Reprinted from SUPPLY CHAIN DIGEST, March 3, 2009
Expert Insight: Supply Chain InView by Ann Drake
Logistics Comment: You and Your Bright Ideas
Achieving Performance Excellence Methodology Can Help Generate Supply Chain Insight
Generating ideas from the operations people in your entire supply chain can be a worthwhile step toward continual improvement, as I described in my most recent blog. It’s also important to remember some ideas will be superficial flashes of brilliance. Others will have significant potential to become sustainable Best Practices. Determining the difference will depend on having a process in place to evaluate, document, and implement change.
Achieving Performance Excellence
The process we developed several years ago to drive continual improvement through our network uses a cross functional and integrated approach. For this process, which we call “APEX” (for Achieving Performance Excellence), we set up a steering team that evaluates ideas using a Lean Six Sigma methodology. The team’s critical analysis relies on data that monitors and measures performance.
When an idea is determined to positively impact service, cost, and quality, the APEX process follows a five-step, project-based approach (DMAIC) to make the improvement.
1. Define – The first step of the APEX process involves defining the opportunity for improvement, gathering customer requirements, and documenting a project plan.
2. Measure – The Measure phase establishes the data and metrics used to monitor the performance and process improvements.
3. Analyze – The Analyze phase is used to determine the root cause of the problem. The best possible solution to impact the area of opportunity is then developed.
4. Improve – The Improve step of the APEX process is where the solution is implemented and improvements are made to the current process.
5. Control – The last step is Control, where the key metrics of the project are used to monitor the performance of the improved process.
A New Labor Management System
One of our early applications of the process was a new Labor Management system. When implemented across the network, this new system resulted in significant cost savings – for both our company and our customers. Another bright idea that surfaced from employees at one of our Logistics Centers addresses a particular situation related to the problem of turnover, and that change is currently being introduced at additional Logistics Centers.
In the current environment, the temptation may be to postpone improvement and concentrate on survival. But, as logistics and supply chain management partners, we are also working within an environment of high service requirements and cost management pressures, and those who do not keep on eye on improvement may find their customers looking elsewhere.
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