Six Sigma for Hardware Inventory at IBM

Posted by: meikah | 1 February 2010 | 8:46 pm

Six Sigma in IBM's Inventory Management

Technology is in a roll these days. A newly launched product today is obsolete the next day. So manufacturing companies of technology products often deal with inventory.

IBM serves a global market and thus you can imagine how they manage the supply chain and inventory. Due to fast depreciation in technology products, machines go to the inventory are not worth as much as they age. So, IBM conducted a Six Sigma project to reduce their hardware inventory.

The steps:

  • determine the issue
  • perform a root cause analysis
  • find the solution
  • establishing the results of the project
  • learn from the whole process

Read more in detail here.

Filed under: IBM, Inventory, Six Sigma, Supply Chain, Technology

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Can Lean Six Sigma Solve Inventory Cost Problem?

Posted by: meikah | 17 May 2009 | 11:02 pm

As Six Sigma practitioners would say, “Anything with a process, you can apply Six Sigma.”

If you really think about it, everything goes through a process, and so you can say that you can launch Six Sigma programs in any of your processes. However, there are cases that Six Sigma tools are not the right ones to use for a particular process. So you have to exercise better judgment. :)

In any case, Lean Six Sigma, as the marriage of Lean and Six Sigma, can also be used to address issues on any process. An article on iSixSigma has a good discussion on how Lean Six Sigma solves inventory cost problem.

Manufacturers can use Lean to transform their processes from making for stock to making to order. To do this, production lead time should be less than the customer’s expectation for delivery time. After implementing Lean tools, practitioners can use Six Sigma to reduce variation in the inventory process.

Continue reading…

Filed under: Inventory, Lean, Lean Six Sigma, Six Sigma, Tools/Toolkits

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Lean Six Sigma in the Pharma and Biotech Industries

Posted by: meikah | 13 August 2007 | 8:07 pm

lean six sigma pharmaLean is all about speed and streamlined processes and Six Sigma has the statistically sound methods and tools. From these merits alone it is not surprising that Lean Six Sigma will find its way to the pharma and biotech laboratories.

True enough, Lean Six Sigma can put the quality into the process of drug discovery and development. As Narendra Soman said,

With steadily increasing R&D costs, lagging productivity, and the continuing need to adopt, implement, and integrate novel processes and technologies, the pharma and biotech sectors are well-positioned to benefit from the advantages that Lean Six Sigma has to offer. Its robust, statistically sound methods and tools will help these industries conserve resources, optimize protocols and processes, and streamline operations. This structured approach complements the U.S. Food and Drug Administration’s process analytical technology initiative published in 2003 to design quality into drug products, rather than test quality into final dosage forms. Over time, Lean Six Sigma will become a seamless and critical operational strategy that will enable lasting change and significant improvements in efficiency and productivity.

Read more…

If anything else, this makes me feel a lot better. If only we could also apply Lean and Six Sigma to the practice of medicine. We can surely avoid, if not eliminate, what we call medical malpractice.

*Photo from Stock.Xchng

Filed under: Deployment, Healthcare, Inventory, iSixSigma, Lean Manufacturing, Lean Six Sigma, Pharmaceuticals

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Lean Six Sigma @ Ecolab

Posted by: meikah | 15 March 2007 | 12:13 am

Ecolab, Inc. is a $5 million company that develops and markets products and services for the hospitality, foodservice, institutional, and industrial markets. The company provides cleaning, sanitizing, pest elimination, maintenance, and repair products, systems and services.

Considering the amount of logistics it has to do, Ecolab is bound to go into a strategy that will make them deliver quality products and services on time.

An article on Manufacturer features Ecolab going into Lean Six Sigma, specifically in its manufacturing and supply chain processes. In doing so, it hopes to get 1% of all supply chain employees qualified as Lean Six Sigma Black Belts and about 3% as Green Belts. Working on Lean Six Sigma and the metric called, Overall Equipment Efficiency (OEE), and ERP the following changes have been observed so far:

  • There was a production-related project involving a bid to boost first-time batch acceptance with a goal of reducing the number of batch adjustments made by 20 percent by more closely metering the raw materials being introduced. All areas targeted exceeded the 20 percent level, and one plant saw an 80 percent reduction in batch adjustments.
  • A bulk loading process in a particular plant was examined. The existing process required employees to walk several miles over the course of a day between waiting trucks and the mixing department and quality labs to ensure the trucks were ready to be dispatched.
  • By coming up with a new way of approaching the mixing process, labor was freed up, unnecessary trips were reduced, and more than $200,000 in savings were achieved.

