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Strategic Planning: Hoshin Kanri Strategy Deployment

Hoshin Kanri process is a powerful strategy deployment methodology for defining long-range key entity objectives. These are breakthrough objectives that extend two to five years with little change. In addition, the Hoshin Kanri process does not lose sight of the day-to-day business measures required to run the business successfully. This dual approach provides an extended period of time for the organization to focus its breakthrough effort, and at the same time, continuously improving key business processes day to day. This methodology continues to be used by some of the world's most successful companies such as Toyota, Hewlett-Packard and Texas Instruments.

BENEFITS

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

CONTENTS

1. Introduction to Hoshin Kanri
2. Underlying Principles of Hoshin Kanri
3. Hoshin Kanri Process Using PDCA Approach
4. Hoshin Kanri Tools
5. Elements of Hoshin Kanri
6. Management Reviews
7. Success Factors​ for Effective Hoshin Kanri Deployment

To download this complete presentation, please go to: https://www.oeconsulting.com.sg

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Strategic Planning: Hoshin Kanri Strategy Deployment

  1. 1. © Operational Excellence Consulting HOSHIN KANRI Translating Vision & Strategy to Execution © Operational Excellence Consulting. All rights reserved.
  2. 2. © Operational Excellence Consulting LEARNING OBJECTIVES 2 Acquire knowledge on the key concepts and principles of Hoshin Kanri Gain knowledge on the factors contributing to effective Hoshin Kanri deployment Describe the Hoshin Kanri approach to planning, deployment and review process for managed change Define the Hoshin Kanri process and tools NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg
  3. 3. © Operational Excellence Consulting PROGRAM BENEFITS 3 Focuses the entire company on a few vital goals, rather than the trivial many Creates alignment towards breakthrough objectives through involvement of the whole management team Communicates the key goals to all managers and staff Integrates and encourages cross-functional cooperation to achieve breakthroughs A review process which holds participants accountable for achieving their part of the plan
  4. 4. © Operational Excellence Consulting CONTENTS 4 KEY CONCEPTS & PRINCIPLES PROCESS & TOOLS DEPLOYMENT & MANAGEMENT REVIEWS EFFECTIVE HOSHIN KANRI DEPLOYMENT 01 040302
  5. 5. © Operational Excellence Consulting “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” SUN TZU 5
  6. 6. © Operational Excellence Consulting ● Too many bad projects in process ● Very long lead times for improvements ● Most employees never seem to feel a part of the team ● Little connection between strategy and continuous improvement SYMPTOMS THAT YOUR ORGANIZATION NEEDS TO DO HOSHIN KANRI PLANNING ● Senior management vision does not match organizational activities ● Annual objectives are rolled out in March instead of January ● Year-to-year plans never seem to connect ● Constantly missed budgets and forecasts 6
  7. 7. © Operational Excellence Consulting 7 A TYPICAL COMPANY SPENDS A DISPROPORTIONATELY LESS TIME IN PLANNING… PLAN DO CHECK ACT
  8. 8. © Operational Excellence Consulting 8 THIS IS HOW TOYOTA USES ITS TIME – MORE TIME 0N PLANNING & LESS TIME ON FIRE-FIGHTING PLAN DO CHECK ACT
  9. 9. © Operational Excellence Consulting THE THREE KEY LIMITATIONS OF STANDARD STRATEGIC PLANNING INSUFFICIENT DETAILTOO MANY PRIORITIES LACK OF ACTIVE REVIEW 9
  10. 10. © Operational Excellence Consulting ● Hoshin Kanri is a methodology to capture and concretize strategic goals as well as to develop the means to bring plans to reality ● In other words, Hoshin Kanri is target- means deployment HOSHIN KANRI 10
  11. 11. © Operational Excellence Consulting ● A visual planning tool that helps us identify the key focus points and strategies we will use to steer us towards our vision ● Enables everyone to ‘see’ where we’re going and our plans to get there ● Build plan and strategies as a team ● Shared responsibility for getting results WHAT IS HOSHIN KANRI? 11
