Hoshin Kanri Or Strategy Deployment?

Transcription

1 1 Hoshin Kanri Or Strategy Deployment? Hoshin Kanri Policy Deployment or Strategy Deployment? What is the difference?

2 Hoshin Kanri Policy Deployment or Strategy Deployment? What is the difference? When I commenced my PhD studies in 2005, I was investigating supply chain voids in a small number of priority sectors in Wales, as identified within the Welsh Government s Economic Development Strategy. The sectors I researched included Aerospace, Creative Industries and Life Sciences all very different. Whilst I was gathering data for these sectors, it became apparent that the strategy for all sectors was universal and that every sector was managed/measured using the same approach and KPIs. I therefore decided to do 2 important things: 1. Consider the contingencies of each sector to understand the different, contingent factors that affected them 2. Use Hoshin Kanri to develop and deploy contingent strategies for each sector. (Whilst other strategy development and deployment models were available - Hoshin Kanri was rarely used in empirical studies). 2 Hoshin Kanri, where does it emanate? Hoshin Kanri is translated from Japanese origins as shown below - in an organisation, the Hoshin is the compass that guides everybody s efforts. Hoshin Kanri is also referred to as policy deployment or managing by policy. The approach emanates from the Japanese management systems which also support Lean Thinking and Continuous Improvement (CI). There are a number of definitions of Hoshin Kanri. An early Japanese definition by Mizuno (1984) takes a holistic view of Hoshin Kanri and asserts that it is used to improve performance continuously, by disseminating and deploying the direction, targets, and management plans to top management and all employees, so that all job levels can act on the plans, evaluate, study,

3 and feedback results whilst continually performing PDCA, by analysing current problems and deploying in response to environmental conditions. Some 12 or so years later, Womack and Jones (1996) define it as a strategic decision-making tool that focuses resources on the (few) critical initiatives to accomplish the business objectives of the firm which are translated into specific projects and deployed down to the implementation level in the firm. Hoshin Kanri unifies and aligns resources, establishes clearly measurable targets to progress toward the key objectives and is measured on a regular basis. In 2000, Professor Peter Hines and David Taylor reached their own conclusions and defined Hoshin Kanri as a strategic decision making tool that focuses resources on the critical initiatives necessary to accomplish the firm s critical success factors. It also encompasses the cascading of this by key business processes together with the control, measurement and feedback of results. A key element of Hoshik Kanri is known as catchballing which is defined by Akao (1991) as the reiterative up, down, and horizontal communications across an organisation, necessary for effective determination of target and means of achievement. This communication works well within effective stakeholder engagement activity. So how is this approach used in practice? There are a number of deployment models, below are a few examples: 3 CONTINUED.

4 4 Figure 1 An adaptation of Deming s Plan Do Check Act Model (Sion 1992) Figure 2 A Simplified Deployment Process (Cowley & Associates, 1995)

5 5 Figure 3 - Hoshin Deployment and Catchball using Annual Plan Tables (Cowley & Associates, 1995)

6 Figure 4 - Five Stage Closed Loop Management System (Kaplan and Norton, 2008) 6 Figure 5 A Full University/Organisational Deployment Example (Lethbridge et al., 2007). The phrase Hoshin Kanri can either whet people s appetites for a challenge, or can switch them off. From my own experience, whilst I worked with the Ministry of Defence Helicopter Support, we applied policy deployment to our business activities through a Business Balanced Score Card, whilst personal objectives were aligned via the annual performance and development review process between line managers and individuals. In S A Partners use the phrase Strategy Deployment rather than Hoshin Kanri. We use this approach to manage our own business and a number of our clients have also adopted the system to great effect, for example Vale, the Shingo Prize winners from the Process Industry, and Welsh Water, a utilities company. Another example of deploying the Hoshin Kanri approach in practice was witnessed during a recent Inside Welsh Industry visit to a company who design and manufacture a full range of airline seating. If you would like to know more about applying strategy deployment (or Hoshin Kanri) to improve alignment and engagement across your business contact Simon Grogan.

7 7 References: Akao, Y. (Ed). (1991). Hoshin Kanri Policy Deployment for Successful TQM. Productivity Press, Cambridge, MA, USA. Cowley, M., and Associates. (1995). Training Materials. Cowley & Associates. (Also see Cowley, M., and Domb, E. (1997). Beyond Strategic Vision. Effective Corporate Action with Hoshin Planning. Melbourne, New Delhi, Singapore). Butterworth-Heinemann, Boston, Oxford, Johannesburg, Hines, P., and Taylor, D. (2000). Going Lean. A Guide to Implementation. Lean Enterprise Research Centre, Cardiff