1. 34 Quality Digest/August 2004
S
ix Sigma. Lean. What do these initiatives have to do with
the supply chain? The short answer is everything. The
origins of these approaches are based, in Six Sigma’s
case, on continuous improvements in quality and variation con-
trol, and in lean’s case, on production velocity and elimi-
nating waste. Both Six Sigma and lean can help improve
supply chain efficiency, and companies today are quick to take
advantage of one or the other approach throughout their organi-
zations. However, few companies realize that while each
approach can be mutually exclusive, an interesting thing hap-
pens when the two are combined.
Which brings us to our first question.
Have we forgotten what customers want?
In the “old” days, quality advocates functioned more or
less as company cops, authoritative figures who’d get you in
trouble for taking shortcuts. Today, and definitely in the future,
the quality professional’s role will have less to do with blowing
the whistle than seamlessly integrating processes within all
business operations relating to customers. This represents a
distinct departure from the past and requires specific tools and
procedures. To access these tools, companies are combining lean
and Six Sigma methodologies. Thus, to answer the question,
quality professionals haven’t forgotten what customers want, but
the quality community has never fully realized the best approach
for recognizing customers: defining value, delivering it and main-
taining accountability for those goals.
Which leads us to the next question.
How can we bring value to the supply chain?
First, what is value? Simply, it’s whatever the customer says
it is and is willing to pay a company to deliver—whether goods
or services. Lean says in order to measure value inhibitors,
increase value and eliminate waste, we must construct a value
stream map of our current state, create another map for the
future that includes the same processes without the waste, and then
devise an action plan to take us to that future state and beyond to
the ideal state: Perfection. Six Sigma tells us to measure these
processes and establish variation-reducing controls to ensure a
consistent output. That methodology also tells us to ensure con-
formity. Taken separately, the lean and Six Sigma approaches
could possibly be viewed as conflicting. These days, companies
are learning that, in fact, the two methodologies are complemen-
tary, if not inseparable.
Within the supply chain, quality professionals must ensure
adherence to processes, compliance to requirements based on the
customer’s definition of value, elimination of nonvalue-adding
activities, and documentation for consistency of purpose and prac-
tice. To do this, we must position ourselves as authorities on
value—and what maximizes value for our companies.
This brings us to our third question.
Is there a tool we can use?
Absolutely. The flowchart on page 35 illustrates a method-
ology that will lead to a clear map of processes feeding into and
through a company before being realized by the customer—i.e.
the total supply chain.
by Derrell S. James

2. Quality Digest/August 2004 35
Each of the 12 steps follows the lean
value-stream mapping methods from
James P. Womack and Daniel T. Jones’
invaluable Lean Thinking (Free Press,
2003). These steps involve every function
at every level of a company, whether
large or small, manufacturing or service.
Additionally, when companies recog-
nize that variation is undesirable in the
quality world, they can incorporate Six
Sigma variation-reduction methods to
strengthen the streamlined processes
and devise the balanced metrics needed
to measure success.
The 12 steps for conducting total
supply chain value-stream mapping and
analysis are as follows:
Step one
To define your company’s business
life cycle, start by answering the following
questions:
I What is the company’s vision and
mission?
I What are the company’s major proc-
esses or organizational flows?
I What are the boundaries?
I Who are the key value stakeholders?
I How do key value stakeholders—i.e.,
the company, its suppliers and its cus-
tomers—define value for the identified
business life cycle?
I What are the outcomes expected from
the business and relationships with sup-
pliers and customers?
For example, a generic business life
cycle for a company might look like the
figure on page 40.
Step two
Customers’and suppliers’interactions
occur at points all along the life cycle and
thus are inseparable from the company
processes noted in step one. If your analysis
uncovers communication breakdowns that
reduce value, add waste or reduce the pas-
sion for success, these should be clearly
identified for intense analysis and scrutiny
during subsequent steps.
A representation of these total supply
chain interactions is required, including
the interactions of leadership; any touch
points between suppliers, customers and
the company; and how these processes are
integrated. Make a note of the “softer” side
of the relationship by expanding upon
the following:
I Describe the relationship between each
company department and its supplier or
customer—is it cordial, collaborative,
adversarial, nonexistent?
I Describe the personalities of the people
involved in the relationships. Are they
proactive or reactive, responsive or pro-
crastinating, talkers or listeners? Consider
ways in which the relationships can be
improved.
At this point, it’s a good idea to
evaluate how thorough you want the
value stream map to be. Too much analysis
will provide inordinate and unmanage-
able data but too little will hinder you
from identifying wasted resources or
process steps.
Assess other potential flows or shared
services that might not be enterprisewide
Customers
Suppliers
Employees External
Influences
STAKEHOLDERS
1. Define the business
life cycle.
2. Define and analyze touch
points with suppliers and
customers.
3. Construct top-level current
state map, including production,
information, service, time
and money.
4. Expand top-level current
state with detail from all
stakeholders.
12. Manage progress, set
regular cadence for
accountability. Repeat
process to refine.
5. Validate all current state
flows and interrelationships,
highlight success criteria.
11. Create and
implement actions to
achieve future state.
6. Capture current state data
and conduct assessments of
behaviors.
10. Create balanced set of
metrics and confirm
behaviors/analyze
potential gaps.
9. Create future state map
based on success criteria,
including behavioral
requirements.
8. Create ideal state map
to drive breakthrough
thinking.
7. Analyze waste, risks,
and other inhibitors
to success.
Feedback validation loop
Feedbackloop
Feedback loop if gaps discovered
Value Stream Mapping

