Hoshin Kanri

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

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:

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

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:

Hoshin tables types:

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

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

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:

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

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

References

  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

External links