ASSIGNMENT # 1

Is Supply Chain Management More Than Purchasing?

I get asked this question a lot: "What is the difference between purchasing and supply chain management?" Though many different and conflicting definitions of supply chain management abound, in my definition, purchasing is a subset of supply chain management. Purchasing deals primarily with managing all aspects related to the inputs to an organization (i.e., purchased goods, materials, and services), while supply chain management deals with inputs, conversion, and outputs. A supply chain consists of three types of entities: customers, a producer, and the producer's suppliers. The extended supply chain includes customers customers and suppliers suppliers. Supply chain management oversees and optimizes the processes of acquiring inputs from suppliers (purchasing), converting those inputs into a finished product (production), and delivering those products or outputs - to customers (fulfillment). Under this definition, supply chain managers decide where to locate manufacturing and distribution facilities, how to route goods and materials among those facilities, and from which parts of the world to source the inputs. Supply chain management unites disparate functions that historically reported to different executive positions with different, and sometimes c

onflicting, priorities. So what does this mean for individuals who have a purchasing-related title? One myth is that purchasing will become less important. To the contrary, analyzing spend for cost savings opportunities, negotiating, and selecting reliable sources of supply will always be critical. These functions fuel profit and provide competitive advantage for the organization. However, the purchasing professional can expect to see his or her role expand to include the management of functions that were separate in the past. These functions include inventory management, internal logistics, warehousing, and other functions that are more related to the input or pre-production side of the supply chain. Today, due to this expanded role, purchasing is often referred to as purchasing and supply management.

Green Supply Chain Management

The six modules in the Green Supply Chain Management (GSCM) series and Sustainability Purchasing Practices are offered as as a combined series and priced at ($75). The GSCM topics cover every stage in manufacturing, from the

product design to recycling or disposal. GSCM is critical in procurement programs, award of contracts, and as part of the overall sustainability planning process. The purpose of the GSCM modules is to describe the impact of green on supply chain management, demonstrating how green practices can save money, increase efficiency, and reduce delivery time. At the conclusion of this series and successful completion of the post-module tests, the student will be able to:

Discuss supplier sustainability assessments and life cycle analysis. Explain the environment costs and benefits of GSCM. Explain the four steps which guide decision-making within a companys plan for GSCM. Discuss the lessons learned from successful materials management case studies.

six sigma
six sigma training, history, definitions - six sigma and quality management glossary
Six Sigma is now according to many business development and quality improvement experts, the most popular management methodology in history. Six Sigma is certainly a very big industry in its own right, and Six Sigma is now an enormous 'brand' in the world of corporate development. Six Sigma began in 1986 as a statistically-based method to reduce variation in electronic manufacturing processes in Motorola Inc in the USA. Today, twentysomething years on, Six Sigma is used as an all-encompassing business performance methodology, all over the world, in organizations as diverse as local government departments, prisons, hospitals, the armed forces, banks, and multi-nationals corporations. While Six Sigma implementation continues apace in many of the world's largest corporations, many organizations and suppliers in the consulting and training communities have also seized on the Six Sigma concept, to package and provide all sorts of Six Sigma 'branded' training products and consultancy and services. Six Sigma has also spawned manay and various business books on the subject. Six Sigma, it might seem, is taking over the world. Interestingly while Six Sigma has become a very widely used 'generic' term, the name Six Sigma is actually a registered trademark of Motorola Inc., in the USA, who first pioneered Six Sigma methods in the 1980's. The original and technically correct spelling seems to be Six Sigma, rather than 6 Sigma, although in recent years Motorola and GE have each since developed their own sexy Six Sigma logos using the number six and the Greek sigma character s. Six Sigma is now a global brand and something of a revolution. But what is Six Sigma?...

six sigma definitions

The answer is that Six Sigma is lots of things.

First, Six Sigma is arguably a very clever way of branding and packaging many aspects of Total Quality Management that exist in their own right, regardless of the development of Six Sigma. Read the section about Total Quality Management and 'Excellence' and you will understand this. Six Sigma is lots of different things because it had different meanings over time, and also because it is now interpreted in increasingly different ways. And Six Sigma is still evolving. The UK Department for Trade and Industry says Six Sigma is: "A data-driven method for achieving near perfect quality. Six Sigma analysis can focus on any element of production or service, and has a strong emphasis on statistical analysis in design, manufacturing and customer-oriented activities." June 2005. Here's the DTI fact-sheet on Six Sigma - please note this is Crown copyright.

