Hoshin Kanri
Figure 1: The Core Hoshin Planning Process
(Source: GOAL/QPC 1989, p. 13)
(1) Establish organization vision
(2) Develop 3-5 year plan
(3) Develop annual objectives
PHASE 1: (1)(2) –
Well done strategic
planning
PHASE 2: (3)to(7) – Heart
of hoshin planning
process
(4) Deployment/roll down to depts., to develop plans
including targets and means
(5) Implementation
Act
(6) Regular progress review – monthly + quarterly
(7) Annual review
Check
Plan
Do
What is different?
•
•
•
•
Everybody company-wide/build strategy into daily management
Distinction between breakthrough/continuous improvement
Greater involvement of leadership (hierarchy of PDCAs)
Bottom-up catchball planning (preparing the ground/consensual –
for faster implementation)
• The management philosophies & business methodologies of total
quality management & lean working
– Management by PDCA
– The Pareto principle
– Business process management/quality tools
• Management of Objectives, rather Management by Objectives
(emphasis on process and review)
• Objectives and means always considered together
• Common language of cross-functional objectives (e.g. Quality, Cost,
Delivery, & People) used by everyone
FIGURE 2.1 Three dimensions of organizational purpose
Vision
Strategy
Changing to a new
position or state for
the organization
Values
Core competencies and a
dynamic capability for
managing these
The organization’s
way of working
Mission
What the organization
does now
Strategic change: strong
outside-in influences and
high importance given to
critical success factors for
breakthrough change
Business
Model
Core business areas:
strong inside-out
influences and high
importance given to key
performance indicators
and continuous
improvement
The annual FAIR cycle: it is
managed by using PDCA
Focus
(Acting)
on the vital few
strategic priorities.
Review (Checking)
Align
(Planning)
focus, alignment,
integration.
plans & management
systems.
act
check
plan
do
Integrate (Doing)
strategically-linked activities
in daily management.
The European Excellence Model
Enablers
Results
People
Results
People
Leadership
Policy &
Strategy
Partnerships
& Resources
Processes
Customer
Results
Society
Results
Innovation and Learning
Key
Performance
Results
Nissan’s Top Executive Audit (Dynamic Capability)
Core Areas/Processes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Cross-functional activities
Daily management
Production maintenance
Standardization establishment
Productivity improvement activity
Inspection
Production control & labour
management
Personnel & labour management
Cost management
Quality control
Engineering capability
Parts localization
Purchasing
Core Competences
1. Daily control
2. The determination of hoshins
3. The coordination of hoshin
development & deployment
4. The establishment of control
items
5. Analytical & problem-solving
abilities
6. Check & action taken
7. Leadership & participation by
high-ranking personnel
Styles of Capitalism
Liberal market economy
• Resources coordinated
through markets
• Strategic resources are
adaptable & general
(market based view of
strategy)
• Strategic management
primarily outside-in &
portfolio based, importance
of SBU
• Shorter-term
Coordinated market economy
• Collaborative institutional
relations
• Strategic resources are
industry, firm specific
(resource based view of
strategy)
• Strategic management
primarily inside-out &
synergy based, common
corporate ways of working
• Longer-term
Is the very large MNC a special case, and what have been the effects of global strategy?