Six Sigma :Supply Chain Management, SCRC Articles Library
Six Sigma: Supply Chain Management Articles
References 1 Harry, M., & Schroeder, R. 2000. Six Sigma. New York. Currency. 2 Statistical Six Sigma Definition. http://www.isixsigma.com/library/content/c010101a.asp. Accessed on April 3, 2003. 3 Hahn, G. J., Hill, W. J., Hoerl, R. W., & Zinkgraf, S. A. 1999. The Impact of Six Sigma Improvement – A Glimpse into the Future of Statistics. The American Statistician, Vol. 53, No.3. 4 Averboukh, E. Six Sigma Trends: Upgrade for Supply Chains and Solution Providers. http://www.isixsigma.com/library/content/c020506a.asp. Accessed on March 3, 2003. 5 Calcutt, R. 2001. Why is Six Sigma so Successful? Journal of Applied Statistics, Vol. 28, Nos. 3&4, 301-306. 6 Phadnis, S. Selection of Project
Future Developments If corporations continue to increase their use of manufacturing and services outsourcing, then the demand for supplier evaluation should increase. It should also follow that there will be an increase in the overall demand for supplier evaluation techniques that produce results which are both more reliable and less costly to generate. Technological advances have resulted in an overall push toward the prevalence of firms whose form more closely resembles that of a virtual organization structure than any other. A virtual organization is defined here as “a temporary network of independents linked by integrated technology to share skills, costs,
Boeing Commercial Airplanes Group Top Suppliers Boeing Commercial Airplanes Group Boeing Commercial Airplanes Group, BCAG, is a firm that demonstrates excellence in the area of supplier evaluation (22). It has a total of 3,100 suppliers. BCAG has put great emphasis on supplier evaluation since half of their total production costs come from suppliers. They have realized that suppliers are integral to the success of their business and established high-level supplier evaluation methodology to decrease their costs, improve their quality and introduce new technologies. Each supplier has to be certified to become a BCAG supplier. Boeing has a “preferred supplier certification” process where
Expected Costs and Benefits: What Should the Professional Supply Chain Manager Know about Six Sigma?
Expected Costs and Benefits Benefits Costs h2. Benefits By becoming more competent in supplier evaluation, firms can expect a number of financial and non-financial benefits. Each particular quality sought in a vendor provides a firm with a different type of benefit. Following are examples of the types of benefits gained from selecting suppliers competent in particular areas. Delivery Selecting vendors with exceptional delivery ability eliminates the “waste” associated with purchasing raw materials such as inventory costs, storage expenses, and the costs of transferring materials multiple times. Many firms have moved to a JIT inventory process in order to reduce the
Implementation Issues Infrastructure Training Project Selection and Execution In order for firms to increase their ability to effectively utilize Six Sigma, they must focus their resources on three major areas: Infrastructure Training Project Selection and Execution Infrastructure Developing a proper infrastructure is important because it ensures that critical resources will be available when necessary. Infrastructure not only includes things such as senior managements support, but it also involves developing a receptive culture and assigning roles and responsibilities to the appropriate personnel (12). Developing a corporate culture that is receptive to Six Sigma is a time consuming process. It begins by introducing
Associated Technologies Statistical Process Control (SPC) Software Critical to quality (CTQ) trees Process maps Histograms Pareto charts Process summary worksheets Cause-effect diagrams Scatter diagrams Affinity diagrams Run charts Control charts Examples of SPC Programs p. Since Six Sigma is a methodology that is built upon statistical analysis, the technologies that are used to support Six Sigma are primarily statistical process control (SPC) software packages. SPC software typically has a number of statistical tools built into it that are critical to a Six Sigma company’s ability to evaluate the efficiency of their processes and analyze data. Other software packages are
Performance Measurements and Metrics: What Should the Professional Supply Chain Manager Know about Six Sigma?
Performance Measurements and Metrics Brainstorming Balanced Scorecard Four Perspectives Approach When six sigma is used as a metric, it means that defects per million opportunities (DPMO) must be below 3.4. This number can be derived by assuming that, in addition to random variability, process averages drift by 1.5 standard deviations, regardless of how well they are controlled. These circumstances result in a one-sided integration under the normal curve beyond 4.5 standard deviations, which equals an area that approximates 3.4/1,000,000 (3). However, six sigma metrics can go far beyond 3.4 DPMO. Metrics can also include things such as the duration and/or cost of value added steps
Definitions Critical-to-Quality (CTQs) Methodologies p. Six Sigma is a business process that allows companies to achieve drastic financial improvements by “designing and monitoring everyday business activities in ways that minimize waste and resources while increasing customer satisfaction”. Traditionally, quality control programs have focused on detecting and correcting manufacturing and design defects. However, the Six Sigma methodology focuses on techniques that prevent defects and errors from occurring at any stage of the process. (1) Statistically speaking, the phrase “six sigma” means six standard deviations. For a process to be six sigma it must have six standard deviations between the mean and the
Background Six Sigma traces its origins to the quest to achieve higher quality at Motorola. This quest began in 1979 when executive Art Sundry proclaimed, “The real problem at Motorola is that our quality stinks!” In the coming years, Motorola studied the relationship between higher quality and lower development costs in manufacturing. They found that contrary to widely held opinions, there is a positive correlation between higher quality and lower development costs. (1) In 1985, an engineer at Motorola’s Communication Sector, Bill Smith, authored a paper that presented the results from his study of the correlation between a product’s field life
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