Hoshin Planning Process

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Hoshin Planning Process

• Workshop
• Month xx, 20xx

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Agenda

• Introduction/Ice Breaker 5 min.
• What is Hoshin Planning? 2 min.
• Why use Hoshin Planning? 24 min.
• How to Use Hoshin 35 min.
• Questions and Answers 15 min.
• Example (tbd) 15 min.
• Wrap Up 5 min.

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What is Hoshin Planning?
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Hoshin Planning

• Hoshin is a Japanese term compass needle
• Designates setting strategic direction of the
  organization
• For HOS Hoshin is
• A closed loop management system for identifying,
  focusing and linking the organization to achieve
  results. Additionally it contains a daily
  management that drives constant progress
  monitoring of these results and reacts to issues
  as they arise
• Traces roots to
• Management By Objectives (MBO) Drucker
• Plan-Do-Check-Act (PDCA)- Shewhart/Deming
• Sometimes referred to as
• Policy Deployment
• Management By Policy
• Management By Planning
• U.S. Based Companies That Have Embraced It
• Danaher, Hewlett-Packard, Proctor Gamble,
  Xerox, Florida Power and Light (FPL)

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Why Use Hoshin Planning?
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Why do we need Hoshin Planning?

• Why?
• Proper alignment requires more than independent
  establishment of strategies
• Hoshin Planning will align those strategies and
  drive the execution
• To Achieve Breakthrough RESULTS!
• Common Failure Modes
• No review of actions or accountability
• Plans not visible or not measured or measurable
• Not aligned or linked to the needs of the site

A PROCESS to help drive Results!
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Hoshin is an active relationship between 2 parts

• The two parts of Hoshin are
• Hoshin Management
• Daily Management
• Hoshin Management (Strategies Objectives)
• Special actions/plans are required to achieve a
  desired result
• Daily Management (Routine KPI Management)
• Can achieve targets with usual improvement
  activity and resources

Hoshin Has Two Sides
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Why Use Hoshing Planning?
Strategic Objective is Achieved!
Base
KAIZEN
Base
Improvement
KAIZEN
Base
Hoshin
Planning
KAIZEN
Base
Base
Year 3
Year 4
Year 0
Year 1
Year 2
To Build Sustainable Competitive Advantage
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Why Use Hoshin Planning?
VS.
To Align Objectives and Targets Throughout the
Organization
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Daily Management

• Daily Management (Routine KPI Management)
• A visual management system to highlight
  day-to-day issues that drives rapid
  implementation of countermeasures.
• A communication tool that drives alignment to the
  lowest levels of what is important to the site.
• Strong linkage into the Visual Management and
  Leadership Standardized Work systems at the site

Daily, Weekly Monthly Monitoring of Progress
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Hoshin Planning Summarized
Both Controlled by Rigorous Process Control
Systems and measured frequently to drive results
OBJECTIVES
Cash
Growth
QMS
Daily Mgt.
Hoshin Management
People
AOP
STRAP
All activities necessary to carry out the routine
work for the SBU
STRATEGIES

• Defined to follow and be governed by
• Rapid Problem Solving methods
• PDCA

Demonstrated through standardized work On the
shop floor
Controlled and driven through Leadership
Standardized Work in daily gemba walks
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How to Use Hoshin?
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What Does Hoshin Planning Mean To You?
Top Mgt
Breakthrough
Middle
Mgt
Kaizen
Supervisor
Daily
Management
Front LineAssociate
Adapted From Beyond Strategic Vision, Effective
Corporate Action With Hoshin Planning Cowley,
Domb, 1997 pg. 57
How Should You Spend Your Time?
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Timing of Hoshin Planning
JULY
AUGUST
SEPT
OCT
NOV
DEC
JAN
STRATEGIC PLANNING
HP LEV 1 COMPLETE
ACTION PLANDEV COMPLETE
HP LEV 2 3 COMPLETE
NEWYEARHPBEGINS
CONCURRENT BUDGETING PROCESS
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7 Phase Hoshin Planning Process
Establish Organizational Vision
PLANNING
Strategic Planning/ Develop 3-5Year Breakthrough
Objectives
Develop Annual BreakthroughObjectives and
ImprovementPriorities
Self-Diagnosis
Catchball
Deploy Improvement Priorities
Lean SS CAP
Implement Improvement Initiatives
IMPLEMENTATION
Root Cause Countermeasures
Critical Step
REVIEW
Monthly Review
Annual Review
Annual Review
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The Process of Critical Thinking (PCT)
Step 1 WHAT Breakthrough Thinking
Step 2 HOW FAR Annual Breakthroughs
Step 3 HOW Identify Key Driver Process
Step 4 HOW MUCH/ WHEN Determine Measures Track
Step 5 WHO Identify Key Resources Deploy
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PCT Step 1 WHAT?
World-Class
Breakthrough Objective
Best-In-Class
Industry Standard
GAP
Current Situation
Current Situation
Breakthrough Thinking Leads us to World Class
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PCT Step 2 - HOW FAR?
Breakthrough Objective
Yr 3
Annual BT Objectives Yr 3
Yr 2
Annual BT Objectives Yr 2
Yr 1
Annual BT Objectives Yr 1
Current Situation
Identify First Year Breakthrough Objective
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PCT Step 3 - HOW?
Annual Breakthrough Objective
Improvement Priority
Why?
Why?
GAP
Why?
Why?
Current Situation
Why?
Identify Key Driver Processes
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PCT Step 4 - HOW MUCH/ WHEN?
100
0
Determine Measures Track
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PCT Step 5 - WHO?
100
100
Resource A
3
Current Distribution Of Resources
Team B
Relative Impact On Improvement Priorities
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20
Resource C
40
Resource D
Team E
0
0
Identify Key Resources Deploy
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Daily Management and Hoshin Planning
Once Breakthrough is achieved process is
standardized to Daily Management!
Strategic Objective is Achieved!