  12. 12. © Operational Excellence Consulting WHAT HOSHIN KANRI IS NOT ● A tool for management to control the employees ● An MBO program with a new packaging ● Focused entirely on outcomes or results ● A performance appraisal tool ● A management reporting tool ● Another one of those “extracurricular activities” 12
  13. 13. © Operational Excellence Consulting BENEFITS OF HOSHIN KANRI 13 Leadership evident at all levels There is a clear line of sight Aligns resources, objectives and metrics to all goals and at all levels of the organization Every employee is clear of their role and objectives Employees are involved in setting targets, improvement schedules and reviews Everyone understands the goals of the organization
  14. 14. © Operational Excellence Consulting HOSHIN KANRI CREATES ALIGNMENT TOWARDS BREAKTHROUGH OBJECTIVES THROUGH INVOLVEMENT OF THE WHOLE MANAGEMENT TEAM Source: Based on Yoji Akao, 1991 q Vision q Objectives q Strategy q Resources q Action q Schedule GoalsReview Measures Hoshin Plan SENIOR MANAGEMENT IMPLEMENTATION TEAMS MIDDLE MANAGEMENT 14 Note: Although the Objectives/Goals terminologies are sometimes used in reversed, the differentiation remains.
  15. 15. © Operational Excellence Consulting THE THREE LEVELS OF HOSHIN KANRI DEPLOYMENT § Vision § Mission § Shared Values Management by Principles § Objectives Setting § Target-means Deployment Management by Priorities § Network of Inter-related Projects § Cross-functional Management Management by Projects 15
  16. 16. © Operational Excellence Consulting HOSHIN KANRI IS A POWERFUL SYSTEM FOR GOAL ALIGNMENT § Alignment through entire company structure using top- down goal setting § Each subsequent goal supports the previous level’s goals Verticalalignment Organization Goals Department Objectives Individual Objectives Department Objectives Individual Objectives Individual Objectives Individual Objectives 16
  17. 17. © Operational Excellence Consulting HOSHIN KANRI & LEAN IMPERATIVES Hoshin Kanri Customer Value ContinuousImprovement Management by Fact Teamwork ALIGNMENT PRINCIPLE OPERATING PHILOSOPHY 17
  18. 18. © Operational Excellence Consulting Top-down focus on creating and improving systems HOSHIN KANRI INTEGRATED WITH Bottom-up focus on total employee involvement in continuous improvement TOTAL EMPLOYEE INVOLVEMENT TEAMWORK HOSHIN KANRI & EMPLOYEE INVOLVEMENT 18
  19. 19. © Operational Excellence Consulting LINKAGES OF BSC, HOSHIN KANRI & MBO § Company “Report Card” at a glance § Contains macro measurements related to key success factors (e.g. productivity, revenue, etc.) § For senior management Balanced Scorecard § Provides focus and alignment § Measure key processes § Reveals what, who and when Hoshin Kanri § Targets are negotiated between supervisor and subordinates § For rewarding performance MBO 19
  20. 20. © Operational Excellence Consulting THE THREE KEY UNDERLYING PRINCIPLES OF HOSHIN KANRI PLAN-DO-CHECK- ACT CYCLE PARETO PRINCIPLE CAUSE & EFFECT RELATIONSHIP 20
  21. 21. © Operational Excellence Consulting THE SEVEN KEY STEPS OF HOSHIN KANRI 21 1. Establish organizational vision 2. Develop 3-5 year strategic objectives 3. Develop annual objectives 4. Deploy to departments using target- means approach 5. Implement the action plans 6. Review progress regularly (e.g. monthly, quarterly) 7. Conduct half- yearly and/or annual review Strategy development Strategy deployment
  22. 22. © Operational Excellence Consulting Vision Annual Objectives Measures Objectives Measures Objectives Measures Objectives Measures TOP MANAGEMENT FRONTLINE SECTION MANAGER DEPARTMENT MANAGER 2-way dialogue & negotiation 2-way dialogue & negotiation 2-way dialogue & negotiation TARGET-MEANS DEPLOYMENT: “CATCH-BALL” PROCESS 22
  23. 23. © Operational Excellence Consulting CRITICAL SUCCESS FACTORS 23 Focus on the process, not so much on the results 1 Data driven (management by fact) 2 Management goals and priorities are deployed across all functions and levels 3 Adequate tactics defined to achieve goals 4 Communications among functions are sufficient 5 Regular management review 6
  24. 24. © Operational Excellence Consulting Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg ABOUT OPERATIONAL EXCELLENCE CONSULTING 24

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