Transcript Six Sigma Process Improvement in the Supply Chain using SCOR

Six Sigma
Process Improvement
in the Supply Chain
using SCOR
MAESC 2006
March 31, 2006
Paul Babin – Mimeo.com
Doug Geyer – Mueller Industries
Six Sigma Process Improvement in the
Supply Chain using SCOR
Six-Sigma
 Supply Chain
 SCOR model
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Model
Measures
Balanced Scorecard
 Integration
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Six Sigma Process Improvement in the Supply Chain using SCOR
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Abstract: Six Sigma is an important quality tool for driving
business results through process improvement. Using project
teams that focus on reducing process variation, the Six
Sigma approach has been used successfully across a wide
spectrum of engineering and business problems.
When applied to Supply Chain improvement, the Supply
Chain Operations Reference (SCOR) Model provides a
framework to identify and select the most influential Six
Sigma projects that can drive important operational and
strategic benefits.
This presentation will provide a practical explanation of how
SCOR is used, and how it relates to other tools including Six
Sigma and the Balanced Score Card.
What is 6-Sigma? 3.4 ppm
3.4 PPM
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6-Sigma Process Improvement Methodology
Define the key
processes that affect
customers.
Define
Analyze the data, converting
it to insightful information.
Measure
Analyze
Control the process to
assure that important
improvements are
sustained.
Improve
EXECUTION
Measure the
performance of key
characteristics.
Improve the process to
achieve the results desired.
Control
Comparing Six Sigma, Lean, TOC
ref Dave Nave, Quality Progress, March 2002
Program
Six Sigma
Lean Thinking
Theory of Constraints
Theory
Reduce variation
Remove waste
Manage constraints
Application
Guidelines
1.
2.
3.
4.
5.
Define
Measure
Analyze
Improve
Control
1.
2.
3.
4.
5.
Focus
Problem focused
Identify
value
Identify
value
stream
Flow
Pull
Perfect
Flow Focused
1.
2.
3.
4.
5.
Identify constraint
Exploit constraint
Subordinate
constraint
Elevate constraint
Repeat cycle
System constraints
6-SigmaTools by DMAIC Phase
ref Implementing 6-Sigma, Breyfogle 2003
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Define
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Project Selection Matrix
Cost of Quality
Project Charter
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Key process output variables
Financial Metrics
Voice of the Customer
Analyze
Box Plots, Pareto Charts, Control
Charts
Scatter plots, Comparison Tests
Regression Analysis
ANOVA (Analysis of Variance)
Improve
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Measure
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Key process input variables
DOE (Design of Experiments)
Full Factorial DOEs
2k Fractional Factorial DOEs
Robust Designs
Response Surface Methodology
Improvement Recommendations
Control
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Process Maps, SOPS,
Failure Mode and Effects Analysis,
Mistake Proofing
Control Plan
Change Management
Supply Chains
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Cross Functional vs. Departmental
Customer Focused vs. internal process focused
Customer
Service
Suppliers
Manufacturing
Distribution
Warehouses
Logistics
Inventory
Customers
SCOR - Model
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Supply Chain Operations Reference Model
Tool for Supply Chain Improvement
Analysis Methodology – Opportunity Identification
Hierarchical Levels
Common Definition of process elements
Measures appropriate to each level and element
Applicable to Make-to-Order and Make-to-stock
SCOR – Management Processes
PLAN
PLAN
SOURCE
MAKE
RETURN
PLAN
DELIVER
RETURN
SOURCE
RETURN
MAKE
DELIVER
RETURN
MAKE
DELIVER
RETURN
RETURN
Supplier
Internal or External
SOURCE
Your Company
Customer
Internal or External
SCOR Supply Chain Example
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Level 1 scope for copper fittings wholesale supply chain
Company
Copper Fittings Plants and DCs
Supplier's
Suppliers
Supplier
Tube Mill
Supplier
Purchased
Fittings
Plan
Source
Make
Customer
Wholesale
Customers
Deliver
Return
Enable
Customer's
Customers
Plumbers
Balanced Scorecard
Strategy Deployment Tool
 Measures
 Initiatives
 Strategic Thrust – Compete based on
Supply Chain Excellence
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Balanced Scorecard
Perspective
Financial
Customer
Internal Business
Perspective
Learning &
Growth
Strategy
Measurement
Targets
Initiatives
Integrating
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BSC
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SCOR
Six Sigma
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References:
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Breyfogle, Forrest W. III, “Implementing Six Sigma
– Smarter Solutions Using Statistical Methods, 2nd
Edition”, Wiley, 2003.
Nave, Dave, How to Compare Six Sigma, Lean
and the Theory of Constraints. Quality Progress,
March 2002.
Supply Chain Council, Supply Chain Operations
Reference Model, version 7.0, www.scc.org
Questions?
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