CPT | Carriage Paid To – Incoterms 2020

The CPT (Carriage Paid To) – Incoterms 2020 rule requires the seller to deliver the goods to its carrier but does not indicate whether that is either at the seller’s premises loaded onto the collecting vehicle or delivered to another premises not unloaded from the seller’s vehicle. The seller must carry out any export

CIP | Carriage and Insurance Paid To – Incoterms 2020

CIP (or Carriage and Insurance Paid To) – Incoterms 2020 is an Incoterm where the seller is responsible for the delivery of goods to an agreed destination in the buyers country, and must pay for the cost of this carriage. The sellers risk however, ends once they have placed the goods on the ship,

DPU | Delivered at Place Unloaded – Incoterms 2020

This is a new rule for Incoterms 2020. While it is often stated as simply being a change of name from the previous DAT (Delivered At Terminal) it is in fact just that little bit more. DAT itself was introduced 2010 as an expansion of DEQ (Delivered Ex Quay) to cover any mode of

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DAP | Delivered at Place – Incoterms 2020

DAP requires the seller to deliver to a place named by a buyer, typically the buyer’s premises. The buyer is responsible for unloading the means of transport. The seller has to carry out any export formalities and the buyer has to carry out any import formalities. Like with CPT and CIP the seller contracts

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DDP | Delivered Duty Paid – Incoterms 2020

This rule DDP | Delivered Duty Paid – Incoterms 2020 should be used with great care as the seller might need to be a registered entity both for import and VAT/GST in the buyer’s country, a fairly unlikely scenario. If the seller finds itself unable to be the importer or to be able to

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FAS | Free Alongside Ship – Incoterms 2020

The FAS (Free Alongside Ship) – Incoterms 2020 rule goes back to the days of sailing ships, and requires the seller to place the goods alongside the vessel nominated by the buyer. FAS is rarely used these days but still might be appropriate typically in shipments of heavy machinery which is brought to the

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FOB | Free On Board – Incoterms 2020

FOB (Free on Board) is the most commonly-used trade term but in practice it is used without reference to any version of the Incoterms® rules. In such cases it is then up to the seller and buyer to agree in their contract on what they mean when they use these three letters. This trade

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CFR | Cost and Freight – Incoterms 2020

CFR (Cost and Freight) is one of the most commonly-used trade terms after FOB but in practice it is used without reference to any version of the Incoterms® rules, including Incoterms 2020. In such cases it is then up to the seller and buyer to agree in their contract on what they mean when

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CIF | Cost Insurance and Freight – Incoterms 2020

The CIF – Incoterms 2020 is identical to CFR except in one aspect. Even though the risk transfers to the seller upon loading the goods on board the vessel, in CIF the seller is obliged to take out the minimum level of insurance cover for the buyer’s risk. This will be at Institute Cargo

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Key Six Sigma Concepts

At its core, Six Sigma revolves around the following key concepts: Critical to quality (CTQ): Attributes most crucial for the customer Defect: Failing to deliver what the customer wants Process capability: What one’s process can deliver Variation: What the customer sees and feels Stable operations: Ensuring consistent, predictable processes to improve what the cus­tomer

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The Six Sigma Quality Level

According to Harry and Schroeder,1 Six Sigma quality fundamentally means a breakthrough strategy that can be interpreted as “a disciplined method of using extremely rigorous data gathering and statistical analysis to identify the sources of errors and ways of eliminating them.” Sigma is a letter in the Greek alphabet used by statisticians to measure

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Six Sigma versus Three Sigma

In contrast to Six Sigma quality, the Three Sigma quality standard of 99.73 per cent translates to 2,700 parts per million (PPM) failures, even if we assume zero drift. For processes with a series of steps, the overall yield is the product of the yields of the different steps. For example, if we had

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Shifts and Role of Six Sigma

Six Sigma promotes the idea that the distribution of output for a stable, normally distributed process (voice of the process) should be designed to take up no more than half of the tolerance allowed by the specification limits (voice of the customer). Although processes may be designed to be at their best, it is

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Defects Per Million Opportunities (DPMO)

To achieve Six Sigma quality, a process must produce no more that 3.4 defects per million opportunities. An opportunity is defined as a chance for non-conformance or not meet­ing the required specifications. This means one needs to be nearly flawless in executing key processes. The process and culture is conditioned for zero defects rather

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Six Sigma Strategy

Six Sigma is probably one of the best methodologies to pervade the world of improvements. Its measurement orientation, rigorous training scheme, process centricity and stakeholder involve­ment differentiate it from other quality methodologies. The tools in Six Sigma are not new, but its direct linkages to business objectives and priorities make it a powerful strategy

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Implementing Six Sigma

Six Sigma is a rigorous, focused and highly effective implementation of proven quality prin­ciples and techniques. A company’s performance is measured by the sigma level of their business processes. Traditionally, companies accepted Three or Four Sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per

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Define, Measure, Analyse, Improve and Control (DMAIC)

DMAIC can be described as follows: D Define the goals of the improvement activity. At the top level, the goals will be the strategic objectives of the organization such as a higher ROI or market share. At the operations level, a goal might be to increase the throughput of the production department. At the

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Define, Measure, Analyse, Design and Verify (DMADV)

There are certain situations where the project team members may feel that a process needs to be replaced by a new process rather than simply improving the existing process. The demands of the customers with regard to quality cannot be satisfied by the existing process. At times, an organization may decide to launch a

Six Sigma Training Programmes

Six Sigma involves changing major business value streams that cut across organizational barriers. It is the means by which the organization’s strategic goals are to be achieved. Six Sigma must be implemented from the top-down. This needs the efforts of the top leaders in the organization particularly the CEO who is responsible for the

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Applications of the Seven Quality Control Tools in Six Sigma

Six Sigma created a renewed focus on process improvement. The seven QC tools are among the many tools that comprise the Six Sigma tool box. They have been used widely to support quality improvement problem-solving efforts. Table 8.12 shows the application of the seven QC tools in Six Sigma. Source: Poornima M. Charantimath (2017),

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