Hoshin Planning Process: Workshop Month XX, 20xx

Hoshin Planning
Process
Workshop
Month xx, 20xx
Agenda
- Introduction/Ice Breaker 5 min.
- What is Hoshin Planning? 2 min.
- Why use Hoshin Planning? 24 min.
- How to Use Hoshin 35 min.
- Questions and Answers 15 min.
- Example (tbd) 15 min.
- Wrap Up 5 min.
2 freeleansite.com File Number

What is Hoshin Planning?
Hoshin Planning
Hoshin is a Japanese term = compass needle

- Designates setting strategic direction of the organization
For HOS Hoshin is:

- A closed loop management system for identifying, focusing and linking the
organization to achieve results. Additionally it contains a daily management that
drives constant progress monitoring of these results and reacts to issues as they
arise
Traces roots to:

- Management By Objectives (MBO) Drucker
- Plan-Do-Check-Act (PDCA)- Shewhart/Deming
Sometimes referred to as:
- Policy Deployment
- Management By Policy
- Management By Planning
U.S. Based Companies That Have Embraced It

- Danaher, Hewlett-Packard, Proctor & Gamble, Xerox, Florida Power and Light
(FP&L)

Why Use Hoshin Planning?
Why do we need Hoshin Planning?
Why?:
- Proper alignment requires more than independent
establishment of strategies
- Hoshin Planning will align those strategies and drive the
execution
- To Achieve Breakthrough RESULTS!
Common Failure Modes:

- No review of actions or accountability
- Plans not visible or not measured or measurable
- Not aligned or linked to the needs of the site
A PROCESS to help drive Results!

Hoshin is an active relationship between 2 parts
The two parts of Hoshin are

- Hoshin Management
- Daily Management
Hoshin Management (Strategies & Objectives)

- Special actions/plans are required to achieve a desired
result
Daily Management (Routine KPI Management)

- Can achieve targets with usual improvement activity and
resources
Hoshin Has Two Sides

Why Use Hoshing Planning?
Strategic
Objective
is
Hoshin
Planning Achieved!
Improvement
KAIZEN
Hoshin
Planning
KAIZEN
Hoshin
Base
Planning
KAIZEN Base
Base
Base
Base
Year 0 Year 1 Year 2 Year 3 Year 4
To Build Sustainable Competitive Advantage

Why Use Hoshin Planning?
VS.
To Align Objectives and Targets

Throughout the Organization

Daily Management
Daily Management (Routine KPI Management)

- A visual management system to highlight day-to-day issues
that drives rapid implementation of countermeasures.
- A communication tool that drives alignment to the lowest

levels of what is important to the site.
- Strong linkage into the Visual Management and Leadership

Standardized Work systems at the site
Daily, Weekly & Monthly Monitoring of Progress

Hoshin Planning Summarized
Both Controlled by Rigorous
Process Control Systems and OBJECTIVES
measured frequently to drive Cash
results Growth
QMS
Daily Mgt. Hoshin Management
People
All activities necessary to AOP STRAP
carry out the routine work
for the SBU STRATEGIES
Defined to follow and be governed by
Rapid Problem Solving methods
PDCA
Demonstrated through standardized work
On the shop floor
Controlled and driven through Leadership
Standardized Work in daily gemba walks
How to Use Hoshin?
What Does Hoshin Planning Mean To You?
Top Mgt
Breakthrough
Middle
Mgt
Kaizen
Supervisor Daily
Management
Front Line
Associate
Adapted From Beyond Strategic Vision, Effective Corporate Action
With Hoshin Planning; Cowley, Domb, 1997 pg. 57
How Should You Spend Your Time?

Timing of Hoshin Planning
JULY AUGUST SEPT OCT NOV DEC JAN
STRATEGIC PLANNING
HP LEV 1 COMPLETE
ACTION PLAN
DEV COMPLETE
HP LEV 2 & 3
COMPLETE NEW
YEAR
HP
CONCURRENT BUDGETING PROCESS BEGINS

7 Phase Hoshin Planning Process
Establish
Organizational Vision
PLANNING P Strategic Planning/ Develop 3-5
Year Breakthrough Objectives
Develop Annual Breakthrough

Objectives and Improvement
Priorities
Self-Diagnosis Catchball
Deploy Improvement Priorities
D Lean SS
Implement
IMPLEMENTATION CAP
A Improvement Initiatives
REVIEW Root Cause Monthly Review Critical Step

