DMAIC CASE STUDY 1
DMAIC Case Study
Joseph Howell
School of Business, Liberty University
DMAIC CASE STUDY 2
Abstract
The primary focus of this case study is to improve the accuracy and efficiency of the
procurement process within a shipbuilding company. Employing Lean Six Sigma principles, the
project team attempts to recognize and address the root causes of purchasing errors, reduce error
rates, and increase customer satisfaction for the shipbuilder's procurement processes. The case
study will follow the DMAIC (Define, Measure, Analyze, Improve, Control) framework utilizing
a number of Lean Six Sigma tools to evaluate the current procurement process, identify
opportunities for growth, implement repeatable standardized resolutions, and establish control
processes to maintain the improvements over time.
Keywords: procurement, customer satisfaction, tools, root causes
DMAIC CASE STUDY 3
DMAIC Case Study
In the highly competitive, complex industry of shipbuilding, purchasing errors can
drastically impact customer satisfaction, manufacturing effectiveness, and organization
performance (Patil & Bhaduri, 2020). Purchasing errors can lead to incorrect materials, delayed
shipments, and delayed production timelines (Janita et al., 2023). Mericom, a shipbuilding
company, has initiated a project designed to improve the procurement process to address these
procurement issues. This project is intended to ensure error-free procurement processes to
optimize resource utilization and minimize manufacturing rework caused by purchasing errors.
The project will aim to eliminate waste and utilize Lean Six Sigma tools to achieve continuous
organizational improvements (George et al., 2005). The project team is comprised of
stakeholders from the supply chain, manufacturing, operations, and quality control who will
work together to address issues within the procurement process. The case study will highlight the
integration of Lean Six Sigma tools in the DMAIC phases. Mericom will utilize the
organization's employees' expertise and Lean Six Sigma to improve purchasing accuracy (Chen
et al., 2023). The results of this case study will provide Mericom with guidance for future
process improvement and play an important in the shipbuilder's long-term success within the
shipbuilding industry.
Case Study ‘Plan’
Mericom will utilize the DMAIC framework to reduce procurement-related errors in its
supply chain. During the DMAIC, the project team will outline the project’s scope and objective
and provide guidelines for improvements (Chen et al., 2023). Throughout the DMAIC
framework, data analysis will be completed to address the current state of purchasing errors,
analyze trends, and find critical errors in the process (Sirovica, 2023). The case study will
include a root cause analysis. The team will use the root cause analysis to identify causes of
errors and find areas in which the buying process could improve (Widiyani et al., 2023). The
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DMAIC will provide Mericom with the framework to implement solutions in the purchasing
process to improve the organization's long-term standing (Widiyani et al., 2023).
Define
The project begins with the Define phase, which provides background information on the
DMAIC methodology (George et al., 2005). The Define phase will last approximately 14 days,
during which the project team defined the project goals and made sure the team had a unified
goal to meet the project objectives. The first step the project team must complete is defining the
project scope and purpose and identifying specific steps in the purchasing process that require
improvement (Hashim et al., 2024). This step includes identifying key points in the purchasing
completion, which includes technical requirements, analysis of suppliers, material requisitions,
inventory management, and identifying stakeholders and relevant parties to the project (Hashim
et al., 2024). Establishing this scope allows the project team to analyze only critical portions of
the purchasing process. The team will also define measurable goals to reduce the purchasing
errors currently affecting the organization. The scope of the study is problems causing
procurement-related errors.
The project team will be comprised of stakeholders in the organization, including
purchasing, operations, inventory management, customer service, and financial sections. The
different business sectors will provide a diversity of thought and perspectives from other portions
of the organization (Sarwar et al., 2022). Sarwar et al. (2022) explain the importance of utilizing
different stakeholders during DMAIC to improve outcomes for the project. The project team
defines the employees or teams within the organization that directly impact the purchasing
process, and these employees include suppliers, buyers, inventory management, and financial
analysts. Mericom’s project team communicated with the different stakeholders to gather input
on the organization's current procurement process (Sarwar et al., 2022).
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The project team generated a process map, visually depicting the sequence of events,
decision steps, and interactions involved in purchasing (see Figure 4). The process map will
allow the team to identify the areas where purchasing errors are likely to happen. The process
map will showcase the problem areas for the organization to the team, and the project team can
allocate efforts toward these problem areas (Verhaert et al., 2023). These steps in the define
phase will provide a framework for the measure, analysis, improvement, and control phases of
the DMAIC (George et al., 2005).
Measure
During the measurement phase, the project team collects data to measure the current
number of purchasing errors. The project team's goal is to measure the procurement issues to
establish a baseline the organization can use to drive decision-making (George et al., 2005).
The team will first determine the key figures and metrics that will be used to measure the
procurement errors (Sirovica, 2023). The measurement figures the team will use include the
material error rate, requisition errors, late deliveries, and customer complaints, among other
figures related to the objective of the project. The team can create a standardized baseline for the
measurement of the project performance and use this baseline to evaluate the impact caused by
the project improvement efforts (Arifin et al., 2021).
