Hoshin Kanri Workshop

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1 Hoshin Kanri Workshop By Pete Babich

2 Inc., All rights reserved. Revision: 003, 6/15/2006 No part of this document may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior written permission from Inc. Please don t make unauthorized copies the or the accompanying CD. If you need a copy and truly can t afford it, then please contact TQE and ask for special consideration. Author: Pete Babich Inc Grey Stone Rd Poway CA USA Phone: Fax: Web site: 2

3 Table of contents Workshop Preparation... 5 Workshop Objective... 5 Participant Material... 5 Prerequisite knowledge... 5 How to use this guide... 6 Module 1 Introductions and Hoshin overview... 7 Module 2 Mission and Key Activities Module 3 Performance Measures Module 4 Long Range and Annual Plans Module 5 Periodic review Module 6 Implementation tips Case Studies Education Manufacturing Service Appendix Appendix A Workshop checklist Appendix B Suggested room layout Appendix C Schedule planner

4 4

5 Workshop Preparation Workshop Objective The objective of this workshop is to introduce the Hoshin Kanri planning process. The workshop will familiarize participants with the history of Hoshin, its rules, forms, and procedures. It will show how Hoshin augments the Management (TQM) philosophy. The workshop is divided into six modules. Each module begins with a lecture to introduce the tools. Then, in a team environment, participants will practice using the tools by working through a case study. In a two-day workshop, participants will also be able apply the tools to their specific work environment and receive coaching on correct Hoshin application. Upon completion of the workshop, participants will understand how to implement and adapt Hoshin to his/her workplace. Participant will have a complete set of forms, rules, procedures, and guidelines to assure that the full power of Hoshin is realized. In addition, the participants will have experience practicing Hoshin Kanri in a safe, classroom environment. Participant Material The workshop is based on the Hoshin Kanri planning process described in the Hoshin Handbook Third Edition, by Pete Babich. Each workshop participant should be provided with a copy of the handbook and a participant s workbook based on the case study selected. Copies of the participant s workbooks, in PDF format, can be found on the CD. The licensed owner of this can print an unlimited number of participant workbooks. Handbooks can be purchased directly from TQE. Prerequisite knowledge Workshop instructors should be proficient with the Hoshin Kanri process. They should have studied the Hoshin Handbook and have actually used Hoshin in a real, work-related environment. Instructor credibility is significantly enhanced when they can draw upon their own experience for examples. 5

6 How to use this guide Conducting a can be a challenging experience, but this guide is designed to make the process as easy as possible. As the developer of the Hoshin Workshop, I have conducted well over a hundred workshops and never used a Leader s Guide. Of course, since I wrote the Hoshin Handbook and created the workshop, I didn t need one. I knew what I was going to say at any point in the workshop. For someone new to Hoshin or new to training, however, conducting a workshop like that could result in some embarrassing moments. The is intended to provide additional insight and tips that are not available in the participant s workbook. I tried to include in the guide the things I look for during the workshop and how I handle the different situations that arise. In areas of the guide where I suggest a specific script, the text is in script. Don t feel compelled to actually use my script. It is far better to use your own words, but in these cases I felt it was easier just to share with you what I typically say. In general, it s better if you make sure you understand the message you are trying to convey and then use your own words and examples. The follows the format of the participant s workbook. There are three different participant workbooks, depending on the case study selected. While the case studies are in sequence with the lecture notes in the workbook, they are shown separately in the. You are encouraged to become familiar with the participant workbook you choose and compare it to the to see the differences. I suggest you study both guides and create one master participant workbook for your own use. Make notes in this workbook and use it as your guide during the workshop. That way you will be able to synchronize your discussion with what the participants are seeing. Well, good luck with your efforts. I m sure not many people will teach a Hoshin workshop just like me. Some will not do as well, but hopefully with this guide most of you will do it better. Also in the spirit of continuous improvement, if you have suggestions for making this guide better meet your needs then I welcome your feedback. Best regards, Pete Babich 6

