Applying Six-Sigma to Supplier Development

Abstract

Supply chain management (SCM) adopts a systematic and integrative approach to managing the operations and relationships among different parties in supply chains. To implement SCM successfully involves a lot of issues. One of the major issues is supplier development. On the other hand, studies have investigated how quality management can be employed in SCM to improve the performance of various issues in the whole supply network. This study will develop an application guideline for the assessment, improvement, and control of quality in SCM using Six-Sigma improvement methodology. Improvements in the quality of all supply chain processes lead to cost reductions as well as service enhancements. In our approach, supplier evaluation is conducted by principal component analysis. The measurement data from 25 suppliers of a PC manufacturer in Taiwan, including two major input variables and three major output variables, will be used for demonstration.

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