Team A: Week 6-7 Discussion

Global Supply Chain Quality: Six Sigma Approach

Henrich Y. Edimo, MBA

Global Supply Chain Management/DDBA 8510-2

Moutaz Abou-Robieh, PhD

August 3, 2015

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Table of Contents

• Synthesis of Ideas from Literature• Gaps in Literature• Research Topic Background• References• Annotated Bibliography• Summary• Questions

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Synthesis of Ideas from Literature(1 of 6)

• The purpose of this presentation is to address global supply chain quality assurance and quality control to six-sigma continuous monitoring to achieve competitive advantage and supply chain performance.

• Questions to consider are:– What is global supply chain?– What is global supply chain quality and six-sigma approach ?– How is supply chain quality measured using the six sigma approach ?– Is quality controlled across supply chains?– What operational performance exhibits greater performance in supply chain?– What are the risks and economic consequences of delivering poor quality

supply chain?

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Synthesis of Ideas from Literature(2 of 6)

• Effective and efficient supply chain management is critical for the survival and success in the turbulence global environment. The complex mix of heterogeneous collaboration in supply chain increases the complexity of the risk profile in inter-related components with a network (Groznik & Trkman, 2012).

• The effectiveness and efficiency of supply chain process relies on internal and external factors that align with supply chain planners optimization models to minimize cost and gain competitive advantage ( Sodhi, 2003). Bondyopadhyay and Jenicke (2007) examined the Six-Sigma methodology where product specification and tolerance are compared to the inherent variation in of manufacturing a product by incorporating analysis, cuase effect diagram and statistical process control as shown in Fig.1

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Synthesis of Ideas from Literature(3 of 6)

Figure 1. A model for Six Sigma approach to design and process improvement in automotive supply chains(Bandyopadhyay, & Jenicke, 2007).

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Synthesis of Ideas from Literature(4 of 6)

• In addressing quality assurance in supply chain management strategy requires inspection and quality control to six sigma continuous improvement (Bandyopadhyay & Jenicke, 2007).

• Supply chain quality is defined as a set of practices that emphasized on continuous process improvement among partners in the supply chain in order to enhance performance and achieve customer satisfaction through emphasis on learning (Mellat-Parast, 2013).

• Lin and Li (2008) analyzed how effective supply chain management is treated as a key to building a sustainable competitive edge through the improvement of inter-firm and intra-firm relationship. Lin et all suggested and integrated framework for supply chain performance measurement.

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Synthesis of Ideas from Literature(5 of 6)

• Deloitte. n.d. stated risk and vulnerability continue to grow, especially across supply chains, moving organizations to implement strategies to mitigate risk and reduce costs. Due to inherent level of complexity and vulnerability in supply chain, incorporating strategies, continuous monitoring, and tactics to build resilience is vital to the success of the organization (Wisma, 2008).  

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Synthesis of Ideas from Literature(6 of 6)

• Framework to Address Supply chain quality – Mellat-Parast (2012) proposed a quality management that facilitates

cooperative learning and improves inter-organizational processes. – Huehn-Brown and Murray (2010) stated despite literature emphasizing on

continuous monitoring and improvements, weaknesses need to be better understood by engineering managers to further improve the process by educating, training, and proper execution of approaches.

– Bandyopadhyay and Jenicke (2007) presented a six sigma approach to quality management and how it can be used for continuous quality assurance and quality improvement in the global supply chain. The author picture a tremendous emphasis on six sigma approach to quality and productivity improvement in global supply chain.

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Gaps in Literature(1 of 3)

• Lin and Li (2010) explored the phenomenon of integrated framework for supply chain performance measurement by adopting the six-sigma metrics and included three components namely team structure, supply chain process measurement, and output measurement. However, the authors reported the following gaps in literature:

Lin et al. suggested a majority of articles focused on intra-organizational performance and failed to grasp the idea of how supply chain has holistically performed.

Lin et al. also suggested that previous research failed to consider the variation of measured values which ignored the distribution of uncertainties.

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Gaps in Literature: Research Design(2 of 3)

Lin et al. determined there existed no common metrics for evaluating different processes on the same scale. This implied different variables could not be examined without utilizing the correct metrics.

Lin et al. suggested the process team should possess motivation, capacity, and the authority to improve processes and results.

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Gaps in Literature: Threats to Validity(3 of 3)

• Huehn-Brown & Murray (2010) used a quantitative methods and model to identify key continuous improvement characteristics patterning to leadership, learning, and collaborating supply chain needs to be executed efficiently. The authors determined numerous lean enterprises and six sigma approaches talk about continuous improvement, however, they do not necessarily delve into exactly how to create a continuous environment for improvement (Huehn-Brown & Murray, 2010).

