Improvement of Direct Procurement Phase of a Company : Application of Lean Six Sigma philosophy on Supplier Relationship Management (SRM).
Antipov, Ivan (2020)
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020120927140
https://urn.fi/URN:NBN:fi:amk-2020120927140
Tiivistelmä
This thesis research aims at identifying Supplier Relationship Management (SRM) failure root-causes and defining problem preventive actions based on application of the Six Sigma process improvement approach.
Organizational success is based on a company’s ability to obtain the required raw materials, other supplies and services that allow factories and mines to keep operating. Procurement process is often a key part of a company’s strategy. The approach a company takes to onboard and manage suppliers while building beneficial business relationships is critical for further favourable procurement activities. This fact indicates the importance of supplier relationship management (SRM) for efficient risk management and market competitiveness of an organization.
SRM initiatives often fail to deliver the expected results due to implementation complexity. In order to streamline the business process of SRM, concept of Lean 6 Sigma was applied for identification and elimination of process defects and waste. The DMAIC (Define, Measure, Analyse, Improve, Control) approach was utilized for identification of process obstacle root causes and determination of failure preventive actions.
Research outcomes included an evaluation of buyer-side level of acknowledgement of SRM and identification of SRM failure root causes. The study showed that the process usually fails to deliver due to low level of commitment – lack of invested resources and poor communication. As the program obstacles are always interrelated, regular SRM program analysis and evaluation is required for ensuring the required process deliverables. The study provides SRM initiative continuous development framework as it has theoretical foundation and process improvement technique application pattern.
Organizational success is based on a company’s ability to obtain the required raw materials, other supplies and services that allow factories and mines to keep operating. Procurement process is often a key part of a company’s strategy. The approach a company takes to onboard and manage suppliers while building beneficial business relationships is critical for further favourable procurement activities. This fact indicates the importance of supplier relationship management (SRM) for efficient risk management and market competitiveness of an organization.
SRM initiatives often fail to deliver the expected results due to implementation complexity. In order to streamline the business process of SRM, concept of Lean 6 Sigma was applied for identification and elimination of process defects and waste. The DMAIC (Define, Measure, Analyse, Improve, Control) approach was utilized for identification of process obstacle root causes and determination of failure preventive actions.
Research outcomes included an evaluation of buyer-side level of acknowledgement of SRM and identification of SRM failure root causes. The study showed that the process usually fails to deliver due to low level of commitment – lack of invested resources and poor communication. As the program obstacles are always interrelated, regular SRM program analysis and evaluation is required for ensuring the required process deliverables. The study provides SRM initiative continuous development framework as it has theoretical foundation and process improvement technique application pattern.