Section 4. Building the Bridge: Lean Six Sigma Logistics Tools

Table of Contents
ix
Five-Why Analysis .................................................................................. 220
Design of Experiments ............................................................................ 222
Inferential Statistics ................................................................................. 223
Chapter 22. Operational Tools ................................................................... 227
Flow Concepts ............................................................................................. 227
Just-in-Time and the Pull System .......................................................... 227
Lead-Time Management, Speed, and Flexibility .................................. 229
Leveled Flow ........................................................................................... 230
Frequency and Lot Size .......................................................................... 232
Organization Concepts ................................................................................. 232
Standardized Work Plan ......................................................................... 233
The SIMPOC Model ............................................................................... 233
5S Organization and Visual Control ...................................................... 234
Red Tag Initiatives .............................................................................. 235
Poka-Yoke ............................................................................................ 236
Chapter 23. Measurement Tools ................................................................. 237
Data Collection Plan .................................................................................... 237
Process Capability ........................................................................................ 238
Defects per Million Opportunities .......................................................... 241
Sigma Calculations .................................................................................. 242
Conventional Measures of Logistics Performance ..................................... 245
Total Cost Analysis ..................................................................................... 246
Chapter 24. Case Study: GoldSMART Products, Inc. .............................. 249
Lean Six Sigma Logistics: A Real-World Story ....................................... 249
GoldSMART Products, Inc.: A Case in Lean Six Sigma Logistics ........ 250
The Calm Before the Storm ................................................................... 250
The Approach of Ominous Clouds ........................................................ 251
In the Eye of the Storm ......................................................................... 252
Riding Out the Storm ............................................................................. 255
Seeing Daylight Again ............................................................................ 260
Chapter 25. Summary and Conclusion ...................................................... 267
Index ............................................................................................................. 271

PREFACE
As logistics and supply chain professionals, we all have one thing in common.
This commonality is that time is a scarce resource, one that must be treated as
a treasured commodity. This means that we must choose wisely when deciding
what books to read or what avenues to pursue for professional development.
With any luck, when we do invest our time in reading an industry book, we
will walk away with one or two “golden nuggets” that can help us with our day-
to-day responsibilities and challenges.
As the authors of Lean Six Sigma Logistics, we certainly kept the above in
mind as we developed the framework for this book. To begin, we continuously
asked ourselves whether a certain topic or theme was relevant to today’s logis-
tics and supply chain practitioner. We continuously asked ourselves whether
each point passed the “so what?” test.
Consequently, we spent significant time up front developing the framework
for the book. Using the serene background of Benson Lake in Eastern Ontario,
Canada, we devised what we believe to be the key drivers for all logistics
processes. This was no easy task. First of all, we must consider the two authors:
one practical-thinking academic and one academic-thinking practitioner. Many
times, we debated theory versus practicality and, oddly enough, many times the
academic argued for practicality and the practitioner argued for rigor of theory!
What lesson did we learn from this? The first was that theory relates directly
to strategy. The second lesson is that practicality relates to tactical realities. To
be sure though, we recognized that strategy and tactics are both required to
achieve anything of significance. We must know what we want to accomplish
and we must understand how to accomplish it!
A majority of our discussion surrounded the topic of “flow.” Not flow from
an inventory point of view, but rather the flow of the book itself. We continu-
xi

ously reminded ourselves that readers must be able to see the book as a whole,
such that by the end they will say, “I see it, I get it!” And, therefore, the
Logistics Bridge Model was born.
The Logistics Bridge Model is a compass and map. It will help us to set
a strategic destination and direct us on the operational journey. It is not a step-
by-step “how-to” guide, but rather a path for critical thinking. In our opinions,
it is critical thinking that is required in logistics and supply chain management
today. We need to be able to look at operations differently. We need to under-
stand what value is and what waste is. We need to leverage value and eliminate
waste. That is the primary purpose of this book.
In all sincerity, we appreciate your valuable time and we hope this book
will help you to achieve your professional goals and organizational objectives.
As well, we hope you will embrace the Logistics Bridge Model and enhance
your ability to look at your supply chain with a critical eye and vision for
improvement.
Thomas Goldsby and Robert Martichenko

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