Image credit; BMGI

What is Hoshin Kanri?

Hoshin Kanri (Japanese: 方針管理) is a 7 step process used as part of Strategic Planning, in which goals are communicated and shared throughout the company, and then put into action. The purpose of Hoshin Planning is to improve communications throughout the company, whilst also reducing the waste created by poor direction or bad management at any level. For this reason, companies that use Hoshin Kanri often follow a Think, Plan, Implement, and Review process.

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Video: How to Apply Hoshin Kanri, Gemba Academy

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Business Flow with Hoshin Planning

With Hoshin Planning, the goal is to share goals down from the top level, whilst simultaneously sharing results from the shop floor up to the management. Much like the veins and arteries in the human body, this flow should permeate and unite all levels of the organization, by aligning the goals of the company (Strategy) with the plans of middle management (Tactics) and the work performed by all employees (Operations).

In this way, Hoshin is unique amongst Lean tools, as it discusses more explicitly the opening of communications and discussion of goals, rather than the actual process implementation itself.

A Standard Hoshin Process: Credit I-Nexus

4 Steps to Hoshin Planning

1 – Create a Strategic Plan

Hoshin Kanri is begun with a Strategic plan, often set annually, by the Top level management. The goals should be within limits (5 goals or less as best practice), focused on effectiveness, and agreed between all levels of management, to ensure they are realistic and achievable.

2 – Develop Tactics

Once these targets have been set by the top tier, it is up to middle managers to develop the tactics that will best achieve these goals. Communication is key, to ensure that goals and strategies are realistic, as well as well understood by all levels of the business.

3 – Take Action

At the plant/shop floor level, supervisors and team leaders should then work out the operational details, to ensure they are both aligned with the established goals and tactics, as well as realistic and achievable. This is the stage known as going to 'Gemba', where the goals are actioned at the real place.

4 – Review and Adjust

At this point, the results and statuses on the projects are then fed back up the tiers of the company. This ensures the 'Closed Loop' system is in place, allowing top management to review the progress of the shop floor operations, and adjust their goals and tactics accordingly.

Read more: The Seven Steps of Hoshin Planning