Designing a “Smart” Six Sigma architecture for your Logistics Network

If you cut through all the clutter of Logistics, at the core of a best in class Logistics organization is the ability to minimize variation. And hence, the concept of variation reduction becomes one of the most critical skills for a Logistician.

Again, if you rise above all the granular activities- the primary aspect of a logistician is to manage inventory- static or in motion. And if you are familiar with fundamentals of Inventory management, it is all about managing variance. Look at all the types of inventory in the Supply Chain adn you will see why variation plays such a critical role in how we manage inventories throughout the business and Supply Chain.

And this makes Six Sigma an extremely important tool in every Logistician’s toolkit.
However, a challenge with leveraging Six Sigma across the Supply Chain has been that it was leveraged in silos across the Supply Chain.

But I believe that the time is now right, in terms of technical capabilities, Computing power and Analytical capabilities to create an end to end “Smart” Six Sigma architecture.
I have suggested an architecture below but this is just suggestive. But imagine the benefits of leveraging an end to end architecture.

As an example, consider Safety Stock- that exists to hedge against the unknown- and primarily exists to account for variation in Supplier quality, Transportation reliability, Manufacturing process capability, and customer demand patterns.

What this means is that if we can understand and control variation in our processes from supplier to customer,we can address a major portion of uncertainity that exists in Supply Chains.



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