Guest column: Using Six Sigma to counter setbacks during times of trouble
Sanjeeve ST, senior manager at Al Madina Logistic Services SAOC’s supply chain department in Oman, explains that you don’t have to be a Six Sigma expert to improve your company’s bottom line.
The logistics sector is abuzz with some key players claiming record growth despite the slowdown, while others are gearing up to employ methods to counter the economic depression.
The March edition of Logistics Middle East published some very interesting points about PricewaterhouseCooper’s annual report on the challenges that lie ahead. It reported that a "mere one third of the respondents believed they would increase their revenues over the last 12 months, compared to 90% last year".
For those of you who are pessimistic, I believe there could not be any better period than now to review your key operation fundamentals and seek ways to streamline them. There is a real need now more than ever to map your business processes both upstream and downstream to seek improvement measures to gain efficiency, thus reducing cost to have a better bottom line.
One of the quickest and easiest methods that I have applied over the years is to employ DMAIC (Define-Measure-Analyse-Improve-Control) improvement methodology. By selecting a couple of process owners to map key processes, along with the average time taken to execute each task, the process owners than review each process by simply listing each one by its necessity in order to identify unwanted processes and then eliminate them. Remember to cross the process owners between departments/divisions to ensure nothing gets hidden due to personal reasons.
Below is a brief overview of DMAIC and how to execute it. This approach definitely works; just ensure you have the right team to execute the proposition and that you have support from your senior management team.
Step 1: DEFINE
What to do: You should form the process team, identify opportunities, select the project, define the goal and objectives and establish a timeline.
Tools you can use: You can use input-process-output diagrams, Pareto analysis and failure mode effect analysis.
Step 2: MEASURE
What to do: You should define and analyse the current process, assess the capability of your measurement process, assess the current capability of the process, and consider variance/noise reduction.
Tools you can use: You can use process flow/mapping, cause and effect with constant noise experimental/standard operating procedures, graphical analysis (histograms, run charts, etc.), and failure mode effect analysis.
Step 3: ANALYSE
What to do: You should identify the key input variables, discover the relationships between the inputs and outputs and identify the root causes of the problems.
Tools you can use: You can use process flow/cause & effect/constant noise experimental/standard operating procedures, root cause analysis and graphical analysis (histograms, diagraphs, etc.)
Step 4: IMPROVE
What to do: You should identify and test proposed solutions, implement solutions and re-assess capability.
Tools you can use: You can use design of experiments, capability studies, graphical analysis (histograms, run charts, etc.), statistical analysis (regression, hypothesis tests, etc.) and control charts.
Step 5: CONTROL
What to do: You should document results and the return on investment, take actions to hold the gains and celebrate and communicate (which is crucial for next base-lining projects).
Tools you can use: You can use control charts, a control plan, and failure mode effect analysis/mistake proofing.
During the process elimination exercise, members must have the courage to strike out legacy systems or obsolete ways of working. Typically it takes between three and six months to complete the exercise for each operations unit (depending largely on the size of operations). The key objective of DMAIC is to simplify processes and reduce variations to reduce operating cost.
The common belief is that one has to be an expert in Six Sigma to drive such improvement programmes but I personally don’t believe that’s the case. With just some basic understanding of statistical tools and operations know-how, you will be a matter of steps away from making some real and quantifiable changes for the better.