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Six Sigma in the Supply Chain

Six Sigma companies don’t have three- or four-sigma suppliers.

Praveen Gupta
Tue, 01/04/2005 - 22:00
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After launching a corporatewide Six Sigma initiative, leadership must consider how to get Six Sigma institutionalized in the supply chain. After implementing Six Sigma at an organization, its managers must think about continuing the improvement rate through implementing Six Sigma in its supply chain. Motorola started implementing Six Sigma in 1987. After about 18 months, the company recognized the completion of projects and improvement of processes to almost a five Sigma level (i.e., about 230 parts per million). But, to get to Six Sigma performance level, companies can’t work with three or four Sigma suppliers. Growing problems had a root cause related to the incoming material. Sometimes the process problem was related to the customer requirements, with either too tight tolerances or the wrong requirements. To better understand customer requirements, companies need to keep in mind that errors are reduced if they focus on taking customer requirements to the Six Sigma level. Bob Galvin, former CEO of Motorola, asked IBM, which is a larger company, to implement Six Sigma. Six Sigma success at IBM is a different story.

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