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1.1 Strategic Planning with Hoshin Kanri

Hoshin Kanri provides a planning structure for bringing critical processes up to the desired level of performance. Hoshin Kanri is essentially a methodology that seeks to apply the plan, do, check, act (PDCA) cycle of Quality Control to managing change (i.e., deploying a policy) throughout a firm. Hoshin Kanri can be defined as follows:

Hoshin Kanri

· Provides a systematic approach to managing changes in the primary aspects of an organization · Provides a planning structure for bringing critical processes up to the desired level of performance

Hoshin Kanri strives to provide management a methodology for creating consensus about fundamental changes to a system or organization. In his article "Understanding Hoshin Kanri: An Introduction," Greg Watson proposes the following model for this consensus planning and execution process:

Hoshin Model

Implementation Teams Hoshin Plan

-Action -Schedule

-Vision -Objectives

Senior Management

Review

Measures

Goals

-Strategy -Resources Middle Management

[Source: H oshin K anri: Policy D eployment for Successful TQ M edited by Yoji Akao

In this model, the planning and implementation process is illustrated by the peripheral circle. The process is initiated by senior management and moves to middle management and finally to the implementation team. Each of these groups (i.e., senior management, middle management, and implementation team) is represented by a circle defining their responsibilities and areas for interaction. Senior management is responsible for defining the organization's vision and its core performance objectives. These establish what the business is all about. At this point a dialogue is established with middle management to negotiate the goals that support the achievement of the core organization objectives. These negotiation processes are illustrated by the two-way arrow at the interaction of the middle and upper management intersection. After middle and upper management have come to consensus on the goals, middle management determines how the goals are to be reached. Defining how the organization will achieve the goals involves establishing a strategy for accomplishing the objectives and identifying the resources required to implement the strategy. After the strategy has been defined and the resources identified, middle management negotiates with the implementation team on the performance measures that will be used to track the progress of the implementation. After consensus is established the implementation team is empowered to initiate and manage the change process. The processes come full circle with a senior management led review process that is concerned with reviewing the progress of the implementation as well as assessing the performance of the planning system. Watson has identified the following key steps for implementing Hoshin Kanri:

Implementing Hoshin Kanri

· · · · · · · · · · Define the organization's vision and objectives. Devise long- and medium-term management strategies. Collect and analyze the information. Plan the target and means. Set control items and prepare a control item list. Deploy the policy. Deploy the control items. Implement the policy plan. Check the results of implementation. Prepare the status report for implementing hoshin kanri.

Define the organization's vision and objectives: Effective policy deployment begins with a vision of where the business is going. The organization's vision is foundational in the development of a company-wide policy for quality as well as the development of a plan for promoting improvement throughout all aspects of the firm. Devise long- and medium-term management strategies: Translate policies and plans developed in Step 1 into long and medium-term strategies for changing company culture to achieve the desired goal(s). Collect and analyze the information: Gather data on the organization's current situation and performance. This data should focus on the previous year's performance, along with the current internal and external conditions. The analysis involves identification of problems discovered during the data collection phase with the primary focus being to ascertain the firm's most critical problems. Plan the target and means: Based on the analysis of the organization's current situation, identify action items (targets) and a plan for achieving them. Set control items and prepare a control item list: Identify specific control items for deploying the plan developed in Step 4 as well as a list of specific jobs, responsibilities, control period, control method, contingency plans, etc. Deploy the policy: Coordinate policy implementation throughout the company by identifying specific targets (goals) for specific divisions, departments, and personnel.

Deploy the control items: Identify specific action items required to achieve policy goals for the specific divisions, departments, and personnel throughout the firm. This step involves the development of the action plan sheet for each division, department, individual, etc. Implement the policy plan: After planning and preparation the firm must implement the plan as laid out in the policy plan and, more specifically, the action plan sheets. Check the results of implementation: As the policy is deployed there will be feedback on results and performance. These should be evaluated and checked against targets and goals. When differences are discovered, identify the causes, identify those causes with the greatest impact on performance and take corrective actions. Successful corrective actions should be incorporated into the following year's plan. Prepare the status report for implementing Hoshin Kanri: At the end of the year develop a status report that details the results of the policy deployment efforts. These serve as the basis for the development of the next year's policy plan. [Source: Hoshin Kanri: Policy Deployment for Successful TQM]

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