Special Thanks to Greg Sieber for his contribution and guidance.
The image most often depicted in U.S. literature on Hoshin Kanri is that of a ship’s compass distributed to many ships, properly calibrated such that all ships through independent action arrive at the same destination, individually or as a group, as the requirements of the “voyage” may require.
Hoshin Kanri is a systems approach to the management of change in critical business processes using a step-by-step planning, implementation, and review process. Hoshin Kanri improves the performance of business systems. A business system is a set of coordinated processes that accomplish the core objectives of the business. For every business system there are measures of performance and desired levels of performance. Hoshin Kanri provides a planning structure that will bring selected critical business processes up to the desired level of performance.
Hoshin Kanri is applied at two levels:
Strategic Planning Strategies—Business Simulations
Daily Management Strategies —Business Operations
The origin of Hoshin Kanri can provide insight into its concepts. The term Hoshin is short for Hoshin Kanri. The word Hoshin can be broken into two parts. The literal translation of ho is direction. The literal translation of shin is needle, so the word Hoshin could translate into direction needle or the English equivalent of compass. The word Kanri can also be broken into two parts. The first part, KAN, translates into control or channeling. The second part, RI, translates into reason or logic. Taken altogether, Hoshin Kanri means management and control of the organization’s direction needle or focus.
Hoshin = a course, a policy, a plan, an aim
Kanri = administration, management, control, charge of, care for
The most popular English translation of Hoshin is Policy Deployment. Most books by American authors use Policy Deployment as the name for Hoshin. Other frequently used translations are ‘Management By Policy’, ‘Hoshin Planning’, ‘Policy Management’, ‘Managing for Results,’ Strategic Deployment’ and ‘Goal Deployment’. No matter what you call it, Hoshin is effective and helps organizations become more competitive.
The purpose of Hoshin Kanri (or Policy Deployment) is to make it possible to get away from the status quo and make a major performance improvement by analyzing current problems and deploying strategies that respond to environmental conditions. Policy Deployment cascades, or deploys, top management policies and targets down the management hierarchy. At each level, the policy is translated into policies, targets and actions for the next level down.
With Policy Deployment, top management vision can be translated into a set of coherent, consistent, understandable and attainable policies and actions that can be applied at all levels of the company and in all functions of the company. When these actions and policies are applied, they result in a vision becoming a reality – and major, continual improvement in performance.
At the beginning of the Policy Deployment process, top management sets the overall vision and the annual high-level policies and targets for the company. At each level moving downward, managers and employees participate in the definition—from the overall vision and their annual targets—of the strategy and detailed action plan they will use to attain their targets. They also define the measures that will be used to demonstrate that they have successfully achieved their targets. Then, targets, in turn are passed on to the next level down. Each level under top management is, in turn, involved with the level above it to make sure that its proposed strategy corresponds to requirements. Regular reviews take place to identify progress and problems, and to initiate corrective action.
Policy Deployment ensures that everyone in the company is made aware of the overall vision and targets, and the way that these are translated into specific requirements for their own behavior and activities.
Hoshin Kanri can be thought of as the application of Deming’s Plan-Do-Check-Act (PDCA) cycle to the management process. The PDCA cycle represents a generic approach to continual improvement of activities and processes.
IN THE ‘PLAN STEP, a plan of action is developed to address a problem. Corresponding control points and control parameters are created. The plan is reviewed and agreed.
IN THE ‘DO’ STEP, the plan is implemented.
IN THE ‘CHECK STEP, information is collected on the control parameters. The actual results are compared to the expected results.
IN THE ‘ACT STEP, the results are analyzed. Causes of any differences between expected and actual results are identified, discussed and agreed. Corrective action is identified.
The Plan-Do-Check-Act Cycle is a logical sequence for behavior. PDCA implies that once one cycle of the sequence is completed with the ‘ACT step (in which corrective action is identified), the ‘PLAN step (in which a plan to address how corrective action will be generated) of the next cycle should be started.
The initial considerations in the Hoshin Kanri approach to business system change are as follows:
Measuring the business system as a whole Setting core objectives of the business
Understanding the environmental situation in which the business operates
Defining processes that make up the system, and their activities, goals, and metrics
Providing resources to perform activities to achieve business objectives.
The Hoshin Kanri approach aims to ensure that insight and vision are not forgotten and ignored as soon as planning activities are over. It aims to guarantee that planning documents, once finalized, are kept alive and acted on daily, and not shelved as soon as they have been completed. It aims to prevent the daily quota of fire fighting, unplanned ‘strategic’ meetings, and quarterly bottom-line pressures taking precedence over the really strategic plans. In the Hoshin Kanri environment, short-term activities are determined and managed by the plans themselves. There is a continual process of checking to make sure that what is done each day reflects the intentions, the targets, and the vision the company has agreed to pursue. Both planning and deployment are critical features of Hoshin Kanri, hence the term policy deployment.
Hoshin Kanri provides an opportunity to continually improve performance by disseminating and deploying the vision, direction, targets, and plans of corporate management to top management and to all employees so that people at all job levels can continually act on the plans, and evaluate, study, and feed back results as a part of a continual improvement process.
The intention is that, in companies using Hoshin Kanri, everybody is aware of management’s vision, departments don’t compete against each other, projects run to successful conclusions, business is seen as a set of coordinated processes.
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