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What is Hoshin Kanri?
Hoshin Planning:
Breakthrough Improvement From Vision-Driven Leadership
The image most often depicted in U.S. literature on Hoshin Planning (also commonly known as Hoshin Kanri, and Policy Deployment) is that of a ship’s compass distributed to many ships, properly calibrated such that all ships through independent action arrive at the same destination, individually or as a group, as the requirements of the “voyage” may require.
Hoshin Planning is more than a compass for steering the direction of your business processes. It is the strategic means of control that allows your organization to make quick turns, changes, and adjustments before you become trapped in a crisis. Success in a highly competitive world requires more than focus and direction. You must have innovation. Hoshin Planning is the means for keeping the actions and innovations of your people aligned with your organization’s strategic intent.
The ideas and inspirations that guide and improve your organization come from your people. But the only way to truly leverage the creative talent of your workforce and apply those innovations to your products, your markets, your investors, and your investments, is through the use and application of Hoshin Planning.
How It Works…
Hoshin Planning provides an opportunity to continually improve performance by disseminating and deploying the vision, direction, targets, and plans of corporate management to top management and to all employees so that people at all job levels can continually act on the plans, and evaluate, study, and provide feedback results as a part of a continual improvement process.
The intention is that, in companies using Hoshin Planning, everybody is aware of theirs and management's Critical Success Factors (CSF’s) and Key Performance Indicators (KPI’s), departments do not compete against each other, projects run to successful conclusions, and business is seen as a set of coordinated processes.
At the beginning of the Hoshin Planning process, top management sets the overall vision and the annual high-level policies and targets for the company. At each level moving downward, managers and employees participate in the definition—from the overall vision and their annual targets—of the strategy and detailed action plan they will use to attain their targets. They also define the measures that will be used to demonstrate that they have successfully achieved their targets. Then, targets, in turn are passed on to the next level down. Each level under top management is, in turn, involved with the level above it to make sure that its proposed strategy corresponds to requirements using “Catchball” communication techniques. Regular reviews take place to identify progress and problems, and to initiate corrective action.
Hoshin Planning is a management tool used to identify and close “gaps.” The difference between where you are and where you want to be can be and is thought of here, as a gap. Yet some gaps are more strategically important than others. Using these Key Performance Indicators (KPI’s), is the job of management to steer the focus of their organization towards those few vital priorities that will keep or bring the organization into alignment with the demands of its markets. Once these are identified, employees can then pinpoint the group, division, factory, department, or project gaps that must be closed to stay aligned with the strategic direction of your organization.
These “vital few priorities” are actually called “Hoshins.” A key principle of Hoshin Planning is to deploy and track only a few priorities at each level of the organization. Given all of the rapid changes and increasing distractions organizations face today, individuals must be able to focus on those things that offer the greatest advantage to the organization. The clearer the priorities, the easier it will be for people to focus their energies on what really counts. How often has your company made dramatic improvements in a product or process that suddenly became obsolete due to the lack of these communication tools?
NOTE: © TBM Consulting Group, Inc. The X-Matrix featured above is displayed above with permission from TBM Consulting Group, Inc. TBM developed Dploy® Solutions, a suite of web-based software solutions that facilitate management process for policy deployment, key performance indicators, knowledge sharing, and aligning continuous improvement initiatives to strategic objective and KPIs. Learn more at www.dploysolutions.com or contact TBM at www.tbmcg.com.
Hoshin Planning improves the performance of business systems by assuring correct and timely implementation of both Strategic and Operational Breakthroughs using a step-by-step planning, implementation, and review process. Hoshin Planning:
Directly ties strategic intent through direct, cross-functional involvement in budget planning comprised of top-down/bottom-up plans that are “owned” by the entire organization.
The Hoshin Planning approach aims to ensure that insight and vision are not forgotten and ignored as soon as planning activities are over. It aims to guarantee that planning documents, once finalized, are kept alive and acted on daily, and not shelved as soon as they have been completed. It aims to prevent the daily quota of firefighting, unplanned 'strategic' meetings, and quarterly bottom-line pressures taking precedence over the actual strategic plans that are aligned with the strategic vision of your organization.
In the Hoshin Planning environment, short-term activities are determined and managed by the plans themselves. There is a continual process of checking to make sure that what is done each day reflects the intentions, the targets, and the vision the company has agreed to pursue. Here, Balanced Scorecards are often used to clarify Targets & Measures that greatly simplify the Review Process. Clear planning, deployment and review of actual results are critical features of the Hoshin Planning System. TQM provides the foundation for this process using a modified version of Deming’s PDCA philosophy.
