Hoshin Planning: Strategically Drive Improvements

Hoshin Planning, commonly referred to as, “policy deployment”, is a method used to ensure that the strategic goals of a company are consistently driving progression and action at every organizational level of a company. This type of methodology strives to eliminate wastes that result from the inconsistency of direction and inadequacy of communication, as its intentions are to get every employee on the same page.

In order to achieve the desired level of synchronization, an organization’s goals, management tactics and employee operations all need to be in absolute alignment. The Hoshin Planning method does just that with seven detailed steps:

Step 1: Establish Organizational Vision

1. Evaluate existing vision and mission statement
2. Assess current policies, procedures, and management system
3. Analyze the present long-term goals of the organization

Step 2: Develop 3-5 Year Strategic Plan

1. Focus on five goals or less; a smaller number of goals makes it easier for companies to prioritize and generate objectives that are “real”, measurable and within reach.
2. Goals and objectives should be primarily defined based on what will be the most effective, rather than the most efficient.
3. Assess growth opportunities, continuously improve operations, and generate activities that will allow for revolutionary change within the organization.

Step 3: Develop Annual Objectives

1. Break down the overall goals of the 3-5 year plan into incremental objectives that will be achieved annually. Reaching the annual objectives confirms progression and will enable a company to reach their main goals in a measurable fashion.
2. Provides the transitioning point from developing objectives to deploying objectives.

Step 4: Deploy Annual Objectives

1. Develop top-level improvement priorities; apply metrics to them.
2. Develop second and third level targets that are business specific and are directly correlated to top-level priorities; apply metrics to them.
3. Cascade strategic goals down through all levels of the company.

Step 5: Implement Annual Objectives

1. Identify and solve problems
2. Implement changes
3. Execute improvements

Step 6: Monthly Review

1. Formally and continuously track implemented activities
2. Evaluate progression in achieving annual improvement objectives

Step 7: Annual Review

1. Assess if year’s objectives are on track with the overall 3-5 year plan goals.
2. Determine what changes need to be made in the following year’s cycle.

Hoshin Planning was created to emphasize the importance of deployment when creating objectives. In manufacturing, deployment is one of the most crucial aspects in enhancing productivity and operational efficiency.

By utilizing the Hoshin Planning methodology, manufacturers are able to focus on optimally managing production and inventory to support customer delivery and supply chain operations in the most efficient and effective manner possible.

The benefits of Hoshin Planning include:

1. Ensures that the organization is consistently focused on specific strategic directions and goals
2. Communicated objectives to the entire organization
3. Creates a unified vision across all functional levels
4. Errors are minimized and waste is eliminated
5. All resources are used optimally and thus, money is saved

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