Wednesday, May 7, 2008

Selecting the Right Improvement Project

Once an organization has come to understand how goods, products or services flow through each step of their value stream, they can then look to apply measurement techniques at various stages, to help identify where improvement opportunities exist. Identification however, is only an initial step in the improvement process, as prioritization of these opportunities must then follow to ensure that any improvement activities focus on the right projects, for the right reasons, at the right time for the organization.

As organizations begin to truly “learn” the activities they are performing, they will almost immediately realize that the numbers of improvement opportunities are far greater than anyone originally anticipated. This realization often comes as the result of applying quantitative (or even qualitative) measurement techniques, as stated above, and the analysis of the resulting data which often yields surprising, if not alarming, results. At this point, it’s not unusual for an organization to see improvement opportunities almost everywhere they look.

While this may be an exiting time for individuals that are involved in the improvement initiative, this is also a critical stage in the initiative’s evolution. For most organizations, resources are extremely scarce and managers are inherently skeptical; they are concerned with the potential impact to their production schedules and in many cases, to their bottom lines. Applying a system of prioritization to these newly discovered opportunities helps to prevent any misallocation of resources (i.e., for the right project at the wrong time) which could work to validate this sense of skepticism and may severely impact the creditability of a fledgling improvement effort.

Perceptions of urgency and importance should therefore be balanced in line with business needs and objectives, as well as financial and other considerations. Personal “pet projects” should be considered cautiously, to ensure that projects are selected based on their overall value to the organization. Such consideration should also extend to the project’s probability for success, as initial gains are vital to creating a sense of momentum around the initiative. In many organizations, projects that meet these criteria are referred to as “low hanging fruit”, because of their relative importance and ease of completion.

Continuous improvement is so-called because it is an iterative process; improvement activities are on-going, evolving and adapting. Process variance is identified, reduced, reduced further, and in the ideal case, ultimately eliminated. In order to effectively manage this process however, prioritization of improvement opportunities is necessary to ensure that improvement activities target the right projects in a sequence and manner that is consistent with the overall goals of the organization.

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