DCM/10.08/AS-RR/TS
Demand Chain Management
6 Sigma Case Study – CAT : Part 3

This case was prepared by Alan Smart, Cranfield School of Management, Cranfield University, Cranfield, Bedford, MK43 0AL, England And Richard Renshaw © Cranfield School of Management And Richard Renshaw October 2008. All rights reserved.

Control Phase & Conclusions Discussion Points from Part 2  Ensure you describe the expected impact on the business for each improvement suggestion: this needs to be quantified  Provide criteria to prioritise the improvement suggestions, for example: o Difficulty o Speed of implementation o Scale of impact  This approach should help you facilitate decision making with the stakeholder group o Your criteria need to be clearly evaluated, consistent and understandable (especially when there is a debate whether the criteria is negative or positive e.g. speed verses lead time to benefit) o Are any of your criteria subjective? o You may want to make it more visual e.g. using conditional formatting in a spread sheet based matrix  See summary comments on next sheet

6 Sigma Case Study – CAT : Part 3 DCM/10.08/AS-RR/TS
Cranfield School of Management 2

Action	Objective	Comments	Impact	Difficulty	Speed
Tighter Approval Control	Reduce the quantity of drawing changes required substantially. Focus resource on the important changes	Discussions with marketing and the dealerships are critical in making this work and in aligning expectations. The dealers are key for selling the product; the product is relatively new. Criteria and targets need to be decided to underpin the prioritisation suggested. The implementation approval team will need guidance on how the decisions need to be made.
Hire Two New Engineers	Increase capacity to enable more drawings to be processed	An increase in capacity of around 10% on its own is not sufficient to materially change the situation, hence this suggestion is irrelevant. The numbers suggest that setting targets appropriately will eliminate the need for additional capacity
Batch Lower Priority Engineering Changes	Make the engineering change easier to control	This could impose some control over the release of the engineering changes, but not the volume. This will need communication to the relevant stakeholders, suppliers, internal drawing users
Audit	Reinforce discipline; communicate the importance of control	This is relatively easy to do and focused. It’s just good practice and reinforces confidence in the process; communication with suppliers will help with this. Repeats of the audit during the control phase will help in measuring discipline in the process.

6 Sigma Case Study – CAT : Part 3 DCM/10.08/AS-RR/TS
Cranfield School of Management 3

Action	Objective	Comments	Impact	Difficulty	Speed
New Document System	Use an IT system to speed up decision making	This is a longer term fix and requires investment; however the cost could be spread over all of the product groups in the company. This would be a project in its own right and requires its own justification

Action
What measures should be put in place to understand if the new
solutions suggested are working?
What duration of monitoring is required to see if there is a change
in behaviour?
Which measures need to be followed up with Finance to understand
if the benefits are being realised according to plan?