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Developing a Lean Design for Six Sigma through Supply Chain methodology

Article  in  International Journal of Productivity and Quality Management · October 2010

DOI: 10.1504/IJPQM.2010.035891

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Int. J. Productivity and Quality Management, Vol. 6, No. 4, 2010 407

Developing a lean design for Six Sigma through

supply chain methodology

Ming-Chang Lee*
Department of Information Management,
Fooyin University,
151 Chin-Hsueh Rd., Ta-Liao Hsiang Kaohsiung County, Taiwan
E-mail: ming_li@mail2000.com.tw
*Corresponding author

To Chang
Department of Information Management,
Shu-Te University,
No. 59, Hengshan Rd., Yanchao Kaohsiung County, Taiwan
E-mail: changt@mail.stu.edu.tw

Abstract: The six-sigma systems can promote the enterprise competitive

ability, such as pursuing cost improvement, promoting quality, the customer’s
satisfaction and valid strategy performance. This paper explored the synergies
resulting from the combination of state-of-the art quality initiatives, lean and
design for Six Sigma, and develop an integrated SCOR with lean and design for
Six Sigma methodologies for their applications to service process improvement
and design/or resign. We used the concepts of strength and weaknesses of
supply chain operations, lean, and design for six-sigma, for developing a lean
design for six-sigma through supply chain model. We discussed a lean and
design for Six Sigma through supply chain methodology.

Keywords: lean design for Six Sigma; supply chain methodology.

Reference to this paper should be made as follows: Lee, M-C. and Chang, T.
(2010) ‘Developing a lean design for Six Sigma through supply chain
methodology’, Int. J. Productivity and Quality Management, Vol. 6, No. 4,
pp.407–434.
Biographical notes: Ming-Chang Lee is an Assistant Professor of Department
of Information Management at Fooyin University and National Kaohsiung
University of Applied Sciences. His research interests include knowledge
management, parallel computing, and data analysis. His publications include
articles in the journal of Computer and Mathematics with Applications,
International Journal of Operation Research, American Journal of Applied
Science and Computers, Industrial Engineering, International Journal
Innovation and Learning, Int. J. Services and Standards, Lecture Notes in
Computer Science (LNCS), International Journal of Computer Science and
Network Security, Journal of Convergence Information Technology and
International Journal of Advancements in Computing Technology.

To Chang is an Assistant Professor and the Chairman of Department of

Information Management at Shu-Te University, Taiwan. His qualifications
include Master degree in Computer Science from Naval Postgraduate School,
USA and PhD in Electronic Engineering from Chung Cheng Institute of

Copyright © 2010 Inderscience Enterprises Ltd.

408 M-C. Lee and T. Chang

Technology, Taiwan. His research interests include information security,

management information systems, and enterprise resource planning. His
publications include articles in International Journal Innovation and Learning,
Int. J. Services and Standards, and International Journal of Computer Science
and Network Security.

1 Introduction

Lean production refers to approaches initially developed by the Toyota Motor

Corporation that focus on the elimination of waste in all firms, including defects
requiring rework, unnecessary processing steps, unnecessary movement of materials or
people, waiting time, excess inventory, and overproduction. The root of both lean and
Six Sigma reach back to the time when the greatest pressure for quality and speed
were on manufacturing. Lean rose as a method for optimising automotive manufacturing;
Six Sigma evolved as a quality initiative to eliminate defects by reducing variation
in processes in the manufacturing industry. Desai (2008) explains phase wiz
application of all the phases of define-measure-analyse-improve-control (DMAIC),
and ultimately shows how Six Sigma can help improving productivity as well as
profitability. It is not surprising that the earliest adopters of lean Six Sigma (LSS) arose
in the service support functions of manufacturing organisations like GE Capital,
Caterpillar Finance, and Lockheed Martin (Snee, 2000; Natarajan and Morse, 2009).
Linking maintenance excellence and Six Sigma leads to an improved model of
the organisation of the maintenance function, enables reduction of variations in the
process, eliminates the occurrence errors and reducing the time cycle for the maintenance
process (Lazreg and Gien, 2009). LSS for services is a business improvement
methodology that maximises shareholder value by achieving the fastest rate of
improvement in customer satisfaction, cost, quality, process speed, and invested capital
(Su et al., 2006). The fusion of lean and Six Sigma improvement methods is required
because:

• lean cannot bring a process under statistical control

• Six Sigma alone cannot dramatically improve process speed or reduce invested
capital

• both enable the reduction of the cost of complexity.

Ironically, Six Sigma and lean have often been regarded as rival initiatives. Lean
enthusiasts note that Six Sigma pays little attention to anything related to speed and
flow, while Six Sigma supporters point out that lean fails to address key concepts like
customer needs and variation. Both sides are right. Yet these arguments are more often
used to advocate choosing one over the other, rather than to support the more
logical conclusion that we blend lean and Six Sigma (George, 2002). Wang et al.
(2004) applied Six Sigma to supplier development in the supply chain management
(SCM). The Voluntary Inter-industry Commerce Solutions Association’s (VICS)
collaborative planning, forecasting and replenishment (CPFR) is a process tool to
 Developing a lean design for Six Sigma through supply chain methodology 409

