1.2 Identify the Target Area [STREAM*] Copy Copy

Select the area of the plant to work on for this implementation project. You will be validating this choice in the next few steps in the Roadmap, but for your first implementation select an area with a high probability for success! You want this implementation to become a gold standard and example of excellence for future projects, so don’t undertake something too risky at first.

The selection of a Target Area is a balancing act, between selecting an area that is doable within the relatively short time-frame allowed, but at the same time big enough to generate significant benefits. In an upcoming step you will estimate benefits, but for now use your best judgement in selecting the Target Area for this project. You may need to come back to this step is you discover that the potential benefits are not high enough.

The Target Area may be an entire assembly line, a portion of a line, or an assembly cell or group of cells. A feeder line by itself might also be a good Target. We recommend staying away from upstream processes like machining and fabrication for your first project, since these processes involve a higher level of complexity including changeovers. Do these areas later, once you have more experience. Non-manufacturing Value Streams are also great targets for the future.

To help in the selection, and in prioritizing a worthwhile target area for your Lean efforts, you need to create a checklist of attributes, and create a weighted scoring system. You need to see a high number of yes answers to the following questions, in order to make sure that you are selecting a suitable implementation project. If less than 50% of the questions can be answered positively, look for other opportunities. The factors you will be scoring include the following:

Significant quantifiable benefits. The kinds of benefits normally associated with a Lean project include reduced cycle time, reduced inventory, improved productivity, reduced floor space, reduced scrap and rework, and improved housekeeping. It is always preferable to express these anticipated benefits in the common denominator of dollars, although this is sometimes difficult. If the benefits of a flow project cannot be quantified, or if the benefits are modest, this is a red flag to warn you that your time would be better spent elsewhere.

Medium to high process maturity. The Process Maturity Model was discussed previously, and should be applied to your proposed target area. While a low maturity does not automatically rule out the area as a candidate, it does mean that some preparatory work needs to be completed in the areas of process documentation, training and certification, and process control. These activities can take place as a part of your Lean initiative, with the understanding that additional time will be needed. More specifically, lower process maturity means some extra work during Phase II, the data gathering phase of The Lean Roadmap.

High Process Stability. While the process maturity concept is focused on standard work, training, certification and process management, process stability refers to yield or repeatability. In order to implement flow in an area, it is necessary to have acceptable levels of repeatability, so that scrap and rework are not a significant challenge. You do not need to be at the level of Six Sigma quality, 3.4 defects per million opportunities, in order to proceed with a Lean initiative, but if your processes are unstable you should work to stabilize them first.

Low Risk. While the word guaranteed may sound a bit strong, you want to select a target area where there is little doubt that the goals of the implementation can be met. This is critically important for your first implementation project. It is important that the Lean initiative succeed, in order to build confidence and enthusiasm for future efforts. Management is unlikely to fund future Lean projects if there is a past history of failure. Why would a Lean project fail to be successful? There are a variety of reasons, the foremost being weaknesses in leadership and culture.

High visual impact. People need to see that a change has taken place. After a Lean project, if the area looks the same as before, the logical conclusion of a casual observer would be that nothing has actually changed. After a Lean project, the desired response from your co-workers, suppliers and customers should be “wow”. This requires a very high level of organization and housekeeping (5S) has been achieved, in additional to the structural process improvements.

A complete Value Stream. Your target area should be able to produce a completed product, and not just focus on a sub-process or processes. If you cannot complete a product as a part of your Lean initiative, it will be difficult to see and appreciate the improvements that have been made. The ability to complete a product is a good rationale for starting your implementation from the end of the value stream, to have a direct impact on the completed product and your customer.

Can be replicated. When it comes to process improvements, our motto is “Steal Shamelessly”. Why try to reinvent the wheel if a perfectly good improvement has already been implemented elsewhere, in another department or company? This is not literally stealing, it is merely being smart and using ideas that are freely available to you. A successful Lean project can be helpful to other areas in your company, by showing them the way and shortening implementation time.

Makes a significant impact to a bottleneck or restriction. The Theory of Constraints tells us that your flow rate through a value stream will never be any faster than your slowest process. By improving a critical process constraint, we can improve throughput, reduce WIP inventory among other benefits.

Has a significant market impact. The customer pays all of the bills, so if improvements in the target area have a significant positive impact on your customer, it makes sense to select that area. Improvements that directly benefit the customer include improvements in response time, quality and flexibility.

Is an operational problem, not management or policy. You should focus your improvement efforts on a tangible operational problem, especially as you start your Lean journey. Policy and management issues are also included under the Lean umbrella, but in the category of tools called Hoshin Kanri. This large and important body of knowledge is not addressed in this book.

Has medium to high volume. Select an area with significant volume. This ensures that you have work available in the target area, and the benefits achieved have a greater impact on the bottom line.

Is the worst area of the plant. Remember that you want your Lean efforts to be highly successful, so focus on the biggest problem product or area. A success in the worst area of the plant will communicate a strong New York style message: “If you can make it there, you’ll make it anywhere”. Be assured that you will succeed, otherwise the message will be just the opposite.

Is a Value Stream that wanders all over the plant. Linking work together in a new layout will result in increased productivity and the elimination of non-value- added walking and material movement. You may be very surprised at the benefits of doing a re-layout based on Lean principles.

Is buried in WIP. Work In Process inventory is tied not only to  waste of working capital and poor housekeeping, but it’s also the main contributor to long lead-times and low quality. Focusing on an area with lots of WIP, and reducing it, will send a powerful visual message when the area looks completely different afterwards. WIP exists in the office as well, in piles of unfinished paperwork.

Is an area where operators are cross-trained. Cross-training in a Lean environment is not only recommended, it is required. Selecting an area where the operators are already cross-trained will reduce the amount of preparation needed, and accelerate the implementation process greatly.

Has relatively good O.E.E, which stands for Overall Equipment Effectiveness. It is a measurement of availability, quality and performance of production machinery, expressed as a percentage. Low O.E.E. is a significant impediment to good flow, and should be considered a process stability issue.

OKRs
Objective: Decide with your team on the Value Stream to be worked on.
Key Result: Document your selection in the Line Design Workbook.