Design of synchronized supply chains: a six sigma tolerancing approach

A supply chain network can be viewed as a network of facilities in which a customer order will flow through internal business processes such as procurement, production, and transportation, ultimately reaching the required products on time to customers. The delivery performance of such a network can be maximized by pushing the work through the system in a way that the finished products reach the customer in a customer specified delivery window, with a very high probability. This entails synchronization and hence strict control of variability of deliveries at all intermediate points, to ensure that the raw materials and semi-finished work arrive at work spots in a timely fashion. We explore the use of the Motorola six sigma tolerancing methodology to achieve synchronization in supply chains. In particular, we use the six sigma approach to: (1) analyze a given supply chain process for six sigma delivery performance; and (2) design synchronized supply chains to guarantee six sigma delivery performance. We provide an example of a plastics industry supply chain, for which we report analysis and design experiments that demonstrate the use of the six sigma approach in designing synchronized supply chains with high levels of delivery performance.