By Tom DePaoli
Many supply chain and purchasing professionals are intimidated by Lean Six Sigma (LSS) and its proponents. Relax. It is just a disciplined approach to problem solving. LSS uses many tools that have been around for years; in many cases the tools have just been cleverly repackaged by consultants.
Decisions are data-based, disciplined and plodding. Without top-down commitment, LSS is doomed to fail. Make sure you secure this executive commitment, and better yet make participation a strong criterion for individual performance reviews (raises). Projects should be selected by ROI (Return on Investment) and since much time and teams are required for a project, they must return or save at least $300,000 to qualify as a full blown LSS project.
Supply chain and purchasing professionals must be involved in sourcing the LSS consultant. Experience is critical and a proven track record of project success essential. Get references and insist on examples of work. Use a fixed hourly rate and make sure all developed training and projects remain your property. You can try to make the contract performance-based but many LSS firms will not agree to this. Make the goal to be self-sufficient internally within two years with all LSS training and projects.
Some LSS projects that have been done in purchasing and the supply chain are: Inventory cost, part obsolescence prevention, leadtime reduction, backlogs, unexpected orders, customer service internal and external, cost of schedule changes, transaction flows, cost of return product, and supply chain optimization. Many of these involve process mapping which is a type of flow chart that illustrates how things are done and identifies areas of strength or weakness.
LSS is not the only tool that can be used by supply management professionals for improvement. In my experience LSS should be used when the potential savings is great and you have some good data to analyze. If you do not have good data the LSS project will take even longer. If data is sparse, the Lean approach is much preferred which is highly visual, intuitive and does not require as much data.
Always Lean a process before you use LSS. By this I mean eliminate any redundant steps in the process that can be easily eliminated first. Reduce the number of variables in the process. Try to understand the voice of the customer (VOC) clearly before your start process improvement. Remember if the customer does not really care or value a process step; ask yourself, “Why are we doing it?”
Finally use kaizens for straightforward less complicated projects. The kaizen approach is usually done by the work team using the process and strives to eliminate waste in the process. The new kaizen improved process should then be quickly implemented. Supply chain and purchasing professionals must take the leadership role in LSS, Lean and kaizens. In my professional experience, the rewards of these approaches can be astounding. They do however require a measured and disciplined approach, and a commitment to not giving up!
Dr. Tom DePaoli is the Management Program Director at Marian University in Fond du Lac, Wisc., and the Principal (CEO) of which does general business consulting in the supply chain, Lean Six Sigma and human resources areas. Recently he retired from the Navy Reserve after more than 30 years of service. In other civilian careers, he was a supply chain and human resources executive with corporate purchasing turnaround experience and Lean Six Sigma deployments. He is the author of eight books and numerous articles. His Amazon author’s page is https://www.amazon.com/author/tomdepaoli
George E. Krauter
When one defines third-party MRO (3PMRO) success, one assumes that fundamental operations are being executed and that expectations are being met (i.e., ROI goals are surpassed} Read More
The US Labor Department reported in March of this year that there were 6.6 million job openings, a record high. Although most of us applaud these numbers Read More
Millennials working in the supply chain management field don’t fit the mold that the older generation assumes for them. APQC’s recent study Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More