Six-Sigma Guidelines to Improve Inventory Management in a Bottling Company

Abstract

Warehousing allows timely distribution of goods between suppliers, manufacturers, retailers, and end customers. Thus, its optimal performance is crucial for the global supply chain. While there are methodologies to accomplish its optimal performance, few practical cases are reported in the specialized literature. This work describes the implementation of Six-Sigma to improve the warehousing operations associated to inventory management in an international bottling company in Mexico. This was performed through the DMAIC methodology with the following qualitative and quantitative tools: 5WH1, Root Cause Analysis, Ishikawa Diagram, SIPOC, and the 5 Why’s. After a three-month implementation plan, the improved inventory policies reduced stockout/overstock risks, order rejection rates, warehouse saturation, loading/unloading maneuvers, unsuitable storing practices, and increased distribution fleet utilization. These improvements implicated expected annual savings of approximately $4.0M, which can be increased if other processes beyond warehousing such as route and location planning are considered. The implementation details contribute to the limited case studies literature that can support the application to solve warehousing problems in other industries.