A Six Sigma Approach to Shipping Management

Written by Mike Osborne on . Posted in management-transportations

Shipping is considered by some as just another cost of doing; however, it is also deemed a source of differentiation or significant savings by others.  While there seems to be awareness of the opportunity, the potential savings and improvements seem elusive to many – causing them to scale back their pursuit of improvement. And, so long as freight gets from point A to point B, the priority placed on making changes remains low and an opportunity is missed. Shipping, is a facet of business worth ample attention and consideration; behind materials and labor, it ranks as the third highest source of expenditures for most companies.

Consequently an effectively managed shipping plan is a tremendous asset to any business. The cost-savings it produces, and the efficiency it ensures, directly impact an organization’s overall value. A well devised shipping strategy enables continuous improvement. This is achieved through the following steps:

·      Issue identification ­– The fundamental component of shipping management is the ability to recognize areas for improvement, because before you can fix a problem, you have to know it exists. Experience and industry benchmarks are useful in identifying the opportunities.

·      Measuring – The only way to properly prioritize projects for improvement, and produce impactful and desired results is to establish metrics that create quantifiable visibility into the intricacies of each process. If you can’t measure it, you can’t fix it.

·      Solution development – Once the areas for opportunity are currently understood and documented, they can be compared against best-in-class solutions.  The difference, or the gap, can serve as the input to the road map. It will also further quantify the savings opportunities and efficiencies that stand to be gained.

·      Controlling and implementation – Solutions designed to have a positive impact can be implemented, and are continually monitored after deployment. This ensures they generate the intended impact.

·      Maintaining processes – Processes that are refined should continually be monitored to make sure that no new issues arise as a result of any optimization. This also allows the accommodation or adoption of any new developments that enable further improvement.

Making these policies part of a shipping strategy will greatly benefit any company. Shipping is a vital – though regularly overlooked – step within operations, that is able to produce significant value when managed effectively. If the Six Sigma program is adhered to, the impact generated is far beyond what one might expect.