Introduction of Lean Management and Six Sigma principles to urban logistics

This document discusses the introduction of Lean Management and Six Sigma principles in urban logistics to reduce space requirements, optimize the use of transport modes, and improve city sustainability. It explores the challenges and opportunities in adapting Lean concepts to logistics and highlights the current context of Lean and Six Sigma logistics. The document also discusses the significance of Lean and Six Sigma in logistics, the role of variation reduction in managing inventories, and the principles of Lean Production and Six Sigma. It concludes with the benefits and applications of Six Sigma in the service sector.

Running head: OPERATIONS MANAGEMENT
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Nam of the Student
Name of the University
Author Note

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Topic- Introduction of Lean Management and Six Sigma principles to urban logistics in
order to reduce space requirements, optimize the use of transport modes, and improve
city sustainability
2.1 Introduction
It has been identified that on the basis of the production system of today’s logistic
organizations it can be added that lean manufacturing had its origin after world war II when
the organization like Toyota to outstand from its competitors with respect to quality,
reinvented colossal production framework pays attention to the elimination tome and material
waste, in its production technique. As the result, Toyota could gain fast as well as flexible
techniques that allow it to offer consumers what they want, they want it with the reasonable
price. Furtere (2016) performed a study and added the fact that companies have been
searching for the development of continuous improvement habits, elimination of waste and
enhancement of skills in their human resources and those practice were related to lean
thinking.
In this context, Furterer (2016) commented that the concept of lean has been greatly
implemented in the production process with a considerable number of studies in the field.
Nonetheless, there has been some difficulties particularly in adapting learn concepts and
assumptions to logistics, even though the philosophy of lean could potentially provide the
benefits for the field. However, it can be added that there are some opportunities for the
development of studies that certainly map and generate information on existing literature
state in the lean and six sigma logistic field like the systematic review. As the consequence, it
has been identified that processing sector is the most representative which is followed by
Automobile and service industries. In addition to this, it has also been studied that authors of

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this study have identified the opportunities for research on some particular industries like
Sugarcane-based Energy.
Current context of Lean and Six Sigma logistics
This particularly study were categorised as per their relevance, scope, methodology
and type of sector and year of publication and the consequence demonstrated that the chosen
paper paid heed to the application of lean methodology to minimize the cost and increase the
tome efficiency as well as quality. Moreover, when reviewing the context, it is learnt that
most researched topics were identified that as being technology in Supply Chain and its
implementation factors and major methodology were data mining, survey, simulation and
optimization models and value stream mapping. So, scholar of the study have suggested
future work on the application of theoretical articles. On the other side, in light of reach
opportunity for connection lean and Six Sigma logistic concepts in the studies, Svensson et
al. (2015) performed a study and characterized the present state of the study on lean logistics.
With the inclusion of review protocol, research questions were provided to lead and guide
data collection from the selected papers with respect to theory, application, lean tools and the
concept of six Sigma. Thus, it can be added that the contribution of this paper certainly
comprehends the identification of the major topics covered in the study.
On the other side, Chugani et al. (2017) performed a study and mentioned the fact that
penchant for technique enhancement is inherent in human nature; even the distant ancestors
discovered an effective way to start fire make and build shelter. Authors have also state the
fact that improvement at the earlier stage have probably come about through trial and error
and it took hundreds of years to become part of human skill. It can be added that there have
been a series of issues in the coming days with the evolution of practices and to solve this
problems two major approaches for structured issues resolving emerged separately in 20th

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century and they have been known as Lean and Six Sigma methodologies. Authors of this
study have also added the fact that TQM often focus on the removal of process defecting as
well as reduction of the process variability. It has also been noted that six sigma and lean
have often have considered as the model rival initiative and Sigma plays a great role to
anything about the speed and flow.
On the contrary, Jadhav et al. (2014) argued and mentioned that there is a constant
need for greater level of competitiveness than achieved through the implementation of either
methodology- which have now been able to convince the practitioners that these two
approaches are synergistic. Furthermore, it is learnt that Lean and Six Sigma are two different
set of bodies of knowledge and either Six Sigma is about the location and elimination of root
causes of process problems. It has been identified that six sigma tool could include different
parameters of why and how. It can be added that lean the roadmap is one of the successive
refinement to enhance the overall techniques of the entire process. According to the author of
this study, lean could specify values in the eyes of consumers of the customer and make value
flow at the pull of consumers. Moreover, lean could involve and empower the employees
which is highly necessary for an organization to retain and motivate employees irrespective
of business type and size.
Lean and the logistics
Svensson et al. (2015) performed a study and added the fact that the effect of lean on the
logistics is significant and a common misconception of lean philosophy is that it only finds
application in manufacturing setting and the goal of the lean is to estimate waste, decrease
work process inventories and decrease the process as well as manufacturing lead times.
Furterer (2016) also mentioned the fact that lean has a very significant cultural element to it
which is highly crucial to the logisticians as well as the concept of overall cost. In this