improve the SCM. It includes collaborative planning, execution and monitor between
all members (VICS, 2006). Fliedner (2003) investigates the traditional supply chain
forecasting which some costs are occurred from the inaccurate forecasting. Using
CPFR, the inaccurate forecasting problem can be improved. The challenging goal
to achieve competitiveness in modern markets begins from business process
integration. The processes are actually driven by customer requirements rather than by
the internal business gains. In order to meet the final customer requirements,
companies are involved in supplier-customer chains (Mazzola, et al., 2007). Knowles et
al. (2005) integrate Six Sigma, balance score card and supply chain operations
reference (SCOR) into a supply chain conceptual improvement model (SCCIM).
Banuelas et al. (2009) description of status of Six Sigma implementation of Six Sigma
in the supply chain provides a benchmarking exercise including tools and
techniques, fundamental metrics, potential savings and reason for potential failures
among others.
Design for Six Sigma (DFSS) is a relatively recent approach to product development
that focuses on delivering the right product at the right time and at the right cost. DFSS
provides a systematic method to build important customer requirements into all related
aspects of the product development process that can be measured, verified and optimised.
DFSS provides a way for customers to incorporate performance characteristics into
their product manufacturing and development processes (Chang and Su, 2007).
Manufacturing and development processes can then be optimised to meet those customer
requirements using specific and quantifiable metrics. DFSS is a separate and emerging
business-process management methodology related to traditional Six Sigma. DMAIC Six
Sigma may still be used during depth-first plunges into the system architecture analysis;
DFSS provides system design processes used in front-end complex system designs
(Chowdhury, 2002).
LSS and DFSS methodologies have been successfully applied in a variety of
industries
1 to improve performance
2 to design new products, processes and services
3 to redesign the existing ones (Jugulum et al., 2009).
lean and DFSS disciplines have been popularised because their successful
implementations by many world-class organisations around the world to improve
business processes and reap substantial benefits of cost savings. DFSS works on the early
stages of the process life cycle and utilises the most powerful tools and methods presently
known for developing optimal service design. It was found in a literature study that
although it is possible to have independent successes in lean, DFSS, and SCOR, each
magnifies the strengths of the other while compensating for the weaknesses when
integrated in an overall improvement or design strategy. Therefore, the motivation for
this paper is to develop an integral lean, DFSS and SCOR methodology for improving the
efficiency and quality of their business activities in the supply chain continuously. The
rationale for the combination of the three methodologies are also examined and justified
on theoretical basis. A well-proven DMADV and lean techniques are used to develop a
LSS strategy, and a conceptual framework of the LSS methodology through supply chain
design. The research framework is illustrated in Figure 1.
410 M-C. Lee and T. Chang

Figure 1 The research framework

Service process
improvement or
design/redesign

Design/redesign
of SCOR, lean
DFSS converge

Lean SCOR DFSS

methodology methodology methodology

2 Lean

In the 1970’s, we ‘discovered’ the Toyota production system (TPS). Since then, many
companies have adopted TPS or ‘lean manufacturing’ methods, realising enormous cost
savings while improving competitive position. Now we are finding that lean
manufacturing is not enough to stay competitive (Sanchez and Perez, 2001). The basic
problem with traditional product development processes is that most of the cost is locked
in long before production launch. Products that do not reach out to customers in terms of
price, performance, and benefits do not sell well. In short, designs that arrive at the
factory late, with poor production yields, major manufacturing problems, and unresolved
engineering problems, undermine the benefits of lean manufacturing. Lean is a strategic
approach to change and improvement. Focusing just on the tools at an operational level
and reducing cost, will not obtain the full benefits (Miller, 2005). The overarching benefit
of lean is the ability to see cost and lead time reduction opportunities where you never
saw before. Through application of the lean concepts and tools, the process step once
through essential are unnecessary, and their costs and delays removable after lean tools
have been applied (George, 2003).
The most important advantages of lean production are speed and timing. Applying
standard lean tools to the new product development process will certainly reduce
development lead-time. By taking a broader view of new product development, we can
simultaneously minimise manufacturing lead-time, maximise product performance from
the customer’s viewpoint, and maintain target cost. There are many existing tools and
methods that can help your company achieve a high level of synergy and performance in
product design. To be effective, tools and methods must be applied at the appropriate
points in an integrated product development process (Sahin, 2000; Smith and Adams,
2001). Lean is an approach that seeks to improve flow in the value stream and eliminate
 Developing a lean design for Six Sigma through supply chain methodology 411

waste. The evolution of lean approach is cell and line, shop floor, value stream and value
system. The evolution of the lean approach denoted as Table 1 (Gibbons, 2008; Grewal,
2008).
Table 1 Evolution of the lean approach

1980–90 1990–mid 1990 Mid 1990–1999 2000+

Cell and line Shop floor Value stream Value system
Highly prescriptive Highly prescriptive Lean principles value Contingency
tool-based approach, best practice stream mapping. involving customer
disseminating the approach, with a value, policy
tools used by Toyota focus on quality The concept of the deployment, size,
and others lean enterprise with a industry, technology
focus on quality, cost focusing on
and delivery. system-level
Concept of ‘one best capability and
way’ still prominent integrated processes
– ‘what would
Toyota do?’

We utilise a seven-step lean design process as an integrated product development

process. The seven-step lean design process is an integrated approach to new
product development. It will reduce your time to market and improve the market
acceptance of your new products. It will capture manufacturing cost reductions that are
inaccessible to after-the-fact applications of lean and Six Sigma. Lean design represents a
powerful competency that is guaranteed to improve your organisation’s competitive
position.
Step 1 Define product
Define as clearly as possible what the market desires, without either overshooting or
undershooting on performance, features, and quality. Voice of the customer (VOC) tools
are applicable during this first step. Tools and methods to consider are:
• a lean and more efficient version of quality function deployment (QFD)
• probe-and-learn feedback techniques
• market or customer surveys
• focus groups
• Kano methods are used to identify spoken and unspoken customer needs.
Step 2 Establish product line optimisation team (PLOT)
With a reasonably clear product definition in hand, your company can convene an
appropriately chartered PLOT. This team considers how the new product will fit within
existing material inventory, processes, factory layout, core competencies, etc. Process
capability is evaluated against proposed specifications. The PLOT provides specific
recommendations for enhancing the synergy and manufacturability of the product to the
development team at the project. The PLOT also develops a product roadmap to guide
product development through the expected life cycle of the product line.
412 M-C. Lee and T. Chang

Step 3 Determine target cost

Once the project is underway, design requirements are prioritised based on customer
benefit and need. A target cost is established. The team develops a preliminary cost
model to put into the target cost. This is a tool that designers can use early in the
conceptual design. This model will evolve over time to become an accurate
representation of the actual cost-at-volume for the new product. The target cost should be
used iteratively through product development is as Figure 2.

