Risk management in military supply chains: Is there a role for six sigma?

Abstract

This paper reports on the findings of an investigation into supply chain process variability in the UK defence supply chain. The study's objectives were twofold: (1) to investigate the nature and causes of variability in the defence supply chain; and (2) to ascertain whether a six sigma methodology could be applied usefully in this context. Herein it is described how, by following the DMAIC (define, measure, analyse, improve and control) framework and employing a mixture of quantitative and qualitative tools, a number of specific problems and their root causes were identified. An action plan for improvement is put forward based on the findings of the study. The research concluded that six sigma has applicability in the defence supply chain. However, it was also concluded that it is unlikely to be implemented throughout the supply chain under present circumstances, due to current stock holding policies and low levels of activity in certain demand categories. Statistical process control methods were nevertheless recommended together with the formation of an exceptions management team to investigate problems and lead efforts to foster a continuous improvement culture. Most importantly, the research revealed the pernicious effects of a cultural and organisational dependence on the mean average as a performance metric. This research recommends that urgent consideration be given to the introduction of variance-based measures instead. When made available to distribution centre staff in the form of user-friendly bar charts, variance-based measures illustrate the real implications of poor process controls for their fellow servicemen on the front line.

Keywords:

• Six sigma
• Defence logistics
• Supply chain

Notes

^†“A demand” is the military term for an item ordered.