Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement
Hoshin Planning
Transcript of Hoshin Planning
Hoshin Planning Process
WorkshopMonth xx, 20xx
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Agenda
- Introduction/Ice Breaker 5 min.
- What is Hoshin Planning? 2 min.
- Why use Hoshin Planning? 24 min.
- How to Use Hoshin 35 min.
- Questions and Answers 15 min.
- Example (tbd) 15 min.
- Wrap Up 5 min.
What is Hoshin Planning?
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Hoshin Planning
• Hoshin is a Japanese term = “compass needle”- Designates setting strategic direction of the organization
• For HOS Hoshin is:- A closed loop management system for identifying, focusing and linking the
organization to achieve results. Additionally it contains a daily management that drives constant progress monitoring of these results and reacts to issues as they arise
• Traces roots to:- Management By Objectives (MBO) – Drucker- Plan-Do-Check-Act (PDCA)- Shewhart/Deming
• Sometimes referred to as:- Policy Deployment- Management By Policy- Management By Planning
• U.S. Based Companies That Have Embraced It- Danaher, Hewlett-Packard, Proctor & Gamble, Xerox, Florida Power and Light
(FP&L)
Why Use Hoshin Planning?
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Why do we need Hoshin Planning?
• Why?:- Proper alignment requires more than independent
establishment of strategies- Hoshin Planning will align those strategies and drive the
execution- To Achieve Breakthrough RESULTS!
• Common Failure Modes:- No review of actions or accountability- Plans not visible or not measured or measurable- Not aligned or linked to the needs of the site
A PROCESS to help drive Results!
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Hoshin is an active relationship between 2 parts
• The two parts of Hoshin are…- Hoshin Management- Daily Management
• Hoshin Management (Strategies & Objectives)- Special actions/plans are required to achieve a desired
result
• Daily Management (Routine KPI Management)- Can achieve targets with usual improvement activity and
resources
Hoshin Has Two Sides
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Why Use Hoshing Planning?Im
prov
emen
t
Base Base
KAIZEN
Year 0 Year 1 Year 2 Year 3 Year 4
BaseBase
BaseKAIZEN
KAIZEN
Strategic Objective
is Achieved
!
Hoshin Planning
Hoshin Planning
Hoshin Planning
To Build Sustainable Competitive Advantage
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Why Use Hoshin Planning?
VS.
To Align Objectives and Targets Throughout the Organization
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Daily Management
• Daily Management (Routine KPI Management)- A visual management system to highlight day-to-day issues
that drives rapid implementation of countermeasures.
- A communication tool that drives alignment to the lowest levels of what is important to the site.
- Strong linkage into the Visual Management and Leadership Standardized Work systems at the site
Daily, Weekly & Monthly Monitoring of Progress
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Hoshin Planning SummarizedBoth Controlled by Rigorous Process Control Systems and measured frequently to drive results
OBJECTIVES
STRATEGIES
CashGrowth
QMS
PeopleSTRAPAOP
Daily Mgt. Hoshin Management
All activities necessary to carry out the routine work for the SBU
Defined to follow and be governed by…Rapid Problem Solving methodsPDCA
Demonstrated through standardized work On the shop floorControlled and driven through Leadership Standardized Work in daily gemba walks
How to Use Hoshin?
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Top Mgt
Middle Mgt
Supervisor
Front LineAssociate
Breakthrough
Daily Management
Kaizen
How Should You Spend Your Time?
What Does Hoshin Planning Mean To You?