Figure 2 The target cost through product development

Start
Continue
designing unit
Target cost (CT) more cost data is
Actual cost (CA)
is determined known
is estimated

Yes
Is
CA< CT?
No

Apply lean tools to

reduce actual cost

Step 4 Translate requirements into specifications

The design team uses value engineering techniques to generate a broad and innovative
list of design alternatives for the new product. Toyota and others have successfully used
this ‘set-based’ approach to generate and consider a broad spectrum of possibilities
before selecting the final concept. The design team uses a simple cost/performance
tradeoff tool to determine which concept has the best combination of manufacturing cost
and customer value. To ensure the final design choice represents the best balance
between customer needs, quality and cost, the team evaluates alternative designs against
twenty cost factors in five categories:

• direct labour

• direct materials

• assignable capital

• design costs

• factory overhead.
 Developing a lean design for Six Sigma through supply chain methodology 413

Step 5 Design at system level

Upon arriving at an optimal concept, the design team consults the product line roadmap.
From this forward-looking document, the team identifies opportunities to extend and
customise the product. Platform design considerations are incorporated into the rapidly
solidifying design. The team also considers scalability, modularity, and mass
customisation strategies as ways to capture economies during future product line
expansion.
Step 6 Design at detail level
As detailed design begins, the team determines the compatibility of the new design to
existing and planned manufacturing processes. To optimise design variables or
controllable process parameters, the team uses a powerful Six Sigma methodology called
design of experiments (DOE). DOE is the only method capable of dealing successfully
with the usual situation of multiple design and process variables having interactive effects
on product performance. The traditional practice of testing one variable at a time is
ineffective in this situation, even counter-productive. DOE has the additional capability
of ‘robust design’ – designing a product to perform consistently in the face of
uncontrolled manufacturing or use-environment factors.
Step 7 Production preparation process
To ensure smooth and rapid transition of the new design to the factory, the team
considers the manufacturability of the product from the standpoint of touch labour,
standard materials, cell-layout, take time, capacity, etc. A model for this ‘production
preparation process’ (3P) has recently emerged from studies of the ‘Toyota way’. An
adoption of this comprehensive process is used by the team to ensure smooth and rapid
transition of the new design to the factory.
The goals of 3P are design products for lean production, incorporate error-proofing
and JIT, guarantee process capability and cycle time, and build-quality into the system
(see Figure 3).

Figure 3 Toyota’s production preparation process

Information
phase Creative phase Redefine phase
-Part numbers -Alternative -Flow chart
-Drawings Processes -TAKT time
-Samples -Model cells -Cycle time
-Volumes -Simulation -Process capacity
-Ramp schedule -Standard work
-Process steps -Standard layout
Launch to
-TAKT time production

Lean production focuses on the identification and elimination of the seven wastes in
every worker’s area every day, using JIT concept to create a pull system over time. A pull
system is a dramatic innovation when compared to traditional push systems. It minimises
414 M-C. Lee and T. Chang

inventory, work-in-process, and raw material in a manufacturing process. Table 2

illustrates the techniques of lean product improvement methodologies (principle) and lean
product techniques.
Table 2 The lean product improvement methodologies (principle) and techniques

Lean production principles Lean production techniques

• Identification and elimination
(seven elements of waste)
• Produce product only on demand
(just-in-time)
• Understanding the customer
• Continually simplify the production
process
• Minimal inventory,
work-in-process, and raw material
• Optimising the use of manufacturing
resources
Source: Pyzdek (2003) and Burton (2001).
• Pull system through the plant
• Visual management
• Value stream mapping
• Team-based Kaizen activities
• Standardisation for each work activity
• Mistake-proofing
• Cellular manufacturing
• Kanban production control system
• Group technology
• Single minute exchange of dies (SMED)
• Total product maintenance (TPM)
• 5S
• Work flow balancing
• TSKT time (one piece flow)
• Set up time reduction (quickly changeover)
• Workforce reduction
• Spaghetti diagram
• Plant layout

3 Design for Six Sigma

Six Sigma initiatives have achieved recent popularity because of their bottom line focus
versus previous TQM initiatives which often tended to be unfocused (Etienne, 2009).
General Electric, one of the leaders in Six Sigma programs defines its key elements as:
• Critical to quality: attributes most important to the customer
• Defect: failing to deliver what the customer wants
• Process capability: what your process can deliver
• Variation: what the customer sees and feels
• Stable operations: ensuring consistent, predictable processes to improve what the
customer sees and feels
• Design for Six Sigma: designing to meet customer needs and process capability
 Developing a lean design for Six Sigma through supply chain methodology 415

Lean design for Six Sigma (LDFSS) will ensure your product and service development
experts launch the right products and services with the right features for the right market
the first time. DFSS is a separate and emerging business-process management
methodology related to traditional Six Sigma. DFSS has the objective of determining the
needs of customers and the business, and driving those needs into the product solution so
created. DFSS is relevant to the complex system/product synthesis phase, especially in
the context of unprecedented system development. It is process generation in contrast
with process improvement ideal for both companies that have implemented Six Sigma or
already use advanced design methodologies. DFSS is often used when the existing
processes do not satisfy the customers or are not able to achieve strategic business
objectives (Eckes, 2001; Thomas and Singh, 2006). DFSS has successfully been
implemented for product design in number of leading manufacturing firms such as
Motorola, GE, Allied Signals, Honeywell, and Seagate, while a lack of examples is found
of designing services within a supply chain (Haik and Roy, 2005). DFSS, lean production
development and lean knowledge management are three effective methodologies in
improving a product development process. DFSS can greatly improve product value and
quality. Lean product development and lean knowledge management can help to achieve
better product development lead time and efficiency by reducing wastes (Yang and Cai,
2009).
Define-measure-analyse-design-verify (DMADV), is sometimes synonymously
referred to as DFSS. The traditional DMAIC Six Sigma process, as it is usually practiced,
which is focused on evolutionary and continuous improvement manufacturing or service
process development, usually occurs after initial system or product design and
development have been largely completed. DMAIC Six Sigma as practiced is usually
consumed with solving existing manufacturing or service process problems and removal
of the defects and variation associated with defects. On the other hand, DFSS (or
DMADV) strives to generate a new process where none existed, or where an existing
process is deemed to be inadequate and in need of replacement. The relationship of
DMAIC with DMADV is showed as Figure 4.
There are five steps in the DMADV process, they include; define, measure, analyse,
design details and verify the design. Here is some more information regarding each step.