The team will gather historical data on purchasing errors from the past 12 months. The
information will be collected from different locations, including purchasing records, requisition
records, supplier reports, and other relevant historical data sources. The project team will verify
that the historical data is accurate and appropriate for the case study subject during the previous
12 months (Hashim et al., 2024). After data collection is complete, the team will examine the
data to identify trends in the current issues related to purchasing. During the examination of the
data, the project team will identify recurring errors using statistical approaches to find the
DMAIC CASE STUDY 6
frequency and severity of the purchasing errors. The project team can enhance their improvement
strategies if they focus on the root causes of the problems (Hashim et al., 2024).
The project team will then focus on evaluating Mericom's current purchasing process
capabilities. The assessment includes gauging performance indicators, including capability
indices, process capability ratios, and control charts (see Figure 1). The analysis of the
organization's capabilities offers insight into the performance level of the business and
showcases areas the business can improve.
Figure 1
Control Chart
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
0
1
2
3
4
5
6
7
8
9
10
Errors Mean Upper Control Limit Lower Control Limit
Figure 1 displays the control chart demonstrating Mericom’s current purchasing process and its
errors over time.
Analyze
The Analyze phase will take place over approximately one month, with the objective of
identifying the purchasing problems' root causes and finding development areas that could lead
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to significant improvements for the organization (Hashim et al., 2024). The project team will
carry out these objectives utilizing a series of activities.
Mericom’s project will start the analysis phase by completing an in-depth root cause
analysis to find the causes of the purchasing errors. The root cause analysis can be done through
a series of tools, including the 5 Whys method (see Figure 2). Mericom’s project team chose the
5 Whys tool to help the team find concrete solutions that will address the problem moving
forward. Benefits to solving the root causes of the purchasing errors include Mericom’s team
being able to create solutions to the root cause of the problems rather than the organization
simply treating the symptoms of the purchasing problems (Wolniak & Grebski, 2023).
Figure 2
Root Cause Analysis (5 Whys)
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Figure 2 displays the 5 Whys the Mericom project team utilized to find the root cause of
the procurement problem. Based on the results of the 5 whys, Mericom should focus on
developing processes for operation leads to address the root problem. Mericom’s project team
starts by analyzing the data collected during the Measure phase of the DMAIC process to address
patterns and trends identified. George et al. (2005) explained that data analysis allows the team
to make informed decisions designed to prioritize continuous improvements in reducing errors.
The project team utilizes data visualization techniques to find the relationships across variables
aimed at finding improvement opportunities. Mericom’s project team can utilize the Pareto
analysis to find the common errors that contribute to the procurement error rate (see Figure 3).
Figure 3
Pareto Chart
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Figure 3 displays the Pareto chart the Mericom project team utilizes to find common
errors that contribute to the procurement process, with late delivery accounting for 37.6% of the
procurement errors identified. Mericom should focus on solving the operations lead issue
identified in the 5 whys to evaluate the late delivery percentages after the root cause is solved.
Mericom’s project team will review and improve the process map that was created during the
Define phase in the DMAIC, utilizing insights gathered from the root-cause analysis and data
collection. The team process map visually depicts the purchasing process workflow, identifying
key steps, decision points, and stakeholders involved (Verhaert et al., 2023). Flowchart
techniques will allow Mericom’s project team to find redundancies and blocks to restructure the
purchasing process (Satolo et al., 2023). Presenting a visualization of the purchasing process will
allow Mericom’s team to focus on areas where errors are more likely to happen, focusing on the
organization's ability to improve these areas (see Figure 4).
Figure 4
Procurement Flowchart
.
I Needs S
R I Supplier
R for
P / Requ
Quotation
E Propo S Supplie N Co I Purchase
O
O Fulfillme I Goods A Invoice R Keeping
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Figure 4 displays the current procurement flowchart for Mericom with the recognition of
material needs starting the process and bookkeeping ending the process. Mericom should
automate supplier identification, request for proposals, evaluate proposals, negotiatation, and
invoice approval to avoid human-related errors (Van Hoek & Lacity, 2023). The analysis phases
helps determine if the processes meet the desired standards of the organization and its customers
(George et al., 2005). The Mericom team can identify specific areas for improvement by
comparing procurement capability across specified targets (Van Hoek & Lacity, 2023). Defining
procurement process capabilities can offer Mericom insights into the performance of individuals
and help the project team establish realistic goals (Chen et al., 2023).
The project team will conclude the analysis phase by identifying the specific
improvements the team can make based on the Ishikawa diagram (see Figure 5). The process
improvements will range from procurement process adjustments to increased buyer training and
enhanced communication lines between the stakeholders involved in the procurement process.
Mericom’s project team will prioritize the improvement opportunities based on their impact on
solving the procurement problems currently facing the organization. The improvement
opportunities found by the Mericom project team will serve as the framework for the
Improvement phase.