7 Module 1 Introductions and Hoshin overview Time required: minutes Who are these people and why are we here? What is Hoshin Kanri? Overview This module introduces the instructor to the participants and the participants to each other. It provides an overview of the entire workshop and an introduction to the Hoshin Kanri process. It discusses the history of Hoshin and how it fits in a TQM system. It introduces the concept of Hoshin being a set of forms and rules and sets the stage for the remainder of the workshop. Chart the course for your organization Good morning everyone. My name is [Your name], and I will be your instructor for the workshop. My objective is to assure that everyone understands the Hoshin Kanri process and how to use it to improve the way you manage. Welcome everyone to the workshop. Hoshin Internet Workshop Overview Introduce yourself and state that you will be leading the workshop. Keep your introduction to just your name. You will have a chance to provide a more detailed personal introduction later. The primary objective of the workshop is to assure that everyone learns the basic principles of Hoshin Kanri and understands how to use those principles to improve the way they manage their organizations. 7

8 Module 1 a. Introductions 1. Overview 2. Mission and Key Activities 3. Performance Measures & BFPT 4. Vision - Long Range & Annual Plans 5. Plan Review 6. Implementation Tips & Wrap-up Agenda Pete Babich, 6/23/2004 The general outline of the workshop is shown on this slide. The workshop is divided into six modules. We will begin with introductions and a brief overview of Hoshin Kanri. In modules 2 & 3 we will discuss the concept of Business Fundamentals and how they are used to manage today s business. In module 4 we will discuss Breakthrough Plans and how they are used to change the way we do business in order to meet the needs of the future. Module 5 addresses the most important part of Hoshin the review process. Finally, module 6 will provide tips to help you implement Hoshin in your own organization. Each of you has two documents. The first is the Hoshin Workbook. It includes copies of the slides and exercises. The second is the Hoshin Handbook. It is the text for the workshop. We will primarily be using the workbook during the workshop and will only refer to the handbook, but you should make sure to read the handbook and keep it as your Hoshin reference. Also take care of housekeeping duties here. Inform participants of the location of the restrooms and your policy regarding breaks. Breaks can consume more time than allowed because people don t return promptly. A good technique is that if you have a tenminute break, then resume the workshop exactly ten minutes after the break began. Participants will quickly learn that ten minutes means ten minutes. Inform participants when you will break for lunch and when you will end each day. Make sure that you keep these two schedule commitments, but maintain flexibility for all other schedule commitments. 8

9 Overview Planning Frustrations What bugs you about the way your organization currently does business planning? Limit your list to twenty items. Pete Babich, 4/21/2004 To get started, I want you to think about the way your organization currently does its business planning. What do you like and dislike about your planning process? Turn to page 5 in the workbook and record your Likes and Frustrations. Allow at least 3-5 minutes for this exercise. Walk around the room. You don t need to see what people are writing just if they are writing. If people are not participating consider offering examples of frustrations. We don t have a focus. We have a plan, but nobody uses it. People aren t held accountable. When you are sure most people have individually listed at least one or two frustrations, instruct each group to record their frustrations on their team s flipchart. Suggest a process where each person offers one frustration in turn. Continue taking turns until people start passing and then enter free form discussion. Instruct the recorders to keep their entire list on one page. Some people will ask if the things they like about their planning process should also be listed. Answer no, and explain that only frustrations motivate change. Allow team discussions during the list generation process, but don t let them get bogged down. The most important behavior is to generate a list all of frustrations, not to explain why each frustration is important. When each flipchart looks reasonably full, inform the teams that they only have one minute remaining so make sure the important frustrations are listed. When time is up, ask each team s spokesperson to read the list of frustrations for everyone to hear. Do not discuss the frustrations. At this point, all we are trying to do is make sure people are aware of the frustrations. Wrap up the exercise by explaining that participants current planning process is ideally designed to deliver the listed frustrations. If they like these frustrations then they should keep doing what they are doing. If they don t like the frustrations, then they will need to change their planning process. The intent of the workshop is to introduce a planning process that will address the majority of the frustrations and not sacrifice the things they like. Point out that we will return to the list of frustrations and the end of the workshop. 9

10 Module 1 Who am I? Your picture Introductions Who are you? Name Job Years with organization Biggest planning frustration Pete Babich, 4/21/2004 Introduce yourself. Describe your background and experience using Hoshin Kanri, and how you came to be teaching this workshop. After your introduction, go around the room and ask each person to state their name, job position, and years with the organization. If the group is small, you can also ask them to share their biggest planning related frustration. Take notes to remind you of the people with the most experience or particularly strong frustrations. You can call on them during the workshop to provide specific examples. 10

