Hoshin Kanri

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Hoshin kanri (direction management (Japanese: 方針管理 Hepburn: hōshin kanri?)) is a method devised to capture and cement strategic goals as well as flashes of insight about the future and develop the means to bring these into reality.[1]

Key features[edit]

Also called policy deployment, hoshin planning, or simply hoshin (as in "FY12 Hoshin"), it is a strategic planning/strategic management methodology based on a concept popularized in Japan in the late 1950s by Professor Yoji Akao. "Each person is the expert in his or her own job, and Japanese TQC [Total Quality Control] is designed to use the collective thinking power of all employees to make their organization the best in its field." This is the fundamental principle of hoshin kanri. In Professor Ishikawa's words in his book What Is Total Quality Control?: "Top managers and middle managers must be bold enough to delegate as much authority as possible. That is the way to establish respect for humanity as your management philosophy. It is a management system in which all employees participate, from the top down and from the bottom up, and humanity is fully respected." Adaptations of the concept have since been developed by many others, among them Dr. Yoji Akao, that use a Deming cycle (Plan-Do-Check-Act) to create goals, choose control points (measurable milestones), and link daily control activities to company strategy.[2]

The discipline of hoshin kanri is intended to help an organization:

  • Focus on a shared goal.
  • Communicate that goal to all leaders.
  • Involve all leaders in planning to achieve the goal.
  • Hold participants accountable for achieving their part of the plan.

It assumes daily controls and performance measures are in place: "With hoshin kanri... the daily crush of events and quarterly bottom-line pressures do not take precedence over strategic plans; rather, these short-term activities are determined and managed by the plans themselves."[3]

In Japanese, hoshin means "compass needle" or "direction". Kanri means "management" or "control".[4] The name suggests how hoshin planning aligns an organization toward accomplishing a single goal.

Hoshin planning[edit]

Hoshin planning systematizes strategic planning. To be truly effective, it must also be cross-functional, promoting cooperation along the value stream, within and between business functions.

Hoshin planning is a seven-step process, in which you perform the following management tasks:

  1. Identify the key business issues facing the organization.
  2. Establish measurable business objectives that address these issues.
  3. Define the overall vision and goals.
  4. Develop supporting strategies for pursuing the goals. In the Lean organization, this strategy includes the use of Lean methods and techniques.
  5. Determine the tactics and objectives that facilitate each strategy.
  6. Implement performance measures for every business process.
  7. Measure business fundamentals.

The hoshin process employs a standardized set of reports, known as tables, in the review process. These reports are used by managers and work teams to assess performance. Each table includes:

  • A header, showing the author and scope of the plan
  • The situation, to give meaning to the planned items
  • The objective (what is to be achieved)
  • Milestones that will show when the objective is achieved
  • Strategies for how the objectives are achieved
  • Measures to check that the strategies are being achieved

Hoshin tables types:

  • Hoshin review table: During reviews, plans are presented in the form of standardized hoshin review tables, each of which shows a single objective and its supporting strategies.
  • Strategy implementation table: Implementation plans are used to identify the tactics or action plans needed to accomplish each strategy.
  • Business fundamentals table (BFT): Business fundamentals, or the basic elements that define the success of a key business process, are monitored through its corresponding metrics. Examples of business fundamentals are safety, people, quality, responsiveness, or cost.
  • Annual planning table (APT): Record the organization’s objectives and strategies in the annual planning table. The APT is then passed down to the next organizational structure.

The implementation plan usually requires coordination both within and between departments and process owners. Implementation plans are not just the responsibility of an individual completing the lowest-level annual plan. Each level in the organization carries detailed responsibilities to ensure support for and successful completion of the organization’s plans. This is how the do step of PDCA happens.

The annual hoshin review[edit]

Because hoshin is a cyclic process, the review of the previous year’s performance is the basis for the next year's plan.

  • For those objectives that were completed successfully, perform an analysis to determine what went right and to determine if the supporting strategies and performance measures initially established were truly appropriate. Also, note any exceptional results and how they were obtained.
  • For each objective that was not attained, determine the reasons for the deviation. Typically, the analysis consists of the detailed supporting data of all strategies associated with the objective. The strategy owners also should identify what their teams would have changed to have been more successful in the year just completed as well as for the future.

These reviews are conducted at all levels of the organization. Starting at the lowest level that has plan ownership, the review is completed and the information passed up the organizational structure (management levels). Each level then uses the review tables from previous structures (management levels) to complete its own review. The review is completed using information from:

  • Hoshin review tables
  • Corporate objectives
  • Business plans
  • Economic projections
  • Customer inputs
  • A quality assessment (if conducted)

The senior management team can determine whether last year’s critical business issues and business objectives (which were selected to address the issues) are still appropriate for the coming year.

Reviewing progress periodically[edit]

Although the planning cycle is annual, you don’t just make the plan then forget about it until next year. Review business fundamental metrics monthly to ensure that performance is trending in the right direction. Review the annual plan quarterly to ensure that the plan is still the right plan.

The final annual review is essentially a compilation and summary of the hoshin review tables accumulated during the year. This final review returns you to the study step described earlier. The study step plays a crucial role in improving organizational learning ability.

Key proponents/practitioners of hoshin kanri include the following:

See also[edit]

References[edit]

  1. ^ Akao, Yoji, ed. (Jap: 1988, Eng: 1991). Hoshin Kanri, policy deployment for successful TQM (in English(tr. from Japanese)). New York: Productivity Press (Originally Japanese Standards Association). pp. xiii. ISBN 1-56327-311-X.  Check date values in: |date= (help)
  2. ^ Akao, Yoji, ed. (Jap: 1988, Eng: 1991). Hoshin Kanri, policy deployment for successful TQM (in English(tr. from Japanese)). New York: Productivity Press (Originally Japanese Standards Association). pp. xiv. ISBN 1-56327-311-X.  Check date values in: |date= (help)
  3. ^ Akao, Yoji, ed. (Jap: 1988, Eng: 1991). Hoshin Kanri, policy deployment for successful TQM (in English(tr. from Japanese)). New York: Productivity Press (Originally Japanese Standards Association). pp. xiv. ISBN 1-56327-311-X.  Check date values in: |date= (help)
  4. ^ Akao, Yoji, ed. (Jap: 1988, Eng: 1991). Hoshin Kanri, policy deployment for successful TQM (in English(tr. from Japanese)). New York: Productivity Press (Originally Japanese Standards Association). pp. xiii. ISBN 1-56327-311-X.  Check date values in: |date= (help)

Bibliography[edit]

External links[edit]