Lean Six Sigma in Service Companies

A production strategy where products are built only after a customer places an order. This allows for high customization but can lead to longer wait times.

A production strategy where basic parts are pre-manufactured and assembled after an order is received. This allows for a faster delivery and some level of customization.

A production strategy where products are designed and manufactured from scratch according to specific customer requirements. This caters to complex, unique needs and often involves extensive engineering.

The view of a supply chain that focuses on the different processes and their owners within the chain. Helps identify and analyze key processes.

A series of inter-connected processes that contribute to the end-to-end supply chain process.

The process of coordinating and planning different aspects of the supply chain, ensuring smooth operations and meeting demand.

The number of orders received and the size of each order. These factors influence the complexity of managing the supply chain.

The level of uncertainty about future demand. Sharing information and having effective policies become more important as uncertainty increases.

The ability of a third party to achieve further scale economies and increase surplus is less likely when the demand is large.

Third parties can potentially increase surplus through aggregation when requirements are highly variable over time.

It's less likely for a third party to increase surplus if assets required are specific to a particular firm.

A firm benefits the most from outsourcing to a third party when its needs are small, uncertain, and shared by other firms.

The total cost of ownership considers acquisition, ownership, and post-ownership costs.

Auctions are best suited when the acquisition cost is the primary factor in the total cost of ownership.

Auctions may not be appropriate when post-ownership or ownership costs are significant.

Supplier performance should be evaluated based on its impact on the total cost of ownership, considering all three components.

The use of AI to predict future sales, optimize delivery processes, and reduce storage costs in retail.

The use of AI to analyze historical data and patterns to predict future sales performance, especially considering past events and recurring trends.

The use of AI to automatically process sales orders from unstructured data like emails, extracting key information like customer details, product SKUs, quantities, and prices.

The use of AI to analyze data from various sources within the supply chain to provide real-time insights into product flow, documents, and overall supply chain health.

The use of AI to improve stock forecasting, reduce stock holding, optimize delivery processes, and identify false stock in a supply chain.

A methodology that combines Lean and Six Sigma principles to achieve faster processes, lower costs, and higher quality. It focuses on eliminating waste and reducing variation to improve efficiency.

A structured approach used in Six Sigma projects to define, measure, analyze, improve, and control processes.

The initial phase of a Six Sigma project where the project scope, deliverables, team, and project plan are established.

A tool used to understand the scope of a process and identify its key elements. It stands for Suppliers, Inputs, Process, Outputs, and Customers.

Processes that have a direct impact on the customers of the business. Examples include production, marketing, and order execution.

Processes that support the core business processes to function effectively. Examples include maintenance, IT, and purchasing.

Processes that guide, direct, and control core and support processes. Examples include planning, budgeting, and controlling, and strategic management

The process of identifying stakeholders involved in a project and determining whether they have a positive or negative stake. This information is used to plan communication and team composition.

The ability of machines to learn and adapt based on data, similar to how animals and humans gain intelligence through experiences. This involves processing information, identifying patterns, and making predictions.

A specialized subset of machine learning that uses artificial neural networks, inspired by the structure and function of the human brain, to learn and solve complex problems.

A type of machine learning where the algorithm is trained on labelled data, meaning each input is associated with a known output. It enables the machine to predict outputs for new, unseen inputs.

A type of machine learning where the algorithm learns from unlabelled data and discovers hidden patterns or structures. It is used to identify clusters of similar data points or to reduce data dimensionality.

A subset of AI that focuses on enabling machines to understand, interpret, and generate human language.

AI systems that can generate creative content, such as text, images, or code, by learning from vast amounts of training data. They can produce realistic and coherent output based on given prompts or constraints.

A software or service platform that allows users to access and utilize powerful language models without having to build and maintain their own infrastructure.

A phenomenon where AI systems produce incorrect or nonsensical output due to limitations in their training data or understanding of the world. This is a known limitation of AI, especially when dealing with complex or unfamiliar situations.

The ability of a company to effectively utilize its resources, like capacity, timing, and location, in a way that aligns with its competitive strategy.

The strategies and processes companies use to manage their supply chain, from raw material procurement to final delivery, to ensure they meet customer needs efficiently and effectively.

The process of analyzing customer needs and demand patterns to determine the best way to shape demand to align with available supply.

The strategies and choices companies make about where they source their raw materials and components, including whether to source locally or offshore.

The process of identifying distinct groups within a market that have similar supply chain requirements and creating different supply chains to meet their specific needs.

The theory that a company's supply chain strategy should directly support and enhance its competitive strategy.

The process of assessing and analyzing a company's supply chain capabilities and performance to identify areas for improvement and optimization.