Motorola Inc., who first developed the methodology in the mid-late1980's and who provide extensive Six Sigma training and consultancy services, provide the following definitions:

six sigma according to motorola

"...Six Sigma has evolved over the last two decades and so has its definition. Six Sigma has literal, conceptual, and practical definitions. At Motorola University (Motorola's Six Sigma training and consultancy division), we think about Six Sigma at three different levels:

As a metric As a methodology As a management system

Essentially, Six Sigma is all three at the same time." "...Six Sigma as a Metric: The term "Sigma" is often used as a scale for levels of 'goodness' or quality. Using this scale, 'Six Sigma' equates to 3.4 defects per one million opportunities (DPMO). Therefore, Six Sigma started as a defect reduction effort in manufacturing and was then applied to other business processes for the same purpose.."

"...Six Sigma as a Methodology: As Six Sigma has evolved, there has been less emphasis on the literal definition of 3.4 DPMO, or counting defects in products and processes. Six Sigma is a business improvement methodology that focuses an organization on:

Understanding and managing customer requirements Aligning key business processes to achieve those requirements Utilizing rigorous data analysis to minimize variation in those processes Driving rapid and sustainable improvement to business processes.."

"..At the heart of the methodology is the DMAIC model for process improvement. DMAIC is commonly used by Six Sigma project teams and is an acronym for:

Define opportunity Measure performance Analyze opportunity Improve performance Control performance.."

"...Six Sigma Management System: Through experience, Motorola has learned that disciplined use of metrics and application of the methodology is still not enough to drive desired breakthrough improvements and results that are sustainable over time. For greatest impact, Motorola ensures that process metrics and structured methodology are applied to improvement opportunities that are directly linked to the organizational strategy. When practiced as a management system, Six Sigma is a high performance system for executing business strategy. Six Sigma is a top-down solution to help organizations:

Align their business strategy to critical improvement efforts Mobilize teams to attack high impact projects Accelerate improved business results Govern efforts to ensure improvements are sustained.."

"..The Six Sigma Management System drives clarity around the business strategy and the metrics that most reflect success with that strategy. It provides the framework to prioritize resources for projects that will improve

the metrics, and it leverages leaders who will manage the efforts for rapid, sustainable, and improved business results..

General Electric (GE), the first large-scale adopters and advocates of Six Sigma after Motorola, and considered by most experts to have been responsible for Six Sigma's rapidly achieved high profile, provide the following definitions of Six Sigma:

The 5 S's
There are five primary 5S phases: sorting, set in order, systematic cleaning, standardizing, and sustaining. Sorting Eliminate all unnecessary tools, parts, and instructions. Go through all tools, materials, and so forth in the plant and work area. Keep only essential items and eliminate what is not required, prioritizing things per requirements and keeping them in easily-accessible places. Everything else is stored or discarded. [edit]Straightening

or Setting in Order

Arranging tools, parts, and instructions in such a way that the most frequently used items are the easiest and quickest to locate. The purpose of this step is to eliminate time wasted in obtaining the necessary items for an operation.

[edit]Sweeping

or Shining

Standardized cleaning-point at a 5S organized plant

Clean the workspace and all equipment, and keep it clean, tidy and organized. At the end of each shift, clean the work area and be sure everything is restored to its place. This makes it easy to know what goes where and ensures that everything is where it belongs.

Standardizing
All work stations for a particular job should be identical. All employees doing the same job should be able to work in any station with the same tools that are in the same location in every station. Everyone should know exactly what his or her responsibilities are for adhering to the first 3 S's. Synonym : Systemize

Sustaining the Practice

Maintain and review standards. Once the previous 4 S's have been established, they become the new way to operate. Maintain focus on this new way and do not allow a gradual decline back to the old ways. While thinking about the new way, also be thinking about yet better ways. When an issue arises such as a suggested improvement, a new way of working, a new tool or a new output requirement, review the first 4 S's and make changes as appropriate. It should be made as a habit and be continually improved.

