Logistics: Six Sigma, Lean Management, 4P Logistics, Fishbone Analysis and Solutions

This article discusses Six Sigma, Lean Management, 4P Logistics, Fishbone Analysis and Solutions in Logistics. It explains the difference between Six Sigma and Lean Management, how 4P Logistics works, and how Fishbone Analysis can help solve problems in manpower and machine. The article also includes actions to solve problems in manpower and machine. Course code, course name, and college/university are not mentioned.

Running head: Logistics 0
Logistics

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Contents
Introduction...........................................................................................................................................2
Six sigma and Lean management..........................................................................................................3
Six Sigma..........................................................................................................................................3
Lean management..............................................................................................................................3
Difference between Six sigma and Lean management.......................................................................3
4P logistics............................................................................................................................................5
Fishbone Analysis.................................................................................................................................7
Actions to solve problem in manpower and machine............................................................................8
References...........................................................................................................................................10

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Introduction
The benefit of six sigma tool is uniform process which reduces defect, cost and most
importantly improves productivity to satisfy customer and increase the market share. The
lean management reduces the cycle time or production time of product (Snee, 2010). The lean
requires less equipment and less human efforts. Six sigma analysis is undertaken to
understand which area of the production can be affected by waste and which part can be
affected by variation. So that, right tools can be used to solve right problems. The 4PL
provider brings value and manages the logistics process, also concerning how warehouses are
used. Organisations hire 4PL to increase profits and to properly manage to provide access to
greater base of potential suppliers. The logistics company is facing immense problems in
regards to managing supply chain. The fishbone analysis in itself is a problem solving tool
especially comparing, testing and interpreting. Undertaking the most appropriate system,
equipment and properly utilising them to regulate maintenance in the business operation.
Dynamic market situations demand changes in various policies in the operation of every
business. Automatic order picking facilities reduction in time of deploying and appropriating
every worker at right place.

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Six sigma and Lean management
The practical approach states that six sigma and Lean management both work towards
the same ultimate goal- eliminating waste and creating efficiency. While both Lean and six
sigma are business methods that aims to improve efficiency and effectiveness in the
organisation. Both seek to reduce waste and increase the productivity as far as possible.
Every organisation works to earn more and more profit. This can be achieved by two ways-
targeting more and more customers and eliminating useless expenses and waste.
Six Sigma
Six sigma is an extension of number of quality tools available to the organisation
results in improvement. Six Sigma is a quality tool that focuses on reducing the number of
errors in a process. It focuses on identifying variation. It looks at root cause analysis to
determine the source of errors.
Lean management
Lean is a system which tries to reduce or delete activities related to value loss. It is
more focused towards removing waste and creating more value for products. Lean
management focuses on keep production standards. If the production standards are high then
each step results in very little waste.
Difference between Six sigma and Lean management
Six Sigma Lean Management
To satisfy the client`s requirement.
Implementation of Six Sigma techniques
will lead to reduction of flow time of the
operation.
To improve production by increasing
efficiency by cutting down the waste
created by rework, errors, idle time.
Six Sigma can be done by applying proper Lean is an organised process helps in

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controls and taking appropriate steps. The
basis of this technique is normal distribution
and probability.
removing waste from various processes of
the organisation like distribution,
manufacturing and service.
Six Sigma was introduced by Motorola Lean was introduced by Toyota.
Breakthrough process Improvement teams
focused on eliminating chronic problems
and reducing variation in processes.
Rapid improvement teams focused on
improving process speed and eliminating of
deadly waste.
Six Sigma is calculation based on statistics
and correction of faults to maximise output.
Six sigma is basically used to reduce error
prone activities in manufacturing fields.
Lean management is based on fix
manufacturing processes from minute to
minute. Lean is basically for manufacturing.
Six Sigma allows benefit to both systems to
be fully utilised.
Many companies has achieved success with
lean techniques to maximise profits.
Six Sigma is a structured approach to
handle organisational problems by reducing
risk.
Lean management decision makers apply
continuous improvement methods to check
the ways to increase value and reduce
waste.
Six sigma is a process which interrupt and
do not allow to change organisational
culture and behavioural change in
employees.
Lean is to inculcate change in an
organisational culture and permanent
change in employee behaviour.
Six Sigma is a quality measurement that
meets perfection in products or services. Six
Sigma is a process of maintaining the
desired
Lean management aims at reducing waste
from the operation process. It focuses on
serving worth firm`s product or service to
the customers.