Countermeasures
C
Annual Review
Annual Review

The Process of Critical Thinking (PCT)
Step 1 : WHAT
Breakthrough Thinking
Step 2 : HOW FAR

Annual Breakthroughs
Step 3 : HOW
Identify Key Driver Process
Step 4 : HOW MUCH/ WHEN

Determine Measures & Track
Step 5 : WHO
Identify Key Resources &
Deploy

PCT Step 1 WHAT?
World-Class
Breakthrough
Objective
Best-In-Class
Industry Standard GAP
Current
Current Situation
Situation
Breakthrough Thinking Leads us to World Class

PCT Step 2 - HOW FAR?
Breakthrough
Objective
Annual BT Objectives Yr 3 Yr 3
Annual BT Objectives Yr 2 Yr 2
Yr 1
Annual BT Objectives Yr 1
Current Situation
Identify First Year Breakthrough Objective

PCT Step 3 - HOW?
Improvement Annual Breakthrough

Why? Objective
Priority
Why?
GAP
Why?
Why?
Current Situation
Why?
Identify Key Driver Processes

PCT Step 4 - HOW MUCH/ WHEN?
100
Determine Measures & Track

PCT Step 5 - WHO?
100% 100%
Resource A
3%
Current Team B 20% Relative
Distribution Impact On
20% Improvement
Of Resources
Resource C Priorities
Resource D 40%
Team E
0% 0%
Identify Key Resources & Deploy

Daily Management and Hoshin Planning
Once Breakthrough is achieved

process is standardized to
Daily Management! Strategic
Improvement
Objective is
Hoshin Achieved!
Planning
KAIZEN
Hoshin
Planning
KAIZEN
Hoshin Daily
Planning Mgmt
Daily
KAIZEN
Mgmt
Daily
Foundation Mgmt
for Daily Daily
Mgmt Mgmt
HP
Year 0 Year 1 Year 2 Year 3 Year 4

PCT & the Top Level HP Matrix
HOW
Top Level
All items
Improvement
Priorities
are listed HOW
HOW Annual WHO
in priority order
Breakthrough
Targets
to Improve MUCH
FAR Objectives
starting from
3-5 Year
Breakthrough
Annual Metrics the center
Objectives
RESOURCES
WHAT = Primary Responsibility
= Secondary Responsibility
OWNER

Complete Top Level HP Matrix
3- HOW Use dots to show

relationship of Targets
and Resources to the
Use dots to show
relationship of
Improvement Priority
5- WHO
Improvement Priorities to
Annual Objectives
Top Level
Improvement
Priorities NOTE: Only Solid dots on
a resource deploy to the
Annual Targets next level
Breakthrough to Improve
2- HOW Objectives
FAR 3-5 Year

Breakthrough
Objectives
4- HOW RESOURCES
MUCH = Primary Responsibility
1- WHAT = Secondary Responsibility
OWNER
The whole picture of your company on one sheet of paper!

Linkage on the Matrix
Top Level
Improvement
Priorities
Dots show Annual Targets
linkage from Breakthrough To
Target back to Objective Improve
Breakthrough
for that level 3-5 Year
Breakthroughs

Points to Remember about the Matrix
As soon as a solid dot is placed above a resource, that resource

will get a lower level matrix or an action plan.
Clear circles indicate support resources. They do NOT get a
lower level matrix or action plan unless they get a solid dot on
another matrix.
The dots are TOP LEVEL - Company
Danaher Business System Office - Policy Deployment 1998
to be used as
a sanity check Top Level
The Improvement
Improvement
Priorities
Annual Targets
Breakthrough to
Objectives Improve
3-4 year
Priority is deployed
Breakthrough
Objectives
Resources
l Primary Responsibility
m Secondary Responsibility
to the lower level SECOND LEVEL - Plant

Second Level Policy Deployment
matrix or an action
plan Second Level
Improvement
Priorities
Top Level
Targets to
Improvement
Improve
Priorities
Annual
Breakthrough
Objectives
RESOURCES

Transferring Improvement Priorities to the 2nd Level
TOP LEVEL The 2nd level 12 oclock and

TOP LEVEL Policy Deployment 2004
3 oclock positions have all
Imp. Priorities new text in them nothing
and Annual is rotated into them from
Objectives are level 1.
Top Level
copied directly
Improvement
Priorities
onto the 2nd

