by Elmer Epistola
Hoshin Planning Process
is a systematic planning methodology for: 1) defining the
of the organization or company; and 2) ensuring the
implementation of 'business fundamentals'
required to successfully run the
business on a daily basis. Hoshin planning, therefore, is a
two-prong planning approach that covers the organization's strategy to
achieve breakthrough results through its long-term objectives and ensure
continual improvement through its short-term business fundamentals.
Like many modern business concepts today, hoshin planning was developed in
Japan. The Japanese words 'hoshin kanri' can be translated into 'direction
setting'. And like many Japanese management concepts, hoshin
planning also promotes the involvement of
in the process, on the basic premise that desired results can only be
attained if everybody in the organization fully understands the goals of
the company and is somehow involved in the 'chain' of plans defined to
generated by the Hoshin process is
hierarchical in nature, with the
corporate objectives determining the corporate strategies which, in turn,
are supported by lower-level strategies that cascade down the
organization. In effect, the goals of every individual should
support the goals of the next person up in the hierarchy. Every strategy further
consists of tactics or actions that need to be undertaken to accomplish
planning process basically consists of the following
1) identification of critical business issues that the organization faces;
2) establishment of business objectives to address these issues; 3)
definition of the company's over-all goals; 4) development of strategies
that support the over-all goals; 5) definition of sub-goals or tactics that support
each strategy; 6) establishment of metrics or indicators for measuring
process performance; and 7) establishment of business fundamental
measures. The first 3 steps of this process are handled by top
management, with the defined over-all goals supported by the rest of the
organization through steps 4-7.
aspect of the Hoshin process is the
of the defined
plans. It is not enough to have a documented plan - it needs to be checked
against actual performance. Hoshin plans must undergo a major review
at least once a year.
During review, Hoshin plans are usually presented using
Hoshin review tables,
each of which shows a single objective and its supporting
strategies. A group or individual responsible for several objectives
therefore needs to generate several review tables in order to cover all
details must be shown for each strategy in the review table: 1) the
strategy owner(s); 2) the timeframe; 3) the performance metrics; 4) the
target(s) for each strategy as defined during the Hoshin planning process;
and 5) the actual results at the time of the review.
between the target and actual results, whether positive or negative, must
be noted along with the impact of the discrepancy on next year's plans.
As mentioned earlier, hoshin
plans are hierarchical in nature, cascading from the top levels to the
lower ones, so review tables must likewise cascade upwards.
which is the analysis of what went right or what went wrong in each
strategy, is an important aspect of hoshin reviews. Determining
objectively what were done right in strategies that attained the desired
results and what need to be improved in strategies that failed to hit
their targets is required in the organization's learning process.
Analyses of how the strategies fared must be done in terms of detailed
actually another set of tables used in Hoshin planning,
i.e., the strategy implementation planning tables.
are used to identify the tactics or action plans needed to accomplish each
strategy. Implementation plans usually present the following information:
1) the tactics needed to implement the
strategy; 2) the people involved in each tactic and their exact
responsibilities; 3) the timeline of each tactic, usually presented as a
Gantt chart; 4) performance measures; and 5) how and when the
implementation plans will be reviewed.
can not be pursued effectively unless the company's operations are sound
and stable. This is the reason why the Hoshin planning process also
involve the definition of business fundamentals and their metrics, which
are documented in a
business fundamental table. Business
fundamentals, or the basic elements that define the success of a key
business process, are monitored through its corresponding metrics.
These business fundamental metrics indicate whether or not the various
value-adding operations or activities are doing well. BFT figures must be
in control before the long-term strategies are attended to.
planning, to be truly effective, must be
i.e., they must promote intra- and inter-process cooperation. This
only reflects the reality that the various departments of a company need
to support each other in order to achieve remarkable synergistic results.