• Save
Hoshin Kanri
 

Hoshin Kanri

on

  • 4,312 views

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/Hoshin-Kanri-155

Hoshin Kanri ( Hoshin Planning, Policy Deployment, Management by Policy) is a powerful, systematic Strategic Planning/Management methodology developed by Dr. Yoji Akao that uses a Plan-Do-Check-Act cycle to create goals, choose control measures and link daily control activities to the company's strategy. It involves a "catchball" as the driving force of alignment, clarification and employee involvement. The methodology continues to be used by some of the world's most successful companies such as Toyota, Hewlett-Packard and Bank of America.

With the discipline of Hoshin Kanri in place, you can expect the following benefits:

a) Focuses the entire company on a few vital goals, rather than the trivial many
b) Creates alignment towards breakthrough objectives through involvement of the whole management team in the planning process
c) Communicates the key goals to all managers and staff
d) Integrates and encourages cross-functional cooperation to achieve breakthroughs
e) A review process which holds participants accountable for achieving their part of the plan.

Statistics

Views

Total Views
4,312
Views on SlideShare
4,312
Embed Views
0

Actions

Likes
7
Downloads
5
Comments
2

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • Hi Cesar, you can download a copy of this presentation here:
    https://flevy.com/browse/business-document/hoshin-kanri-strategy-deployment-155
    Are you sure you want to
    Your message goes here
    Processing…
  • highly informative presentation. I just hope the author may allow me to geta copy of this material. thank you very much. Engr. Cesar Yamuta/Philippines
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Hoshin Kanri Hoshin Kanri Presentation Transcript

