Reducing Operational Costs through Lean Six Sigma in Supply Chain Processes

Abstract

The modern supply chain is often burdened by inefficiencies and high operational costs, which can erode profitability and hinder business growth. In recent years, businesses have increasingly turned to Lean Six Sigma methodologies to address these challenges. This research explores the application of Lean Six Sigma principles in optimizing supply chain processes, with a specific focus on reducing operational costs. By integrating Lean's emphasis on waste reduction and Six Sigma's focus on process variation, organizations can create more efficient and cost-effective supply chain operations. The study begins by outlining the theoretical foundations of Lean Six Sigma and its relevance in contemporary supply chain management. Lean principles aim to eliminate waste (non-valueadding activities) in processes, while Six Sigma techniques focus on reducing variability and defects in performance.
Together, these methodologies provide a comprehensive approach to process improvement that addresses both cost
reduction and quality enhancement. The paper further delves into the tools and techniques commonly used in Lean
Six Sigma, such as value stream mapping, process flow analysis, DMAIC (Define, Measure, Analyze, Improve,
Control), and root cause analysis.