Manufacturer, “Ecolab, Eyes on Growth” with a link provided by iSixSigma

*Photo credit:

Filed under: Benefits and Savings, Deployment, Inventory, Lean Six Sigma, Six Sigma Organizations

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Lean/Six Sigma Putting Efficiency in Manufacturing

Posted by: meikah | 14 February 2007 | 11:26 pm

More and more manufacturing companies are realizing the value of combining Lean Manufacturing and Six Sigma. Who doesn’t want a strategy that eliminates waste, simplifies procedures and speeds up production combined with quality-assurance principles?

Reliable Plant features an Oracle whitepaper on combining Lean and Six Sigma. The paper listed the following chief benefits:

  • Cost efficiency: Many companies initially look to lean methods as a means to reduce manufacturing costs. But focusing too much on reducing cost could leave the company with unsustainable improvements. A healthier approach is to treat lean as a stimulus to growth.
  • Inventory reduction: Carrying inventory costs a company in warehouse space, constrained capital and potential handling damage. However, inventory management is crucial when a manufacturing company imports raw materials. There is really a need to make careful forecasts that anticipate market demand rather than relying solely on real customer orders.
  • Shorter cycle times: This eliminates waiting in lengthy queues, and the company can attend to customer orders in a timely manner.
  • Greater flexibility: Be real-time enterprises with enhanced agility — the ability to respond almost immediately to customer demands.

Read more…

Reliable Plant, “Lean/Six Sigma: The quest for efficiency in manufacturing,” with link provided by iSixSigma.

*Photo credit:

Filed under: Benefits and Savings, Deployment, Inventory, Lean Six Sigma, Manufacturing


Managing Inventory Through Lean Six Sigma

Posted by: meikah | 8 February 2007 | 12:15 am

While inventory serves as a buffer for fluctuating material costs and varying supplies delivery time, it can also be every business’s nemesis. That is if the organization has no supply chain or investment management system in place.

Lean Six Sigma can also reduce excessive and obsolete inventory says James Martin, writing for iSixSigma. Inventory problems are addressed by looking at root causes, such as long lead times, poor forecasting accuracy, quality problems or design obsolescence. If only for these reasons, an organization really has to choose well the person assigned in procurement. He must be someone who makes calculated risks and very knowledgeable about the market and the forces that play in it.

Using DMAIC and Lean tools, improvement teams can drive to those mentioned root causes and examine them closely. According, to the article, this is how it will go:

In an actual improvement project, the team begins an inventory analysis by defining the project’s goals in the Define phase. Using these goals as guidelines, relevant questions are developed to enable the team to understand how the system operates. Data fields corresponding to these questions are identified and extracted from information technology (IT) systems. The data fields are then organized in the form of an inventory model to provide the information necessary to answer the team’s questions and understand the root causes of the inventory problem.

After the Define phase, the team begins to evaluate measurement systems and plan data collection activities. This is the Measure phase of the project. An important activity in this phase is an on-site physical count by location of inventoried items associated with the problem. This is done to measure valuation accuracy relative to stated book value. Measurement analyses also are conducted of management reports and their related workflow systems. These analyses determine the accuracy of key supply chain metrics such as lead time, lot size, expected demand and its variation, forecasting accuracy (different from demand variation), on-time delivery and other metrics that may be related to an inventory investment problem. Unfortunately, supply chain metrics often are scattered across the several software systems within an organization. These systems include the forecasting module, master production schedule module, materials requirements planning module, inventory record files, warehouse management system module and similar IT systems.

After verification of a system’s metrics, the improvement team begins data collection to capture information necessary to answer the team’s questions developed during the Define phase. Relevant information, which may help the team in its root-cause investigation, usually includes suppliers, lead times, expected demand and its variation, lot sizes, storage locations, delivery information, customers and other facts.

Continue reading…

Source: iSixsigma, “Lean Six Sigma to Reduce Excess and Obsolete Inventory,” link provided by Promax Consulting

*Photo credit:

Filed under: Inventory, Lean Six Sigma

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