• Define: In the first step, you must define the design goals that are both consistent
with your customer’s demands and your own company’s goals.

• Measure: In this step, four things should be measured. They include, CTQ’s which
stand for critical to qualities, production process capability, risk assessments and
product capabilities.

• Analyse: It is important to use the process of analysis to develop and design better
alternatives that can reduce defects. These designs must be evaluated for their
inherent capabilities to determine whether the design is the best available or if an
alternative can be created which may be better.

• Design details: In this step a design must be optimised to function at its peak. In
addition, in order to optimise a design, a design must usually be verified. While
verification is the last process, during the design details step, a design plan should be
readied for the next step.
416 M-C. Lee and T. Chang

• Verify: Once a design has been analysed and tested, it should be verified.
Verification usually occurs through pilot runs. As a design is verified through the
pilot run, it can be readied for full production.

Figure 4 The occasions using DMAIC and DMADV methodologies

Source: Modified Pyzdek (2003)

3.1 Similarities between DMADV and DMAIC (Cronemyr, 2007)

• two of these Six Sigma methodologies talks about reduction of DPMO (defects per
million opportunities)
• both DMADV and DMAIC use the same kind of Six Sigma tools (like, DOE, QFD,
TREEZ, Pugh matrix etc.)
• customer’s needs are the basic driving parameters for both Six Sigma methodologies
• Six Sigma black belt (BB) and master black belt (MBB) play important roles in
implementation for both the cases
 Developing a lean design for Six Sigma through supply chain methodology 417

3.2 Differences between DMADV and DMAIC (Cronemyr, 2007)

• DMADV can be thought of for either designing of completely new product/process or
substantial redesign of an existing product. On the other hand, DMAIC is used for
modifying or fine tuning some existing processes in order to make it inline with
customer requirements.
• Measure phase of DMADV deals with quantifying customer’s needs to make
specifications. However, measure phase of DMAIC deals with measuring current
performance level of existing process.
• Analyse phase of DMADV deals with comparing and finalising possible solutions
with respect to customer needs by using tools like Pugh matrix etc. Analyse phase of
DMAIC tries to figure out root cause of process deviation.
• Improve phase of DMAIC eliminates the defects from the existing process and align
them with customer’s expectations. Design phase of DMADV deals with building
new Six Sigma product/process.
• Validate phase of DMADV ensures that newly developed products/processes
conform to the customer’s needs. The control phase of DMAIC ensures that a
modified process won’t deviate further from its current performance level.
Six Sigma is all about improving efficiencies and reducing costs of existing products.
DFSS on the other hand, is about the design, development and commercialisation of new
products and processes. It is about growth, revenue and profitability. Unlike Six Sigma
that requires a small focused team. DFSS and new product development requires a
dedicated, long-term cross functional team that typically includes business, marketing,
technology, engineering, manufacturing, sales and many other support functions. There is
a misconception that like Six Sigma, DFSS is a turnkey system that can be immediately
incorporated and implemented with quick return on investment. The DFSS and new
product development process must be tailored to that unique combination of factors for
the initiative to be relevant and sustainable. Table 3 summarised the important
differences between Six Sigma and DFSS. Table 4 summarised the DFSS methodologies
(principle) and DFSS techniques.
Table 3 Differences between Six Sigma and DFSS

DMAIC: define, measure, analyse, DMADV: define, measure, analyse, design,

improve, control
Look at existing processes and fixes
problems
Small project team
Deal with one or two customer
More reactive
Dollar benefits obtained from Six Sigma
can be quantified rather than quickly
verify
DMADOV: define, measure, analyse, design,
optimise, verify
Focuses on the up-front design of the product
and process
Multidisciplinary product team
Deal with multiple customer requirements at one
More proactive
Benefits are more difficult to quantify and tend
to be more long-term. It can take six to 12
months after the new product before you will
obtain proper accounting on the impact.
418 M-C. Lee and T. Chang

Table 4 The DFSS principles and techniques

DFSS principles DFSS techniques

• Focus on proactive • VOC and survey design
• Design of new products or services and • Kano model and survey
process • Quality function development
• Focus on marketing, R&D, and design • Project and design scorecard
• Involves greater cultural change • Introduction to TRIZ and ASIT
• Team work is cross-functional • Morphological analysis
• Increase a customer satisfaction • Pugh’s concept selection
• Increase in profit over the product lifecycle • Axiomatic design
• Reduction in defects and variability in • Boundary diagram
product development process
• Function definition
• Increase in productivity
• Part-to-function matrix
• Reduction in product development time and
development cost • Function-driven design FMEA
• Value analysis (VA/VE)
• Parameter diagram
• Design VMEA
• Enhanced robustness planning
• Robustness demonstration matrix
• Taguchi robustness
• Design of experiments
• Verification and validation
• Statistical tolerance

3.3 Benefits of DFSS

• increase customer satisfaction, revenues and profit
• differentiated and high quality new products
• cycle time reduction and speed to market
• flexibility to respond to new market requirements, application and regulations
• better assessment of risks through the product development cycle
• sustainable products and processes
• effective communication, portfolio management, resource management and project
management.

4 SCOR with lean and DFSS

The SCOR-model is a process reference model that has been developed and endorsed by
the Supply Chain Council as the cross-industry standard diagnostic tool for SCM. SCOR
 Developing a lean design for Six Sigma through supply chain methodology 419

enables users to address, improve and communicate SCM practices within and between
all interested parties.
SCOR is a management tool. It is a process reference model for SCM, spanning from
the supplier's supplier to the customer’s customer. The SCOR-model has been developed
to describe the business activities associated with all phases of satisfying a customer’s
demand. By describing supply chains using process building blocks, the model can be
used to describe supply chains that are very simple or very complex using a common set
of definitions. As a result, disparate industries can be linked to describe the depth and
breadth of virtually any supply chain. The model has been able to successfully describe
and provide a basis for supply chain improvement for global projects as well as site-
specific projects (Deo, 2005; Mazzola et al., 2007).

