"Hoshin Kanri A Strategy Implementation Engine

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2 "Hoshin Kanri A Strategy Implementation Engine

3 SSA Welcomes you to Hoshin Kanri Workshop PRESENTED TO: PRESENTED BY: NC Founder Chairman SSA Group of Companies Mumbai

4 Who am I? 4 R NC (NC Narayanan) Founder Chairman SSA Group of Companies Mumbai India BE (Mech.), MS (Research) from IIT 43 Years experience in Corporate Career 30 years in Corporate and 13 years in consulting. Publications: 1. Enigma of Lean 2. Lean Six Sigma in a Nutshell 3. Statistical Guide 4. Arete 5. Pragmatic Leadership (under publication) Blog: ncnarayanan.blogspot.com LinkedIn:

5 Train the Trainer from BSI, USA 5 R

6 SSA Group of Companies Beyond Perfection Passion for Impossible Strategy Excellence Operational Excellence Design Excellence People Excellence Knowledge Excellence Institutionalizing envisioning, strategizing & implementation Excellence in boardroom Institutionalizing continuous improvement, systems & practices. Institutionalizing NPI processes to achieve First Time Right, time to market & cost effective new products Institutionalizing excellence practices in people management Institutionalizing knowledge development & competency growth practices FRUITION 6 R

7 What we do? Customer Loyalty Improvements Cost Reduction 7 R

8 SSA s Tool Kit 8 R

9 Some of SSA clients 9 R

10 Geographical presence UK Bosnia Nigeria Muscat Zimbabwe SA 10 R

11 Publications 11 R

12 Scenario Building

13 13 India as Superpower 2020

14 Is it a realistic vision? 14

15 India once the Greatest Nation Aryabhatta Astronomy Budhayana Value of Pie Bhaskara Decimal system Bhramagupta Inventor of zero 15

16 Metamorphosis Of India 16

17 Centuries of Invasion India Modi-fied

18 Protected to global economy onwards 18

19 GDP Contributions Economy Factors USA India India as in Per Capita $ 51,688 $ 1491 $ (in 1960) GDP Growth (2012) Manufacturing Industry 2.8% 3.986% 3.4% 19.2% 26.4% 5.99% Service 79.6% 56.4% 5.43% Agriculture 1.2% 17.2% 2.68% Inflation 1.6% 9.31% 1.83% (in 1960) 19

20 Quality & Prosperity GDP per capita COUNTRY GROWTH X US JAPAN TAIWAN KOREA CHINA

21 GWP Growth of mankind years ago 0.01 billion USD 21 Revision #

22 GWP Growth of mankind 100 years ago billion USD 22 Revision #

23 GWP Growth of mankind ,160 billion USD 23 Revision #

24 Challenges of Indian industries Focus on Cost, Quality, Innovation 24

25 Height of stupidity 25

26 Overall Mfg Performance of India Share of Mfg GDP stagnated at 15% for years. Govt of India targets of 25% by National Manufacturing Competitiveness Program to support achieving target 26

27 MSMEs in India Source : The Economic Times 30 million SMEs in India Contributing to 45% of the industrial output 8000 quality products 40% of India s exports % Contribution by MSMEs Employing 60 million people Creating 1.3 million jobs every year 27

28 Why the Industrial Growth is stunted?

29 Manufacturing Business Model Brahma Market PRODUCT INTRODUCTION PROCESS Customers Support Processes Suppliers MATERIAL ACQUISITION MANUFACTURING DISTRIBUTION Customers Vishnu OPERATIONS PROCESS Mahesh 29

30 PERFORMANCE Mantra of Business CEO Vision COMPETENT & EMPOWERED PEOPLE ROBUST PROCESSES VISIONARY & KNOWLEDGABLE LEADERSHIP TIME 30

31 Need & Do Interaction DO s & Needs Interaction Zone becomes the Business Model DO s NEEDS Process Capability QCDS (Quality, Cost, Delivery & Service) 31

32 Performance What is a Step Change? In 1 year Time 32

33 Classical Approach Previous Year Performance Incremental Goals New Year Budget No Strategic Altitude No Means only financial goals How part is unanswered Only chasing the numbers 33 R

34 Four Stages in Development GAZING: No Questions Asked OBSERVATION: Correlate things without reason leading to superstition SCIENTIFIC: Learn to connect cause & effect ENQUIRY: Unearth laws CONTEMPLATION: Question these laws 34

