Hoshin planning for industrial product companies

By - February 17, 2016

A Hoshin plan is a key tool for industrial products companies. It is a lean tool that aids in aligning your companies’ strategic objectives with the particular action plans and resources needed for their successful execution. Beginning at the strategic plan level, it flows down through your organization defining and incorporating middle management tactics and, breaking those into specific work activities that will be performed by all employees. The end object in addition to converting strategic initiatives into executable plans is to eliminate waste associated with inconsistent direction, uncoordinated execution and poor communication.

A Hoshin plan follows the basic lean precept which is to, “plan, do, check and act.” In utilizing this planning your first step will be to create a strategic plan focused on identifying and furthering your company’s long-term goals. If you haven’t undertaken this activity in the past a good place to start is by identifying five goals. Keeping the number of strategic goals small will help ensure a successful outcome and avoid stretching your organization beyond its capabilities. The individual plans should focus on effectiveness, doing the right things, over efficiency as that can be achieved later through continuous improvement. The plans should have been developed by achieving top down consensus which includes consulting with middle management. Each plan needs to have Key Performance Indicators, KPIs, that will drive the desired outcome. Lastly, each plan needs to have an owner who can lead the development of the tactics necessary to support the strategy and facilitate and coach the organization through to completion.

The second step is to take action or, “do.” This encompasses the supervisors and team leads identifying and working through the operational details needed to implement the plan tactics. This will include working with their plant floor and/or administrative team members to identify and assign ownership to managing and carrying out all related activity.

The third step, “check,” portion of the Hoshin planning process is to track as a unit each strategy and its associated tactics and detail activities. This needs to be done on a daily basis and through a visually available tool like a mounted project plan, activity graphs, or the like. This daily reporting should on an exception basis call out adherence to the plan, activities that are at risk and what plans and/or additional activities and resources are being brought to bear to mitigate the issue(s).

The fourth step comes to the adjustment activity known as, “act.” Acting is an iterative process where each days’ activities are carried out and when necessary, adjustments are incorporated as new information comes to light or unexpected results require mitigation.

As we’ve all probably experience in the course of our careers, people perform best when they have a defined purpose which is measured and reported. Incorporating this understanding of not just what to do but why it’s important is a key benefit of the Hoshin planning process. To learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.

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