Adapted From Beyond Strategic Vision, Effective Corporate Action With Hoshin Planning; Cowley, Domb, 1997 pg. 57
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Timing of Hoshin Planning
JULY AUGUST SEPT OCT NOV DEC
STRATEGIC PLANNING
HP LEV 1 COMPLETE
ACTION PLANDEV COMPLETE
JAN
NEWYEAR
HPBEGINS
HP LEV 2 & 3 COMPLETE
CONCURRENT BUDGETING PROCESS
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Deploy Improvement PrioritiesDeploy Improvement Priorities
Develop Annual BreakthroughDevelop Annual BreakthroughObjectives and ImprovementObjectives and Improvement
Priorities Priorities
Monthly ReviewMonthly Review
ImplementImplement Improvement InitiativesImprovement Initiatives
7 Phase Hoshin Planning Process
Annual Review
PLANNING
IMPLEMENTATION
REVIEW
Establish Establish Organizational VisionOrganizational Vision
Strategic Planning/ Develop 3-5Strategic Planning/ Develop 3-5Year Breakthrough ObjectivesYear Breakthrough Objectives
Annual ReviewAnnual Review
Self-Diagnosis
Root Cause Countermeasures
Catchball
Lean SS CAP
Critical Step
P
D
C
A
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The Process of Critical Thinking (PCT)
Step 1 : WHATBreakthrough Thinking
Step 3 : HOWIdentify Key Driver Process
Step 4 : HOW MUCH/ WHENDetermine Measures & Track
Step 5 : WHOIdentify Key Resources &
Deploy
Step 2 : HOW FARAnnual Breakthroughs
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PCT Step 1 – WHAT?
Current Situation
BreakthroughObjective
CurrentSituation
World-Class
Industry Standard
Best-In-Class
GAP
Breakthrough Thinking Leads us to World Class
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PCT Step 2 - HOW FAR?
Annual BT Objectives Yr 2
Current Situation
Annual BT Objectives Yr 3
Annual BT Objectives Yr 1
BreakthroughObjective
Yr 1Yr 2
Yr 3
Identify First Year Breakthrough Objective
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PCT Step 3 - HOW?
Why?
GAP
Annual BreakthroughObjective
Current Situation
Why?Why?
Why?Why?
ImprovementPriority
Identify Key Driver Processes
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PCT Step 4 - HOW MUCH/ WHEN?
Determine Measures & Track
0
100
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PCT Step 5 - WHO?
40%
20%
20%
Identify Key Resources & Deploy
RelativeImpact On
Improvement Priorities
CurrentDistribution
Of Resources
Resource A
Team B
Resource C
Resource D
Team E
100%
0% 0%
100%
3%
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Daily Management and Hoshin PlanningIm
prov
emen
t
DailyMgmt
Daily
KAIZEN
Year 0 Year 1 Year 2 Year 3 Year 4
DailyDaily
DailyKAIZEN
KAIZEN
Hoshin Planning
Hoshin Planning
Once Breakthrough is achieved…process is standardized to
Daily Management! StrategicObjective is
Achieved!
MgmtMgmt
MgmtMgmt
FoundationforHP
Hoshin Planning
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Top LevelImprovement
Priorities
HOW
AnnualBreakthrough
Objectives
HOWFAR
3-5 Year Breakthrough
Objectives
WHAT
Targetsto Improve
HOW MUCH
PCT & the Top Level HP Matrix
All itemsare listed
in priority orderstarting from
the centerRESOURCES
= Primary Responsibility
= Secondary Responsibility
WHO
OWNER
Annual Metrics
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RESOURCES
AnnualBreakthrough
Objectives
Targetsto Improve
3-5 Year Breakthrough
Objectives
Top LevelImprovement
Priorities
= Primary Responsibility
= Secondary Responsibility
5- WHO
4- HOW MUCH
Use dots to show relationship of Targets and Resources to the Improvement Priority
3- HOW
Use dots to show relationship of
Improvement Priorities to Annual Objectives
2- HOW FAR
1- WHAT
NOTE: Only Solid dots on a resource deploy to the
next level
The whole picture of your company on one sheet of paper!
Complete Top Level HP Matrix
OWNER
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3-5 YearBreakthroughs
TargetsTo
Improve
Top Level Improvement
Priorities
Linkage on the Matrix
AnnualBreakthrough
Objective
Dots showlinkage from
Target back to Breakthroughfor that level
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• As soon as a solid dot is placed above a resource, that resource will get a lower level matrix or an action plan.
