Page 394 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

354 Chapter Ten

with the enterprise resource planning (ERP) system for the organization,
based on the need to customize the purchasing and supply information
system to match the unique processes of the organization.

The common problems in the purchasing and supply process include
1. Wrong material or wrong specification delivered
2. Poor material quality
3. Material shortage
4. Material not delivered on time
5. Difficulty in finding needed material
6. Waste through spoilage, material obsolescence, and wrong item rdered
7. Wrong specification ordered
8. Excessive delay in order processing
9. Excessive delay in payment processing
10. Financial loss due to fraud, lawsuit, or inappropriate supplier payment
11. Excessive inventory on hand
12. Escalating material purchase cost
These common problems are often caused by
• Problem in coordinating action and decision making with suppliers
• Flow synchronization of long-lead-time items
• Mismatch between material flow methods (for example, lean and mass
production systems)
• Poor or inadequate communication with suppliers
• Mistrust between suppliers and customers
• Cultural differences
• Market complexity (number of suppliers, number of items to order)
• Market uncertainty or turbulence
• Poor decision-making processes
• Poor product or technology knowledge
• Poor project or process management
Numerous strategies have been applied, in various situations, to enhance the
efficiency and effectiveness of purchasing and supply activities. Each
strategy has some unique area of application relative to the different causes
of process performance problems. The following list shows a number of
these strategies.
• Production planning and scheduling
• Inventory management
• Enterprise resource planning (ERP) systems
• Information sharing with suppliers (e.g., end-customer data, sales
trends, and forecasts)