4.1 The advantages and critique of SCOR

SCOR is a model developed and endorsed by the Supply-Chain Council (SCC) as the
cross-industry standard for SCM. SCOR defines the supply chain as the integrated
processes of plan, source, make, deliver, and return, spanning from your suppliers’
supplier to your customers’ customer, aligned with operational strategy, material, work,
and information flows.
The model builds its strength by linking process elements, metrics and best practices
associated with supply chain execution. Some of the advantages of using the SCOR
model for a supply chain improvement initiative are:
1 standardised model and framework that provides a common language to
communicate supply chain definition, metrics and best practices for all interested
parties
2 structured methodology to align business and supply chain strategies and determine
targets for supply chain improvements to meet business objectives
3 standardised multi-level process performance metrics
4 level 1–3 material, work and information flow analysis
Critique of the SCOR model includes

1 inadequate organisation wide training

2 few metrics associated with the organisational development (employee learning)
aspect of a balanced scorecard
3 few analytical tools for problem solving and execution of improvement projects
identified by SCOR.

4.2 SCOR model consists of five major process workflows

A major goal of applying a SCOR model is to develop a value stream map describing a
supply chain’s major process workflows. SCOR model consists of five major process
workflows (see Figure 6). These are:
420 M-C. Lee and T. Chang

1 demand and supply planning

2 warehousing and delivery
3 sourcing strategies
4 reverse logistics
5 transformation processes.
SCOR consists of several hierarchal levels. These include an evaluation of strategic goals
and objectives in a context of competitive supply chain analysis, value stream mapping
(VSM) of major process workflows and at the lowest level an operational analysis of
work tasks, standards and metrics. However, the usefulness of a SCOR model is that it
can be customised to fit the specific supply chain of almost any organisation, but, major
process workflows are standardised and include basic control elements based on the
combined knowledge of many industry experts.

4.3 SCOR with lean and DFSS

Building a supply chain model or process with using a highly standardised
structure enables an organisation to detect and eliminate process variation. This
is because variation from a well-known standard is easily detected, analysed and
eliminated using lean, Six Sigma or designs Six Sigma and similar improvement
methodologies. This concept is shown in Figure 5 at the second and third levels of the
pyramid.

Figure 5 SCOR model’s hierarchal levels

 Developing a lean design for Six Sigma through supply chain methodology 421

Figure 6 SCOR model’s five major process workflows

5 The rationale for combination lean with DFSS

DFSS seeks to avoid manufacturing/service process problems by using advanced VOC

techniques and proper systems engineering techniques to avoid process problems at the
outset (i.e., fire prevention). When combined, these methods obtain the proper needs of
the customer, and derive engineering system parameter requirements that increase
product and service effectiveness in the eyes of the customer. This yields products and
services that provide greater customer satisfaction and increased market share. These
techniques also include tools and processes to predict, model and simulate the product
delivery system (the processes/tools, personnel and organisation, training, facilities, and
logistics to produce the product/service) as well as the analysis of the developing system
life cycle itself to ensure customer satisfaction with the proposed system design solution
(Chase et al., 2000).
In this way, DFSS is closely related to systems engineering, operations research,
systems architecture and concurrent engineering. DFSS is largely a design activity
requiring specialised tools including: QFD, axiomatic design, TRIZ, DOE, Taguchi
methods, tolerance design, robustification and response surface methodology. While
these tools are sometimes used in the classic DMAIC Six Sigma process, they are
uniquely used by DFSS to analyse new and unprecedented systems/products.
The following represents our more specific list of elements of the DFSS framework:
1 understand real customer needs through VOC analysis
2 use QFD to translate customer needs into critical technical characteristics of the
product and ultimately into critical to quality (CTQ) characteristics of the product
and process
422 M-C. Lee and T. Chang

3 focus on designing for the lifecycle to minimise lifecycle costs with design for
manufacturing and assembly (DFMA), value analysis and target costing and to
enhance reliability with design for reliability and design for test (DFT)
4 mistake-proof the product and process
5 perform failures modes and effects analysis (FMEA) or anticipatory failure
determination (AFD) to identify potential failures and take corrective action to
mitigate or prevent those failures. FMEA and AFD apply to both the design of the
product and the design of the process
6 develop capable manufacturing processes and select processes that are capable of
meeting the design requirements, especially with CTQ parameters
7 use DOE or Taguchi methods to optimise parameter values and reduce variation, in
other words, develop a robust design
8 verify and validate the product design will meet customer needs with peer reviews,
checklists, design reviews, simulation and analysis, qualification testing, production
validation testing, focus groups and market testing
9 measure results with DFSS scorecard; estimate Sigma – do results meet quality
target?.

5.1 The strength and weaknesses of SCOR, lean, and DFSS

The SCOR model only focused on supply chain processes; it is incomplete in its
description of all business process. Key processes and functions missing from the scope
of the model include sales and marketing, research and technology development, product
development, and some elements of post-delivery customer support. SCOR also assumes
but does not specifically address training, quality, information technology (IT), and
administration. In the evolution of SCOR deployment methodology, the most critical
failure modes associated with application of the model are tied to the following
weaknesses
1 inadequate top-to bottom organisation training and development to enable full
utilisation of the model within a company
2 few formal analytical techniques that can be used for diagnosis of root-cause process
problems
3 inadequate tools, methodologies and techniques to ‘implement’ the improvement
opportunities which SCOR identifies.
The advantages of using lean as a process improvement methodology are:
1 structured methodology for waste identification and elimination in any process
2 organisation wide training and involves employees at all levels
3 focused and rapid process improvement and cost reduction
4 structured project management approach and helps communicate customer defined
value to all levels of organisation.
 Developing a lean design for Six Sigma through supply chain methodology 423

5 Strong analytical tools to map the process and identify root-causes

Critique of lean methodology includes: (Hines et al., 2004)
1 few tools for focusing lean efforts on strategic and operational process priorities
2 inadequate analysis of financial expectations and accountability for bottom-line
results
3 lacks an overall supply chain discipline
4 lack of strategic perspective (at least until recently).
The main drawback of using lean alone as a process improvement methodology is lack of
strategic supply chain direction. Lean efforts will certainly yield results but can lead to
islands of excellence within an organisation if used alone and the time from effort to any
significant results can be long. Table 5 summarised methodology strength and weakness
of SCOR, lean and DFSS.
Some of the advantages of Six Sigma as an improvement methodology are: (Revere
et al., 2006)
1 structured methodology and approach for defect and variance reduction in any
process
2 dedicated roles, responsibilities, and program infrastructure
3 organisation wide training and development
4 customer and data driven problem solving
5 rigid project tracking and financial accountability for results.
Critique of Six Sigma methodology includes: (Hines et al., 2004)
1 lacks alignment of project execution with strategic and operational priorities
2 no methodology to develop understanding of relationships between projects
3 data dependent tools and techniques difficult to use in situations where data is not
available or readily collected
4 processes improved independently
5 lack of consideration for human factors.