11 Overview Module 1: Learning Objectives Describe how Hoshin is an integral part of TQM. Discuss the history of Hoshin and the derivation of its name. Describe how Hoshin separates daily management from breakthrough activity. List the forms that make up a complete Hoshin Plan. Well, let s get started. Here are the learning objectives for the Overview module. To follow along with the lecture, please turn to page 7 in the workbook. Briefly discuss each learning objective. Management (TQM) TQM Models: EFQM Excellence Model Malcolm Baldrige Criteria for Performance Excellence Deming Prize ISO9000 Management or TQM is an integrated system of management best practices that help organizations become more effective. TQM is documented in a number of organizational excellence models like the Malcolm Baldrige Criteria for Performance Excellence, the Japanese Deming Prize, and the European Foundation for Quality Management s Excellence Model. The models are based on the processes and methods used by world-class organizations. The premise is that if other organizations adopted the same or similar processes, their performance would most likely improve. Employee Involvement Process Improvement Customer Focus Planning Process Process Management One of the simplest models of TQM is shown here. The model starts by understanding customers and their current needs and predicting future needs. Information regarding competitors is also gathered. The customer and competitive situation feeds the organization s planning process. The planning process helps orchestrate action. It identifies the key processes necessary to satisfy today s customer and the processes that must be developed or improved to satisfy tomorrow s customers. Process management includes the behaviors and techniques to assure that today s customers are always satisfied and costs are managed to assure the organization s financial health. 11

12 Module 1 Process Improvement includes the behaviors that systematically improve processes to assure customers will continue to be satisfied in the future. Employee Involvement includes the people related processes of TQM. It includes management leadership and constancy of purpose, training and supporting employees, and empowering them to work together to achieve organization excellence. The net effect of all of these behaviors is to improve organizational results. This workshop will only address the planning part of the model, but all elements of the model are required for successful TQM implementation. Basic Business Questions What is our business? What should it be? What will it be? Peter Drucker, 1974 The planning process begins with management answering some basic business questions as defined by Peter Drucker. Management must decide what business the organization is in (point to the first point). Management must also determine what the organization will be in the future (point to the second and third points). The distinction between should be and will be is resource constraints. It is important to note, that senior managers are not the only people that need to answer these questions. They must be answered at every level of the organization. Recognize that you are the CEO of everything you manage and down. Answering these questions is your responsibility too! Effective Planning Techniques Identify Critical Few Objectives Evaluate Resource Constraints Establish Performance Measures Develop Implementation Plan Conduct Regular Review Meetings Regardless of the planning process used, effective planners tend to exhibit a few common behaviors. Briefly discuss each of the behaviors. Stress that the most important behavior separating good planners from the rest is the fact that they check on progress or conduct periodic reviews. I am now going to introduce the concept of Hoshin planning and I think you will see that it models these effective behaviors. 12

13 Overview Hoshin Kanri Developed to communicate company policy and facilitate implementation of the strategic plan. Japan s Deming Prize winners credit Hoshin as being a key contributor to their business success. US companies like Hewlett-Packard and Xerox have also adopted the concepts of Hoshin Planning. Hoshin meets the intent of item 2.0, Strategic Planning of the Malcolm Baldrige National Quality Award. Hoshin is a set of forms and rules that encourage employees to analyze situations, create plans for improvement, conduct performance checks, and take appropriate action. Pete Babich, 5/27/2004 Hoshin Kanri was developed in Japan, but it s based on the US concepts of Management by Objective and the basic quality improvement model PDCA. Briefly discuss each of the bullet points based on your own experience and knowledge. When you distill Hoshin to its most basic elements, however, it s a set of forms and rules. The forms provide the planning structure and the rules provide the process for using the forms. If you use the forms and follow the rules, it will walk you through the planning process. Hoshin hoshin = a course, a policy, a plan, an aim. Kanri kanri = administration, management, control, charge of, care for. English Translation The term Hoshin Kanri was first documented in 1965, in a paper by Bridgestone Tire Company that studied the planning behaviors used by Deming prize winners. Discuss the translation of Hoshin Kanri into English. Use the Hoshin Handbook as your reference. Many early adopters of Hoshin changed its name. The most common translation is Policy Deployment, but most people now just call it Hoshin. Organizations like Hewlett-Packard and Xerox began using Hoshin back in the early 80s. It was considered company private by many organizations until the early 90s. Hoshin is now in the public domain and just about every Baldrige winner uses Hoshin or a Hoshin like process. Management by Objectives Focus the entire organization on common goals. Identify how each organization unit supports the goals. For each unit obtain agreement on annual objectives consistent with the common goals. Establish measures for unit self-control. Point good people in the right direction and then let them go. Pete Babich, 5/26/2004 As I mentioned before, Hoshin is based on the concepts of MBO and PDCA. Peter Drucker popularized MBO. Discuss the concepts of MBO. While Drucker described the review process as an integral part of MBO, many people failed to conduct reviews and as a result, MBO didn t work. Good people were pointed in the right direction and they went in a hundred different directions. 13