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Research Topic Background(1 of 5)

Supply chain is a network of firms that profit by collaboration (Tapiero & Kogan, 2007). Typically, in supply chains, uncertainty arises not only as a result of uncertainties in the underlying processes producing quality, but also due to the motivation and preferences of each of the parties (Tapiero & Kogan, 2007). Supply chain management requires the simultaneous integration of customer requirements, internal processes and upstream supplier performance is an efficacious approach to supply chain quality management (Romano, 2002). Supply chain risk and quality management may be better understood when viewed through the lens of reality versus narrow optics that may fail to convey the danger that may at any time period (Deloitte n.d.).

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Research Topic Background(2 of 5)

• Supply chain management (SCM) emphasizes interdependence among firms, collaboratively working as a team to achieve efficiency in supply chain activities. Efficient and effective supply chain designs reduces cost, improves flexibility, enhance quality, and ensure customer satisfaction (Mallat-Parast, 2013).

• Addressing and understanding quality issues at the supply chain is critical to the success of the organization and supply chain performance.

• Based on limited studies, it is apparent there are conceptual and theoretical differences between traditional approaches towards quality and supply chain quality (Mallat-Parast, 2013).

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Research Topic Background(3 of 5)

• Quality control techniques such as Sig-Sigma or Failure Mode and Effect Analysis (FMEA) could be extended and redesigned to be effectively utilized across supply chain (Mallat-Parast, 2013).

• According to Mallat Parast, 2013, relationship management and effective buyer-seller collaboration build the development of inter-organizational processes and inter organization learning in supply chain. He porposed supply chain quality practices must be based on trust, governance, information integration, process integration, and cooperative learning.

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Research Topic Background (4 of 5)

• Toyota Production System (TPS) used the Value Stream Mapping (VSM) a lean supply chain tool to identify wasteful and necessary value-adding activities. The VSM incorporated all activities in the product process which included: production flow, design flow, and material and information flow (Wee & Wu, 2009).

• Six-Sigma is a strategy developed by Motorola in the 1980’s. This concept recognizes that variations or defects are inevitable due to insufficient design margins, inadequate process control, imperfect parts and materials, fluctuation in environmental conditions, and operator variation (Wee & Wu, 2009).

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Research Topic Background (5 of 5)

• Six Sigma is statistically analytical in its approach, so applying it everywhere across the supply chain is not realistic. Additionally, Lean practices can also be applied in areas where Six Sigma’s overly statistical approach is not appropriate. The combined application of the three, through experienced practitioners, means that the right technique is selected at the right time (Culey, 2008).

• Six Sigma is a methodology that enables world-class quality and continuous improvement to achieve the highest level of customer satisfaction (Huehn-Brown & Murray, 2010). Supply chain actors perform the dual role of supplier and customer which necessitates the coordination and integration of inter-organizational and inter-organization linkages (Prakash, 2013).

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References

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Bandyopadhyay, J. K., & Jenicke, L. O. (2007). Six Sigma approach to quality assurance in global supply chains: A study of United States automakers. International Journal of Management, 24(1), 101-107. Retrieved from the ABI/INFORM Global database

Culey, S. (2008). Design the six sigma supply chain. Supply ChainEurope, 17(5), 44-47. Retrieved from the ABI/INFORM Global database

Deloitte. (n.d). Supply chain risk strategies for emerging markets. Understanding the importance of risk.Retrievedfromhttp://www2.deloitte.com/content/dam/Del oitte/ie/Documents/Risk/2013_supply_chain_emerging_mark ets_deloitte_

References

Groznik, A., & Trkman, P. (2012). CURRENT ISSUES AND CHALLENGES OF SUPPLY CHAIN MANAGEMENT. Ekonomska Istrazivanja, 25(4), 1101-1112. Retrieved from http://search.proquest.com/docview/1373234468?accountid=14872

Romano, P. (2002). Impact of supply chain sensitivity to quality certification on quality management practices and performances. Total Quality Management, 13(7), 981-1000. Retrieved from the Academic Search Premier databaseWisma, M. (2008). Global Business Management: Current Trends and Practices. The Journal of Applied Business and Economics, 8(1), 96-109. Retrieved from the ABI/INFORM Global database

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Annotated Bibliography(1 of 10)

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Bandyopadhyay, J. K., & Jenicke, L. O. (2007). Six Sigma approach to quality assurance in global supply chains: A study of United States automakers. International Journal of

Management, 24(1), 101-107. Retrieved from the ABI/INFORM Global database

According to Bandyopadhyay and Jenicke (2007), supply chain globalization and quality assurance in global supply chain have taken a new direction that involved inspection and

quality control to six sigma continuous improvement . The authors presented a six-sigma approach to quality management for continuous quality assurance and improvement in global supply chain. Bandyopadhyay et al. took a new direction from that of inspection and quality control to six-sigma continuous improvement approach that incorporated QS- 9000/ISO-9000 registrations. The comprehensive review of the quality and continuous improvement in supply chain management focused on developing and sustaining the product design, production, inventory, transportation, and planning to meet and exceed customers’ satisfaction. The authors concluded that it is critical and vital for all departments to work together and in harmony to improve the quality of global supply chain.