  • © Operational Excellence Consulting. All rights reserved.Hoshin KanriYour NameYour Job Title© Operational Excellence Consulting. All rights reserved.
  • 3© Operational Excellence Consulting. All rights reserved.Workshop Objectives• Gain an understanding of the principles and keyconcepts of Hoshin Kanri• Define the Hoshin Kanri process, tools and keyelements• Describe the Hoshin Kanri step-by-stepapproach to planning, implementation andreview process for managed change• Gain practical knowledge and skills in applyingthe Hoshin Kanri process and tools
  • 5© Operational Excellence Consulting. All rights reserved.Workshop Outline• Introduction to Hoshin Kanri What is Hoshin Kanri? Purpose of Hoshin Kanri Linkages of Hoshin Kanri, BalancedScorecard & MBO Comparison of Hoshin Kanri with MBO• Underlying Principles of HoshinKanri Plan-Do-Check–Act Cycle Pareto Principle Cause-and-Effect Relationship• Hoshin Kanri Process Using PDCAApproach Review of Strategic Planning Process Hoshin Kanri Steps Hoshin Kanri Incorporating the BalancedScorecard Top Management Objective Setting Deployment to Department Managers Operationalize through Projects Performance Review• Hoshin Kanri Tools X Matrix Alignment & Deployment Chart Management Control Chart Daily Management Matrix A3 Report Software for Hoshin Kanri• Elements of Hoshin Kanri Performance Measurements Breakthrough Hoshin Daily Management Cross-functional Management• Management Reviews Types of Reviews Checklist & Guidelines for Reviews• Critical Success Factors• Summary & Closing Comments
  • © Operational Excellence Consulting. All rights reserved.Introduction to Hoshin Kanri
  • 9© Operational Excellence Consulting. All rights reserved.“Total Quality does notguarantee the companieswill produce strategies.Winning strategies mustcome from the minds ofthe leaders, augmentedby inputs from thetroops.”- Edwin ArtztChairman & CEO, Procter & Gamble
  • 11© Operational Excellence Consulting. All rights reserved.“But Apple really beats toa different drummer. Iused to say that Appleshould be the Sony of thisbusiness, but in reality, Ithink Apple should be theApple of this business.”- Steve Jobs
  • 13© Operational Excellence Consulting. All rights reserved.Typical CompanyDoPlanCheckAct
  • 15© Operational Excellence Consulting. All rights reserved.Toyota’s Use of TimeDoPlanCheckAct
  • 17© Operational Excellence Consulting. All rights reserved.Hoshin Kanri• Taken together, Hoshin Kanri means amethodology to capture and concretize strategicgoals as well as to develop the means to bringplans to reality• In other words, Hoshin Kanri is target-meansdeployment
  • 19© Operational Excellence Consulting. All rights reserved.Purpose of Hoshin Kanri 1• Provides a step-by-step planning,implementation and review process formanaged and sustainable change• Facilitates a set of coordinated processes thataccomplish the core objectives of the business• Clarifies specific annual target policies derivedfrom long- and medium-term policies thatencompass the long term visions of thecompany
  • 21© Operational Excellence Consulting. All rights reserved.Benefits of Hoshin Kanri• Every employee is clear of their role and objectives• Leadership evident at all levels• Everyone understands the goals of the organisation• Aligns resources, objectives and metrics to all goalsand at all levels of the organization• Employees are involved in setting targets,improvement schedules and reviews• There is a clear line of sight
  • 23© Operational Excellence Consulting. All rights reserved.A Hoshin Kanri System for GoalAlignment•Alignmentthrough entirecompanystructure usingtop-down goalsetting•Eachsubsequentgoal supportsthe previouslevel‟s goalsVerticalalignmentOrganizationGoalsDepartmentObjectivesIndividualObjectivesDepartmentObjectivesIndividualObjectivesIndividualObjectivesIndividualObjectives
  • 25© Operational Excellence Consulting. All rights reserved.Activity 2: Brainstorming ofManagement Initiatives/Projects• In groups, based on your organization‟s Vision,Mission and Values defined in Activity 1, listdown all the management initiatives. Write eachinitiative/program/project on a Post-it note.Time: 10 mins
  • 27© Operational Excellence Consulting. All rights reserved.Comparison of Hoshin Kanri & MBOMBO Hoshin Kanri1. Basics •Behavioral theories•Scoring system•Lean or Total Quality•Control cycle2. Organization •Focused on theindividual•Focused on theorganization and groupsof individuals3. OperatingSystem•Decisions on objectives(“troubleshootingsystem”)•Planning of coherencebetween objectives of theindividuals•PDCA cycle•Management byprocesses•Top-down / bottom-upflows
