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Importance of Six Sigma in Process Improvement

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Importance of Six Sigma as Process and Sustainability Improvement in United Parcel Services

Martin Tunggadjaja

March 2013

ABSTRACT

Six Sigma is a process improvement developed by Motorola in 1985 that encompasses a set of strategies and tools acquired in order to improve the current business practice and systematic processes to fulfill the objectives. It is initially designed to measure how many faults or defects are in the process so that they can be eliminated systematically as part of improvement to reduce weaknesses and reinforce quality. One of popular process improvement methodology that is part of Six Sigma is DMAIC, which consists of: Define, Measure, Analysis, Improve and Control. Originally Six Sigma was first incorporated into manufacturing industries; this methodology also applies well to logistics companies since the focus is customer-oriented. Supply chain management is a key strategic factor for increasing organizational effectiveness and for better realization of goals such as enhanced competitiveness, better customer care and increased profitability (Gunasekaran, Patel, Tirtiroglu, 2001, p71). Therefore, Six Sigma as shown to be successful in delivering business benefits through variation reduction (Knowles, Whicker, Femat, 2005, p51). This paper discusses how Six Sigma apply to the logistics processes and an example case study of United Parcel Service (UPS) incorporating this technique to reposition itself in the world’s most improved logistics and supply chain provider.

Page 1 of 15

1. Introduction
Six Sigma is a comprehensive system to achieve, sustain and maximize business success of companies (Ranawat et al, 2007, p1). With this system, it is possible to understand customer needs, to use facts, data and statistical analysis more disciplined, and to manage, improve and reinvent business processes (Pande, Neuman, Cavanagh,

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