The Logistics Bridge Model

Both Lean and Six Sigma lend distinctive disciplines and tools to supply chain management and logistics. Using these disciplines and tools will allow an organization to uncover and deal with wastes and inefficiencies. Although Lean and Six Sigma tools are very powerful, we need to remember that for Lean and Six Sigma to work in logistics, a fundamental mind shift must occur. This mind shift requires that we first begin making decisions based on the concept of “Total Logistics Costs,” and second, we have the courage to eliminate waste in its various forms. This may sound simple but in reality will prove otherwise. Organizational norms, management tradition, and financial accounting methods will fight against “Total Cost” and will continue to support our natural tendencies to create waste. The Logistics Bridge Model provides a template for the design and implementation of a logistics strategy based on Lean and Six Sigma principles.

The Logistics Bridge Model is a model that can be used as a compass for the supply chain professional. That is, it will provide direction and insight on how to solve today’s logistics challenges. At the heart of these challenges is the need to bridge our suppliers with our own processes and then bridge our processes to the customer. All this must happen while we face competitive and shareholder pressures to increase market share and reduce costs.

The Logistics Bridge Model teaches us that Lean Six Sigma Logistics is made up of three main principles. These principles are:

1. Logistics Flow

2. Logistics Capability

3. Logistics Discipline

Logistics Flow

Flow is a crucial tenet in any corporate logistics strategy. The CEO recognizes that elements of flow are inherent in every business function. Understanding flow inside the organization allows the firm to understand its strengths, weaknesses, opportunities and constraints. Flow describes the operational effectiveness of the company. The CEO will be most interested in three types of flow: asset flow, information flow, and financial flow. How productive are the assets, how do we manage information, and how do we generate a return on our investment? These three key elements of flow form a foundation that is closely tied to supply chain and logistics activities, creating awareness of the importance of flow and strategic logistics management.

Logistics Capability

Logistics Discipline

Maintaining flow and capability requires discipline. Discipline is the third key focus area for CEOs as they develop a logistics strategy. Enlightened CEOs recognize that logistics and supply chain management are not about technology, but rather about people and process. For people and processes to be effective, there must be discipline to the principles and strategies being used. Lean is a quintessential example of the importance of discipline. Many executive managers review the principles of Lean and recognize them as nothing more than common sense. Yet their attempts at implementing Lean fail miserably! Why? The number one cause of failure is lack of discipline. Lean Six Sigma and eliminating waste is not difficult conceptually. At the end of the day, it is nothing more than a lot of hard work. And hard work requires discipline. To work hard and to work smart require a commitment to the principles and consistent application of the tools. Relative to logistics, discipline is extremely important. The Logistics Bridge Model describes logistics discipline as focusing on three main aspects: Collaboration, Systems Optimization, and Waste Elimination. These three tenets will drive discipline and success and are necessary to support any corporate Lean Six Sigma initiative.

Logistics Bridge Model – Getting Started

In summary, the Logistics Bridge Model starts with higher-order principles that will be the focus of the top executive of the organization: Logistics Flow, Logistics Capability, and Logistics Discipline. Once the CEO believes this is the proper strategic approach to logistics, the CEO can pass the strategic focus areas to the next level of management.

Senior management will be tasked with implementing the three key Lean Six Sigma Logistics principles. This takes us to the next level of tenets in the model. Logistics Flow will focus on Asset Flow, Information Flow, and Financial Flow. Logistics Capability will focus on the logistics system’s Predictability, Stability, and Visibility. Logistics Discipline requires strategies focused on Collaboration, Systems Optimization, and Waste Elimination.

In the end, the senior executive will embrace these nine second-order tenets and will develop an execution plan to implement the strategies, engaging the next management level of the organization. This takes us to the level of the doers, the people who have to implement the strategy. These are the people who have to get it done! Fortunately, the Logistics Bridge Model has developed third-order tenets. These are the strategic areas that the implementers need to focus on, twenty-seven tactics that represent the best of what Lean and Six Sigma have to offer to supply chain organization and processes.