Hoshin Kanri

Strategic approach to Continuous Improvement

There are ways of looking at India’s present economic woes marked by a rapid fall in the value of the rupee caused by persistent inflation of the past few years and the high current account deficit (CAD) of about $85 billion (4.5 per cent of GDP) which needs to be funded through uncertain capital inflows year after year.  Based on data with the Reserve Bank of India (RBI), about a quarter of the $300 billion in foreign debt owed by Indian corporations is short-term loans due to be repaid in a year, according to Daljeet Kohli, head of research at India, Nivesh Securities. But what is important right now for organizations is to become more localised, more competitive. Whether it is Quality, Cost, Delivery, Morale or Safety – you have to be the better then your competitor in some way. There has to be some reason why customers will select you against your competitor. If you stay discipline, focused, keep on getting better every day and aim at pockets of activity you can have decent numbers. But if you stand still or don’t improve and hope for the tide to take you back for a ride, probably that wouldn’t be a good idea.

Hoshin Kanri can be one of the proven means by which this can be achieved when competition is stiff and pressures are mounting on your organization. It is a systematic approach that can be applied to grind down even the most severe competition.  Hoshin Kanri is also called Policy Deployment. It is a method devised to capture & cement strategic goals as well as flashes of insight about the future & develop the means to bring these goals into reality. In Japanese, hoshin means “shining metal”, “compass”, or “pointing the direction”. Kanri means “management” or “control”. The name suggests how hoshin planning aligns an organization toward accomplishing a single goal.

Hoshin Kanri is intended to help organization:

– Focus on a shared goal
– Communicate that goal to all pillar heads
– Involve all pillar heads in planning to achieve the goal
– Hold participants accountable for achieving their part of the plan

It is also used to:

– Prioritize action areas to ensure that we are focusing on those that will impact our overall goals
– Provide clear measures to judge how each action is impacting “closing the gaps” on the goals
– Allow each individual being called on to contribute to link his efforts to the top level goals of the    Company

The tool is used at multiple levels within the Company:

– Each level is developed from the level above
– The process includes a simple reporting procedure that gives simple visual management to   evaluate progress

Policy deployment is not an end in itself not it’s a magic or too complicated. Policy deployment matrix can be used to decide on where to allocate resources and how to measure their impact on what’s important to the business. The Policy Deployment Matrix forces the key Questions to be addressed in a structured way for everyone to be aligned to the same goals and to share the same vocabulary as to what those goals really mean. Policy deployment matrix is reviewed periodically in order to view the progress towards the strategic Vision & Mission.  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.

In a nutshell Hoshin planning is a process in which you perform 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.

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