November 5, 2015 / continuous improvement, Employee Morale, industry news, KPIs, lean manufacturing, performance metrics, root cause analysis, strategic planning
In today’s lean manufacturing world, you don’t have to be an expert to know some of the lingo. Most manufacturing executives could easily rattle off terms like continuous improvement, kanban, just-in-time, and root cause analysis without even fully understanding what each entails, and many could probably provide a basic definition.
However, one lean manufacturing term that is not as well known—and even harder to say—is Hoshin Kanri. Although not as popular as some of the other lean strategies, Hoshin Kanri (also called Policy Deployment) can be a valuable planning tool for manufacturers. In fact, according to an article from IndustryWeek, the methodology is starting to gain traction among industry leaders.
“Hoshin Kanri is fast becoming an integral part of the strategic planning process at many organizations,” William Waldo, COO of consulting firm BMGI, writes in IndustryWeek. “From decades of refinement, this methodology has emerged as extremely effective in creating strategic alignment and galvanizing an organization toward achieving its vision.”
What is Hoshin Kanri?
Although difficult to pronounce, Hoshin Kanri is fairly simple in concept. The Japanese strategic planning process is designed to ensure that a company’s mission, vision, goals, and annual objectives are communicated and implemented throughout the entire organization, from top management to the shop floor level. According to leanproduction.com, this alignment eliminates the waste that comes from inconsistent direction and poor communication. In essence, it aims to “get every employee pulling in the same direction at the same time,” the website explains.
Although experts often vary on the specific steps involved in Hoshin Kanri planning, Waldo of BMGI believes there are seven key steps to successful implementation. Below is a brief summary of each step:
- Step 1. Establish Organizational Vision: This requires you to evaluate the current state of your organization with respect to your vision, business planning processes, and execution engine.
- Step 2. Develop Breakthrough Objectives: Breakthrough objectives are significant improvements that require your organization to stretch itself and will take three to five years to achieve.
- Step 3. Develop Annual Objectives: What will you need to achieve this year in order to reach those three to five-year breakthrough objectives?
- Step 4. Deploy Annual Objectives: The goal here is to turn those breakthrough objectives into workable targets and objectives at the departmental level using tools such as the Hoshin Planning Matrix, detailed action plans, summary reports, and value stream maps.
- Step 5. Implement Annual Objectives: This is where improvements are executed, using the most appropriate problem-solving approach.
- Step 6. Monthly Review: A monthly review fosters a culture of accountability and action by reviewing progress toward achieving annual improvement objectives.
- Step 7. Annual Review: This is a thorough review of the year’s objectives that shows where the organization stands against the stated objectives and what adjustments must be made to the next cycle.
Like any lean manufacturing initiative, Hoshin Kanri can seem a bit daunting. However, many manufacturing leaders have had success with the methodology, including Bridgestone, Boeing, Motorola and Toyota, to name a few. Accuride, a manufacturer of forged aluminum wheels and other commercial vehicle components, was recently honored by The Association for Manufacturing Excellence (AME) for its continuous improvement efforts, including implementation of Hoshin Kanri at its Rockford corporate facility and factory, reports The Fabricator.
There are two main reasons why your service center should consider joining many others in adopting Hoshin Kanri strategic planning. First, it creates a shared vision across the entire organization, which fosters good communication and can be good for employee morale. In addition, it can have a positive impact on performance. “Implementing Hoshin allows an organization to build a high performance culture and measure the progress of culture change toward a high performance,” according to an article from iSixSigma. “Following this process on a set schedule for each of the fundamental plans and annual plans throughout the organization ensures achievement of the business mission and progress towards the business vision.”
Even if Hoshin Kanri is not for your service center, adopting some form of strategic planning is critical if you want to be successful in today’s market. As Confucius once said, “A man who does not plan long ahead will find trouble at his door.”