Using the six-sigma metric to measure and improve the performance of a supply chain

The need for a comprehensive, flexible and adaptable framework for evaluating the performance of a supply chain and its entities has long been felt. It is also recognized that such a framework is more effective if the performances of various processes and entities can be measured on a common scale and benchmarked against world-class standards. In this paper, it is shown how the six-sigma metrics, immensely popular across the globe today, can help an organization in this regard. The motivation behind the integration of the two concepts comes from the versatility of the six-sigma metrics in performance measurement, certain similarities in the two approaches and research results establishing that supply chain management can be enriched through application of quality management principles. A structured methodology, with which the performance of a supply chain and its entities can be effectively measured, monitored and improved with the help of the six-sigma metrics is presented. The method is also illustrated with a case example.