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context, Cudney, Furterer and Dietrich (2013) mentioned the fact that lean practitioner does
not pay attention to individual cost factors like transportation or warehousing but instead
focus on the overall cost. It has been identified that with the inventory carrying cost
representing 15 to 40% of overall logistic for several sectors making decision on the basis of
overall cost which is done again on the basis of dramatic implications for logisticians.
Regrettably, even though numerous organizations never embrace the overall cost concept
completely because poor decisions are made continually on the basis conventionally visible
cost drivers like transportation, per-unit purchase price and warehousing.
Six Sigma and Logistician
As put forward by Jadhav et al. (2014), the idea and concept of variation reduction could be
paramount to the logistician, as studied in the previous paper, logistic is about managing
inventory and again managing inventory is about managing variance. If different types of
inventories are considered, it can be seen why variation plays a very crucial role in how one
could manage inventories throughout the business as well as supply chain. In this context,
Chugani et al. (2017) commented that maintaining safety stocks due to variation in supplier
quality, transportation reliability manufacturing process capability as well as consume
demand patterns. It can be added that control variation in process from supplier consumers
and then it could be able to minimize its reliance on the buffer dramatically. Sabadka (2014)
mentioned that logistician should think of themselves as actuaries such as those who develop
rates for the auto-mobile insurance. Authors of the study have also added the fact that
logisticians are no different than the actuaries in such analogy. Particularly, for demographics
and sports cars, the logisticians tend to substitute competence of the suppliers, transpiration
reliability as well as demand fluctuation. Thereafter, logisticians determine the rate of
insurance with the use of inventory as most significant unit of currency. Nonetheless, the
major issue here is that even though several logisticians tend to target their organizations like

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teenage drivers, organizational performance is more like the middle age soccer parent who
could drive mini-vehicle.
Lean Production:
According to Madu and Kuei (2014), lean production is often defined as the series of
principles and tools that help to eliminate the process activities and it does not value and
create the flow in a technique. On the other side Lee et al. (2013) mentioned that lean process
can be defined as one which uses the absolute of resource to add value to the service product.
Lean manufacturing could be viewed as the philosophy of management focusing on the
reduction of eight different type of wastes. It can be added by reducing the amount of waste
or by eliminating waste, quality can be enhanced, production time is minimized.
It has been identified that lean tools could include continuous process enhancement
and mistake proofing and here lean remains as the management philosophy which is
fundamentally focus on creating a better workplace through large organizations like Toyota
principle of respect for humanity. As put forward by Martínez-Jurado and Moyano-Fuentes
(2014), Lean Production System more completely embodied in it recent incarnation such as
just in time systems as well as Toyota Production System. Authors of this study have
mentioned the fact that at the heart of Lean is the determination of value and value is often
defined as the form, feature or the function for which a consumer is intended to play. Authors
of the study have added the fact that such processes that do not add values and considered
waste. On the other side, lean framework is used as the tool to pay attention to resources and
energies on manufacturing the value-added the features while identifying and eliminating
non-valued activities.

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Processes in Lean are considered as the value stream. Hence, lead time reduction as
well as the flow of value streams are the major areas of the focus in lean. In this context,
Jones (2014) mentioned that value stream mapping could help the teams to understand the
flow of materials and information in creating as well as delivering the product or services that
are being provided to consumers by the organizations. It is certain that lean management
tools could help to provide tools for analysing the process flow and delay times at each
activity in a process; it also helps to emphasize value-stream mapping which centres on the
separation ‘value-added’ from ‘non-value added’ work with the tools to eliminate the major
reason of non-value activities and their cost. It can be added that lean management tool helps
to emphasize the value stream mapping which helps to recognize and attempt to omit eight
different type of waste and non-value added work, inventory and waiting time and
transportation as well as human talents.
Six Sigma
Sabadka (2014) performed a study on lean and management and six sigma factors and
mentioned the act that six sigma is more a management technique which aims to enhance and
deliver near-perfect products and services. The primary goal of six sigma is to enhance
consumer satisfaction by eliminating and reducing the amount of defects. Hence, defects
could be related to any aspects of consumer satisfaction, in this context Sunder (2016)
mentioned the six sigma is more majorly targeted to reduce variation particularly in a
business prices and it is more of a great way to permeate the culture of continuous
enhancement in an organization. On the other side, Cudney, Furterer and Dietrich (2013)
performed a study and mentioned that the act that six sigma is fundamentally referred to a
statistical construct which measures how persistent and how far a known process could
deviate from perfection. It has been identified that six sigma tend to represents a greater
degree of quality and virtually such products and business process are defect free.

