Supply chains are the lifeline of any business. They provide goods and services to customers in a timely manner and at a competitive price point. But to do this, they need to use the right strategies, like Agile Sigma.

When the pandemic struck, supply chain managers were left scrambling. Pandemic-related shortages and supply chain issues caused a host of disruptions in the movement of goods across all industries. 

As a result, COVID-19 increased the pressure for businesses to grow, innovate, and adapt. Supply chain managers were pushed to find new tools and implement strategic methodologies to respond quickly and remain competitive in the industry.

However, there are many complex processes and variables in even a simple supply chain. So much so, that it’s undoubtedly challenging for managers to find strategies that will keep up with customer needs, market demands, and the advancement of innovative technology.

To address these challenges, businesses and corporations have developed methodologies that enhance business process performance and meet changing customer demands. Two of these are agile methodology and Lean Six Sigma methodology. While powerful on their own, when combined, they maximise the efficiency of your supply chain significantly.

Before jumping into how these 2 methodologies work together, let’s first discuss each method separately. Then, you’ll eventually see how they come together in a strategic hybrid to optimise your processes.

What is Agile Methodology in the Supply Chain?

Agile methodology deviates from traditional processes that are more prone to human error. It’s basically any system that allows you to increase speed without sacrificing quality. 

You can apply agile methodology to many facets of a business, including a complex supply chain. Many companies such as global apparel brands H&M, Mango, and Zara have already adapted this thinking. And in doing so, they can optimise their process and increase profits, prioritising agility in every section of their supply chains. All of which are essential if you want to survive the global supply chain crisis we’re seeing today. 

In a nutshell, the key concepts of an agile supply chain are the following: 

  • Using Agile Technology: Integrating technology in your supply chain processes helps you have full visibility of your business. You’ll have access to real-time data and information that allows you to react quickly to the changes in the market.

Technology also helps enhance your inventory management and demand forecasting, avoiding excess inventory and potential shortages of goods that can result in significant loss of profit.

  • Prioritising Flexibility: Along with better processes come flexibility and receptiveness of your supply chain. Being agile means you can easily pivot processes to cater to customer demands. 

After all, customers are the ones who will keep your business operatingーso it’s necessary to accommodate their needs as fast as you can.

  • Developing Better Partner Relationships: In every business, you will always work with suppliers to deliver the materials you need. So, implementing agile methods means having solid partnerships with your suppliers, working closely with them at all times to create your products quickly and efficiently.

Prioritising agility in your supply chain means being open to systems that will lead to process efficiency without losing any product quality. It’s a way of thinking—leading to better decision-making at a management level.

Now that you’re familiar with agile methodology, let’s see how Lean Six Sigma methodology is different.

What is Lean Six Sigma Methodology in a Supply Chain? 

Lean Six Sigma is a combination of lean principles and Six Sigma to improve production processes. This methodology integrates all the concepts that improve process efficiency and a set of management techniques to reduce variation, defects, and errors in a process. 

By using Lean Six Sigma in your supply chain, you can improve in the following areas: 

  • Increase Revenue: Provide a consistent service to your customers with your hyper-focused supply chain processes. Your dependable service will likely result in more satisfied customers一giving you more pricing power and higher revenues. 
  • Decrease Order Fulfilment Time: Spot areas with high degrees of waste and variance in your fulfilment process. Once identified, you can correct inefficiencies by reducing paperwork and automating processes like picking, shipping planning, and shipment verification to increase productivity.
  • Minimise Unnecessary Efforts: The lean methodology allows you to identify and eliminate non-value-adding processes methodically. Through this, you can avoid overproduction of goods, unnecessary transportation of materials, and poor production facilities that add irrelevant work.

The Lean Six Sigma methodology guides and points you toward better improvements of your operations. It gives you the ability to increase customer satisfaction while reducing costs.

So, both methodologies are already robust in their ways. How does combining both further improve your supply chain?

Agility + Lean Six Sigma = Agile Sigma 

Agile methodology is using systems that will give you speed, collaboration, and efficiency in the supply chain. On the other hand, Lean Six Sigma helps you optimise your processes by implementing lean principles and management techniques.

Luckily, you don’t have to choose just one. You can benefit from a synergy of the two and combine agile methodology with Lean Six Sigma to get what we refer to as “Agile Sigma.” This method means constantly searching for the best way to provide value for your customers, optimising processes while retaining rapid product delivery. 

Here’s how Agile Sigma trumps other methodologies: 

Graph comparing metholodogies

Source: Korina Mercado

Integrating Agile Sigma in your business is better than employing just one of agile methodology or Lean Six Sigma methodology. As you can probably see from the chart above, Agile Sigma provides top-notch flexibility for supply chains to achieve the highest efficiency and effectiveness. 

The secret is to balance customer-centricity, variations and cost reductions, fast delivery speed, and market share growthーall the while being responsive to the changes in market demands. 

Achieving the Highest Possible Agility in Your Supply Chain

Supply chain disruptions are inevitable, but they don’t always mean profit depletion. By adapting methodologies to navigate through any sudden changes, you can guarantee continued business operations consistently, even with the most unexpected of situations.

Using this guide we’ve provided, Agile Sigma can certainly put you in the right direction towards supply chain simplicity and resiliency. The methodology allows you to deliver results quickly with data-driven, customer-centric decisionsーall for increased revenue generation.

Ready to employ Agile Sigma in your supply chain? 

If so, then we recommend that you start with a low-level integration of the methodologies, slowly building towards combining the two processes. You’ll want to get familiar with agile technologies, tooーa key factor to achieving the highest supply chain efficiency. 

As always, our team in Good for Life can help you get started. Get in touch with us today to learn about our sustainable suppliers and agile technologies for improved processes across your supply chain.