Lean Six Sigma In Supply Chain And Logistics
Lean Six Sigma is a methodology that is used mainly to minimize or remove defects, enhance any process, and eradicate errors in any business process.
The core of the Lean Six Sigma approach is built on eliminating wastes which indirectly helps in improving efficiency and quality. It also aims to streamline and improve all the underlying processes. Six Sigma works on a disciplined system of data collection and makes use of improved statistical tools. If you require Lean Six Sigma to produce the desired results, it needs the effective involvement of senior management and workers through all stages of its application.
Why is Lean Six Sigma so important in this industry?
Logistics are the backbone for any business in today’s world. It provides the competitive advantage that sets a company above others in the market. The Six Sigma approach of eliminating the wastes or minimizing the errors in a process can be very useful when applied correctly to the logistics domain. A Lean Six Sigma approach can increase the satisfaction levels of both external and internal clients and also help yield financial benefits.
In any business that involves logistics, variation reduction is important. Logistics requires managing inventory and this depends heavily on managing variance.
It is important to maintain a safety stock to cover for variances in transportation reliability, supplier quality, customer demand patterns and manufacturing process capability. This dependency on buffer stock may be reduced to a large extent if one can understand and control the variation in the entire process flow from the supplier to the customer. Differences in production or control and dissimilarity in outbound and inbound logistics may lead to a stoppage in production. This keeps the organization’s credibility and loyalty at stake.
Lean Six Sigma thrives on the reduction of variation associated with processes or products. This approach can be implemented to reverse or forward the logistics process. Lean Six Sigma works by getting to the root of the problem and finding the most suitable solution for the problem. This technique is a simple, yet very effective way of ensuring improvements in a process. Lean Six Sigma aims for continuous improvement over a long period of time.
Lean and Six Sigma provides 3 different strategies for the logistics company. It can improve processes, redesign processes that are out of date and no longer relevant and help logistics companies with the ongoing management of the processes. A common issue deals with shipment errors. These are either reported by the customers or realised by the company after the delivery. Even one incorrect shipment a month qualifies as unacceptable, especially when there is obviously a reason why incorrect deliveries continue to happen.
Anexas has worked with some of the biggest logistics companies in the world, and helped increase their profits by leaps and bounds.