Suppliers try out better ways to satisfy their customers, and the customers are on the lookout for getting maximum value from the supplier’s products and services.  Thus, it is a win-win situation.  It is important to establish strategic partner relationship between suppliers and customers for integrating the joint process improvement projects.  Basically, the key elements to this include:

• Formation of Steering Committee
• Methodology to be adopted
• Budget of project and its funding
• Confidential agreements

This approach is very comprehensive and involves equal responsibility and execution on both sides.

The foundation step is to form a steering committee comprising of members from both the organizations.  The participants should hold equal levels of responsibility in their respective organizations.  The steering committee so formed would establish the partnership rules, the modes of communication and frequency of team meetings.  Then discussions are held for initiating new projects on process development, status of existing projects, and the method of handling problems.  It is ideal to hold a quarterly face-to-face meeting of the steering committee to update project status and also to voice concerns of committee members.  But it depends upon the nature and duration of project.  For shorter project cycles, a monthly conference call would hold good.  Client confidentiality should be mainly specified in the Master Service Agreement.  For reaching common goals, it becomes essential to work together in an open and honest fashion.  Sharing of some confidential information in this process is quite okay.

After its set up, the steering committee has the crucial task of establishing common terms and methodology to be adopted.  It is recommended that strong methodologies like Six Sigma and Lean Six Sigma are adopted in both the organizations in lieu of their effective tools and techniques.  Six Sigma tools can be utilized for effective visual illustration of current and future process flows.  Some examples of these are Process Maps, Value Stream Maps (VSM), Spaghetti diagrams, and SwimLanes Maps.  The Steering Committee should also define common operational terms to avoid conflicts.  In case the organizations have different definitions for terms, then it has to abide by the published regulations, like Chemistry, Manufacturing, and Controls (CMC) which is defined by Good Manufacturing Practice Guidelines, and the Sarbanes-Oxley (SOX) documentation on financial matters.  If any one organization is more experienced in the types of process improvement methodologies needed for the project, then it should be acknowledged and their opinion should be considered specially.  The other partnering organization should also be given adequate training so that they can function on equal footage.

Utilization of Six Sigma demands buy-in from both teams, which is brought about by voicing on the project from both parties, and recognizing the experiences of each Black Belt and Master Black Belt member in the team.  There may be conflicts sometimes in cases of reorganization.  Anyway, both the parties should strive to work in harmony in their joint efforts to achieve common goals.

During the phase of the process improvement project, it is likely that both suppliers and customers benefit from the experience.  It may help the supplier to become more productive and efficient, and he is likely to pass on its benefits such as lower prices, faster delivery, etc. not only for this client, but also for others.  The customer is also likely to get benefitted such as bringing products faster to market, reasonable product cost, etc., and he will pass on those benefits in the form of placing more orders with that supplier.

A win-win situation is thus arrived at when both the organizations get benefitted from the joint process improvement project.  These are the key factors while integrating process improvement projects between vendors and customers.

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Lean operates on the principles of removing wastes of any process, thus accelerating the velocity and reducing process costs.  It basically focuses on speed.  Six Sigma operates on the principles of reduction of variations and improvement of process yield.  It basically focuses on quality of any given service or product.  Quality and speed and complementing factors, and thus Lean and Six Sigma methodologies complement each other.   To have a competitive edge over others, you should effectively combine both Lean and Six Sigma tools and principles.  Their combination holds the perfect toolkit for addressing almost all types of process problems.

Six Sigma contains certain drawbacks which can be rectified by Lean.  For example, Six Sigma effectively eliminates defects, but it does not address the issue of process flow optimization, which is done by Lean.  Lean Six Sigma helps to create an effective process stream map and helps identify value add costs and non-value add costs.  It helps to address CTQ (customer Critical To Quality) by capturing voices of customers and using simulation methods.  Based on their delay time, the projects within a process are prioritized.  This helps to identify activities involving high defect rates (Six Sigma tools) or long setups (Lean tools).  The manufacturing process highly benefits from reduction in capital expenditure and working capital.

Lean provides tools for reducing lead time (like setup reduction) and for controlling lead time (like Pull systems).  Lean also fits very well within the DMAIC process of Six Sigma and has proved to be an important complement to Six Sigma.  The Kaizen approach in Lean is also used for accelerating the rate of improvement.

Many organizations have benefitted dramatically from the combined use of Lean and Six Sigma methodologies. Lean Six Sigma methodology has been applied in all kinds of processes ranging from manufacturing to healthcare in the last 15 years.