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Mar 17, 2015

Can you use Six Sigma in Supply Chain ?

A Manufacturer can provide a quality which is highly dependent on - 1- The Suppliers and the suppliers of suppliers (reaching some times up to mining or extraction of a natural product) 2- Clients and clients of clients. (going through value addition by clients, and moving through Distributors, Stockists and Retailers finally reaching the end user) Somebody who is managing the supply chain has to manage the issues of quality and delivery across supply chain. This means he has opportunities if doing DMAIC and DFSS projects involving suppliers and intermediaries. Some industries impose certain certification programs on suppliers - for example an automotive component supplier needs to have TS 16949 certification and his suppliers need to be ISO 9001 certified. Similarly some other companies (as in electronic industry) have supplier approval and supplier assurance programs. Some other industries are keen to know about labor practices, ethics, environmental and safety consciousness of their suppliers (example - pharmaceutical industry) All such programs can be complemented by Six Sigma because Continual Improvement is a requirement in all such programs. Six Sigma has now become synonymous with continual improvement. Big improvements happen when we convert improvement opportunities into well defined projects, assign the right team members, have the right management support and approval and use a structured methodology (like DMAIC) After tasting success with Six Sigma and setting their own house in order, many companies induce/ recommend/ suggest Six Sigma implementation in upstream and/or downstream companies. Many Companies induced many suppliers to use Six Sigma. Similarly automotive companies are training and developing their suppliers on usage of Six Sigma techniques, Banks are forcing their service providers to use Six Sigma in their BPO environments. Common projects taken up are - Reduce cost without increasing delivery time. Reduce delivery time without increasing cost. Improve quality without increasing delivery time. Reduce delivery time without reducing quality.