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This research aims to enhance the operational excellence and continuous improvement of the retail supply chain in the Saudi Thobe Factory through an integrated approach of Six Sigma DMAIC (Define-Measure-Analyze-Improve-Control) with artificial intelligence (AI).

The study identified the tailoring department as the department with maximum defects by using voice of customer and critical to quality tools. An AI-integrated Six Sigma approach was applied to identify and eliminate nonproductive stages, and a new facility layout was designed to enhance productivity and customer satisfaction.

The use of the factor rating method and simulation using Arena software led to an improved sigma level from 1.597 to 2.237, representing an increment of about 40%. Additionally, the defects per million opportunities reduced from 461,538 to 230,769. The study can help production industry management to optimize facility layouts and improve overall production line efficiency.

This study addresses the lack of published research on the use of an integrated approach of Six Sigma DMAIC with AI in the retail and distribution sector of Saudi Arabia, particularly for small and medium-sized enterprises (SMEs). The study demonstrates how this approach may significantly boost SMEs’ performance and provides a basis for future research in this area.

This study provides a practical example of how an integrated approach of Six Sigma DMAIC with AI can be used in the retail and distribution sector of Saudi Arabia to enhance operational excellence and continuous improvement. The study highlights the potential benefits of this approach for SMEs in the region and provides a framework for future research.