Additional S's
Three other phases are sometimes included: safety, security, and satisfaction.

Safety
A sixth phase, "Safety", is sometimes added. There is debate over whether including this sixth "S" promotes safety by stating this value explicitly, or if a comprehensive safety program is undermined when it is relegated to a single item in an efficiency-focused business methodology.
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Security
A seventh phase, "Security", can also be added. To leverage security as an investment rather than an expense, the seventh "S" identifies and addresses risks to key business categories including fixed assets (PP&E), material, human capital, brand equity, intellectual property, information technology, assets-in-transit and the extended supply chain.
[citation needed]

Satisfaction
An eighth phase, "Satisfaction", can be included. Employee Satisfaction and engagement in continuous improvement activities ensures the improvements will be sustained and improved upon. The Eighth waste Non Utilized Intellect, Talent, and Resources can be the most damaging waste of all. It is important to have continuous education about maintaining standards. When there are changes that affect the 5S program such as new equipment, new products or new work rules, it is essential to make changes in the standards and provide training. Companies embracing 5S often use posters and signs as a way of educating employees and maintaining standards.
[citation needed] [citation needed]

The Origins of 5S
5S was developed in Japan. It was first heard of as one of the techniques that enabled what was then termed 'Just in Time Manufacturing'. The Massachusetts Institute of Technology's 5-year study into the [2] future of the automobile in the late 1980s identified that the term was inappropriate since the Japanese success was built upon far more than components arriving only at the time of requirement. John Krafcik, a researcher on the project, ascribed Lean to the collective techniques being used in Japanese automobile manufacturing; it reflected the focus on waste in all its forms that was central to the Japanese approach. [3] Minimised inventory was only one aspect of performance levels in companies such as Toyota and in itself only arose from progress in fields such as quality assurance and Andonboards to highlight problems for immediate action. 5S was developed by Hiroyuki Hirano within his overall approach to production systems. Many Western managers coming across the approach for the first time found the experience one of enlightenment. They had perhaps always known the role of housekeeping within optimised manufacturing performance and had always known the elements of best practice. However, Hirano provided a structure for improvement programs. He pointed out a series of identifiable steps, each building on its predecessor. Western managers, for example, had always recognised the need to decide upon locations for materials and tools and upon the flow of work through a work area; central to this (but perhaps implicit) is the principle that items not essential to the process should be removed stored elsewhere or eliminated completely. By differentiating between Seiri and Seiton, Hirano made the distinction explicit. He taught his audience that any effort to consider layout and flow before the removal of the unnecessary items was likely to lead to a sub-optimal solution. Equally the Seiso, or cleanliness, phase is a distinct element of the change program that can transform a process area. Hirano's view is that the definition of a cleaning methodology (Seiso) is a discrete activity,
[4]

not to be confused with the organisation of the workplace, and this helps to structure any improvement program. It has to be recognised, however, that there is inevitably an overlap between Seiton and Seiso. Western managers understood that the opportunities for various cleanliness methodologies vary with the layout and storage mechanisms adopted. However, breaking down the improvement activity in this way clarifies that the requirements for the cleanliness regime must be understood as a factor in the design [5] aspect of Seiton. As noted by John Bicheno, Toyota's adoption of the Hirano approach, is '4S', with Seiton and Seiso combined presumably for this very reason. The improvement team must avoid the trap of designing the work area and then considering the cleanliness or tidiness mechanism. Hirano also reminded the world of the Hawthorne effect. We can all introduce change and while people in the business consider the change program to be under management focus the benefits of the change will continue, but when this focus has moved (as is inevitably the case) performance once more slips. Western managers, in particular, may have benefited from the distinction between the procedural or mechanical elements, Seiketsu, of keeping these matters in focus and the culture change, Shitsuke, which is a distinct approach to bringing about a new way of working. A number of publications on the subject in the West have questioned whether this culture can really be tackled as part of an exercise of [6] relatively limited scope. The broader kaizen, or continuous improvement, approach is built, among other things, upon the company's valuation of all members of the workforce. If employees don't feel valued within the overall company culture, perhaps the change required falls outside the limits of a housekeeping improvement program.