Sigma features, Enablers, Goals, DMAIC/DMADV

Sigma features

Inventory management plays two critical roles in Lean Six Sigma. Firstly, the management of raw materials and semi-finished goods in the lean manufacturing process. Secondly, inventory control of finished goods held in a warehouse by manufacturers. In both cases, you should keep a sufficient stock level to minimize inventory carrying costs.

As a component of lean manufacturing, stock levels of raw materials and semi-finished products need to be controlled and managed. Similar to Japanese kaizen and Just-in-Time principles, just the right amount of stock should be held to keep production schedules going. This will reduce waste and optimize the production workflow.

For finished goods, excess and obsolete inventory are major business issues. These often involve deadstock and seasonality. A typical solution addresses the excess inventory. You might sell them below cost or donate them, for example. But this does not address their root cause.

• Identify the value that a company will get from Lean Inventory Management.
• Optimize the flow of inventory through the business by removing obstacles in the way. This comes from the Japanese 5S Lean principle (Sort, Straighten, Sweep, Standardize, Sustain).
• Move inventory only when requested by the customer. This is adapted from the Kanban Lean principle.
• Be flexible and adapt to change. This is influenced by the Kaizen Lean principle.
• Continuously refine your inventory management processes to improve quality, cycle time, efficiency and cost. This is derived from the DMAIC Six Sigma methodology.

Principles

• Demand management. You should only move inventory upon an order by a customer.
• Cost and waste reduction. But not to the extent of negatively affecting the customer.
• Process standardization. Standardizing, for example, on transportation and business processes.
• Industry standardization. Standardizing on product parts and components.
• Cultural change. Everyone along the supply chain must work as a team. Similarly, this echoes principles from Just-in-Time manufacturing.
• Cross-organization collaboration. Teams that cut across the organization can help to understand value better. Thus, it provides a holistic view similar to that of customer.

Enablers Goals

DMAIC/DMADV

DMAIC

Define: the problem, goal, reason the issue needs to be resolved.

Measure: the current state as a baseline and use it as a starting point for improvement.

Analyze: the root cause, identify with data driven tools and validate as to why said issue is happening.

Improve: here you need to identify some creative solutions to get rid of the major root causes, so the problem will be fixed and prevent future similar issues.

Control: here you want to maintain the improvements and sustain the success of those new improvements.

DMADV

DMADV is the acronym for the framework of Design for Six Sigma (DFSS), which is used when developing a brand-new service or product within a business. The acronym stands for Define, Measurement, Analysis, Design, and Verify.

Define: The goal of the new product or service, set realistic and measurable goals, why it is needed.

Measurement: You must know which factors that are critically important; this should include any parameters, including risks, as well as the production process and product capability.

Analysis: Here you develop design alternatives, work with different combinations and outcomes, and select the best components that would work.

Design: This is where a detailed prototype is developed. After this is done, a more detailed version is developed where errors may make it necessary to modify the current version.

Verify: Here is the final step where the newly designed product is taken to the real world test to see if it will work perfectly. Many production runs might be necessary to see if the quality is the absolute highest it can be.

DMAIC and DMADV do have a number of similarities that are worth noting. They both use statistical tools and facts in order find solutions to common quality-related problems and focus on reaching the business and financial goals of an organization. DMAIC and DMADV are implemented by Green Belts, Black Belts and Master Black Belts and are used to reduce defects to fewer than 3.4 per million available opportunities, or Six Sigma. Their solutions are data intensive and based only on hard facts.

The two most widely used Six Sigma methodologies are DMAIC and DMADV.  Both methods are designed so a business process will be more efficient and effective. While both of these methodologies share some important characteristics, they are not interchangeable and were developed for use in differing business processes.  Before comparing these two approaches in more detail, let’s review what the acronyms stand for.

• DMAIC: Define, Measure, Analyze, Improve, Control
• DMADV: Define, Measure, Analyze, Design, Verify

Despite the shared first three letters of their names, there are some notable differences between them. The main difference exists in the way the final two steps of the process are handled. With DMADV, the Design and Verify steps deal with redesigning a process to match customer needs, as opposed to the Improve and Control steps that focus on determining ways to readjust and control the process. DMAIC typically defines a business process and how applicable it is; DMADV defines the needs of the customer as they relate to a service or product.

With regards to measurement, DMAIC measures current performance of a process while DMADV measures customer specifications and needs. Control systems are established with DMAIC in order to keep check on the business’ future performance, while with DMADV, a suggested business model must undergo simulation tests to verify efficacy.

DMAIC concentrates on making improvements to a business process in order to reduce or eliminate defects; DMADV develops an appropriate business model destined to meet the customers’ requirements.