5.2 The rationales for combination lean with DFSS

Now take a close look at the strengths and weaknesses of SCOR (see Table 5 below). It
quickly becomes clear that SCOR methodology fills a major need in a lean and Six
Sigma program – identification, prioritisation and strategic alignment of project
opportunities with the capability to execute them. The philosophy of lean provides the
strategy and creates the environment for improving flow and eliminating waste.
Empowered staff are encouraged to continuously improve to create value adding
opportunities that otherwise would not be identified. DFSS helps to quantify problems,
makes evidence based decisions, helps to understand and reduce variation and identifies
root causes of variation to find sustainable solutions.
424 M-C. Lee and T. Chang
A combination of both can provide the philosophy and the effective tools to solve
problems and create rapid transformational improvement at lower cost, potentially, this
could increase productivity, improve quality, reduce costs, improve speed, create a safer
environment for patients and staff and exceed customer expectations.
Table 5 The strength and weaknesses of SCOR, lean and DFSS
SCOR
Structured methodology for
alignment of strategic and
operational metrics and
goals to identify business
improvement opportunities
Standardised supply chain
process reference model
and framework
standardised multi-level
process performance
metrics industry and
competitive benchmark
data sources
‘Macro-level’ approach or
identification of
improvement opportunities
Level 1–3 material, work
and information flow
analysis
Source for best-in-class
SCM practices
Can be used to identify
enabling IT capabilities to
optimise the supply chain
Opportunity and project
portfolio with detailed ROI
analysis
Inadequate organisation-
wide training and
development
Few analytical tools for
cause effect analysis and
problem solving at the
‘macro-level’
Inadequate tools,
methodologies, or
techniques to focus on
executing projects
identified by the SCOR
efforts
Little programmatic
infrastructure for
organising and managing
concurrent project activities
Methodology strength
Lean
Structured methodology for
diagnosing and executing
waste elimination projects in
any process
Typically focused on a
factory/cell/process level
scope
Focus on workplace
organisation (5S) and
preventative techniques
(PTM)
Level 4 + material, work and
information flow analysis
Concurrent training/projects
– applied skills development
Best-in-class operating
practices at a factory and cell
level
Standard work development
Visual controls and cell
management tools for control
of new processes
Very effective at rapidly
reducing cost – through
waste elimination
Few tools for focusing lean
efforts on strategic and
operational process priorities
Inadequate program
infrastructure and training to
drive breakthrough
improvement
Poor capability for
addressing support system
issues and transactional
processes
Inadequate analysis of
financial expectations and
accountability for bottom-
line results
No tools or capability to
remove bottlenecks driven
by process variability/defects
DFSS
Structured methodology for
diagnosing and executing defect
and variation reduction projects
in any process
Dedicated roles, responsibilities,
and program Infrastructure
Top-to-bottom organisation
training and development highly
structured problem solving
approach (DMADV)
Level 1–4 + variation and defect
reduction techniques
Concurrent training/projects –
applied skills development
Customer and data driven
decision making
Unique methodologies for
product development,
operations, and transactional
applications
Rigid project tracking and
financial accountability for
results
No specific methodology for
aligning strategic and operation
priorities with project execution
and candidate selection
No methodology to develop
understanding of the
confounding relationships
between projects
Inadequate ‘macro-level’
analytical techniques to validate
projects
Data dependent tools and
techniques difficult to use in
poorly controlled and wasteful
operating environments
 Developing a lean design for Six Sigma through supply chain methodology 425

6 Developing a LDFSS through supply chain methodology: SCOR, lean

and DFSS converge

SCOR essentially brings a supply chain strategic focus and alignment of business and
supply chain strategy. The strong fact-based, data-driven problem solving approaches that
lean and DFSS have help to discover ‘root causes’. Additionally, lean brings focus to the
customer value. SCOR – assists companies in making many of the major decisions that
will affect the general construct of their supply chain and such decisions will have a
major impact on the resulting supply chain(s) and its performance and offers a relatively
quick return on investment (ROI). Lean and DFSS a complement and strengthen the
SCOR-based strategic decisions by providing a continuous improvement philosophy.
VSM, part of the lean methodology, can be effectively used to map the workflow and
transactions which are specific to each company, adding considerable detail to support a
deeper understanding of current and future state processes. For an organisation, using all
the three approaches leads to a holistic process improvement methodology.
DFSS is the application of Six Sigma principles to the design of products and their
manufacturing and support processes. In one respect, DFSS is the repackaging of many
quality tools and techniques appropriate for product development into a framework. This
framework contains many of the same elements as the advanced product quality planning
(APQP) process used in the automotive industry. Often the acronyms DMADV or
identify, design, optimise and validate (IDOV) are used to describe the DFSS process.
Figure 7 (SOCR, lean, and Six Sigma converge) provides the unique and common
strengths of the three methodologies discussed. It is quite evident that these
methodologies are complimentary and their individual weaknesses are resolved by their
convergent strengths. We recommend starting with SCOR and using the supply chain
excellence (SCE) approach to understand your various supply chains, their construct and
priorities. Table 6 is the task of SCOR, lean and Six Sigma.

