The Lean way
ILS follows the principles of Hoshin Kanri in helping companies develop and execute effective strategic plans. Hoshin Kanri is a cyclic planning and management tool of Japanese origin. Companies apply it on two levels.
At the strategic planning level, companies systematically set a small number of key long-range corporate objectives called Breakthrough Objectives. These are usually 2 to 5 year plans.The objectives are directed at achieving significant performance improvements or at making significant changes in the way an organization, department or key business process operates.
At the day-to-day level, Hoshin kanri lays out the business fundamentals that will be continually monitored to keep the business running. This is how the process owners are able to take real-time corrective action for continuous process improvement (Kaizen.)
The method can also be thought of as the application of the Deming Cycle of Plan, Do, Check, Act to the management process. The Hoshin Review of the plan of last year is the basis (Check) for the new Hoshin Annual Plan (Plan). This plan cascades through the organization by Annual Planning Tables (APT) prepared at each level. The plan is translated into policies, targets and actions for execution (Do) at the next level down. Every level reviews their APTs periodically (usually monthly) to identify, discuss and decide the causes of any differences between expected and actual results. They develop and implement (Act) corrective actions and continue the cycle.
Strengths of Hoshin Kanri
- Focuses the entire organization on the vital few, rather than the trivial many
- Communication of a shared strategic vision
- Participative. Creates alignment and involvement towards breakthrough objectives
- Integrates and encourages cross-functional cooperation to achieve breakthroughs
- The progress on plans Is carefully monitored. This allows for a response to non-execution and corrective action
- The planning process is continuously improved
- Emphasis on a thorough analysis and understanding of problems which occurred during the previous cycle of planning
Requirements for Hoshin Kanri
- A disciplined implementation is necessary
- A long term commitment, ongoing support of senior management
- Breakthrough Objectives should be stable during a five year period
Hoshin Kanri belives that the best way to obtain the desired result is to ensure that all employees in the organization understand the long-range direction of the company and that they are working according to a linked plan to make that vision a reality. It sets out to measure and monitor the fundamental business processes of the organization. With these processes under control, organizations are able to stress the systems and drive for those breakthrough objectives.
The program includes
- Details on what Hoshin Kanri is and how it is used
- Step by step process to lead the team in a review of their vision, mission and values, reflection on previous year’s performance
- Development of potential high impact goals and narrowing those to the Breakthrough Objectives
- Development of a communication plan
- Follow up meetings to refine the plan
- Using case studies or actual work place problems
- Breaking down and translate the objective so that the next level in the organization can take action
- Following the Problem Solving Process