Lean Six Sigma Approach For Warehouse Operations Optimization: A Case Study In Electronic Industry

Abstract

This paper is about implementing Lean Six Sigma in a case study in the electronic industry to find out the problem that created a high total cost in recent years. Through DMAIC tools such as SIPOC, Fishbone Diagram, Pareto chart, and 5 Whys analysis, the real and specific conditions of a manufacturing process in the electronic industry can be represented. After that, this paper's main purpose is to minimize the total cost including labor, transportation, inventory, and ordering costs by using direct shipment. From then operation managers can easily modify the parameters and continue to use the MILP (Mixed Integer Linear Program) to solve the problem. By using the CPLEX, the MILP for a decision-making problem involving labor, inventory, and transportation will be solved optimally. According to the computational experiment, implementing direct shipment results in an average cost saving of 5% and a 14% decrease in the number of trucks used.