Review the information in this chapter about Six Sigma principles and Six Sigma organizations.

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Relationship Diagram, PDPC (Process Decision Program Chart), Cause & Effect Diagram, other tools such as Kaizen, TPM (Total Productivity Management), ISO, BPR (Business Process Reengineering). These tools aim at one common objective - increased profits through enhanced quality. Six Sigma is a methodology that combines both, the gradual & continuous improvement and radical redesign.

Six Sigma has gained a lot of importance in the past few years. Six Sigma begins by measuring the statistical variability within a process. It means plus or minus six standard deviations, which translates down to 3.4 errors per million occurrences. Six Sigma processes are designed to reduce process variability. Thus six sigma will help in reducing defects and applied it to every business process of supply chain. Six Sigma helps the organization to achieve improved process flows and better communication. There is decreased Work-in-Progress. Cycle time for every activity/process is reduced.
With Six Sigma an organization has enhanced productivity and improved capacity thereby resulting in increased amount of output. There is a decrease in unit costs since cycle time is reduced and more time is available to produce more thereby allowing the company to have more Price flexibility.
We will use six sigma in Supply chain management:
Supply chain means:
"A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm." By Terry Harison.

It has following three components:

(1) Demand Fulfillment?The objective of the demand fulfillment process is to provide fast, accurate, and reliable delivery-date responses to customer orders. Demand Fulfillment is mainly an execution-level sub-process that includes order capturing, customer verification, order promising, backlogs management, and order fulfillment.

(2) Demand Planning?The objective of the demand ...