MANAGEMENT SEMINAR
SIX SIGMA IN LOGISTICS
 

TEAM
ARANGO ALBRECHT, JUAN YURI
GARCÍA LÓPEZ, LIZETH GABRIELA
BETHANCOURT PÉREZ, JUAN GILDARDO
RANAWAT, MAHIPAT BALWANTRAJ
RUTHER, CATHERINE
ORTIZ SANCHEZ, JANINA
HAMBURG, 28 JUNE 2007
 

Index of content

1 INTRODUCTION 1

1.1 INITIAL SITUATION 1 1.2 A IM AND STRUCTURE OF THE PAPER 1 2 SIX SIGMA ­ AN OVERVIEW 2 2.1 S IX S IGMA AND T OTAL QUALITY M ANAGEMENT 4 2.2 M AIN C OMPONENTS OF S IX -SIGMA 5 2.2.1 Leadership 5 2.2.2 Organizational Structure 6 2.3 S IX S IGMA M ETHODOLOGY AND T OOLS 6 2.3.1Methodologies 7 2.3.2 Tools 7 3 BASIC PRINCIPLES OF LOGISTICS 9 3.1 D EFINITION 9 3.2 D EVELOPMENT OF L OGISTICS AND ITS GENERAL FUNCTIONS 10 3.3 F EATURES OF L OGISTICS 11 3.4 I MPORTANCE OF INFORMATION IN L OGISTICS 12 3.5 P RESENT - DAY CHALLENGES IN L OGISTICS 12 4 LINKAGE BETWEEN SIX SIGMA AND LOGISTICS 14 4.1 F INANCIAL BENEFITS ­ L OGISTIC WASTES 15 4.1.1 Wastes of space and facilities 15 4.1.2 Wastes of transportation 16 4.1.3 Waste of inventory 17 4.1.4 Packaging waste 18 4.2 R EDUCTION OF VARIATION - P ROCESS MEASUREMENTS 19 4.3 P ROJECT S TRATEGIC A LIGNMENT - K EY P ERFORMANCE I NDICATORS 21 4.4 S IX S IGMA IN TRANSPORT FUNCTION OF L OGISTICS 23 4.4.1 Define 24 4.4.2 Measure 24 4.4.4 Improve 26 4.4.5 Control 27 5 CONCLUSION AND OUTLOOK 28 6 REFERENCES 29

1 Introduction
1.1 Initial situation

Supply chain management is a key strategic factor for increasing organisational effectiveness and for better realisation of goals such as enhanced competitiveness, better customer care and increased profitability (Gunasekaran/ Patel/ Tirtiroglu 2001, p. 71). There has been activity in both academic and industrial circles to generate improvements in this area. The principal focus of this activity has been in waste reduction. Little effort has been expended on the reduction of variation. Six Sigma has shown to be successful in delivering business benefits through variation reduction (Knowles/ Whicker/ Femat 2005, p.51). Six Sigma is a comprehensive system to achieve, sustain and maximize business success of companies. With this system it is possible to understand customer needs, to use facts, data and statistical analysis more disciplined, and to manage, improve and reinvent business processes (Pande/ Neuman/ Cavanagh 2000, p.21). On the whole it is interesting to see how the linkage between Six Sigma and Logistics is developed. While Six Sigma has traditionally been associated with manufacturing and product quality, leading manufacturers are using it nowadays to improve their Logistics capabilities. Applying Six Sigma methodology to complex and challenging Logistics processes, can decrease variation and optimize the processes (Selzer 2006, p.54). 1.2 Aim and structure of the paper The aim of this paper is to describe some relevant binding elements between Six Sigma and Logistics and to make clear the benefits of this combination. The paper consists initially in a description of general basic principles of Six Sigma and the definition of vital concepts. In chapter 2 and 3, an overview about functions, features and the importance of Logistics is given. Following this principles, Six Sigma is linked with Logistics as a tool to optimize processes, while reducing variation of key process measurements. Finally Six Sigma is applied to transport function of Logistics in a hypothetical example. This work closes with a conclusion and an outlook. [...]