Figure 5
Ishikawa Diagram
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Improve
The improvement phase will be the longest in the DMAIC process and will last
approximately two months. Mericom’s project team, during the improvement phase, will focus
on the implementation of the targeted solutions to address the root causes of the procurement
errors (Sirovica, 2023). The team will accomplish this improvement through a number of
activities in the improvement phase. The first activity the project team initiates is brainstorming
with the intention of finding solutions that were found during the analysis phase (see Figure 6).
The solutions found during the brainstorming activity can include system enhancements, process
changes, or any other improvements that can increase the productivity of the procurement
process (Nasciemnto et al., 2024). Mericom’s project team will contemplate viewpoints from
each stakeholder to provide solutions that are feasible and will have an impact on the
organization.
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Figure 6
Brainstorming Graph
Figure 6 displays the results of the brainstorming session between the different
stakeholders for Mericom. The exercise showed that common procurement problems include
software issues, inconsistent data, outdated approval workflows, requisition issues, and training
issues. Once the project’s team identified potential solutions, they prioritized the improvement
plans based on the impact and alignment of the project objective. Mericom will implement a
method that will outline the specific steps to achieve each solution (see Figure 6). Mericom’s
team will focus on communicating with stakeholders, including procurement, requisitioning,
customer service, operations, and inventory management.
Figure 7
Improvement Plan
P
I
S
I
D Reporting
I
A
W
P Supplier
E
I
levels
S Issues
T Issues
R
P
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Figure 7 displays the proposed improvement plan that encourages the improvement of the
procurement process. The project team proposes improving the flow of procurement, the
requisition process, and the training process of the organization. The Mericom project team
proposes implementing automated approval processes, standardized procurement processes,
enhanced supplier management, and improved technology to streamline the procurement
process. The project team also pinpoints improving demand forecasting as an essential venture
for Mericom, and the organization should develop stronger relationships with stakeholders inside
and outside the organization, optimize the company's inventory management, and implement
just-in-time inventory (JIT) (Choi et al., 2023). The final step the Mericom project team proposes
is to improve training and procedures by providing comprehensive training, encouraging
employees to learn, documenting procurement policies, and maintaining procedures by updating
them periodically. The improvement phase highlights the importance of implementing solutions
and focusing on implementing a continuous improvement process in the organization (George et
al., 2005). The team will communicate with employees collecting feedback to identify areas for
additional improvement.
Control
S
P
P
Automate
approval
processes
Standardize
processes to
ensure
consistency
Enhance
Supplier
Management
Leverage
Techncology
I
D
F
Develop Strong
Relationships
with
Stakeholders
Implement a
Supplier
Evaluation
System
Optimize
Inventory
Management
Implement just-
in-time (JIT)
inventory
I
T and
P
Provide
comprehensive
Training
Encourage
Continous
Learning
Document
Procurement
Policies
Review and
update
procedures
regularlly
DMAIC CASE STUDY 14
The controlling phase acts as the final step in the DMAIC framework, with the primary
objective of the phase being the establishment of control processes and the development of
monitoring systems to provide a framework for continued improvements (George et al., 2005).
Mericom’s project team will develop methods that clearly define the measures the organization
will have to complete to maintain the improved procurement process (Panayiotou et al., 2022).
The control plans Mericom will implement will involve detailed actions and responsibilities to
support the improvement of the procurement process (Sharma et al., 2022). The control plans for
an organization may include procedures, quality checks, and key performance indices to sustain
the organization's improved procurement procedures (Sharma et al., 2022).
Mericom will implement monitoring systems, quality control, data analytics, and
performance audits to control the procurement process. The monitoring systems Mericom’s
project team will implement will provide transparency to the purchasing process performance,
showing that when deviations to the procedures happen, the organization can identify early signs
of potential errors (Wang & Wang, 2022). Corinthians 10:13 (English Standard Version Bible)
explains that temptation to do the wrong things is common to man; however, man will not be
tempted beyond their ability, and there will be a way to escape the temptation. The control phase
provides a robust set of procedures for employees to avoid temptations that may lead to errors.
The control phase will focus on the development of training initiatives for employees to
ensure all stakeholders in the procurement process are equipped with the skills to avoid errors
(Sarff & O’Brien, 2020). Improving training with clear guidelines and instructions focused on
error prevention can improve Mericom’s procurement process and raise employees' confidence
in their roles (Penjišević et al., 2024). Mericom’s project team will verify that the improved
processes, monitoring systems, and procurement procedures are appropriately documented and
available across the organization. The documentation provides the organization's employees with
DMAIC CASE STUDY 15
a procedure for error-free procurement. Providing a procedure for employees to follow will lead
to minimized errors in the procurement process (Sarff & O’Brien, 2020).
Conclusion
The application of DMAIC and Lean Six Sigma tools in Mericom’s project provided
significant improvements, including reduced purchasing errors, improved purchasing procedures,
decreased rework, and enhanced organizational performance. Utilizing Lean Six Sigma tools,
Mericom showcases its commitment to improving and solving organizational problems.
Mericom must focus on maintaining the processes outlined in the project to ensure the
organization continuously improves purchasing processes. The project team's lessons learned can
drive enhancement in different areas within the organization to reinforce and improve the
business's performance.
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