What It Gives You…
Deployment of your most innovative and cost-effective strategies can be directly and quickly implemented. And when a change in direction is necessary, the details of this change can be quickly communicated level by level throughout your organization. More than that, it gives people the tools for communicating to management (both vertically and horizontally) the impact or consequences of those proposed changes. This is how a potential crisis becomes an opportunity.People can then quickly adjust their targets and continue to focus on work that matters to the larger direction of the organization. The Hoshin Planning System provides the means and measures for building companies that work by keeping them focused on work that matters.
Improving your ability to track the beast of profitability, market share, and outshine your competition demands that you have an integrated set of simple tools that everyone can understand and use together to correctly manage and improve the complex processes that define your business.
The Hoshin Planning System gives you a tactical advantage over your competition when it comes to implementing change. It allows you to:
It is the means for empowering everyone to stay invested in achieving great results. It is the means for strengthening the true purpose of your organization and “sticking to” that purpose for many years to come. It converts the vague generalities of long-term objectives into a set of ambitious but realistic short-term strategies. In other words, it translates strategic intent into correctly aligned day-to-day behavior that people in your organization can act upon and improve using the tools of TQM, or Lean, or Six Sigma, or any combination of Improvement Strategies that best aligns with your business processes.
To best leverage the creative talent of your people, you know you must not stress them out with misdirection or conflicting objectives. When each person feels filled with conviction that what they are working on is vital and necessary, each will be inspired to build products and processes that are smarter, safer, faster, better, cheaper. They will not only be inspired to exceed all expectations, they will know how and where to communicate those innovations so that value is added every step along the way.
Hoshin Planning implements daily, weekly, monthly, yearly points of accountability through the vital and strategic use of two-way communication in ways that can inspire top management to focus relentlessly on competitive advantage. This strength within the organization can give you the edge that allows you to unleash massive and overwhelming influence in your markets and against your competitive rivals. Success in business is about becoming a force for transformation. It is what allows you to lead and dominate your industry through the loyalty and devotion of all your suppliers and customers inside and outside of your organization.
Hoshin Kanri & Deming's Plan-Do-Check-Act (PDCA) Cycle…
Hoshin Kanri can be thought of as the application of Deming's Plan-Do-Check-Act (PDCA) cycle to the management process. The PDCA cycle represents a generic approach to continual improvement of activities and processes. In fact, Total Quality Management (TQM) in it full application, includes Hoshin Planning as the means for implementing the BREAKTHROUGH innovations discussed above.
IN THE 'PLAN' STEP, a plan of action is developed to address a problem. Corresponding control points and control parameters are created. The plan is reviewed and agreed.
IN THE 'DO' STEP, the plan is implemented.
IN THE 'CHECK' STEP, information is collected on the control parameters. The actual results are compared to the expected results.
IN THE 'ACT' STEP, the results are analyzed. Causes of any differences between expected and actual results are identified, discussed and agreed. Corrective action is identified.The Plan-Do-Check-Act Cycle is a logical sequence for behavior. PDCA implies that once one cycle of the sequence is completed with the 'ACT' step (in which corrective action is identified), the 'PLAN' step (in which a plan to address how corrective action will be generated) of the next cycle should be started.
Initial Considerations…
The initial considerations in the Hoshin Kanri approach to business system change are as follows:
The Hoshin Kanri approach aims to ensure that insight and vision are not forgotten and ignored as soon as planning activities are over. It aims to guarantee that planning documents, once finalized, are kept alive and acted on daily, and not shelved as soon as they have been completed. It aims to prevent the daily quota of fire fighting, unplanned 'strategic' meetings, and quarterly bottom-line pressures taking precedence over the really strategic plans. In the Hoshin Kanri environment, short-term activities are determined and managed by the plans themselves. There is a continual process of checking to make sure that what is done each day reflects the intentions, the targets, and the vision the company has agreed to pursue. Both planning and deployment are critical features of Hoshin Kanri, hence the term policy deployment.
Hoshin Kanri provides an opportunity to continually improve performance by disseminating and deploying the vision, direction, targets, and plans of corporate management to top management and to all employees so that people at all job levels can continually act on the plans, and evaluate, study, and feed back results as a part of a continual improvement process.
The intention is that, in companies using Hoshin Kanri, everybody is aware of management's vision, departments don't compete against each other, projects run to successful conclusions, business is seen as a set of coordinated processes.
History of Hoshin Kanri...
ERP & Hoshin Kanri...
ERP Implementations…
Profit-Ability Improvement... (¬Click here to see definitions)
Profit-Ability Management Principles... (¬Click here to see definitions)
People, Empowerment & Profit-Ability… (¬Click here to access articles)
Hoshin Kanri & Deming's Plan-Do-Check-Act... (PDCA) Cycle…