  • 29© Operational Excellence Consulting. All rights reserved.Comparison of Hoshin Kanri & MBOMBO Hoshin Kanri6. Evaluation ofPerformance•Based on results•Tied to personnelmanagement•Based more on “how”(process) than on results•Integrated into linemanagement- Audit by thedirector/ manager- Self-evaluation ofresults/ objectivesdifferences- Evaluation by “internalcustomers” andcolleagues•No direct link withpersonnel management
  • 31© Operational Excellence Consulting. All rights reserved.Major Weaknesses of MBO• Performance Appraisal as Principal Objective,rather than Business Results• Simple reflection of the budget• Large number of objectives, therefore dispersive
  • 33© Operational Excellence Consulting. All rights reserved.Major Strengths of Hoshin Kanri• Synergy between top-down and bottom-upprocesses• Continuous, systematic management ofprocesses• Rigorous application of PDCA cycle• Emphasis on cause-and-effect relationships
  • 35© Operational Excellence Consulting. All rights reserved.Breakthrough• Breakthrough meansimprovement to asignificantly higherlevel of performance• Lack of breakthrough fora business organizationwould place it in aposition of regression ina competitiveenvironmentThink BIG:Boldly Important Goals
  • 37© Operational Excellence Consulting. All rights reserved.Control• Control implies adherence to acurrent standard• Reasons for maintaining control: Improvement might be uneconomical Few alarm signals Hold the materials, processes andproducts to specification Maintain current performance levels Hold the gains achieved by recentbreakthrough projects
  • 39© Operational Excellence Consulting. All rights reserved.Relationship of Breakthrough & Control• In the situation of “out-of-control”, resources arediverted to address the sporadic problems, whilechronic problems are often neglected• Control is often a pre-requisite for breakthroughto take place• Control implies doing things right• Breakthrough implies doing the right things
  • 41© Operational Excellence Consulting. All rights reserved.Activity 4: Breakthrough & Control• In groups, based on the list generated in Activity 2,classify each initiative/program/project (“Post-it-Note”)under the heading of „Breakthrough‟ or „Control‟.Time: 15 minsBreakthrough Control
  • 43© Operational Excellence Consulting. All rights reserved.Underlying Principles of HoshinKanri• Plan-Do-Check-Act (PDCA) Cycle• Pareto Principle: Focus on the vitalfew• Cause-and-Effect Relationship
  • 45© Operational Excellence Consulting. All rights reserved.Pareto Principle (80/20 Rule)• To identify the “critical few” fromthe „trivial many”.• The top twenty percent of theproblems account for eightypercent of the cost of poor quality.Also called the “80/20” rule.• Emphasize the need to focusresources and attention on theissues which provide the greatestcontributions.P A R E T O D IA G R A Mfo r C o s t o f Q u a lity b yA s s e m b ly P ro c e s s02 5 05 0 07 5 01 0 0 01 2 5 01 5 0 0Wire-bondTrim-formDie-attachMoldingLasermarkDicingA s s e m b ly P r o c e s s$00001 02 03 04 05 06 07 08 09 01 0 0Cumm.%ofCOQ
  • 47© Operational Excellence Consulting. All rights reserved.Cause & Effect• Purpose To identify and structure the causes of a given effect• When to use When investigating a problem, to identify and selectkey problem causes to address When effect of a problem is known, but possiblecauses are unclear To find other causal relationships, such as potentialrisks or causes of desired effects
  • 49© Operational Excellence Consulting. All rights reserved.Activity 5: Target and Means• In groups, brainstorm as many means as possible toachieve the following targets. Identify the top twomeans which have the highest impact on theoutcome.1. Turnaround a loss-making bakery shop by end 20122. Get pre-school children to be well-behaved anddisciplined at home and in public places3. Climb to the top of Mt. Everest by end 20144. Give up the smoking habit within 3 monthsTime: 10 mins
  • 51© Operational Excellence Consulting. All rights reserved.Review of Strategic Planning ProcessSharedValuesMissionVisionEnvironmentalAssessmentStrategiesStrategic ObjectivesAction PlansReason forexistenceFutureintentGuidingPrinciplesBroad statements of directionCapabilities and risksThings to change or improve (3-5 years)Implementation
  • 53© Operational Excellence Consulting. All rights reserved.Hoshin Kanri Steps 11. Establish organizational vision2. Develop 3-5 year strategic plan3. Develop annual objectives4. Deploy/roll down to departments Departments develop plans and means Focus deployment – not everyone needs to beinvolved in everything Iterative (catch-ball) nature may take time