Annual Target to
Breakthrough Improve
Objectives
Level HP. 3-5 Year

Breakthrough
Objectives
Matrices. l
m
Resources
Primary Responsibility
Secondary Responsibility
SECOND LEVEL
Typically, a 2nd
Level Matrix is
created for a Second Level
Improvement
primary resource Priorities
Top Level
for each top-level Improvement

Priorities
Target to
Improve
Improvement Annual
Breakthrough
Objectives
Priority. l
m
RESOURCES

Transferring Improvement Priorities To The 3rd Level
SECOND LEVEL Not always suggesting

SECOND LEVEL Policy Deployment 2004
you need 3rd Level.
Top Level and Based on size, complexity,
Second Level breadth, and maturity of
Imp. Priorities organization.
Second Level
are copied
Improvement
Priorities
Top Level
directly onto Improvement

Priorities
Target to
Improve
the 3nd Level Annual

Breakthrough
Objectives
HP Matrices. l
m
Resources
THIRD LEVEL
THIRD Level Policy Deployment
If necessary, a 3rd
Level Matrix is
created for a Third Level
Improvement
primary resource Priorities
Second Level
for each second- Improvement

Priorities
Target to
Improve
level Improvement Top Level

Improvement
Priorities
Priority. l
m
RESOURCES

Completing the Second Level PD Matrix
Use dots to show

3- HOW relationship of Targets and 5- WHO
Use dots to show Resources to the
relationships between Improvement Priorities
Improvement Priorities
and Annual Objectives
2nd Level
Improvement
2- HOW Priorities Use dots as a check to make sure
Top Level
Improvement
Targets
to
the Improvement Priorities & Targets
Priorities Improve
meet the goal and support the
Annual
Breakthrough Annual Breakthrough Objectives
Objectives
RESOURCES
4- HOW
1- HOW FAR MUCH/WHEN
= Primary Responsibility
OWNER

Cascading Priorities to ACTION
TOP LEVEL
Company/Group
Top
Point of Impact - Action Plan
The level where root causes are
Level
Improvement
Priorities
Annual
Breakthrough
Objectives
Target to
Improve
SECOND
LEVEL addressed! Action Plans can be
3-5 Year
Breakthrough
Objectives
Resources
Plant/Business

initiated out of any matrix level.
Second
Level
Improvement
Priorities
Top
Level Target to
Improvement Improve
Priorities
Annual
Breakthrough
ROOT CAUSE
Objectives
POINT OF IMPACT -
RESOURCES
LEVEL- ACTION PLAN

Sub Plant/Dept Engineer/Supv
Cascade as many times as Second Level Policy Deployment
necessary to the Im provem ent Priority Title: *
Review Team : *
Policy Deployment Action Plan
Departm ent/Location: Managem ent Ow ner:
* *
Date: *
Next Review : *
Root Cause Level Environm ental Situation Sum m ary: *
Tim eline
Target Im provem ent
Core Objective: *
POINT
Third
= Original Plan x = Progress at Review
Level Planned 2003 Status
Im pact
Improvement Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec ( P a st D u e i n R e d )
Priorities
Second
Level
Improvement
Priorities
Target to
Improve OF
Top
Level
Improvement
Priorities
IMPACT
RESOURCES

Creating Action Plans
Hoshin Planning Action Plan
Im provem ent Priority Title: * Date: *
* *
Review Team : * Next Review : *
Environm ental Situation Sum m ary: *

Create an Action Plan
Tim eline
Core Objective: *
Planned
2004
Status
For every Improvement
Im pact
Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec ( P a st D u e i n R e d )
Priority at the Point of

Impact
Step 4: Identify the

impacts on the
improvement priority and
top level breakthrough
objective
Step 3: What is the

Step 1: current status of the
Determine Step 2: Record action. Color code
actions & write ownership and background as red to
on worksheets timing of the actions show items past due.