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quality in the products and improve by
taking necessary steps.
Six sigma is suitable for long-term and
complex problems. Six sigma needs high
investment. It is not suitable for solving
common problems (Munteanu, 2017).
Lean management works for good
beginning of improvements which require
less investment because of the nature of
skills to be improved. It gives less emphasis
on statistical tools and techniques
(Munteanu, 2017).
Six sigma and Lean refers to the same because they both are bunch of structured tools
which assist in problem solving and improve performance (Antony, 2011). When the current
situation is to reduce waste and develop an efficient process, the lean tools are used. Whereas,
when the goal is to eliminate variance and improve situations, the six sigma tool is used
Psychogios, Atanasovski & Tsironis, 2012).
4P logistics
Arrangement in which an organisation sources out its logistics operation to more than
two specialist firms in which one specialist firm is the 3rd party logistics and 4th party logistics
is hired to coordinate the activities of the 3rd party (BusinessDictionary, 2018). For supply
chain, when 3rd party logistics outsourcing is accepted without any business risk then
corporations are looking for another partner to outsource the activities like build, run and
measure supply chain solutions on organisation`s behalf (Mangan & Lalwani, 2016). This
extension in the supply chain for the activities performed by 4th party is known as 4th party
logistics. The 4th party manages all the resources, technology and capacity. 4PL handles the
integration of backend system, it also increase market transparency for goods. It also focuses
on cost reduction of procuring goods. Fourth- party logistics is also referred as lead logistics

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provider (Aktan, Sahin & Basaran, 2016). It has a major role in supply chain because it is
believed that 3rd party logistics have wider responsibility and accountability in assisting the
customer to reach the goals. Transparency is a key for 4PLs that also sometimes function as
3PL. 4PL works with customers to check and balance also for creating confidential
agreements and prohibiting the share of information from transportation providers. While
managing the movement of goods domestically and internationally. Transportation system
becomes complex. The main transportation management services aims at planning and
renders execution of shipment services. Lead logistics provider manages the whole supply
chain to meet changing demand of customer needs (Mehmann & Teuteberg, 2016a).
A 4PL guides every element of supply chain and also manages the 3PLs, supervising
transportation management and operation of the warehouses of the organisation. 4PL helps in
making cost-effective plan to operate. An 4th party logistics acts as primary supply chain
management provider. LLP (Lead Logistics provider) undertakes the integration of all
logistics services. 4PLs undertakes the acquisition of logistics service through contracts. By
outsourcing the management of services, organisation starts making financial strategy to
influence the decision making and applying the decisions on implementing and tracking
logistics solutions. Such as in automobile industry which has more complex supply chain as
compared to other industries, the backbone of operating supply chain, 4PLs (4th party
logistics) runs the business efficiently. Different from 3rd party logistics, 4PL organisation is
sometimes considered as separate entity which establishes long term contract between one or
more partners. 4PL organisation acts as an interface between the customer and various
logistics service providers (Supplychain247, 2018).
Ideally, almost all the client`s supply chain is managed by LLPs. By increasing
demand of products and services in various parts of the world, more and more logistics
services need to be developed so that the need of the customer can be accomplished. Supply

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chain is also extending its range, so as the number of warehouses are increasing. But with the
increasing associated risks in the business world, several challenges are identified in
warehousing (Aktan, Sahin & Basaran, 2016). As the warehouses are established at various
places to satisfy the customer needs while being so competitive. The increasing warehouses
led to advancement of technology (Christopher, 2016). The entry of 4PLs in logistics industry
bothered the concept of creation of outsourcing strategy delegating the services to others to
reach and increase access of products and services to the people around the world. The 4PL
(4th party logistics) is created to manage the logistics services. The risk of goods and services
is transferred to 4th party logistics as soon as it starts its giving services in respect of the
organisation. 4PLs render services on the behalf of the large companies. The 4PLs coordinate
the ships at the port, stores and delivers the goods on the place where required. Every
Logistics Company suffers from some problems- procures a lot of fuel costs, needs
improvement in business processes especially technology advancement (Mehmann &
Teuteberg, 2016b).
Fishbone Analysis
Fishbone analysis is also known as cause and effect analysis and root cause analysis.
This tool is to identify and rectify the root cause of any failure in the organisation and cause
of certain and specific event. It is considered as one of the quality management tool. Root
cause is underlying or basic problem that is destroying and causing problem to the whole
surface. In this case, the aim to identify the problem in the supply chain management and to
achieve the highest efficiency. Optimising the picking order activity is important for
developing worker efficiency in a machine operated warehouse (mbaskool, 2018). Firstly, the
company has to look into the issue where it is losing the value of operation. The problem is
order picking due to lack of labour and automatic machines to carry out fast order picking.

