We turned to hoshin kanri (strategy deployment) in an effort to focus our operational activity. But, after a couple of business setbacks, all of our good work has gone out the window and we’re back to fire-fighting.
I’d heard great things about hoshin kanri from a couple of old colleagues. As operations director, I loved the concept of aligning the daily activity of operators with my own business goals.
So, I did my homework on hoshin. I invited my management team to join me in disseminating some of our key strategic goals into SMART objectives, applicable to different job specs on site. Several reams of A3 later and we had sketched out a tiered diagram linking our business goals around reducing parts per million error rates and improving OEE to defined targets for the shopfloor.
We twinned this with our appraisal system and booked in some training for our first-line managers on setting and monitoring performance objectives.
The plan rolled out and, initially, all went well. We kicked things off with a townhall-style meeting where we, the senior team, set the factory vision and emphasised the importance of everyone’s involvement in achieving success. The new objectives were set for all shopfloor functions and we found some immediate improvements coming through in reduced defects. Morale visibly lifted and you could sense a feeling of collective purpose emanating from the factory.
Sadly, the serenity wasn’t to last. First we lost our long-serving MD and then a major supplier went to the wall, leaving us with a real problem sourcing some key components. Our new MD sees hoshin as a luxury item. He argues that we are wasting an awful lot of production time pulling managers and operators off the line for PDRs/meetings. Operators get paid to assemble goods not deliver grandiose business goals, he says.
The loss of the supplier has also rattled us. Many key personnel in QC and operations, understandably, have made it their mission to source a suitable replacement. The hoshin objectives are a distant afterthought in their to-do lists.
So can we still salvage hoshin kanri or is my new MD right to say the system is incompatible with business reality?
The expert view: Paul Bell, MD, Manufacturing Excellence
Let’s answer your final question first. Hoshin kanri, or strategy deployment, is absolutely compatible with real-life business.There are numerous, diverse, successful organisations who have used the process with great effect.Indeed, if you study the CI initiatives in companies who have won Best Factory Awards, or who are hosting exemplar visits, you will almost always see a massive degree of workforce involvement. You’ll also witness a process to ensure that the efforts of the workforce are focused on the organisation’s objectives.
It is essential that companies maintain all of the CI initiatives that they launch, or the whole improvement process is jeopardised for the future. In your organisation, it is important that you re-energise your hoshin kanri initiative to make it clear to all that it is a process to which you are committed, before people start to question whether it is going to be sustained.
The next issue to be overcome is the approach of the new MD. This will be a difficult time for both him and yourselves, as you all make the necessary adjustments to your beliefs in order to work well together.I would suggest that you explain the gemba approach, that it is the operators at the coalface in particular who see the wastes and the opportunities, and that by cascading goals through the organisation, those people will be able to improve the things that are really important to the organisation.
You absolutely must capture the benefits from the work that has already been done, and in particular, you need to quantify those benefits in hard financial terms; bottom line benefits are very persuasive when it comes to promoting CI.You should also use evidence of hoshin kanri demonstrating success in other companies; this could be from articles in Works Management, descriptions of how companies have won awards, and from exemplar factory visits. You may need to reduce the amount of time spent on employees’ personal development, in order to show that you have listened to your new MD’s concerns.
Regarding the supplier failure, you have my sympathy.One of the unfortunate consequences of rolling lean through a supply chain is that the disruptions from a supplier failure are much more severe.This has been seen by many companies following the tsunami in Japan a few years ago.You should look at using a hoshin kanri approach to resolve this particular supplier failure, so that a number of people have specific, focused objectives to overcome the problem.The strategy deployment matrix is not a document that has to be fixed for 12 months. You may wish to modify your current one to include the topic of “survive supplier failure”, and process that through the matrix into specific actions.Many organisations require their suppliers to have addressed the issues of business failure and business disruption, and this also follows the risk approach required now in ISO 9001:2015.
Keep up the good work of cascading objectives through the organisation; you will see demonstrable improvements in attitude, morale and profits.