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It could be noted that most organizations in the present day tend to function at only a
three or four sigma and mist likely to lose 15% of their total revenue because of the defects.
Thus, the scholars of the study have mentioned the fact that typical organizations are most
likely to benefit significantly from the implantation of six sigma. When it comes to the idea
of six sigma in business process, it is found the idea was originally used to enhance
manufacturing process at Motorola. It has been identified that Six Sigma holds the
fundamental roots in Total Quality Management approach of 1980 but in the present time it
could be much more than this. It is now being used as across a broad range of sectors with the
inclusion of banking, insurance and telecommunication, healthcare and construction.
On the contrary, Begam, Swamynathan and Sekkizhar (2014) performed a study and added
the fact that Six Sigma applications in service sector has a fundamental role because the
program implies that going beyond the highest quality range fixed in the production process.
Author gave the example that an average of 3.4 errors in every one million financial
transaction might not be able acceptable to a financial organization. Vachon and
Hajmohammad (2016) carried out a study and added the fact that Six Sigma has a broader
meaning because it could emphasize the need to identify the opportunities and eliminate the
defects as defined by consumers. Six sigma model might also help to identify the process
variation and hinders the ability to effectively provide high quality service.
As put forward by Furterer (2016), with respect to tools and techniques consumed by
for process enhancement, there is a peripheral deference between six sigma Total Quality
Management approaches. It is note that six sigma apart remain as the establishment of
organizational infrastructure. Thus, Six Sigma could be ideally considered as the
management system which could integrate strategic objective as well as measurement sys
development and it provides appropriate guidance for the project prioritization and
governance. It is more of a performance management system to drive a more focussed

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implementation of overall business approach. The most necessary premise of Six Sigma
management system is that there is a constant requirement of leadership team in place whose
members could be willing and capable of involving in disciplined and team based process of
presently monitoring real time organizational performance. Jadhav, Mantha and B. Rane
(2014) mentioned that team-based performance of continuously monitoring real-time
business performance metrics and it could take actions in the form of project reviews.
The scholars of this article has also added the fact that team could engage in frequent
dialogue performance which is associated to customer and requirement related and
performance associated with the enhancement of projects. As put forward by Madu and Kuei
(2014) six sigma identifies five organizational roles for the effective implementation. Authors
mention that key management. This particular article has added the fact that six sigma
technique method of lean and six sigma are practiced separately for several years.
Nonetheless, in the most recent time practitioner have come to realise that two these
methodologies could be dependent on each other for a greater success. For instance, it could
be impossible to operate a process with minimum waste or it is dependent at dependable
capacity if individual process steps are highly required variably. Authors also state the fact
that one could effectively study the complex processes which look for the fundamental cause
with the elegant statistical technique and it never make enhancement in cycle time or
production. This can be gained from value stream analysis.
Furthermore, it is also learnt that to extent Lean and Six Sigma approaches have their its own
strengths and weaknesses, particular action plan can followed in effectively implementing
lean six sigma, which is dependent on the type of situation at hand. It can be stated that the
issues related to the accuracy and completeness are conventionally resolved by tools of Six
Sigma. Tools should be developed introduced first. If the consumers need quick outcomes,
lean should be implemented first with an understanding which could deep and complex issues

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(Martínez-Jurado and Moyano-Fuentes 2014). In this context, Jones (2014) commented that
lean six sigma are rich structure of knowledge and they are more mature methodologies for
resolving a broad variety of technique related to problems.
Each methodology has its own individual approach to process enhancement and its own tool
developed. Even though lean and Six Sigma methodologies could be mastered independently
they could and should be implemented together to understand the full benefits of techniques
development by any organization.
Lean Technique Rankings for Ease of Implementation in the Transportation Industry
As put forward by Svensson et al. (2015), lean techniques are ranked as being straightforward
and moderate or difficult with respect to their ease of implementation in the transportation
industry. Authors of the study have mentioned the fact that ease of implementation is based
on the amount of agreement between a potential lean technique as well as present STA
delivery technique with the inclusion of overall delivery system, individual resistance to
change and legal problems. On the other side, Jadhav, Mantha and B. Rane (2014)
commented that when it comes to six sigma model and it is more of a business management
strategy, originally enhanced by Motorola, paying attention to quality of control. Six Sigma
enhances quality by identifying as well as enhancing the causes of defects as well as
variability in the production technique. Authors of the study is more of a business
enhancement methodology and should he applied throughout the construction process. Six
Sigma defines as defect as anything outside of consumer specification. It has been identified
that six sigma approaches to reduce defects could vary depend on whether the technique is
new and already developed. On the other side, Six Sigma could be an incremental change,
while the enhancement are focused on a single organization or contractual relationship in a
conventional sense as the prime or sub-contractor.

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Martínez-Jurado and Moyano-Fuentes (2014) mentioned about some abut some particular
application objects, such as defining project goals and current technique, measuring
fundamental aspect of present technique and collecting relevant data and analysing the data
about determining the relationship and identifying relevant relationship. When it comes to
lean management, Jones (2014) mentioned that about enhancing or optimizing technique
based upon data analysis.
As put forward by Sabadka (2014), one of the most vigorous of the continuous enhancement
methodologies is six Sigma and authors have mentioned that while six sigma has
conventionally been associated with manufacturing and product quality , the major ad leading
manufacturer are particularly using to enhance their extended supply chain as well as logistic
capabilities. Alongside, it also helps to enhance the reliability, some organizations have cut
hundreds of millions of dollars of fat out of their supply chain. It can be mentioned that Six
Sigma leads to complex and challenging logistics techniques which can decrease variation
and optimization of process. In this context Vachon and Hajmohammad (2016) added six
sigma is mostly customer focused and not internally focused.

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