In VSM analyses, identifying the current state is relatively easier than setting a target. The general reason for this is that the personnel carrying out the VSM analysis already have the information required to understand the current state quickly and easily. Thus employees who can rapidly understand the current state can prepare the value stream map quickly, if they have also received VSM training. Creating the target value stream, however, is not this easy, and employees are observed to struggle in many respects when setting targets. In the studies I have taken part in, I have come across situations in which determining the targets caused many heated discussions. Some people find the work under consideration too radical, while others claim that the work being done does not really take the current state further, and that the improvements are insufficient. So how are targets determined? How is it decided which techniques will be put into practice, and when? What should this decision-making process be like? Let us turn to these now.
First of all, being able to determine the targets, and ensuring that they are accepted without giving rise to debate, depends on current losses being set out clearly and on the basis of figures. Losses that are correctly identified will form the basis of the practices that will eliminate them. Because superficial findings leave many questions open when the decision is made to put the practice into effect, this means that those questions have to be answered or that the implementation has to be abandoned, and that means the discussions drag on. So what can be done to identify losses clearly? The answer to this question again requires us to look once more at the 7 Muda of the lean production system. As we move through a process, it consists of identifying the losses we need to pay attention to, that is the 7 Muda, and putting them into figures. Staying away from mere statements should be the principle. Truly measuring, and identifying the real situation, is very important.
You may say that, even after the 7 Muda have been identified correctly, determining the target is still not very easy. Of course there is some truth in that. For example, when should we decide on a Kanban application? One of the questions I encounter most often is "Which production type is Kanban suitable for?" Interestingly, Kanban is suitable for every type of production. Today Kanban can be applied in every field, from the food sector to the hospital, and from maintenance work to mass production. So what is it that those who carry out value stream analysis struggle with? Why do they remain undecided about whether the Kanban system is suitable? The answer is that they feel compelled to think this way because they have difficulty grasping the lean production system, understanding it, and settling it in their thinking. At one business, when warehouse employees insisted on not applying the supplier Kanban system, the company asked us for support. In the review we carried out, the most important point that emerged was that the card Kanban system would not work there. Because what one employee said was this: "What does it mean to tie the work to a card? We have an ... ERP system; why are we not using it?"
What needs to be done in order to determine the targets is, first, to look within the VSM at the ratio between the time that creates added value and the time that does not create added value. Thus, if a material has a value-adding time of 2 hours inside the business, creating flow aimed at preventing the total time from being 2 months will be one of these targets.
Second is determining the targets of the practices to be carried out in order to eliminate unnecessary production and inventory, which are among the most important Muda and which basically rest only on arranging procedures. Here the inventory turnover rate is important. An average for Turkey of around 6 can be accepted. The turnover rate of many companies is around 1-3 turns. Raising this turnover rate to around 10-15 means that very significant capital is released.
The target to be set for productivity is quite clear and definite. OEE must be 85% and above. The current state must be calculated correctly. Because OEE also includes scrap and stoppages, I will not address the other losses.