Supply chain management principles and practices

Supply Chain Management

What does it mean when we say that a process is capable?

In the context of supply chain management and lean manufacturing, when a process is said to be capable, it is within the boundaries of performance as defined through statistical process control (SPC) or Six Sigma methodologies. Process capability is the characteristic of a given workflow to produce a similar level of product quality over duration of production run or process (Parry, Mills, Turner, 2010). Process capability is very important in reverse logistics strategies manufacturers use for recycling packaging and components, ensuring these items meet minimum criterion for use in production again (Cheng, Lee, 2010). In industries where the inventory turns are many times more often than once a week on average, process capability is often translated directly into inventory optimization savings over time (Hong, Tran, Park, 2010). When a process is capable it is also more likely to be replicable as well, which means it can scale across an organization much more effectively than more complex workflows (Jacobs, Chase, 2010). Statistical process control techniques are often used for ensuring a high level of consistency and predictability to inbound supplier inspections, one of the most prevalent area where process capability is relied on in many manufacturing companies. In conclusion, when a process is capable, it also can be forecasted from a cost and performance perspective as well, which translates into greater accuracy of financial performance over time (Parry, Mills, Turner, 2010).