that do not add any value, and by helping supply chains move seamlessly as well as effectively. The greatest sources of waste are targeted by Lean Six Sigma, including: 

• Transportation – Lean Six Sigma improves the transportation stage by eliminating unnecessary movement of materials, greatly decreasing production costs.
• Overproduction- Organizations often build up inventory purely based on speculation and thoughtful forecasting. It can often backfire and result in high costs. Lean Six Sigma helps eliminate overproduction of inventory.
• Non value-added processing - Unnecessary work that provides no improvement or value to the product is often caused by a production facility with a poor layout. The efficiency of the organization increases when its production is simplified by Lean Six Sigma.

Lean Six Sigma largely aids companies in improving the functionality and performance of their supply chains. An online course or professional course exemplifies the effectiveness of Lean Six Sigma in organizational processes. There are plenty of online training courses related to supply chain management as well. An effective and efficiently run supply chain provides a feasible competitive edge and helps in increasing revenue greatly. 

Written By

Afia Ahmad