We want to discuss about two important concepts for a Lean Transformation, Hoshin Kanri & Daily Management, both are critical factors for a cultural shift and performance improvement at a company level, unfortunately they are not so well understood.
Hoshin Kanri management aligns the activities of people throughout the company so that the company can achieve key goals and react quickly to a changing environment.1
How is the Hoshin Cycle Managed?
1.-Strategic Planning, The direction.
The first and very important point is to define a direction, that’s comparing the company’s multi annual goals vs. the current condition, its critical to understand the current organization’s capabilities to clearly understand the gaps to the desired condition and the goals.
2.- Hoshin Deployment, what do we need to do?
Once the direction is established, we will define what we need to do at every level and each department of the organization to achieve the milestones and goals established, we can normally split it on company, department and group level actions.
We will define by which means we will achieve them, here we focus on the process, since each organization and department will find their way according to their specific situation, here is critical to establish a Daily Management System, where we will establish the standard actions to be perform at each leadership and team levels to assure we are daily aligned to the main objectives.
Why is important to link the Hoshin Kanri with Daily Management?
We cannot foresee the future, so we will always have to iterate, observe, learn and adjust, and the only way to do this in an effective way is in a daily manner
Shop floor effective management is the way we manage the company ship daily, this give us the capability to react and correct as soon as we discover deviations and unplanned stops, this will always happen.
Effective daily management without a solid strategy (long term strategic vision) wont go so far, in order to boost the performance into the right direction we need to match both and control them in a frequent manner.
3.- Controlling by Metrics, how are we doing?
Define the ways we will measure it, we should review and define which Indicators will give us the sense of direction and establish the frequency of review for each level.
- Main KPI’s
- Sub KPI’s
- Process Indicators
Whit this we will assure everybody at every level understand how is contributing to the main goal.
4.- Check and Adjust the direction,
For the different Indicators structures (Company to Group level) there is also a frequency of review, these can go from Daily, Weekly, Monthly and Quarterly reviews, this will give the capability to study and react the sooner the possible to keep the way towards our goals.
This 4 steps cycle is performed repeatedly at every level of the organization during the year, until we reach the objectives established, normally at company levels are annually new goals.
References: 1 (Shiba, Graham, and Walden, 1993)