• Clear circles indicate support resources. They do NOT get a lower level matrix or action plan unless they get a solid dot on another matrix.
• The dots are to be used as a sanity check
• The ImprovementPriority is deployedto the lower levelmatrix or an actionplan
Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Annual Breakthrough
Objectives
Targets to Improve
Danaher Business System Office - Policy Deployment 1998
Primary Responsibility Secondary Responsibility
Resources
Top Level Improvement
Priorities
3-4 yearBreakthrough
Objectives
Annual Breakthrough
Objectives
TOP LEVEL - CompanyTOP LEVEL - Company
Top Level Improvement
Priorities
Targets to
Improve
SECOND LEVEL - PlantSECOND LEVEL - Plant
Second Level Improvement
Priorities
Points to Remember about the Matrix
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Transferring Improvement Priorities to the 2nd Level
Second Level Policy Deployment
Primary Responsibility
Secondary Responsibility
RESOURCES
Top LevelImprovement
Priorities
Annual
Objectives
Target to Improve
SECONDSECOND LEVELLEVEL
TOP LEVEL Policy Deployment 2004
Primary Responsibility
Secondary Responsibility
Resources
Annual Breakthrough
Objectives
Breakthrough 3-5 Year
Objectives
Target to Improve
TOP LEVELTOP LEVEL
Breakthrough
Second LevelImprovement
Priorities
Top LevelImprovement
Priorities
Typically, a 2nd Level Matrix is created for a primary resource for each top-level ImprovementPriority.
Imp. Priorities and Annual Objectives are copied directly onto the 2nd Level HP. Matrices.
The 2nd level 12 o’clock and 3 o’clock positions have all new text in them – nothing is rotated into them from
level 1.
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Transferring Improvement Priorities To The 3rd Level
SECOND LEVELSECOND LEVEL
If necessary, a 3rd Level Matrix is created for a primary resource for each second-level ImprovementPriority.
Top Level and Second Level Imp. Priorities are copied directly onto the 3nd Level HP Matrices.
THIRD Level Policy Deployment
Primary Responsibility
Secondary Responsibility
RESOURCES
Top LevelImprovement
Priorities
Target to Improve
THIRD LEVELTHIRD LEVEL
SECOND LEVEL Policy Deployment 2004
Primary Responsibility
Secondary Responsibility
Resources
Target to Improve
Second LevelImprovement
Priorities
Top LevelImprovement
Priorities
Annual Breakthrough
Objectives
Second LevelImprovement
Priorities
Third LevelImprovement
Priorities
Not always suggestingyou need 3rd Level.
Based on size, complexity,breadth, and maturity of
organization.
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AnnualBreakthrough
Objectives
Targets to
Improve
2nd LevelImprovement
Priorities
RESOURCES
= Primary Responsibility
= Secondary Responsibility
5- WHO
4- HOW MUCH/WHEN
Use dots to show relationship of Targets and
Resources to the Improvement Priorities
1- HOW FAR
3- HOW
Use dots as a check to make sure the Improvement Priorities & Targets
meet the goal and support the Annual Breakthrough Objectives
Top LevelImprovement
Priorities
Use dots to show relationships between Improvement Prioritiesand Annual Objectives
2- HOW
Completing the Second Level PD Matrix
OWNER
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Cascading Priorities to ACTION
= Original Plan x = Progress at Review
Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec
Improvement Priority Title: *Department/Location:
* Management Owner: * Date: *
Core Objective: *Timeline
Target Improvement
Planned Dates
Policy Deployment Action Plan
Review Team: * Next Review: *
Environm ental Situation Summary: *
Status (P ast Due in Red)
ImpactOwner (Lead is bold)
2003
Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Target to Improve
SECOND LEVEL SECOND LEVEL – Plant/Business– Plant/Business
Danaher Business System Office - Policy Deployment 1998
Primary Responsibility Secondary Responsibility
Resources
AnnualBreakthrough Objectives
3-5 Year Breakthrough
Objectives
Target to Improve
TOP LEVEL – TOP LEVEL – Company/GroupCompany/Group
POINT OF IMPACT - POINT OF IMPACT - ACTION PLANACTION PLANEngineer/SupvEngineer/Supv Cascade as many times as
necessary to the Root Cause Level
Point of Impact - Action Plan The level where root causes are addressed! Action Plans can be initiated out of any matrix level.