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This analysis will help to identify the suffering caused due to any problem. Then after,
the major factor causing and effecting the activities adversely is identified (Harris, Lilley &
Walter, 2017). The 2nd step is to move inside the situation and identify the root cause of the
event. The aim of 2nd stage is finding what are the factors affecting the running of proper
procedure (Desai, Desai & Ojode, 2015). 4Ms representing manpower, method, machine and
material depends on the number of brainstorming ideas, the way of solution the problem has.
In the second stage, the inefficient manpower and worker is identified and also lack of
machines carrying goods in the warehouse.
(Quality assurance solutions, 2018).
Actions to solve problem in manpower and machine
Technology upgradation is used to support warehousing procedure. In warehouse
management system, managing order picking from storage to meet the requirement of a
customer is a core function. It is visible that a major part of operating expenses is incurred
during order picking. Planning, organising and controlling in WMS (warehouse management
system) order picking process is a major activity to be considered. To manage is to sequence
the picks of material having a batch.

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It is important to pay attention to management of goods in the warehouse includes
rack zones, shelving, sorting different types of goods at different place (Rushton, Croucher &
Baker, 2014). Piece picking is a system in which same resembling goods are placed in a same
order in a single line. So that sorting them from a stock becomes easier when received a order
(Petersen & Aase, 2016).
Zone picking-In zone picking method, different people are allotted to different zone
where same goods are kept, this picking is most suitable when a warehouse receives different
goods orders every time. Each similar bunch of goods should be given a batch number
(Venkitasubramony & Adil, 2017).

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References
Aktan, C., Sahin, E. E., & Basaran, N. (2016). RELATION OF 3PL AND 4PL ACTIVIES
AND THEIR EFFECT ON EMERGING ECONOMIES. International Journal of
Management Economics & Business, 12, 262.
Antony, J. (2011). Six Sigma vs Lean. Some perspectives from leading academics and
practioners. International Journal of Productivity and Performance Management,
60(2), 185-190.
BusinessDictionary. (2018). Fourth party logistics (4PL). Retrieved from:
http://www.businessdictionary.com/definition/fourth-party-logistics-4PL.html
Christopher, M. (2016). Logistics & supply chain management. UK: Pearson.
Desai, K. J., Desai, M. S., & Ojode, L. (2015). Supply chain risk management framework: A
fishbone analysis approach. SAM Advanced Management Journal, 80(3), 34.
Harris, T. E., Lilley, K. A., & Walter, R. K. (2017). The Varying Role of Vertebrae in Pacific
Fishbone Analysis: Comparing Tropical Versus Temperate Midden Assemblages.
International Journal of Osteoarchaeology, 27(6), 1038-1047.
Lira et al. (2017). Use of the Ishikawa diagram in a case-control analysis to assess the
causes of a diffuse lamellar keratitis outbreak. Retrieved from:
http://www.scielo.br/pdf/abo/v80n5/0004-2749-abo-80-05-0281.pdf
Mangan, J. and Lalwani, C. (2016). Global logistics and supply chain management. US: John
Wiley & Sons.
Mbaskool. (2018). Root Cause Analysis. Retrieved from:
https://www.mbaskool.com/business-concepts/operations-logistics-supply-chain-
terms/8567-root-cause-analysis.html

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Mehmann, J., & Teuteberg, F. (2016a). Process reengineering by using the 4PL approach: A
case study on transportation processing in the agricultural bulk logistics sector.
Business Process Management Journal, 22(4), 879-902.
Mehmann, J., & Teuteberg, F. (2016b). The fourth-party logistics service provider approach
to support sustainable development goals in transportation–a case study of the
German agricultural bulk logistics sector. Journal of Cleaner Production, 126, 382-
393.
Munteanu, A. M. C. (2017). Advantages of Lean Six Sigma’s implementation in the
Romanian Economy. Management Research and Practice, 9(1), 54-60.
Petersen, C. G., & Aase, G. R. (2016). Improving Order Picking Efficiency with the Use of
Cross Aisles and Storage Policies. Open Journal of Business and Management, 5(01),
95.
Psychogios, A. G., Atanasovski, J., & Tsironis, L. K. (2012). Lean Six Sigma in a service
context. A multi-factor application approach in the telecommunications industry.
International Journal of Quality & Reliability Management, 29(1), 122-139.
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution
management: Understanding the supply chain. UK: Kogan Page Publishers.
Snee, R. D. (2010). Lean Six Sigma – getting better all the time. International Journal of
Lean Six Sigma, 1(1), 9-29.
Supplychain247. (2018). 13 Key Considerations When Selecting a 3PL and The Difference
Between a 3PL & 4PL. Retrieved from:
https://www.supplychain247.com/article/13_key_considerations_when_selecting_a_3
pl_3pl_vs_4pl

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Venkitasubramony, R., & Adil, G. K. (2017). Design of an order-picking warehouse
factoring vertical travel and space sharing. The International Journal of Advanced
Manufacturing Technology, 91(5-8), 1921-1934.
Quality assurance solutions. (2018). My Beef with the Fishbone Template. Retrieved from:
https://www.quality-assurance-solutions.com/fishbone-template.html