  • 55© Operational Excellence Consulting. All rights reserved.Catch-Ball ProcessGroup Goals & PrioritiesDivision ObjectivesDepartment ObjectivesSection ObjectivesFrontline Objectives
  • 57© Operational Excellence Consulting. All rights reserved.Strategic Planning IncorporatingBalanced Scorecard & Hoshin KanriCustomerPerspectiveLearning &GrowthPerspectiveBusinessProcessesPerspectiveFinancialPerspectiveTargets Setfor KeyPerformanceIndicatorsProcessExecution &ImprovementProjectPlans &ResourceAllocationDrivesNego-tiationInputsResults – Reflection to Identify ContinuousImprovement Opportunities
  • 59© Operational Excellence Consulting. All rights reserved.There are several areas to focus on whenemploying a strategic planning processCustomerPerspectiveLearning &GrowthPerspectiveBusinessProcessesPerspectiveFinancialPerspectiveTargets Set forKeyPerformanceIndicatorsProcessExecution &ImprovementProject Plans& ResourceAllocationDrivesNego-tiationInputsResults – Reflection to Identify ContinuousImprovement Opportunities(1) Complete full scan of theenvironment includinginput for targets from topmanagement(2) Ensure that all businessobjectives are covered byKPIs and targets are set foreach KPI(3) Apply common filter to listof proposed projects(4) Allocate resources againstportfolio of projects(5) Top management is theowner of the project portfolio(6) Regular reviews based onstandard forms and templates(7) Adopt a process view to reflectimprovement1 2 3 4 5 67
  • 61© Operational Excellence Consulting. All rights reserved.Four Key Phases of Hoshin Kanri• Top ManagementObjective Setting• Deployment toDepartment Managers• Operationalize throughProjects• Review Performance
  • 63© Operational Excellence Consulting. All rights reserved.Phase 2: Deployment to Department ManagersDeployment toDepartment ManagersPROCESS OUTPUTINPUTSCross-functionalResources RequestFunctionalScope?AFinalized first-levelHoshin KanriDeployed asFunctional ObjectivesNoYesB
  • 65© Operational Excellence Consulting. All rights reserved.Phase 4: Review PerformanceMonthly Review ofResultsPROCESS OUTPUTINPUTSQuarterly review ofHoshin KanriActual vs.Planned?Updated Control chartReport of Project StatusInvestigate & takecountermeasures toaddress discrepancyYesNoCRewards & Recognition
  • 67© Operational Excellence Consulting. All rights reserved.Common Hoshin Kanri ToolsAlignment & DeploymentChartFor improvement hoshinDaily Management MatrixFor daily managementGantt ChartFor review purposesManagement Control ChartFor review purposes
  • 69© Operational Excellence Consulting. All rights reserved.(64%) (72%)Alignment & Deployment Chart – HR Example
  • 71© Operational Excellence Consulting. All rights reserved.Daily Management MatrixCustomer PerspectiveFinancial PerspectiveInternal Processes PerspectiveLearning & Growth Perspective
  • 73© Operational Excellence Consulting. All rights reserved.X MatrixStep 1: What?BreakthroughThinkingStep 5: Who?ResourceDeploymentStep 4: HowMuch & When?MeasuresStep 3: How?Which KeyProcesses?Step 2: HowFar? This Year?
  • 75© Operational Excellence Consulting. All rights reserved.Activity 7: Alignment & DeploymentTime: 60 mins• Select an Annual Objective based on Activity 6.Cascade the annual objective down to thefollowing levels using the Alignment &Deployment Chart Division Department Section
  • 77© Operational Excellence Consulting. All rights reserved.Example: A3 Storyboard
  • 79© Operational Excellence Consulting. All rights reserved.Types of Hoshin Kanri• Main Objectives vs. Support Objectives• Improvement (Breakthrough) vs. DailyManagement• Cross-functional vs. Functional• Level of Deployment
  • 81© Operational Excellence Consulting. All rights reserved.Main & Support Objectives• Support objectives are objectives aimed atsupporting the main objectives or improvingthe internal business processes• These objectives are formulated by functionalmanagers
  • 83© Operational Excellence Consulting. All rights reserved.Hoshin Kanri Deployment TreeFrontlinerSectionManagerDepartmentManagerGMM1Improve ProcessQualityM1.1Improve AssemblyProcess QualityM1.1.1Improve ProcessCapability at FOLM1.1.1.1Improve Bondabilityof MQFP Devices…M1.1.2Implement DefectPrevention at EOLM1.1.2.1Implement VisionSystem for MQFPTrim Process…M1.2Improve TestProcess Quality……
  • 85© Operational Excellence Consulting. All rights reserved.Concept of Performance Measurements• Performance Measurements are the criticalresults that must be achieved at each level inorder to reach overall organizational goals.• They are determined during the goal setting andalignment process
  • 87© Operational Excellence Consulting. All rights reserved.Key Business Drivers• Critical areas that determine the success for anorganization in a certain strategic approach• Possible Key Business Drivers might include: Innovation Productivity Quality Cost Delivery Service
