Hoshin Kanri

What Hoshin Kanri is meant for? You want to aim improvement efforts within an organisation towards the same goal. This way, all efforts to improve are connected to the same goals. As Lean-guru Masaaki Imai said:

‘’Hoshin kanri is the process of internalising policy of continuous improvement, in all layers of the organisation. It calls upon everyone to translate the policy in the light of their own responsibilities, as long as they spend time to improve towards the chosen direction.’’

Hoshin Kanri or Hoshin planning was developed in the sixties of the last century, where it was implemented at companies like Bridgestone and the Kobe wharf in Japan. Later, it was introduced at companies like Toyota and Komatsu. Currently, the methodology has been adapted and adopted by many different organisations all over the world.

What does Hoshin Kanri mean literally?

People regularly ask what the words Hoshin Kanri mean in a literal sense. Hoshin is Japanese for ‘course’ or ‘compass needle’, while Kanri means ‘to manage’ or ‘to control’. This translates into meanings like course management, navigational management, or strategy deployment. Japanese can be a very poetic language. This is why the direction Hoshin Kanri is pointing or navigating to is sometimes called ‘the true North’. As such, Hoshin Kanri can be described, in summary, as: the methodology you use to find the true North and pinpoint your route towards it.

The six basic elements of Hoshin Kanri

In practice, Hoshin Kanri consists of six basic elements or techniques. We will discuss each of them below.

1. Catch ball

Hoshin Kanri is a strategy development process. Management starts by creating a strategic conceptual plan. This plan is passed on to the underlying layers of their organisation for feedback. This feedback is then used by management to optimize the initial plans. Each layer, in turn, translates the overarching strategy into department-goals, for which management will then provide feedback. This methodology to reach consensus is called catch ball. This is because the products of the strategic process are tossed around like a ball, caught, provided with feedback and then thrown to the next. Eventually, the ball encompasses a broadly accepted strategic plan.

2. Cascade of objectives

Each department creates its own set of goals, lead by the strategic plan, to match the strategic objectives. This creates a cascade of objectives; they’re all related and follow up on each other from the top all the way down. This way, when a department reaches an objective, the overarching objectives come closer to completion as well.

3. The PDCA-cycle as a basic routine

Plan-Do-Check-Act is the basic routine for Hoshin Kanri. This cycle is also known as the Deming-cycle. The Plan phase is where the strategic plan is made and the cascade of department goals arises. If Hoshin Kanri would be an annual cycle, the Plan phase would happen in the fall. The next year, Do-Check-Act follows. This is where the strategy is put into practice, studied and modified. Then, again in fall, the Plan phase for the next year begins anew.

4. The X-matrix

To connect strategic goals and improvements, there’s the X-matrix. Goals and improvements are already logically connected. It’s a clear cause and effect relationship. If we finish an activity for improvement successfully, this contributes to achieving the department goals. That is a step in the right direction, because it also means that the organisation as a whole comes one step closer towards reaching their planned strategic goals. The instrument to visualise this relationship of cause and effect between goals and improvements is the X-matrix.

5. Continuously learning and improving with the performance dialogue

When working with Hoshin Kanri, there are daily, weekly and monthly performance dialogues in each layer of the organisation. During these conversations, the goals and improvements are discussed. The goal is to continuously learn and improve towards the strategic goals. Each performance dialogue follows the Deming-cycle of the Plan-Do-Check-Act-routine.

6. Daily and/or weekly starts or stand-ups

Every team, from management to production, has performance dialogues. These short, standing dialogues, help the team strive for control of the process. It helps them to respond quickly and adequately to changes, and to improve and experiment. When the Hoshin-Kanri process is done well, you can relate the conversation of a daily or weekly start or stand-up directly to the strategic plan of the organisation.

Implementing Hoshin Kanri in your organisation

Would you like to get started with Lean Six Sigma principles like Hoshin Kanri in your organisation? We’re happy to help! Check out our courses or contact us directly if you have any questions, and we will gladly assist.