The six-sigma methodology that was originally created by Motorola and made popular by GE, can undoubtedly be applied to sourcing and procurement processes. The real question is how and what to measure?
The slides above demonstrate how using the DMAIC method is one way to achieving the Six Sigma standard. However, achieving a Six Sigma level of performance of 3.4 defects per 1 million opportunities cannot be directly applied to procurement. For a procurement department, a good measure would be the accuracy in achieving successful 3-way matches. This means for every approved purchase order that's issued; how many are received in full and reconciled against the invoice without any rework or discrepancies. Achieving low rework (defects) on issued POs is a real challenge for most organizations, especially ones that don't already have enabling technologies to help them in putting a systematic process to create visibility at each step of the process.
Tradogram was designed based on a world-class organization's procurement processes. We fully understand all challenges in automating your procurement function and gaining visibility of your company's spending. Talk to us today, let us show you how we can help you achieve up to 90% accuracy on your 3-way matches, and start saving!