14 Module 1 Resolve Issues Standardize Gains Conduct Training Reflect on Lessons Learned Evaluate Results Analyze Deviations Plan-Do-Check-Act A C P D Examine present status Identify improvement areas Establish PMs & Goals Identify Root Causes Schedule Action Conduct Training Implement Action Pete Babich, 5/27/2004 By combining PDCA with MBO, periodic review became an integral part of Hoshin. PDCA describes the basic process improvement model created by Shewhart and popularized by Deming. In simple terms it states; Plan what you want to do, go Do it, Check to see if the results were as expected, and Act on what has been learned. Embellish the discussion with your own experience and knowledge of PDCA. For example, point out that the Six Sigma DMAIC model is a variation of PDCA. As we continue to learn about Hoshin, you will see many examples of PDCA. Two Basic Parts Business Fundamentals Breakthrough Activities As I mentioned earlier, effective planners must focus on both today and tomorrow s business. Supporting this effort, Hoshin is broken into two key parts. Business Fundamentals focus on today s business or keeping the ship afloat. Breakthroughs focus on transforming the organization to meet the needs of the future. About 80-90% of the organization s resources will be focused on Business Fundamentals and about 10-20% of the resources will be focused on Breakthroughs. Effective Hoshin users have learned, however, that nobody in the organization should focus 100% on Business Fundamentals. They should always reserve a small amount of resources to make things better. 14

15 Overview Plan Do Check Act External Data Internal Data Customers Long Range Plan Competitors People, Suppliers Market Forces Last year s results Identify key issues. Develop objectives, strategies, performance measure goals, and implementation plans. Work the plan Yes Results No Time as expected? for Annual Review? No Yes Analysis of deviation Analysis of results Implement Document & countermeasures standardize gains Pete Babich, 5/27/2004 This is the basic flowchart of the Hoshin annual planning process. Notice how it fits the PDCA model. Ask participants to refer to page 68 in the Hoshin Handbook for a bigger picture of the flowchart. One of the most important features of the flowchart is the fact that lessons learned from the previous year are a key input to planning for the next year. Creating Cycles of Learning is one of Hoshin s biggest benefits. Key Elements of any Review P D C A P What did you plan to accomplish? What did you actually accomplish? Why is there a difference between expected and actual results? What was learned and what are the implications for the future? What do you expect to accomplish during the next period? Earlier, I stressed the importance of checking on progress as an essential behavior of effective planners. Hoshin integrates the PDCA model to conduct periodic reviews and assure the plan stays on track. Briefly discuss the review elements. Unfortunately, we will spend the least amount of time in this workshop on the review process, but conducting reviews is the most important part of Hoshin. If you don t review your plan, then you are not using the Hoshin process! Hoshin Plans have five key elements The Business Fundamentals Plan documents daily work. Based on the company s Mission, it describes what the business is. The Long Range Plan documents how the company expects to operate in the future. Based on the Company s Vision, it describes what the business should be. The Annual Plan documents the key activities that must be accomplished this year in order for the company to achieve its Long Range Plan. Review Tables compare actual results to expected results and document changes to the plans. Abnormality Tables document out of the ordinary occurrences, and address problem root causes. Hoshin is about forms and rules so let s look at what forms are necessary for a complete Hoshin plan. Briefly discuss each of the sets of tables that make up a complete Hoshin plan. During the remainder of the workshop, we are going to look in more detail at each of these elements. Ask for and answer any questions. This is probably a good place for a break. 15

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