  • 89© Operational Excellence Consulting. All rights reserved.The Balanced Scorecard ApproachFINANCIALBUSINESS PROCESSESVisionandStrategyTo succeed financially, howshould we appear to ourshareholders?LEARNING & GROWTHCUSTOMERSTo achieve our vision, howwill we sustain our ability tochange and improve?To achieve our vision,how should we appear toour customers?To satisfy our shareholdersand customers, whatbusiness processes mustwe excel at?Source: Kaplan & Norton
  • 91© Operational Excellence Consulting. All rights reserved.Performance Measurements - Benefits• Provide data for evaluating how wellorganizational goals are being achieved• Encourage Management by Fact and ProblemIdentification• Provides a clear format for communicating upand down the management chain• Facilitates project identification• Provide a basis for recognizing goodperformance
  • 93© Operational Excellence Consulting. All rights reserved.Improvement Hoshin• Objective deployment that relates abreakthrough improvement in key areas• Objectives and Goals for Improvement Hoshincould be determined through one orcombinations of the following: Strategic / Business Planning Business Excellence frameworks (e.g. SQA) Managerial grid Benchmarking
  • 95© Operational Excellence Consulting. All rights reserved.Steps in Defining Improvement Hoshin1. Derive target for specific objective2. Perform analysis of past performance of the object being addressed– trend, Pareto analysis and cause-effect relationships, etc.3. Define tactics / means to achieve objective target4. Identify the metrics for the defined tactics / means5. Identify the person(s) responsible and deadline for completing thetactics / means6. Define a forecasted improvement trend for the objective beingaddressed7. Set up a management control chart to plot the actual improvementtrend versus that of the forecasted trend8. Take countermeasures when the actual trend deviates from theforecasted trend
  • 97© Operational Excellence Consulting. All rights reserved.Cascading of Policy DeploymentPolicy Deployment cascades down,with the tactic and targetsat one level becomingthe objective andgoals at thenext level.Objective Goals Tactic TargetsWhat HowMeasure MeasureObjective Goals Tactic TargetsWhat HowMeasure MeasureObjective Goals Tactic TargetsWhat HowMeasure MeasureDepartment ManagerSection ManagerEngineer
  • 99© Operational Excellence Consulting. All rights reserved.Daily Management• Objective deployment related tomaintaining and controlling thecurrent level of performance.• Objectives measurementssubjected to daily maintenanceshould be importantperformance parameters thatrequire regular monitoring. Vitalsigns of how the organization isperforming.
  • 101© Operational Excellence Consulting. All rights reserved.Steps in Defining Daily Management1. Select important performance parameters to be subjectedto Daily Management2. Analyze the capability of the performance parameters overa certain time interval3. Define minimum acceptable level of performance (plan) forthe parameters4. Set up a management control chart to plot the actuallevel of performance versus the minimum acceptablelevel of performance5. Take countermeasures when the actual level ofperformance deviates from the minimum acceptable levelof performance
  • 103© Operational Excellence Consulting. All rights reserved.Cross-Functional Management• Coordination of inter-functionalactivities to achievemanagement goals• Management of horizontal /project organizations that cutacross different functions ordepartments• Incorporate the use of projectmanagement tools
  • 105© Operational Excellence Consulting. All rights reserved.Cross-Functional Integration &Project Management• Hoshin Kanri, in the form of Improvement Hoshin, areoperationalized through projects• Variables affecting the success of projects include: Cross-functional Cooperation (Teamwork) Quality of Project Leadership Systemic Support Reward & Recognition System Availability of Resources Review & Reporting Structure
  • 107© Operational Excellence Consulting. All rights reserved.Purpose of Reviews• To monitor the Hoshin Kanri plans and results• To review the status of the projects initiatedbased on improvement hoshin• To monitor key performance parameters andaddress any anomalies• To improve on the Hoshin Kanri process
  • 109© Operational Excellence Consulting. All rights reserved.Key Points to Note for Reviews• Emphasis on corrective actions and systemicsupport to address deviations from plans• Provide opportunities for recognition ofachieved targets and good efforts• Address system issues hindering theachievement of objectives