Annotated Bibliography(2 of 10)

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Huehn-brown, W., & Murray, S. L., P.E. (2010). Are companies continuously improving their supply chain? Engineering Management Journal, 22(4), 3-10. Retrieved from

http://search.proquest.com/docview/863241907?accountid=14872

Huehn-brown and Murray (2010) examined continuous improvements models than can be integrated with strategic planning, development planning, supply chain management, and budgetary controls to produce excellent operating frameworks. Huehn-brown et al. literature review highlighted eights that interrupt the flow of product and services throughout the value stream. They included: over production, motion, waiting, defects, inventory, transportation, underutilized people or knowledge, and non-value added. Lean activities must be part of the holistic system, or an integrated series of parts with objectives that are clearly designed. To improve supply chain, management must continually discover hidden opportunities that exist. Based on the analysis, the average points were greater for individual that utilized both lean and six-sigma approaches than those who used just the lean approach to improve supply chain performance.

Annotated Bibliography(3 of 10)

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Krueger, D. C. (2009). Operational excellence: Using lean six sigma to translate customer value through global supply chains. Journal of Quality Technology, 41(3), 318-319. Retrieved from http://search.proquest.com/docview/214488230?accountid=14872

Krueger (2009) provided a practical reference of tools, methods, and concepts to improve supply chain management operations globally. Utilizing six sigma methodology, Krueger consolidated information from 110 key concepts that guided an organization to

understand customers through its global supply chain. The author determined operational excellence can be achieved using six sigma to translate customer value through global supply chain. The author findings also expressed lean experts and six sigma belt will likely benefit learn and six sigma tools , forecasting, productivity, improvements, managing and project management. The author further suggested practitioners will find the study difficult to immediately apply the approaches. However, the description and examples provided will spark ideas and encourage further analysis and studies.

Annotated Bibliography(4 of 10)

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Lin, L., & Li, T. (2010). An integrated framework for supply chain performance measurement using six-sigma metrics. Software Quality Journal, 18(3), 387-406. doi:10.1007/s11219- 010-9099-2

Lin and Li (2010) employed a six-sigma metrics approach that integrated framework for supply chain measurement that consisted of team structure measurement and supply chain process measurement. Through the review of academic literature and search, Lin and Li determined supply chain management effectiveness is key to building a sustainable competitive edge through improved inter-firm and intra-firm partnerships and relationships. Because of limitations and deficiencies in supply chain that range from not focus on strategic issues, no systematic approach to long-term performance measures, Lin and Li stressed on the need to new measurement systems and metrics. Lin and Li utilized horizontal and vertical measurements to assess supply chain performance while adopting the six-sigma metrics as an improvement tool for supply chain performance. The proposed framework must align with dimensions and specification with both internal and external environmental changes and factors.

Annotated Bibliography(5 of 10)

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Mellat-Parast, M. (2013). Supply chain quality management. The International Journal of Quality & Reliability Management, 30(5), 511-529. doi:10.1108/02656711311315495

Mellat-Parast (2013) performed a theoretical review on supply chain quality through the lenses of inter-organizational learning that utilizes knowledge-base view (KBV) for competitive advantage. Mellat-Parast framework revealed supply chain management continue to be regarded as a major inter-organizational practice gaining competitive advantage especially in alliances and networks with suppliers and customer. To fully address the notion of supply chain quality, Mellat-Parast focused on strategic supply chain by incorporating quality control techniques such as Failure mode and Effect Analysis (FMEA) and Six Sigma to measure supply chain effectiveness. The findings suggested corporate learning positively facilitated progress and improved inter- organizational learning improved. Therefore, for companies to attain competitive advantage and be successful, quality assurance and continuous monitoring is vital and critical to the success of the firm and supply chain performance.