35 Strategic Forces Govt. Policies Complimentors IMPROVEMENT In Quality, Delivery, cost & service Potential Competitor Business Organization Substitutes MAINTENANCE Of Old Products & Services Current Competitor 35 Customer

36 Typical Benchmark KPI s BENCHMARKS TRADITIONAL WORLD CLASS Stock Turnover Ratio STR 4 Turnover per employee On time delivery 35 60% 16 to Lacs Minimum 98% Response to customers Product renewal Leadership in Industry 2 to 4 DAYS 5% income from new products Low Rankings & Min Export Within Hours 25% income from new products Within top 3 & 20% export Working capital rotation 2-3 Capital employed turnover 1-2 Min 6 Min 4 36

37 Tool-holic & Me first? 2000 s MALCOLM BALDRIGE AWARD DEMING AWARD EFQM AWARD EXCELLENCE AWARDS 1992 BALANCED SCORECARD POLICY DEPLOYMENT STRATEGIC PLANNING 1985 TOTAL QUALITY MGMT SIX SIGMA TQM CONCURRENT ENGG PROCESS MAPPING PROCESS SIMULATION BPMS PROJECT MGMT JIT 5S Q CIRCLES KANBAN LEAN BPR SPC KAIZAN TPM QFD DFM FMEA COPQ 1980 s MANAGEMENT SYSTEMS (COMPLIANCE STANDARDS) ISO 9000 ISO (ISMS) ISO PCMM CMMI 37

38 Trigger Points for Change 1. Vision / Mission / Values 2. Company Plans 3. Learning of Teams Benchmarking R&D Market Research Proactive 4. People and Partners Ideas 5. Customer Demands (Present) 6. Changes in Competition 7. Changes in Government Policies 8. Changes by Technical Collaborations 9. Changes in Ownership 10. Changes in Economic Environment 11. Reaction to Problems / Failures Reactive Desperate 38 R

39 Urgency for Change Four Kinds Of Organization Aware We need to move here! Grasshoppers Lions Chicken (with their heads cut off) Snails Not Aware Don t Know What to Do Know 39

40 Balanced Scorecard Perspectives LEADERSHIP Objective (Result) Financial Results Customer Preference PAT ROIC Growth Repeat Buyer Market Share 40 Means (Enablers) R Process Focus Learning and Changing People Process Capability of key processes (Six Sigma) No. of Capable Processes Saving from Improvement Projects Process Cycle Efficiency (Lean) Number of Innovations Low Attrition Employee Satisfaction No. of Changes in Product /Process/System No. of Training/Employee

41 Hoshin Kanri Workshop

42 What makes an institution? GOALS INDIVIDUAL TEAM ORGANIZATION VISION 42

43 R

44 The Sledge hammer approach 44 R

45 Why Hoshin Kanri? 45

46 Strategy Planning Approach Philosophy Long term perspective Balance between Enablers & Results Method Hoshin Kanri PROFITABILITY IMPROVEMENT GROWTH PERPETUITY Tools Policy Deployment 46 R

47 What is Management? Conventional organizations Not even organized with proper Operational management IDEOLOGY Excellence Operational Management Professional organizations Have all layers of management Excellence 47

48 Islands of Improvements 48

49 PDCA for Transformation 49

50 Transformation Choices Business Excellence IMPROVED EFFECTIVENESS Strategy Systems & Processes Activities Results Fix Problems Six Sigma Redesign Process (Lean Six Sigma) Improve Quality of Thinking and Interactions (Beliefs and Assumptions) 50.. We need new tools for Business Excellence

51 Policy & Goals Deployment Vision P O L I C Y Mission Strategy Success Factors Policies Review Goals Daily performance Improvement Projects D E P L O Y M E N T Divisional Heads Section Heads Self-directing work groups CONTINUOUS IMPROVEMENTS 51

52 What is Envisioning? Wisdom of Team Data Collected START HERE - Envisioning STRATEGIC PLANNING TODAY THE SYSTEM Strategy Planning & implementation FUTURE - Customer concern - Scenario building - Environment - Strength and Weaknesses -Current performance level Feedback Loop 52

53 What is the right approach Evolve a Theory (Philosophy) (Vision & Strategy) Test the Theory Strategy Implementation thro People & Process Refine the Theory (Change Strategy) Find the Gaps in the Theory (Evaluate thro KPI) 53 R

54 What is Strategy? 54

55 BSI Approach to Scorecards 55 R

56 Purpose of Hoshin Kanri Policy Deployment 56 R

57 The Pyramid of Objectives 57

58 58 R

59 59

60 The A3 Report 60

61 61 R

62 End of Module