The hoshin planning concept has its origin in the Japanese word hoshin kanri. In Japanese, the term hoshin refers to compass, pointing the direction or shinning metal. It is essentially a goal that comes with an instruction manual to address the company business need. Kanri on the other hand means control or management. It is the management of not only resources but processes as well.
There are 7 important steps involved in the hoshin planning process. The first involves the identification of important issues faced by the company/business. The second involves the establishment of objectives to address the issues. In the third step is where the company defines its overall goals. In step four, strategies are developed to support the goals formulated in step 3. Step five is concerned with the definition of sub goals that support the strategies developed in step 4. In step six, indicators or metrics for measuring the performance of the process are established. The establishment of business fundamental measures is carried out as the final step. It is important to note that only the top management is allowed to handle/deal with the first three processes.
Thus, the hoshin planning process is a strategic planning/management methodology that is used for defining the key objectives of a company or organization. It is also used to ensure the implementation of business fundamentals necessary to effectively run a business on a day to day basis. It is intended to help a company/organization focus on shared goals to avoid wasting resources and communicate goals to all leaders in order to utilize and magnify the collective knowledge. It is also intended to assist an organization hold participants accountable for achieving their part of the over all plan and create an organization that is accountable. It is worth noting that in this management system/process, employees at all levels of the organization take part.
Strategic planning is absolutely vital to running a successful business, without the right amount of planning in place the business will crumble. Hoshin Kanri is one of the methods that has been created to help companies achieve the goals that they have set themselves. It was invented in the 1950’s in Japan by Professor Kaoru Ishikawa. The fundamental principle is Hoshin Kanri is to acknowledge that everybody that works for a company is an expert in their field; it is the collective knowledge of everybody that helps makes the company what it is. It really does help the individuals in the company feel like a true individual as opposed to somebody that really has no input. Top companies that currently utilize this method include Bank of America, Dell, Hewlett Packard and Nissan. Let’s take a little bit of more in depth look at this management method.
The idea of Hoshin Kanri is that everybody focuses on a shared goal. This philosophy is evident from the name, Hoshin means compass and Kanri means management, which obviously shows that everybody is heading in the same direction. For any success to be had the goal has to be communicated to all the leaders of the company, each person plays their own part in the big master plan.
This method works well for companies as it has everybody working towards the same goals and when everybody does this together you are much more likely to achieve what you want to do.
The process is a fairly long winded one. It involves identification of key business issues and the creation of objectives in order to put these issues right. Strategies are then planned out which are paramount to achieving these goals, objectives will need to be placed into each strategy as well as the means of measuring the success of each of them.
Throughout the Hoshin process there are a number of times in which performance will need to come under review. There are a number of standardized tables which are needed for review and this is quite often carried out by the managers. These reviews will often include the following:
1. The Scope of the Plan
2. The Objective of the Plan, i.e. what the company is setting out to achieve.
3. Milestones that measure when each objective has been achieved.
4. The outlines of strategies that will help the department achieve the objectives that have been set out to them.
5. A check on whether strategies are being achieved or not.
There are also a number of other supporting tables which are used to support the Hoshin Kanri process. This includes a strategy implementation table, business fundamentals table and an annual planning table. In order to achieve the objectives set out there must be communication between each level in the table. The Annual Planning Table will form the basis of the objectives for the next year.
It is important that objectives are constantly monitored to ensure that they are reached. If the Hoshin Kanri plan is put into action properly then you are well on your way to ensuring that your company is working in tangent to achieve the objectives together.
The hoshin kanri is an established technique formulated to attain and reinforce tactical goals in addition to displaying future insights and developing the resources to these into actuality. The hoshin planning method was based on a theory that originated in Japan. In essence hoshin kanri is utilized to convey the company’s policy to every employee in the organization.
The underlying principle of hoshin is to use the combined thoughts of each employee to make their company the best in their area of expertise. Generally hoshin blends in long and short term planning processes with objective and quality management techniques to produce a course of action series. Plainly hoshin kanri is a system of structures and regulations that give confidence to the employees to evaluate situations carry out performance assessments, make improvement plans and take the right action.
The hoshin kanri method provides the organization with; new objective focus, development of plans that support the objectives adequately, evaluating the improvement of these plans, adjusting the plans as they needed, it is a tool for learning in the organization. So hoshin makes sure that every employee in the organization is working towards similar goals. The hoshin planning is hierarchical which flows all the way through the organization and to the important business process.
The hoshin method matches the management principle of total quality organization. The leadership must take the necessary steps to shut the gaps between the organization vision and future performances. The hoshin kanri planning process ensures that performance measures and daily controls are put in place. So hoshin planning bring into line an organization towards achieving the same goals. The main objective of hoshin kanri is to focus the united goal, convey that the all the leaders, and hold the participants liable for accomplishing parts of the plan. These are the tips about hosni planning techniques.
Hoshin Planning or Hoshin Kanri was developed in the 1950s by Professor Kaoru Ishikawa. He simply put it as “Every person is an expert in his job and through collective efforts and capabilities of all employees, an organization can become the leader in its field”.
Hoshin planning puts much emphasis on proper delegation of work and encourages managers and directors to delegate authority within the organizational structure. This provides valuable insight into client and customer requirements and varied feedback through employees at every level helps in successful implementation of projects. It is a powerful tool of control that allows quick decisions and steers your business in the right direction. Indeed, hoshin kanri means ‘a compass that points direction’ in Japanese and that is exactly what it does.
The crux of hoshin planning is to make an organization achieve:
* Continued focus on a common goal
* Proper involvement of higher management to support those goals
* Timely communication of strategic goals to the leaders
* Make everyone accountable for their part in the planning process
If this model is religiously followed, then it can work wonders for any company. As everyone is fully aware of their ‘Critical-Success-Factors (CSF’s)’ and ‘Key-Performance-Indicators (KPI’s)’, different departments within the structure are never on a collision course and all projects have successful resolutions. It is also a perfect tool to isolate and eliminate gaps: Where you are right now and where you should be is considered as a ‘gap’ and the management can identify these weak links and root them out by proper alignment and distribution of work and priorities. These priorities are in fact known as ‘hoshins’ and the goal is to deploy limited and manageable number of these ‘hoshins’ at any given level within the company.
Countless success stories are testament to the fact that Hoshin Kanri is a great management tool to prioritize or delegate work and authority, which ensures that vision and insights are not forgotten once the planning phase is over. Tried and tested over the years, this is one management funda that can surely benefit you.