  • 111© Operational Excellence Consulting. All rights reserved.Monthly Self-Review• Emphasis on self-diagnosis by individuals orteams (process owners) responsible for thepolicy• Monthly self-review should include: Updating the management control chart to checkprogress of the plan Analysis of discrepancies from planned results Follow-up with countermeasures to addressdiscrepancies Reporting the discrepancies and countermeasures
  • 113© Operational Excellence Consulting. All rights reserved.Quarterly Review• More formal review involving functionalmanagement and senior management• Quarterly formal review should include: Review of how the results of lower level objectives arecontributing to higher level objectives Review of the trends of management control charts Presentation of project status Understanding of problems encountered and their causes Evaluate the objectives and make adaptive changes tothe tactics and targets
  • 115© Operational Excellence Consulting. All rights reserved.Annual Review 2• Emphasis on understanding which means led tothe achievement of which targets (cause-effectrelationship)• Standardize resulting improvement to otherareas, where applicable• Document and disseminate lessons learnedfrom Hoshin Kanri of current year
  • 117© Operational Excellence Consulting. All rights reserved.Activity 10: Issues & Challengesof Management Reviews• Identify the top three issues and challenges that you haveencountered in past management reviews. For eachissue/challenge, define a mitigation plan.Time: 15 minsIssue No. Description of Issue/Challenge Mitigation Plan
  • 119© Operational Excellence Consulting. All rights reserved.Checklist for Annual Planning Session 26. Have the employee and customer satisfactionissues been picked up?7. Are there any related strategies that it wouldmake sense to merge into a single strategy?8. Any measures that should have specifictargets over several quarters or several years?
  • 121© Operational Excellence Consulting. All rights reserved.Guidelines for Managing ReviewMeetings 24. Travel and unplanned meetings are kept to aminimum5. Ensure that people are given time for thepreparation of data about the background todeviations from plans (~2 weeks)6. That business units should use same hoshinreview charts/tables to review strategies
  • © Operational Excellence Consulting. All rights reserved.Factors Contributing to EffectiveHoshin Kanri Deployment
  • 125© Operational Excellence Consulting. All rights reserved.Operating Effectiveness• Capacity of organization to achieve majorresults in selected objectives• Factors contributing to operating effectiveness: Continuous improvement as guiding principle Selection of appropriate management levers Performance measurement and feedback systems
  • 127© Operational Excellence Consulting. All rights reserved.Coherence• Three dimensions of coherence Horizontal (Cross-functional) Fit Improvement objectives and actions are aligned across variousfunctions Vertical (Functional) Fit Priority of objectives of subordinates aligns to that of functionalsupervisor Strategic Fit Extent of short-term actions, aimed at short-term objectives,contributing to medium- and long-term objectives
  • 129© Operational Excellence Consulting. All rights reserved.9 Reasons Why Hoshin Kanri Fails1. Wrapping today‟s management process in A3 paper2. Not knowing why3. Setting, broad, vague, shallow objectives4. Cheating on the “therefore” test5. Marking it yellow or red and moving on6. Using the down-up-down process for negotiation, notconsensus7. Happy planning8. Writing your hoshin plan on the computer9. Having a strategy that is too good to be changedSource: gemba panta rei
  • 131© Operational Excellence Consulting. All rights reserved.Key Points / Summary• Hoshin Kanri is a management tool aimed attranslating management objectives to variouslevels of the organization• The main purpose is to achieve Focus andAlignment of organizational objectives• Policy deployment is based on basic principlesof Lean, i.e. customer focus, management byfact, teamwork and continuous improvement
  • 133© Operational Excellence Consulting. All rights reserved.Key Points / Summary• Regular reviews are important to monitor theprogress of the policy deployment• Effective Hoshin Kanri are determined by:operating effectiveness of the organization,coherence of the objectives and mobilizationof individuals and teams involved in the HoshinKanri process
  • © Operational Excellence Consulting. All rights reserved.End of PresentationTo view the full list of training presentations,please visit us at:Operational Excellence Consultinghttp://www.oeconsulting.com.sg