KAIZEN
Improvement
KAIZEN
Daily
Hoshin
Mgmt
Planning
Daily
KAIZEN
Mgmt
Daily
FoundationforHP
Mgmt
Daily
Daily
Mgmt
Mgmt
Year 0
Year 1
Year 2
Year 3
Year 4
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PCT the Top Level HP Matrix
WHO
Annual Metrics
RESOURCES
Primary Responsibility
Secondary Responsibility
OWNER
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Complete Top Level HP Matrix
3- HOW
Use dots to show relationship of Targets and
Resources to the Improvement Priority
5- WHO
Use dots to show relationship of Improvement
Priorities to Annual Objectives
Top Level Improvement Priorities
NOTE Only Solid dots on a resource deploy to the
next level
Annual Breakthrough Objectives
Targets to Improve
2- HOW FAR
3-5 Year Breakthrough Objectives
4- HOW MUCH
RESOURCES
Primary Responsibility
1- WHAT
Secondary Responsibility
OWNER
The whole picture of your company on one sheet of
paper!
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Linkage on the Matrix
Top Level ImprovementPriorities
Dots showlinkage fromTarget back to
Breakthroughfor that level
AnnualBreakthroughObjective
TargetsToImprove
3-5 Year Breakthroughs
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Points to Remember about the Matrix

• As soon as a solid dot is placed above a
  resource, that resource will get a lower level
  matrix or an action plan.
• Clear circles indicate support resources. They
  do NOT get a lower level matrix or action plan
  unless they get a solid dot on another matrix.
• The dots are to be used as a sanity check
• The ImprovementPriority is deployedto the lower
  levelmatrix or an actionplan

