Hoshin Kanri Strategy Deployment Guide

© Operational Excellence Consulting. All rights reserved.
Hoshin Kanri
Strategy Deployment

© Operational Excellence Consulting. All rights reserved. 2
Program Objectives
1. Understand the key concepts and principles of
Hoshin Kanri
2. Define the Hoshin Kanri process and tools
3. Describe the Hoshin Kanri approach to
planning, deployment and review process for
managed change
4. Gain practical knowledge and skills in planning
and deploying Hoshin Kanri in the organization
NOTE: This is a PARTIAL PREVIEW. To
download the complete presentation,
please visit:
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Program Benefits
• 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 in
the planning process
• 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

Program Outline
1. Introduction to Hoshin Kanri
2. Principles of Hoshin Kanri
3. Hoshin Kanri Process
4. Hoshin Kanri Tools
5. Hoshin Kanri Deployment
6. Management Reviews
7. Effective Hoshin Kanri Deployment

Symptoms that your organization needs
to do Hoshin Kanri planning…
• Too many bad projects in process.
• Very long lead times for improvements.
• Constantly missed budgets and forecasts.
• Senior management vision does not match
organizational activities.
• Annual objectives are rolled out in March
instead of January.

“Plans are nothing,
planning is everything.”
- Dwight D. Eisenhower

“Strategy without tactics is the
slowest route to victory. Tactics
without strategy is the noise
before defeat.”
– Sun Tzu

“Even if you are on the right
track, you’ll get run over if
you just sit there.”
- Will Rogers

Limitations of Standard Strategic
Planning
1. Too many priorities
2. Insufficient detail
3. Lack of active review

Hoshin Kanri
• Hoshin Kanri – Japanese term for Policy
Deployment
• Hoshin is composed of two characters:
 Ho means “method or form”
 Shin means “shiny needle or compass”
 Taken together, hoshin means a “methodology for
strategic direction setting”
• Kanri means “management” or “control”

• 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?

What Hoshin Kanri IS NOT
• A tool for management to control the employees
• A strategic planning methodology to replace the
Balanced Scorecard
• Focused entirely on outcomes
• A performance appraisal tool
• A management reporting tool
• Another “extracurricular activities”

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 goals
and at all levels of the organization
• Employees are involved in setting targets,
improvement schedules and reviews
• There is a clear line of sight

Hoshin Kanri Model
Source: Yoji Akao, 1991

Hoshin Kanri at Three Different Levels
• 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

A Hoshin Kanri 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

Hoshin Kanri & LEAN Imperatives
Hoshin Kanri
Customer Value
ContinuousImprovement
Management by Fact
Teamwork
Alignment Principle
Operating
Philosophy

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

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

Breakthrough
• Breakthrough means
improvement to a
significantly higher
level of performance
• Lack of breakthrough for
a business organization
would place it in a
position of regression in
a competitive
environment
Think BIG:
Boldly Important Goals

Underlying Principles of Hoshin Kanri
• Plan-Do-Check-Act
(PDCA) Cycle
• Pareto Principle: Focus on
the vital few
• Cause-and-Effect
Relationship

Review of Strategic Planning Process

Hoshin Kanri Cascade
Goals
Strategies
Objectives
Tactics
The broad outcomes
The detailed steps and tools
you will use
The measurable steps to
achieve the strategies
The approaches you will take

“Catch-Ball” Process
Vision
Annual
Objectives
Measures
Objectives Measures
Objectives Measures
Objectives Measures
Top
Management
Frontline
Section
Manager
Department
Manager
2-way dialogue & negotiation

Hoshin Kanri Process - Example
Direction of
information flow
Catchball:
Negotiation &
Alignment between
two levels
MD
Div Manager
Dept Manager
Section
Manager
Engineer
Customer
Satisfaction
Feedback
Feedback
Feedback
Feedback
Set up & lead
Kaizen team
to reduce rejects
in Line A-1
To improve
quality
Improve
overall yield
Reduce
defects
Reduce rejects
in Line A-1
Policy Owner Objective Means
To improve
quality
Improve
overall yield
Reduce
defects

Four Key Phases of Hoshin Kanri
1. Top Management
Objective Setting
2. Deployment to
Department Managers
3. Operationalize through
Projects
4. Review Performance

Phase 1: Top Management Objective Setting
Top management sets
objectives & determines
tactics to achieve the
objective
PROCESS OUTPUTINPUT
Review and obtain
commitments from
department managers
Breakthrough
Objectives?
A
• Corporate Goals
• Strategic Planning
• Benchmarking Projects
• Past Performance
Review
• Self-Assessment
Determine key drivers
Draft of the first-level
Hoshin Kanri
Deployed as Daily
Management
Objectives
Yes
No

Common Hoshin Kanri Tools
Alignment & Deployment
Chart
For improvement hoshin
Daily Management Matrix
For daily management
Gantt Chart
For review purposes
Management Control Chart
For review purposes

X Matrix
Step 1: What?
Breakthrough
Thinking
Step 5: Who?
Resource
Deployment
Step 4: How
Much & When?
Measures
Step 3: How?
Which Key
Processes?
Step 2: How
Far? This Year?

Hoshin Kanri Deployment Tree
Frontliner
Section
Manager
Department
Manager
GM
M1
Improve Process
Quality
M1.1
Improve Assembly
Process Quality
M1.1.1
Improve Process
Capability at FOL
M1.1.1.1
Improve Bondability
of MQFP Devices
…
M1.1.2
Implement Defect
Prevention at EOL
M1.1.2.1
Implement Vision
System for MQFP
Trim Process
…
M1.2
Improve Test
Process Quality
…
…

Cascading of Policy Deployment
Policy Deployment cascades down,
with the tactic and targets
at one level becoming
the objective and
goals at the
next level.
Objective Goals Tactic Targets
What HowMeasure Measure
Department Manager
Section Manager
Engineer

Types of Reviews
Monthly
Review
Quarterly
Review
Annual
Review

Checklist for Annual Planning Session 1
1. Are the overall measures in the hoshin and
structured business plans clear and
understood?
2. Does each strategy has an owner?
3. Have the critical business issues been
addressed?
4. Have the carry-over activities been picked up?
5. Have the lessons learned been picked up?

Effective Hoshin Kanri
Factors contributing to effective Hoshin
Kanri:
1. Operating effectiveness
2. Coherence
3. Mobilization

Critical Success Factors
• Data driven (Management by Fact)
• Focus on the Process, NOT the Results
• Internal and external customers identified and
considered top priority
• Management goals and priorities are universally
understood and deployed across all functions and within
each level of planning
• Adequate tactics defined to achieve goals
• Communications among functions are sufficient
• Regular management review

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About Operational Excellence
Consulting
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training and consulting firm that assists organizations in
improving business performance and effectiveness.
• The firm’s mission is to create business value for
organizations through innovative operational excellence
management training and consulting solutions.
• OEC takes a unique “beyond the tools” approach to enable
clients develop internal capabilities and cultural
transformation to achieve sustainable world-class excellence
and competitive advantage. For more information, please visit
www.oeconsulting.com.sg

To download this presentation,
please visit us at:
www.oeconsulting.com.sg
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Hoshin Kanri Strategy Deployment Guide

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