Abstract
Nowadays, under highly intensive market competitive pressures, enterprises inside are continuously facing clients’ needs to shorten the lead-time; enterprises outside are confusing the ambiguous market needs. Thus, in the manufacturing conception of global competitive market, although inventory is viewed as essential assets, overstock still implies accumulation of assets and the loss competitiveness. How to balance the supply chain inventory management between low costs and high efficiency has become one of important goals for enterprises. The present study is to show the experience of W company which has successfully and effectively implemented Six Sigma application to reduce excess inventory. Therefore, in order to decrease the problem inventory, the W company launched a Six Sigma project by use of the improvement procedure of Six Sigma ─Define, Measure, Analyze, Improve, and Control (DMAIC)─ to reduce the bullwhip effect from internal process. This project used statistical methods to seek for the vital influential factors. Finally, the company improved the disconnected processes so as to decrease excess inventory and further to enhance the company’s internal competitiveness. The W company without influencing client service level obtained the benefits including the decrease of problem inventory rate from 14.9% to 6% and the scrap rate from 5.2% to 0.9%. The overall costs saved about $0.9 million US dollars and made the company further enhance productivity and competitiveness. In addition, due to the Six Sigma project executed, the relevant department members can understand more about the process involved of the relationship between input and output. It not only strengthens teamwork consciousness, but deeply integrates Six Sigma into the enterprise culture and further achieves enterprise’s ultimate goal of continuous improvement and sustainable operation.