Action Steps Complete the Cause & Effect Chain
Breakthrough Objective:
Attain competitive advantage in Delivery Performance
Effect = Results!
Annual BT Objective #1:
Streamline Engineer-to-Order Processes
Top Level Improvement Priority:

Effect = Cause
Use HOS Tools to improve value stream of
Engineer-to-Order Process
Second Level Improvement Priority:

Implement Improved Order Entry Process Effect = Cause
POINT
Action Step 1: OF
IMPACT
VSM Customer Service Process
POINT
Action Step 2: OF
IMPACT
SW Kaizen to improve productivity
by 35% Actions = Cause
POINT
OF
Action Step 3: IMPACT
VRK to reduce Quote processing time
by 50%

Where VSM and Fits Into The Process
Breakthrough Objectives
Annual BT Objectives
Top Level Imp Priorities
2nd Level Imp Priorities
Value Stream Mapping
Action Plans

Action Plans Drive The Rate Of Improvement
Hoshin Planning Action Plan

Im provem ent Priority Title: * Date: *
* *
Review Team : * Next Review : *
Environm ental Situation Sum m ary: *
Tim eline
Core Objective: *
Planned 2004 Status
Im pact
Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec ( P a st D u e i n R e d )
DASHBOARD/SCORECARD

Scorecards
Targets To
Improve JOP Jumping Off Point from
are entered in which you started tracking the target
priority order
YTD ACT Each month this field gets
updated (is YTD from the monthly
fields located to the right)
Planned targets are established for each month based

on the overall Target to Improve.
An actual that is a miss from the plan, is color coded red

Each Target is Copied to the Top Level Scorecard
Reduce New Prod. Dev. Cycle
TOP LEVEL
IMPROVEMENT Dev. Cycle to 120 Days by 12/95
Increase Market Share to 60%
PRIORITIES
Human Resources Dept.

Engineering Department
Production Department
Marketing Department
Materials Department
Finance Department
TARGET
Sales Department
ANNUAL
BT TO
OBJECTIVES
IMPROVE
3-5 YEAR
BREAKTHROUGH
OBJECTIVE
RESOURCES
= Primary Responsibility
TOP LEVEL MATRIX TOP LEVEL SCORECARD CHART

Scorecards are Created for All HP Matrices
TOP LEVEL
Title
SCORECARD
Top Level
Improvement
Priorities
Annual Target s to
Breakthrough Improve
Objectives
3-5 year
Breakthrough
Objective
Resources
SECOND LEVEL
SCORECARD
2nd Level
Improvement
Priorities
Targets to
Top Level Improve
Improvement
Priorities
Annual Breakthrough
Objectives
RESOURCES

The Review Process Ensure Plan and Learn
Execute To Conduct Regular
The Plan P Reviews
A D
C
Execute to the plan and perform daily, weekly and monthly reviews of
each action plan (Daily Mgt.)
Reviews are designed to keep the Hoshin Plan on track

- Improvement Action owners dont come to be evaluated
- The intent is to present the results of self assessment
The review team provides focused assistance primarily around the
owners analytical process and preparation.
- What did you plan to do? (Plan)
- What did you actually achieve? (Do)
- How does actual vs. target compare (CHECK)
- Standardize whats working, implement countermeasures and/or plan again as
required. (ACT)

Manage Daily Management Through Leadership Standard Work
Embed the Hoshin Plans into Leadership Standard

Work
Make the Hoshin review process part of the daily,

weekly and monthly audit process
The key is to constantly monitor progress and drive

accountability to the lowest level

Third Level HP Countermeasure Sheet
Improvement Priority: Process and organization to grow Printos sales in textiles and ceramics
Targets to Improve: Increase Printos valve/module sales in textiles & ceramics from $100k to $2,500k in 2003
Run Chart Pareto (the

(the "Why"
"Why"you
youmissed)
missed)
2003 Plan
$500 50%50%
2003
2003 Actual
Plan
$450
$400 2003 Actual 40%40%
$350
30%30%
$300
$250
20%20%
$200
$150
10%10%
$100
$50 0% 0%
Delayed
Delayed Evaluation Insufficient
Kit DelayedSales
Insufficient Print Delayed Print Engine
$0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Evaluation Kit
Development Sales Engine
Prospects Delivery
2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $453 Development Prospects Delivery
2003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150 %
Percent 45%
45% 35% 35%
20% 20%
Problem Statement:
$136k monthly miss is due to Delayed Evaluation Kit Development, Insufficient Sales Prospects and Delayed Print Engine
Delivery.
Countermeasures
What Who When How Much (Impact)
Addressed Root Cause: Delayed Evaluation Kit Development
Short-Term:
Short-Term: Assign additional Engineer to complete evaluation
Short-Term: MJF 10/28/03
kit development (delayed one month) in time for ITMA show. $61
Long-Term: JBR Long-Term:
Long-Term: Update Tollgate process to include Engineering
12/15/03
development for necessary targeted-vertical launch kits.
Addressed Root Cause: Insufficient Sales Prospects
Execute Sales Funnel Targets for UK 'T' Shirt outlettwice per DW/HW 10/15/03 $48
week follow-up on Sales Funnel Targets with Sales Engineer.
Addressed Root Cause: Delayed Print Engine Delivery
Execute kanban re-sizing process for Printos at once per quarter
RZ/ MJF 10/22/03 $27
frequency (currently twice-per-yearwhich is not frequent
enough for ramping production).
5 Why Analysis
Systematic method to drive to the true root cause(s) of a

