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Inventory Control Process, Value or Non-Value added

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  • #255641

    JPopwell
    Participant

    Hello,

    I am new to the ISIXSIGMA forum and joined to get help with a Six Sigma Green Belt certification project. I have had a 40 hour class and now I have to complete a project with two other coworkers.

    Our project revolves around Inventory Control. I am struggling with defining if my process steps are Value vs Non-Value added. My process steps include: Product Put away (scan), Product movement, Cycle Counts, Cycle count approval, Correcting inventory errors, Pulling product for Recommerce, Variance documentation.

    Has anyone had any experience with Inventory Control in a Six Sigma project and would have knowledge to answer my question? My first thought is that non of these steps are value added, but that doesnt seem right to me.

    Has anyone ever done a project where the process steps are all “Non-Value” added?

    Thanks for any responses you may have!

    JPopwell

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    #255650

    Strayer
    Participant

    Inventory control is the lean side of lean six sigma rather than the quality-oriented original six sigma. You probably learned in your training that a step is value added if it changes the product or service in some way that the customer wants and it’s done right the first time. Everything else is essentially waste. Ask how inventory control adds value to the end customer. It will help if you think of it in terms of a service rather than internal cost reduction. If a step helps you deliver high quality products faster and at reduced cost, you might call it value added. Everything else, such as inspection and error correction should be optimized if not eliminated.

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    #255651

    Strayer
    Participant

    I want to add that my previous response is based on experience with a former employer where we wanted all salaried employees to be green belt and, since the benefits of six sigma in some other companies had been questioned because it couldn’t be seen in bottom line financial statements… We had lots of people doing their projects in internal processes such as HR, payroll, etc. We insisted that the cost savings be signed off by finance, the use of six sigma tools by that group, and the benefit to end customers by management. We came up with a variant of six sigma for internal processes to better deal with the definition of value added. Sorry that I can’t say more about it since it’s proprietary. But you can find information about six sigma for internal and administrative processes on this site and elsewhere that might be helpful.

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    #255665

    JPopwell
    Participant

    I appreciate that response Straydog! I’m still struggling with whether or not Pulling a product, to be sold, is value added step? I know most all other steps in my inventory process are NVA. I know preparing product to ship is value added but that is out of my scope. Would pulling the product fall into preparing the item to ship and therefore mean it’s added value? Pulling product takes making a scan on a scan gun to remove product from inventory. Our inventory accuracy is our problem, we make mistakes when we scan. That’s why Pulling product to be sold is the last step in our scope.

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    #255667

    Strayer
    Participant

    You’re on the right track. An error pulling the product is a defect that affects the end customer. Doesn’t the fact that this defect occurs imply that this step must be value-added? It doesn’t change the product but it’s a crucial part of the service. Write a problem statement that’s concise, specific, and fact-based about product-pulling errors. That’s the basis for your charter. And now nothing in your internal inventory control process is out of bounds.

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