TOP LEVEL - Company
Top Level Improvement Priorities
Annual Breakthrough Objectives
Targets to Improve
3-4 year Breakthrough Objectives
SECOND LEVEL - Plant
Second Level Policy Deployment
Second Level Improvement Priorities
Top Level Improvement Priorities
Targets to Improve
Annual Breakthrough Objectives
RESOURCES
l
Primary Responsibility
m
Secondary Responsibility
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Transferring Improvement Priorities to the 2nd
Level
TOP LEVEL
The 2nd level 12 oclock and 3 oclock positions
have all new text in them nothing is rotated
into them from level 1.
Imp. Priorities and Annual Objectives are copied
directly onto the 2nd Level HP. Matrices.
Top LevelImprovementPriorities
Annual BreakthroughObjectives
Target to
Improve
SECOND LEVEL
Typically, a 2nd Level Matrix is created for a
primary resource for each top-level
Improvement Priority.
Second LevelImprovementPriorities
Top LevelImprovementPriorities
Target to
Improve
Annual
Breakthrough
Objectives
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Transferring Improvement Priorities To The 3rd
Level
SECOND LEVEL
Not always suggestingyou need 3rd Level.Based
on size, complexity,breadth, and maturity
oforganization.
Top Level and Second Level Imp. Priorities are
copied directly onto the 3nd Level HP Matrices.
Second LevelImprovementPriorities
Top LevelImprovementPriorities
Target to
Improve
Annual BreakthroughObjectives
THIRD LEVEL
If necessary, a 3rd Level Matrix is created for a
primary resource for each second-level
Improvement Priority.
Third LevelImprovementPriorities
Second LevelImprovementPriorities
Target to
Improve
Top LevelImprovementPriorities
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Completing the Second Level PD Matrix
Use dots to show relationship of Targets and
Resources to the Improvement Priorities
5- WHO
3- HOW
Use dots to show relationships between
Improvement Priorities and Annual Objectives
2nd Level Improvement Priorities
2- HOW
Use dots as a check to make sure the Improvement
Priorities Targets meet the goal and support
the Annual Breakthrough Objectives
Targets to Improve
Top Level Improvement Priorities
Annual Breakthrough Objectives
RESOURCES
4- HOW MUCH/WHEN
1- HOW FAR
Primary Responsibility
Secondary Responsibility
OWNER
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Cascading Priorities to ACTION
TOP LEVEL Company/Group
Point of Impact - Action Plan The level where
root causes are addressed! Action Plans can be
initiated out of any matrix level.
TopLevelImprovementPriorities
SECOND LEVEL Plant/Business
Target to
AnnualBreakthrough Objectives
Improve
3-5 Year
Breakthrough
Objectives
SecondLevelImprovementPriorities
TopLevelImprovementPriorities
Target to
Improve
ROOT CAUSE LEVEL- Sub Plant/Dept
POINT OF IMPACT - ACTION PLANEngineer/Supv
Cascade as many times as necessary to the Root
Cause Level
ThirdLevelImprovementPriorities
SecondLevelImprovementPriorities
Target to
Improve
TopLevelImprovementPriorities
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Creating Action Plans
Create an Action Plan For every
Improvement Priority at the Point of Impact
Step 4 Identify the impacts on the improvement
priority and top level breakthrough objective
Step 3 What is the current status of the
action. Color code background as red to show
items past due.
Step 1 Determine actions write on worksheets
Step 2 Record ownership and timing of the
actions
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Action Steps Complete the Cause Effect Chain
Breakthrough Objective Attain competitive
advantage in Delivery Performance
Effect Results!
Annual BT Objective 1 Streamline
Engineer-to-Order Processes
Effect Cause
Top Level Improvement Priority Use HOS Tools to
improve value stream of Engineer-to-Order Process
Second Level Improvement Priority Implement
Improved Order Entry Process
Effect Cause
Action Step 1 VSM Customer Service Process
Action Step 2 SW Kaizen to improve productivity
by 35
Actions Cause
Action Step 3 VRK to reduce Quote processing
timeby 50
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Where VSM and Fits Into The Process
Breakthrough Objectives
Annual BT Objectives
Top Level Imp Priorities
2nd Level Imp Priorities
Value Stream Mapping
Action Plans
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Action Plans Drive The Rate Of Improvement
DASHBOARD/SCORECARD
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Scorecards
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Each Target is Copied to the Top Level Scorecard
Reduce New Prod. Dev. Cycle
TOP LEVEL IMPROVEMENTPRIORITIES
ANNUALBTOBJECTIVES
TARGET
TO
Dev. Cycle to 120 Days by 12/95
IMPROVE
Increase Market Share to 60
Engineering Department
Human Resources Dept.
Production Department
Marketing Department
Materials Department
Finance Department
Sales Department
3-5 YEARBREAKTHROUGHOBJECTIVE
RESOURCES
Primary Responsibility
Secondary Responsibility
TOP LEVEL MATRIX
TOP LEVEL SCORECARD CHART
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Scorecards are Created for All HP Matrices
TOP LEVEL
SCORECARD
Title
Top Level Improvement Priorities
Annual
Target s to
Breakthrough
Improve
Objectives
3-5 year Breakthrough Objective
SECOND LEVEL
SCORECARD
2nd Level Improvement Priorities
Targets to
Improve
Top Level Improvement Priorities
Annual Breakthrough Objectives
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The Review Process Ensure Plan and Learn
Conduct Regular Reviews
Execute To The Plan
P
A
D
C

• Execute to the plan and perform daily, weekly and
  monthly reviews of each action plan (Daily Mgt.)
• Reviews are designed to keep the Hoshin Plan on
  track
• Improvement Action owners dont come to be
  evaluated
• The intent is to present the results of self
  assessment
• The review team provides focused assistance
  primarily around the owners analytical process
  and preparation.
• What did you plan to do? (Plan)
• What did you actually achieve? (Do)
• How does actual vs. target compare (CHECK)
• Standardize whats working, implement
  countermeasures and/or plan again as required.
  (ACT)

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Manage Daily Management Through Leadership
Standard Work

• Embed the Hoshin Plans into Leadership Standard
  Work
• Make the Hoshin review process part of the daily,
  weekly and monthly audit process
• The key is to constantly monitor progress and
  drive accountability to the lowest level

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5 Why Analysis
?????

• Systematic method to drive to the true root
  cause(s) of a problem
• Simply ask why in a step ladder approach until
  fundamental root cause is discovered. Root cause
  is not simply listing the symptoms of a problem
• Normally, after up to 5 steps, the true root
  cause(s) will be exposed

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Action Plans vs. Countermeasures?
Countermeasures are reactive they address how
to get back to plan when a goal is missed for a
period
Jump Off Point (JOP) to stretch target
HP miss
Action Plans are proactive they address how to
achieve a particular goal from the jump off point
(JOP) to the stretch target
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Monthly HP/ISC Review Agenda Format

• Establish the Growth Agenda for
• Todays HP Review
• Financial Review
• Hoshin Planning
• - Road Blocks to Growth, Major
  Predetermined Topics
• - Established HP Growth Initiatives
• - New Product Development
• - Remaining HP Elements (Q, D,C)
• KPIs
• People/Org. Issues
• Other Business

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Follow a typical MOR session
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Monthly PD is typically an 8 hour meeting
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Hoshin Planning Summary

• Aligns Strategy and Execution
• Systematically develops and links plans from
  organizational vision to operational tactics
• Ensures deep and common understanding and
  maximizes ownership and buy-in to plan
• Requires thoughtful, detailed planning for each
  and every improvement action
• Consistently assesses actual performance vs. plan
  and addresses issues and learns from the process

All Employees are Engaged in the Process
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Questions?