1. Hoshin Kanri
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takisco
Hoshin Kanri focuses the entire company on a few vital goals, rather than many.
2 months ago
John Kramer
The leaner we get the better is the strategy and management.
2 months ago
kaydak
Hoshin Kanri sounds like a really interesting methodology for leading a company to
success.
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2. Hoshin Kanri
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1.
© Operational Excellence Consulting. All rights reserved.Hoshin KanriYour NameYour Job
Title© Operational Excellence Consulting. All rights reserved.
2.
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
3.
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
4.
© Operational Excellence Consulting. All rights reserved.Introduction to Hoshin Kanri
5.
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
6.
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
7.
13© Operational Excellence Consulting. All rights reserved.Typical CompanyDoPlanCheckAct
8.
15© Operational Excellence Consulting. All rights reserved.Toyota’s Use of
TimeDoPlanCheckAct
9.
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
10.
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
11.
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
nj1990
It's really a superb idea and I like it very much. It's a good strategy of your companies
successfulness and wealth increases in future.
3 months ago
Anthony Ponzio
I like the idea of building your companies goals from the ground up, ensuring that
everyone has a role in the future prosperity of your company.
3 months ago
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3. Hoshin Kanri
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at all levels of the organization• Employees are involved in setting targets,improvement schedules
and reviews• There is a clear line of sight
12.
23© Operational Excellence Consulting. All rights reserved.A Hoshin Kanri System for
GoalAlignment•Alignmentthrough entirecompanystructure usingtop-down
goalsetting•Eachsubsequentgoal supportsthe previouslevel‟s
goalsVerticalalignmentOrganizationGoalsDepartmentObjectivesIndividualObjectivesDepartmentObjectivesIndividualObjectivesIndividualObjectivesIndividualObjectives
13.
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
14.
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
15.
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
16.
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
17.
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
18.
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
19.
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
20.
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
21.
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
22.
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
23.
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
24.
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
25.
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
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4. Hoshin Kanri
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places3. Climb to the top of Mt. Everest by end 20144. Give up the smoking habit within 3
monthsTime: 10 mins
26.
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
27.
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
28.
55© Operational Excellence Consulting. All rights reserved.Catch-Ball ProcessGroup Goals &
PrioritiesDivision ObjectivesDepartment ObjectivesSection ObjectivesFrontline Objectives
29.
57© Operational Excellence Consulting. All rights reserved.Strategic Planning
IncorporatingBalanced Scorecard & Hoshin KanriCustomerPerspectiveLearning
&GrowthPerspectiveBusinessProcessesPerspectiveFinancialPerspectiveTargets Setfor
KeyPerformanceIndicatorsProcessExecution &ImprovementProjectPlans
&ResourceAllocationDrivesNego-tiationInputsResults – Reflection to Identify
ContinuousImprovement Opportunities
30.
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
31.
61© Operational Excellence Consulting. All rights reserved.Four Key Phases of Hoshin Kanri•
Top ManagementObjective Setting• Deployment toDepartment Managers• Operationalize
throughProjects• Review Performance
32.
63© Operational Excellence Consulting. All rights reserved.Phase 2: Deployment to
Department ManagersDeployment toDepartment ManagersPROCESS OUTPUTINPUTSCross-
functionalResources RequestFunctionalScope?AFinalized first-levelHoshin KanriDeployed
asFunctional ObjectivesNoYesB
33.
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
34.
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
35.
69© Operational Excellence Consulting. All rights reserved.(64%) (72%)Alignment &
Deployment Chart – HR Example
36.
71© Operational Excellence Consulting. All rights reserved.Daily Management MatrixCustomer
PerspectiveFinancial PerspectiveInternal Processes PerspectiveLearning & Growth Perspective
37.
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?
38.
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
39.
77© Operational Excellence Consulting. All rights reserved.Example: A3 Storyboard
40.
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
41.
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
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42.
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……
43.
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
44.
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
45.
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
46.
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
47.
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
48.
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
49.
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
50.
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.
51.
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
52.
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
53.
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

6. Hoshin Kanri
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54.
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
55.
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
56.
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
57.
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
58.
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
59.
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
60.
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?
61.
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
62.
© Operational Excellence Consulting. All rights reserved.Factors Contributing to
EffectiveHoshin Kanri Deployment
63.
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
64.
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
65.
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
66.
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
67.
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

7. Hoshin Kanri
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68.
© 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
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