ORGANIZATION MANAGEMENT

Structured Planning /

Hoshin Planning

Does your organization: Have a beautiful strategic plan collecting dust Keep trotting out the same plan year after year

having made little or no progress Have improvement projects working in twenty

different directions Seem unable to make progress on strategic

objectives because real work gets in the way Have a plan but never checks on progress or

holds people accountable Manage by opinion rather than fact Have a great plan but nobody knows about it

Hoshin Planning

The Hoshin planning process is a systematic approach to identify, sort and resolve issues requiring breakthrough improvement

Business Fundamentals

Key processes that are used to manage the overall business and day-to-day activities Sales forecasting Supplier management Production planning Employee development Customer complaint resolution

Breakthrough Improvement

Reduce product failure rate 10X Win the Malcolm Baldridge award Achieve 25% market share in

< $100 products Reduce new product introduction time

(lab proto to first shipment) to 12 months

Annual planning

Gap Analysis

CurrentPerformance

BusinessPlan

BusinessFundamentals

HoshinPlan

Why separate business fundamentals planning from Hoshin planning?

People have a hard time balancing resources between urgent and important activities . . .

urgent activities cause the most immediate pain

Effective planning techniques

Identify critical few objectives Evaluate resource constraints Establish performance measures Develop implementation plans Conduct regular reviews Take corrective action

Plan linkage chart

Hoshin plan elements

Situation Objective and goals Strategies and owners Implementation items and owners Performance measures and timeline

Hoshin planning table

Hoshin planning guidelines Understand the situation and the causes

affecting the objective before developing strategies to achieve the objective

Select the few critical strategies that are necessary and sufficient to achieve the objective

Do not exclude objectives/strategies because the necessary measures do not exist

Avoid Hoshin strategies that are tactical in nature

Identify a single owner for each strategy

Planning guidelines - continued

Align plans between departments Develop measurable goals and targets Review the plan periodically Management must create the

appropriate environment for planning and conducting reviews

Cascading / linking Hoshin plans

MANUFACTURING MARKETING R & D

1.3

1

1.21.1

1.11 1.21 1.31 1.322

2.1 1.3211.2111.111

Top Management

Functional

Section

Department

Cascading / linking Hoshin plans

Objective Strategy (Goal) (Measure)

Objective Strategy (Goal) (Measure)

Objective Strategy (Goal) (Measure)

DivisionManager

FunctionalManager

SectionManager

1

1.1.1

1.1

ATMCredit / debit cardsMortgagesOn-line banking

GOAL: To become the primary financial institution of its customers

Quality personal service delivery

Facility management Technology enhancement

Coordinated marketing

New definition of personal service

Enhanced people skills

Policy changes Procedure changes

Determine skills required

Develop training

Deliver training

Test / certify Revise job descriptions

Governance and strategy implementation p. 36

Goals are established based on

Past performance data Competitive environment Customer expectations Current and projected resources Estimates of future performance Need for improvement

Identifying strategies Strategies

How will we achieve the objective/goal

Owners Who has responsibility for the achievement of

each strategy

Performance measures How will we track our progress on each

strategy

Equation of goals & strategies

Does the set of strategies equal the goal(S1 + S2 + S3 = Goal)

If an equation can not be established, revise/improve the plan

If objectives are not met, you can trace goal performance through the performance of the strategies

If objectives are not met, you can review the planning process

Good performance measures Use customer focused measures whenever

possible Use measures that can be checked

periodically/frequently Use normalized measures when possible

(e.g. per person, per unit, per $) Use dimensionless measures (ratios, %, etc) Use judgmental measures where appropriate Measure results rather than activities where

possible

Example performance measures Manufacturing

% yield for product/process # days work in process inventory

Research & Development # months from investigation to first production # design problems solved in Manufacturing

Marketing % orders/forecast per product monthly % deadlines met for new product introductions

Finance and MIS # billing errors/invoice # hours system up-time/week

Quality % customer complaints/product $ value of process improvements/improvement team

Implementation plan

Hoshin annual planning Plan

Setting objectives, strategies, goals and performance measures

Developing detailed implementation plans

Do Deploying plans through the organization

Check Reviewing progress and plan execution

Act Ensuring appropriate actions are taken based on results

of the plans (i.e. corrective action on deviations)

Review table

Plan linkage chart

Benefits of structured planning Provides organization-wide focus; makes priorities

obvious Helps ensure consensus on issues and priorities Aids coordination across departments and functions

eliminating duplication of effort and misdirected action

Facilitates teamwork Provides methodology for including customer needs Clarifies responsibility and ownership Allows better decisions and correction of significant

problems

Benefits of structured planning

Provides organization-wide focus; makes priorities obvious

Helps ensure consensus on issues and priorities Aids coordination across departments and functions

eliminating duplication of effort and misdirected action

Facilitates teamwork Provides methodology for including customer needs Clarifies responsibility and ownership Allows better decisions and correction of significant

problems

Improves Planning

Assures Excellence in

Execution

Hoshin planning - summary Planning for breakthrough improvement Cascading/linking of Hoshin plans Detailed implementation plans

(strategies support objectives) Robust reviews and corrective action

Hoshin planning – summary 2

We need everyone working on the right things We need effective utilization of resources We need to track our progress We need to adjust to new situations

… Focus, Orchestrate, Synchronize

Assignment Read BA 550 class packet:

Framing for Learning – Tech Implementation How to Get Aboard a Major Change Effort

Case brief – Silvio NapoliLast names beginning with N - Z