Figure 7 SCOR, lean, and Six Sigma converge (see online version for colours)

Source: Kent and Attri (2007)

426 M-C. Lee and T. Chang

Table 6 The task of SCOR, lean, and DFSS

SCOR Six Sigma/DFSS Lean

-Strategic alignment
-Standard supply chain
definition
-Metrics and benchmarking
-Best practices
-Process map
-Strategic planning
-Process management
-Process infrastructure
-Process decomposition
-Operational specification
-Data driven
-Roles and responsibilities
-DMAC
-Signal level
-Reduce variation
-DFSS
-Hypothesis testing
-Statistical sampling
-Process management
-Process infrastructure
-Quality focus
-VA vs. NVA
-Problem solving
-Training
-Process decomposition
-Operational specification
-Data driven
-Roles and responsibilities
-Eliminate waste
-Reduce inventory
-Local levelling
-JIT
-Visual control
-Process map
-Strategic planning
-Process management
-Process infrastructure
-Quality focus
-VA vs. NVA
-Problem solving
-Training

Since the rationale for blending lean and DFSS through supply chain has been
demonstrated, the next step is to develop an applicable lean and DFSS methodology. A
well-proven DMADV technique is used to develop a LDFSS strategy, and a concept
framework of lean Sigma methodology through supply chain (see Figure 8 and 9).

Figure 8 A concept framework of LDFSS through supply chain methodology

 Developing a lean design for Six Sigma through supply chain methodology 427

Figure 9 A concept framework of LDFSS to product development

7 Lean and design for Six Sigma through supply chain methodology

A conceptual framework of the LDFSS methodology through supply chain that we

designed in this research is presented in Figure 8. The descriptions of each step in the
methodology are given in further detail.

Phase 1 Supply-chain reference model

Step 1 Strategic goals and competitive analysis
A firm’s strategic goals drive business strategy and address the key success factors of the
industry. Strategic goals often include the vision or mission statement for the business.
They should also set the direction and standard for financial and market results against
which actual performance can be measured. The two most common strategic goals are:
1 competitive and market goals that define market share or market growth and
penetration for the firm’s products or services
2 financial performance in terms of key ratios, like return on investment and sales, and
growth in revenues and/or profitability.
The definition of business strategy includes six areas of analysis. The product-market
focus is the first step. The underlying capabilities in implementing a product-market
strategy include the technologies, processes and market access that a firm has. These
address the business and its key success factors. Businesses strategy includes customer
428 M-C. Lee and T. Chang

targeting, product lines and positions, technical capabilities, strategic processes, and
market access.
1 Describe the customer targeting strategy and its requirements.
Without targeting a specific customer segment, it is impossible to develop effective
products or services that meet specific customer needs and requirements. Each
segment, by definition, has a different set of requirements. While differences may be
minor at time, they affect the decision of the customer to purchase the product or
service.
2 Describe the product line and product positioning strategies for the market segment.
The business unit must decide what it will offer and how those offerings will be
positioned within the competitive environment. A firm can have one product or a
product line that covers a range of prices with a variety of features. The price-
quality-performance position is a relative determination compared with competitors'
prices, quality levels and features when comparing your products with alternative
products in the marketplace.
3 Identify the technologies required to implement the product-market strategy.
Technologies provide the basic capabilities needed to develop products or services,
as well as the associated processes used in developing or delivering them to the
marketplace. Technology determines the range of products and speed with which
they can be developed and delivered to the marketplace.
4 Identify the strategic process required to implement the product-market strategy.
The core capabilities of a firm are embedded in the business processes and functions.
Strategic processes can either improve the product or marketing capabilities of a
firm. These processes and functions are the basis of a firm’s competitive strengths
and weaknesses, and make up the core competencies of the firm.
5 Identify the market access strategy.
The final element of strategy requires that a firm have access to its market or
customers. Today, the Internet is considered the new channel for accessing markets.
Step 2 Mapping process workflow and operational analysis
Process mapping and analysis can be an extremely powerful diagnostic tool for your
organisation. By analysing the flow of work and information you will not only find
process issues, but also uncover structural problems, poor controls, and people issues.
You will learn to tap into employee frustration to fix processes and get to the root cause
of quality and timeliness issues.

Phase 2 Define/identify value

Step 1 Draft a project charter (Pyzdek, 2003)
This step describes the project goals and links each of them with related, measurable
project objectives. Measurement criteria for each objective must also be included because
they will be used to conform that an objective has been achieved. In addition, business
 Developing a lean design for Six Sigma through supply chain methodology 429

outcomes to be derived from the project goals and objectives are to be presented as
outlined in the business case.
Step 2 Identify the VOC/the customer value
In this step, understand real customer needs through VOC analysis.
Step 3 Translate the VOCs into measurable requirements
Using tools like QFD, VOC translated into design specifications termed as critical to
customer requirement (CCRs), comprehendible to the supply chain development/design
team (Buss and Ivey, 2001). While QFD is the major tool in identify phase, there are
other tools that may be used, such as Kano model, Pareto analysis, affinity diagram,
values engineering, brainstorming and benchmarking (Rate, 2002).
Step 4 Identify critical-to-quality characteristics (CTQs)
CTQs are:
1 element of a process or practice that has a direct impact on its perceived quality
2 the key measurable characteristics of a product or process whose performance
standards or specification limits must be met in order to satisfy the customer.
They align improvement or design efforts with customer requirements. CTQs represent
the product or service characteristics that are defined by the customer – internal or
external. They may include the upper and lower specification limits, or any other factors
related to the product or service. A CTQ usually must be interpreted from a qualitative
customer statement to an actionable, quantitative business specification (Snee and Hoerl,
2003).

Phase 3 Measure/VSM
In this phase it is importance to quickly understand what the inputs and outputs are of
processes. In the measurement phase, typically use tools such as VSM, motion and time
study, process mapping, measurement systems analysis, and cause and effect (Nave,
2002; Gorge, 2002). VSM is a visualisation tool oriented to the Toyota version of lean
manufacturing (lean production system). It helps to understand and streamline work
processes using the tools and techniques of lean manufacturing.
Step 1 Create a data-collection plan and gather data
We developed a data-collection plan to determine such issues as sampling frequency,
which will perform the measurement, the format of data-collection form and the
measuring instruments. Then collect data in order to measure the CTQs for the service
encounters which are under observation.
Step 2 Construct a current-state value stream map
VSM is a critical tool for your lean implementation. It provides a roadmap for change,
from which you can build your implementation plan for becoming a lean enterprise. In
fact, without a value stream map, businesses often are pursuing lean via only ‘point
improvement’, which does not lead to systemic change.
430 M-C. Lee and T. Chang

This is vital both to understand the need for change and to understand where
opportunities exist.
Step 3 Construct a future-state value stream map
A future state value stream map is the ideal, and an improvement plan to move from the
current state towards the ideal future state. A future-state value stream map deploys the
opportunities for the improvement identified in the current-state map to achieve a higher
level of performance.
Step 4 Develop a detailed process map
Taking the future state map consider an action plan that could be implemented to change
the current process to the future state.