Annotated Bibliography(6 of 10)

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Prakash, G. (2011). Service quality in supply chain: Empirical evidence from Indian automotive industry. Supply Chain Management, 16(5), 362-378. doi:10.1108/13598541111155866

Prakash (2011) conceptual model and set of hypotheses examined the role of service quality in supply chain and analyzed a model that proposed internal and external service initiatives to gain competitive advantage in the market. The model identified the relationship between service quality with loyalty, satisfaction, competitive advantage, and organizational performance. Prakash identified that supply chain players perform the dual function of supplier and customer that necessitated the coordination and integration of intra-organizational and inter-organizational linkages. The author determined the flow of service elements embedded in the flow of products is a source of value to an organization. Prakash findings expressed service quality can strengthen business relationships, develop synchronized relationships between supply chain members and gain competitive advantage.

Annotated Bibliography(7 of 10)

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Romano, P. (2002). Impact of supply chain sensitivity to quality certification on quality management practices and performances. Total Quality Management, 13(7), 981-1000. Retrieved from the Academic Search Premier database

Romano (2002) examined if the knowledge in the ISO 9000 quality system requirement (sensitivity to certification) by diverse supply chain members can really influence quality management practices and operational performance of players in supply chain. The author discussed how ISO 9000 norms are recognized and accepted as a reference model for quality assurance. Romano contributed in understanding the impact of supply chain sensitivity of certification in quality management practices and performance. The author adopted two concepts of certification namely upstream sensitivity and downstream sensitivity to certification. The author emphasized firms with more certified suppliers will have a more advanced internal quality system and better operational performance than those with less certified suppliers In conclusion, there is no general agreement in literature that measure the impact of ISO 9000 certification on the supply chain on a whole. However, on an operational performance perspective, the presence of an initial certified supplier portfolio is associated neither with better quality performance, nor with lower quality costs.

Annotated Bibliography(8 of 10)

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Qrunfleh, S., & Tarafdar, M. (2013). Lean and agile supply chain strategies and supply chain responsiveness: The role of strategic supplier partnership and postponement. Supply Chain Management, 18(6), 571-582. doi:10.1108/SCM-01-2013-0015

Qrunfleh and Tarafdar (2013) analyzed the mediating effect of supply chain practices on the relationship between supply chain strategies and responsiveness. Supply chain practices aim at building relationship with suppliers, eliminating waste, facilitation customization and information sharing with the supply chain. The authors realized that by implementing proper supply chain strategies, responsiveness of the supply chain and the overall performance of the organization will be enhanced. Qrunfleh and Tarafsar recommended that supply chain strategy enhancement is achieved when supply chain strategy aligns with supply chain responsiveness. However, not all organization can appropriately response effectively and efficiently from supply chain strategies. By effectively managing inventory and employing continuous improvement techniques and flexibility across the organization, the supply chain can reduce set-up time adjust capacity and respond swiftly to clients

Annotated Bibliography(9 of 10)

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Wee, H. M., & Wu, S. (2009). Lean supply chain and its effect on product cost and quality: A case study on ford motor company. Supply Chain Management, 14(5), 335-341. doi: 10.1108/13598540910980242

Wee and Wu (20090 used a case base approach to examine how Toyota can continuously gain competitive advantage through its competencies, eliminating waste, and the objective of long-term philosophy. Wee et al. used value stream mapping (VSM) to

describe lean supply chain. This tool is used by Toyota production system to identify the difference between waste and necessary value added activities. Additionally, lean VSM integrate all processes together from raw material to final consumer perfectly. Base on analysis, Wee et al. findings confirmed substantial cost savings can be realized through the sharing of information. The lean supply chain of VSM supported continuous improvement and performance towards building competitive advantage by eliminating waste.

Annotated Bibliography(10 of 10)

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Yang, H. M., Choi, B. S., Hyung, J. P., Suh, M. S., & Bongsug (Kevin) Chae. (2007). Supply chain management six sigma: A management innovation methodology at the samsung group. Supply Chain Management, 12(2), 88. doi: 10.1108/13598540710737271

Yang, H. M., Choi, B. S., Hyung, J. P., Suh, M. S., and Bongsug (Kevin) Chae. (2007) upon the literature review introduced a six-sigma methodology from a supply chain management perspective. The author analyzed the gap in supply chain management and envisioned it needed enormous improvement. The authors determined companies with large and complex supply chain utilize extensive supply chain solutions and process innovation to support and improve operations. Yang et al. determined six sigma is a key enabler for group success by capitalizing on the potential synergy between supply chain management and six sigma which are based on project discipline, sustaining results, well- established HR framework and quantitative strength. Based on the analysis, the authors determined synthesizing supply chain management and six sigma while forming a unique six sigma based methodology to modify operations are fruitful.

Questions

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I am the captain of my fate and the master of my soul “Nelson Mandela”