3. 36 Write in RS No. 34 or visit www.qualitydigest.com
but run parallel to those already depicted. Enabling infrastructures
such as information technology, e-business, human resources,
accounting, and social/cultural customs should be included.
Finally, analyze external influences—societal, environmental,
political—that might affect the map, as well as any destabilizing
forces. These might include policies, laws, demographics or
other trends.
Step three
Assess and map the flow of products, programs, services,
information, money and time based on the business life cycle
defined in step one.
The resulting map and lists of influences represent the current
state—or level one work breakdown—of the enterprise. At this
point, validate boundaries, values, company outcomes, vision and
mission as identified in step one. Adjust these as necessary to
reflect current business realities.
Step four
Take each portion of the current state and drill down a min-
imum of one layer to the details of constituent processes, flows,
components or influences. Assess the processes and document
interfaces as well as the “softer” sides discussed in step two. This
drilling down allows you to clearly see the interaction of the var-
ious flows, both technical and social, and to gather more specific
data for analysis.
Step five
Overlay all informational, social and technical components of
the flow not already captured and mapped. Validate the connec-
tions, interrelationships and decision points of the work break-
down in its current state. Add any shared service or enabling
infrastructures such as IT, human resources and leadership to the
map. Ensure that the information gathered reflects your current
business reality. Challenge any details that are merely assump-
tions, exaggerations or oversimplifications.
Step six
Capture relevant data that’s measured in terms defined by the
company, suppliers and customers, and ensure definitions are con-
sistently understood to prevent data comparison flaws.You want
to capture the metrics or information available for each process
piece and analyze/link the behaviors that each generates. Conduct
assessments, interviews or nonadvocate reviews to capture other
data elements and create a comprehensive view of the total
supply chain.
Step seven
Analyze and identify wastes, inhibitors of flow and value,
costs, risks to flow and risks to success criteria. Group these find-
ings into enterprise themes and then analyze how each affects
time, resources and money. It’s important to re-analyze step five
to ensure that nothing was missed.
You may be thinking many of the tasks in steps two through
seven are redundant. They are, and that’s intentional. Without a
true and complete representation of a company’s current state, any
hope of achieving an effective future state is moot.