Phase 4 Analyse/determine root causation

In this phase, we use both lean and DFSS techniques to analyse the process. Some lean
tools are feasible and powerful for improvement personnel in this phase. Principle
analyse phase include TAKT time/cycle time, TRIZ, 3P, failure mode effects analysis
(FMEA), control charts, and spaghetti diagram (Sahin, 2000; Burton, 2001).
Step 1 Conduct data and process analysis
Step 2 Determine root causes of non-value-added steps

Step 3 Determine the significant root causes

Step 4 Develop transfer function
A transfer function (also known as the network function) is a mathematical
representation, in terms of spatial or temporal frequency, of the relation between the input
and output of a (linear time-invariant) system. With optical imaging devices, for example,
it is the Fourier transform of the point spread function (hence a function of spatial
frequency) i.e., the intensity distribution caused by a point object in the field of view.
Step 5 TAKT time/cycle time
TAKT time can be defined as the maximum time per unit allowed producing a product in
order to meet demand. It is derived from the German word Taktzeit which translates to
cycle time. TAKT time sets the pace for industrial manufacturing lines. In automobile
manufacturing, for example, cars are assembled on a line, and are moved on to the next
station after a certain time – the TAKT time. Therefore, the time needed to complete
work on each station has to be less than the TAKT time in order for the product to be
completed within the allotted time.

Phase 5 Design detail/flow and pull

After the collected data is analysed and conclusions are reached, this phase must be
implemented so that the overall process is enhanced. In the phase, typically use tools such
as cell design, group technology, line balancing, DOE/quality engineering, and SPC
(Moore, 2000; Sahin, 2000; Burton, 2001).
 Developing a lean design for Six Sigma through supply chain methodology 431

Step 1 Eliminate the significant root causes

Select a solution to eradicate the significant root causes that have the most impact on the
CTQs.
Step 2 Develop a pull system
A pull system is where processes are based on customer demand. The concept is that each
process is manufacturing each component in line with another department to build a final
part to the exact expectation of delivery from the customer.
Step 3 Optimise
DFSS stresses predicting and optimising the probability of the design to meet the
required targets given environmental variation, manufacturing variation, and usage
variation. Statistical analysis and optimisation of design is necessary to achieve a robust
product/service design.

Phase 6 Verify/pursue perfection

This phase is designed to help the improvement teams confirm the results and make the
gains lasting. In the phase, typically use tools such as 5S, task tracking, checklists,
hand-off training, control plan, SOP, knowledge management, productivity, and
shareholder value (Lathin and Mitchell, 2000; George, 2002).
Step 1 Develop a control plan
The purpose of this step is to make sure that the solutions endure. In addition, the control
of the service delivery process must occur at both the strategic and tactical levels.
Step 2 Implement the control plans
It is needed to keep track of the process performance after improvement, also to control
the critical variables relating to performance.
Step 3 Productivity
Productivity refers to metrics and measures of output from production processes, per unit
of input. Labour productivity, for example, is typically measured as a ratio of output per
labour-hour, an input. Productivity may be conceived of as a metrics of the technical or
engineering efficiency of production. As such quantitative metrics of input, and
sometimes output, are emphasized. Productivity is distinct from metrics of allocative
efficiency, which take into account both the monetary value (price) of what is produced
and the cost of inputs used, and also distinct from metrics of profitability, which address
the difference between the revenues obtained from output and the expense associated
with consumption of inputs (Pineda, 1990; Saari, 2006).
Step 4 Calculate shareholder value (SV)
SV is the part of its capitalisation that is equity as opposed to long-term debt. In the case
of only one type of stock, this would roughly be the number of outstanding shares times
current share price. Things like dividends augment SV while issuing of shares (stock
options) lower it. This SV added should be compared to average/required increase in
value.
432 M-C. Lee and T. Chang

SV is the value of the firm minus the future claims (debts). The value of company can
be calculated as the net present value of all future cash/flows plus the value of the non-
operating assets of the company.
So
Shareholder value = Corporative value (firm value) − Future claims (debits)
= (NPV of all future free cash flows + value of non-operating
assets) − Future claims (debits)

Non-operating assets include marketable securities (stocks), excess real state, and over
funded pension plans.
Future claims (debits) include interest – bearing debts (long term and short term),
capital lease obligations, underfunded pension plans, and contingent liabilities.

8 Conclusions

This paper explored the synergies resulting from the combination of state-of-the art
quality initiatives, lean and DFSS, and develop an integrated SCOR with lean and DFSS
methodologies for their applications to service process improvement and design/or
resign. The integration model presented here provides a roadmap to the real-world
application of DFSS and lean production methodologies in industrial circles, and it mat
applied to any industrial circumstance to improve process, product, and service quality.
The significant benefits of the integration model are its implementation roadmap,
combination of techniques in every step and philosophy of management, as well as its
development of the quality initiative in the process of continuous quality implementation.
DFSS has to cover the full life cycle of any new products, right from the
organisation’s agreement on development, to the stage of full commercial delivery of the
product. Various DFSS methodologies like DMADV, define, measure, analyse, design,
optimise, verify (DMADOV), define, customer concept, design and implement,
(DCCDI), identify, design, optimise and validate (IDOV) and define, measure, explore,
develop and implement (DMEDI). In this paper, we use DMADV methodology.
In order to achieve the full potential of the integration model application, further
research should focus on the impact of the application of this integration model to the
realistic industry circumstances, and should explore an evaluation mechanism which
would enable us to understand the priority for selecting the applicable industry section to
carry the model.

Acknowledgements

I would like to thank the anonymous reviewers for their constructive comments on this
paper.

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