problem
Simply ask why in a step ladder approach until fundamental

root cause is discovered. Root cause is not simply listing the
symptoms of a problem
Normally, after up to 5 steps, the true root cause(s) will be

exposed

Action Plans vs. Countermeasures?
Countermeasures are
reactive they address how
60 to get back to plan when a
goal is missed for a period
50
40
HP miss Jump Off Point (JOP)
to stretch target
30
Action Plans are proactive

20 they address how to achieve
a particular goal from the
10 Plan Actual
jump off point (JOP) to the
stretch target
0
J F M A M J J A S O N D
Inventory Reduction Plan

Monthly HP/ISC Review Agenda Format
Establish the Growth Agenda for

Monthly PD is typically an 8 hour meeting
Todays HP Review 5%
Financial Review 15%
Hoshin Planning 60%
- Road Blocks to Growth, Major
Predetermined Topics Follow a typical
- Established HP Growth Initiatives MOR session
- New Product Development
- Remaining HP Elements (Q, D,C)
KPIs
People/Org. Issues 20%
Other Business

Hoshin Planning Summary
Aligns Strategy and Execution
Systematically develops and links plans from

organizational vision to operational tactics
Ensures deep and common understanding and

maximizes ownership and buy-in to plan
Requires thoughtful, detailed planning for each and

every improvement action
Consistently assesses actual performance vs. plan

and addresses issues and learns from the process
All Employees are Engaged in the Process

Questions?

Hoshin Planning Process: Workshop Month XX, 20xx

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Hoshin Planning

- Introduction/Ice Breaker 5 min.

- What is Hoshin Planning? 2 min.

- Why use Hoshin Planning? 24 min.

- How to Use Hoshin 35 min.

- Questions and Answers 15 min.

- Example (tbd) 15 min.

2 freeleansite.com File Number

Hoshin is a Japanese term = compass needle

For HOS Hoshin is:

Traces roots to:

U.S. Based Companies That Have Embraced It

4 freeleansite.com File Number

Common Failure Modes:

A PROCESS to help drive Results!

6 freeleansite.com File Number

The two parts of Hoshin are

Hoshin Management (Strategies & Objectives)

Daily Management (Routine KPI Management)

Hoshin Has Two Sides

7 freeleansite.com File Number

Year 0 Year 1 Year 2 Year 3 Year 4

To Build Sustainable Competitive Advantage

To Align Objectives and Targets

9 freeleansite.com File Number

Daily Management (Routine KPI Management)

- A communication tool that drives alignment to the lowest

- Strong linkage into the Visual Management and Leadership

Daily, Weekly & Monthly Monitoring of Progress

10 freeleansite.com File Number

How Should You Spend Your Time?

13 freeleansite.com File Number

JULY AUGUST SEPT OCT NOV DEC JAN

14 freeleansite.com File Number

Develop Annual Breakthrough

REVIEW Root Cause Monthly Review Critical Step

15 freeleansite.com File Number

Step 2 : HOW FAR

Step 4 : HOW MUCH/ WHEN

16 freeleansite.com File Number

Industry Standard GAP

Breakthrough Thinking Leads us to World Class

Identify First Year Breakthrough Objective

18 freeleansite.com File Number

Improvement Annual Breakthrough

Identify Key Driver Processes

19 freeleansite.com File Number

Determine Measures & Track

20 freeleansite.com File Number

Identify Key Resources & Deploy

21 freeleansite.com File Number

Once Breakthrough is achieved

Year 0 Year 1 Year 2 Year 3 Year 4

WHAT = Primary Responsibility

23 freeleansite.com File Number

3- HOW Use dots to show

FAR 3-5 Year

MUCH = Primary Responsibility

1- WHAT = Secondary Responsibility

The whole picture of your company on one sheet of paper!

24 freeleansite.com File Number

25 freeleansite.com File Number

As soon as a solid dot is placed above a resource, that resource