4. 38 Write in RS No. 24 or visit www.qualitydigest.com
Step eight
Create an ideal state based on a joint
definition (i.e., by supplier, customer and
company) of perfection. Include tech-
nical and social elements of this state
such as work and information on demand;
one-by-one processes or single-piece
flow; defect-free work in administrative,
production or service processes; lowest
possible cost; committed and capable
workforce; autonomous decision-making;
rewards linked to performance; goal align-
ment and communications. Obviously,
achieving perfection is impossible, but
setting it as a goal encourages break-
through thinking and analysis that will
create a more robust future state. It also
allows quality professionals to more fully
integrate into the enterprise, thus elimi-
nating any lingering “quality cop” images.
Step nine
Map out a future state you can reach in
a relatively short time—e.g., 12 months—
based upon the ideal consensus. Consider-
ation must be taken of the behaviors
required for success as well as success
criteria determined by the customer, com-
pany and suppliers.
Step ten
Assess and analyze the gaps in the
company’s ability to achieve the future
state. Create a balanced set of measure-
ments for success, and confirm that the
behaviors generated conform to future-
state directives. A balanced scorecard
approach allows those involved to create
measures that complement each other.
They can also use lean and Six Sigma to
evaluate processes.
For example, service turnaround time
is a typical lean metric. An additional
and balancing Six Sigma metric would be
to measure the percentage of service pro-
vided within x number of days. This
ensures the team meets requirements for
average turnaround time and minimizes
variation around that average. Execution
of that particular process in the future
state then becomes a given. What is
quality if not the clear and successful
execution of agreed-upon requirements
between suppliers, customers and the
company?
Additionally, validate any gaps found
and return to step seven in order to capture,
measure and complete the mapping.
Step eleven
Establish and implement actions, pro-
grams and events to help create value and
eliminate waste, thereby achieving the
future state. Create necessary infrastruc-
ture to ensure leadership, integration,
course corrections, validation and account-
ability for the changes. Analyze risks,
change-management issues and other
inhibitors to successful implementation.
Ensure actions allow for a total supply
chain view that will create a win-win sit-
uation for all stakeholders.
Step twelve
Establish a renewal period—say, a
rolling 12-month view—to revisit and
adjust the future state as it moves toward
the ideal. Build into this process stake-
holder enrollment, ownership and account-

5. 40 Quality Digest/August 2004 Write in RS No. 51 or visit www.qualitydigest.com
Enterprise Leadership
Shared Services (Accounting, IT, HR, Legal, Health and Safety, etc.)
Interactive Process Flows
Systems/
program/
product
management
Market
definition
and business
planning
Strategic
and financial
planning/
acquisition
Pursuit
and order
capture
Design and
development
Procurement
and build
Service and
support
A Buisness Life Cycle
ability for all actions and ongoing analyses.
Many quality professionals consider this
step critical. Each opportunity to discuss,
raise issues, analyze and renew activities
with the total supply chain allows stake-
holders to integrate the social changes
needed for success.
Which brings us to our last question.
What is social-technical
integration?
To ensure lasting support and buy-in
from all stakeholders, companies must
integrate the social and technical aspects
of change management that occur in a
joint lean/Six Sigma transformation. Each
stakeholder noted in the 12-step process
has a personal stake in the company’s
future success, and they will naturally
form emotional attachments to the process
in anticipation of the expected outcome.

6. 41
By integrating lean and Six Sigma approaches throughout the
total supply chain, companies can manage change more effec-
tively, engage customers and vendors, and ensure success.
Quality professionals must recognize and embrace this concept.
It’s been said many times that the “soft stuff is the hard stuff.”
That’s not really true. It’s the interaction of the social aspects of
business—typically called the “soft stuff”—with the technical
aspects that truly becomes the hard stuff.
The overlapping area in the above diagram denotes where a
quality professional can add the greatest value. Leaders must
loosen up and realize that success doesn’t happen simply by com-
plying rigidly to a standard. True success comes from delivering
value. Great quality systems and leaders in the future will emerge
from applying lean and Six Sigma throughout the supply chain.
The two approaches will force an internal and external focus well
beyond the technical parts of a business.
Quality isn’t a department, and the supply chain isn’t a buzz-
word for aligning organizational structures, creating centers of
excellence or facilitating more silos for servicing customers. If
we extend W. Edwards Deming’s fundamental point of eliminating
“walls” between organizations to include suppliers and cus-
tomers as intimate and integral parts of our processes, we’ll truly
realize our quality potential.
About the author
Derrell S. James is the general manager of Sypris Test and
Measurement’s calibration division. He has 15 years of experi-
ence in operations leadership and business development in high-
technology manufacturing and service industries. James is a
frequent speaker and writer on leadership, lean and continuous
improvement, and operational effectiveness.
Sypris Test and Measurement is a leading provider of calibra-
tion services, test and measurement services, and specialty prod-
ucts to major corporations and government agencies. Sypris’
nationwide network of state-of-the-art fixed and mobile calibra-
tion laboratories are certified by A2LA for ISO/IEC 17025 and
are also ISO 9001-registered. Visit www.calibration.com or
www.sypris.com for more information.
Write in RS No. 35 or visit www.qualitydigest.com
This is the “hard” part!
Technical
Hardware
Equipment
Task
Technology
Process flow
Layout
Floor space
Social
Information flow
Attitudes/beliefs
People skills
Structure
Relationships
between groups
Culture
Finding A Balance
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