Monday, October 5, 2009

Implementing Hoshin - continued

A good fellow, age 30's-something, Manager/ Engineer, educated in the US and UK, has done successful lean works at manufacturers in the UK and India. Today he is asking "Tell me more about Mike's 3 Keys in implementing Hoshin".
So here goes and I hope that other Hoshin and Lean advocates will weigh-in.

PS I'll probably throw-in some rules like do's and don'ts but it's only because I've actually been the one (EVP) who ran this Hoshin activity for 15 years in a 3000 people Toyota subsidiary following rigorous training in Japan. So I apologize in advance if anyone finds my rules a bit too much. Mike.


All the company's vice-presidents come together at the table. Let's say it's a 'given' that they already have some strategic planning/ vision/ values/ mission/ budgets etc already done so far. Such prior work is an excellent foundation for what is to come with the Hoshin way.

Now, they take out a very big sheet of paper and examine the company by its 12 areas of goals: Q C D S M P TE F G I R .. please see my earlier blogs, or, on my web site at

(MMA stands for Meilleurs Methods d'Affaires in Manufacturing, Management and Administration.)

They all stay in the room and make a review, working ''as one team all together''. They review each of these 12 areas taking one at a time. NB: ''as one team ALL together'' is KEY.

There is no: "hey, you take this, I'll take that"; nor any of: "let's split into groups and meet back later". None of that. Please. You'll see why.

Let's just take the first one, "Quality" for example:
  1. Do actual numbers currently exist? E.g. 1300 PPM * rejects from the customer = 0.1%
  2. * PPM * = # of defects per million of good ones shipped.
  3. Do target numbers exist? by product line? by customer? E.g. 500 PPM or ½ of 0.1%
  4. Are there benchmarks out there in our industry? e.g. 25 PPM defects per million good ones shipped.
  5. PS: it's also OKAY to have more than one measurement for each goal area.
  6. Who set the benchmarks? the customer? which customer? a competitor? which competitor?
  7. Then: do a SWOT for Quality. (INTERNAL: Strengths, Weaknesses. EXTERNAL: Opportunities, Threats.)
  8. Sum-up what does the Quality SWOT tell us? Is it that we need a ''breakthrough'', a major leap-up in Quality, standardization, product development, processes, administration,.. etc etc?
  9. After that: which target level do we need to be at in 3 years? So, 500 --> 100 --> 25 PPM ?
  10. Also, do the same as you would do for strategic planning etc : Ask ourselves all together - - which level of Quality do we want to be at? and, which level are we really determined about? this gets a little sticky because it is easy to back down from the really tough challenges. We gotta have some LEADERS in the gang who will push severly hard to get us to challenge ourselves enormously.
  11. Remember that Toyota and Bridgestone etc don't take light targets and they don't take any excuses either. A rather tough bunch over all. Toyota sets very tough targets even if so-called "impossible" in the short term. Tough targets get us moving faster with more detemination. Easier, "realistic", "safer", or "set a number that ensure we get our year-end bonus or pay raise" type of targets are really not all that motivational. Toyota knoes this. All of Japan knows this. All of Japan has faced this.
  12. Do we know of ways & means (methods)(best practices like ISO, TQC, TQM, VC, 0-DFFP, QA, QRE, QE, DOE, 'Gates', TPS, Lean, 6-sigma, ....)?
  13. IF NOT, do we know how & where to go find out?
  14. Try to decide which of the best practices (those you currently see or foresee) that YOU ALL AS A TEAM wish to adopt and implement on a 3 year timetable.
  15. Finally, pick from among you a single Vice-President to lead the implementations in this goal area. Pass an oath or resolution of the administrative committee that the chosen one has all empowerment to get this done over the entire company and through all silos. Thusly when he or she brings people together from all functions, his or her activity and decision is perfectly supported by all the vice-presidents in harmony. This is more than 'key'. It is critical. (And I'm sure all of you know that too. Been around the block so to say..etc. It's just important for me to say it in black and white.)
  16. Do all 12 areas like this.
  17. Keep the President in constant touch. Later it's he or she who will be publishing a major policy statement (with you all) for the whole company and many of it's stakeholders to take to heart. It will become the basis/ platform of all action.

OK for this afternoon folks. In my next post I'll be talking about this wide policy statement and how it affects each and every person in the company with success being due to empowering cross-functional teams, with very high levels of morale, to accomplish bold objectives. By this HOSHIN approach, a company can become sustainable for the long term.

:) Mike Davis ex- Toyota subsidiary VP.

Saturday, October 3, 2009

Implementing Hoshin : let's get started.

In this blog, I'm continuing the introduction of one of the early steps in the implementation of Hoshin into an Organization's Strategic Management Process. (See also a post in August)
Simply this: form the VP's team and together put a target into each of the 12 goal areas of your enterprise.
These 12 areas get kept forever. This is one of the long-term advantages of applying Hoshin.
Responsibility for the planning and accomplishment of each company-wide target is determined by the VP's working together. They become the first cross-functional team.
Thereafter everyone is in sync with the organization's cross-functional objectives and the implementation methods and their role in the action. "Silos" are no longer the m.o. This is the secret of Hoshin. NEXT: implementation steps, charts, meetings, updates, control ... PDCA and the like.
Source: we used this during my 18 years as the Vice-President at our Toyota subsidiary.
Best wishes in your Hoshin implementation.
Mike Davis