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.

1 comment:

  1. Hi Mike,
    Before getting acquainted to Hoshin Kanri, I have used the below method to get the buy-in from Chairman/Directors.

    1. I made a list of the areas that are currently loosing money. These were not very apparent, as in the manufacture of Apparel (garments), losses are all a given. This is a 25 yr old business and the mindset of all is that those losses are a common practice!!. When I added the losses per quarter and per annum, those numbers were bigger (More than twice) than the current bottom line. Then I sent a note to my Chairman that if given a chance, I can retrieve at least 50% of this losses (= current bottom line).
    2. Before I sent the note to the chairman, I made a Fishbone (Cause and Effect Diagram) of all the problems we had and probable solutions. This ran into six A3 Sheets.
    3. Then I divided the Fishbone into various small projects along with their projected cost savings with their time lines for implementation and the resources required.

    This process is great, good appreciation from the chairman etc, BUT - no action from their side. I could make a great presentation to show "What can be Done", but until the top guys in the company commit and are ready to endure, is it really going to work? Hoshin is great, but it all will be a paper exercise, without action.
    Question: How can one make Chairman/Directors realize that they are loosing money and the only way is to ACT on the Strategy, DO the job to SEE results? How can one shake their old ways of working (Fire fighting all the time) and be contented with it?

    I think I have to overcome the first layer of resistance before I can move on.