1. ORGANIZATION MANAGEMENT
Structured Planning /
Hoshin Planning

2. 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

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

4. 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

5. 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

6. Business Fundamentals
Annual planning
Current Performance
Business Plan
Gap Analysis
Business Fundamentals
Hoshin Plan

7. 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

8. Effective planning techniques
Identify critical few objectives
Evaluate resource constraints
Establish performance measures
Develop implementation plans
Conduct regular reviews
Take corrective action

9. Plan linkage chart

10. Hoshin plan elements Situation Objective and goals
Strategies and owners
Implementation items and owners
Performance measures and timeline

11. Hoshin planning table

12. 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

13. 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

14. Cascading / linking Hoshin plans
1.3 1
1.2
1.1
1.11
1.21
1.31
1.32 2
2.1
1.321
1.211
1.111
Top Management
Functional
Section
Department
MANUFACTURING MARKETING R & D

15. Cascading / linking Hoshin plans
Division Manager
Functional Manager
Section Manager
Objective Strategy (Goal) (Measure) 1
1.1
Objective Strategy (Goal) (Measure)
Objective Strategy (Goal) (Measure)
1.1.1

16. 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
ATM Credit / debit cards Mortgages On-line banking
Governance and strategy implementation p. 36

17. Goals are established based on
Past performance data
Competitive environment
Customer expectations
Current and projected resources
Estimates of future performance
Need for improvement

18. Identifying 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

19. 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

20. 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

21. 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

22. Implementation plan

23. Hoshin annual planning
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)

24. Review table

25. Plan linkage chart

26. 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

27. 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

28. Hoshin planning - summary
Planning for breakthrough improvement
Cascading/linking of Hoshin plans
Detailed implementation plans (strategies support objectives)
Robust reviews and corrective action

29. 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

30. Assignment Read BA 550 class packet: Case brief – Silvio Napoli
Framing for Learning – Tech Implementation
How to Get Aboard a Major Change Effort
Case brief – Silvio Napoli
Last names beginning with N - Z