POINT OF IMPACT
Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Target to Improve
ROOT CAUSE ROOT CAUSE LEVEL-LEVEL- Sub Plant/Dept Sub Plant/Dept
Annual
ObjectivesBreakthrough
TopLevelImprovementPriorities
SecondLevelImprovementPriorities
TopLevelImprovementPriorities
TopLevelImprovementPriorities
SecondLevelImprovementPriorities
ThirdLevelImprovementPriorities
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= Original Plan x = Progress at Review
Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec
Target Improvement
Planned Dates
Status (Past Due in Red)
Impact
Hoshin Planning Action Plan
Review Team: * Next Review: *
Environmental Situation Summary: *
Improvement Priority Title: *Department/Location:
* Management Owner: * Date: *
2004
Core Objective: *Timeline
Owner (Lead is bold)
Step 4: Identify the impacts on the
improvement priority and top level breakthrough
objective
Step 1: Determine
actions & write on worksheets
Step 2: Record ownership and
timing of the actions
Step 3: What is the current status of the action. Color code
background as red to show items past due.
Create an Action PlanFor every ImprovementPriority at the Point ofImpact
Creating Action Plans
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Breakthrough Objective:Attain competitive advantage in Delivery Performance
Action Step 1:VSM Customer Service Process
Action Step 2:SW Kaizen to improve productivity
by 35%
Action Step 3:VRK to reduce Quote processing time
by 50%
POINT OF IMPACT
POINT OF IMPACT
POINT OF IMPACT
Actions = Cause
Effect = Cause
Effect = Cause
Effect = Results!
Action Steps Complete the Cause & Effect Chain
Top Level Improvement Priority:Use HOS Tools to improve value stream of
Engineer-to-Order Process
Annual BT Objective #1:Streamline Engineer-to-Order Processes
Second Level Improvement Priority:Implement Improved Order Entry Process
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Where VSM and Fits Into The Process
Breakthrough Objectives
Annual BT Objectives
Top Level Imp Priorities
2nd Level Imp Priorities
Value Stream Mapping
Action Plans
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= Original Plan x = Progress at Review
Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec
Target Improvement
Planned Dates
Status (Past Due in Red)
Impact
Hoshin Planning Action Plan
Review Team: * Next Review: *
Environmental Situation Summary: *
Improvement Priority Title: * Department/Location: *
Management Owner: * Date: *
2004
Core Objective: *Timeline
Owner (Lead is bold)
DASHBOARD/SCORECARDDASHBOARD/SCORECARD
Action Plans Drive The Rate Of Improvement
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Scorecards
Targets To Improve
are entered inpriority order
Planned targets are established for each month basedon the overall Target to Improve.
An actual that is a miss from the plan, is color coded red
JOP – Jumping Off Point fromwhich you started tracking the target
YTD ACT – Each month this field getsupdated (is YTD from the monthlyfields located to the right)
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TOP LEVEL SCORECARD CHARTTOP LEVEL SCORECARD CHART
Each Target is Copied to the Top Level Scorecard
Reduce New Prod. Dev. Cycle
ANNUALBTOBJECTIVES
TARGET TO
IMPROVE
3-5 YEARBREAKTHROUGH
OBJECTIVE
TOP LEVELIMPROVEMENT
PRIORITIES
Incr
ease
Mar
ket S
hare
to 6
0%
Dev
. Cyc
le to
120
Day
s b
y 12
/95
RESOURCES
Pro
duct
ion
Dep
artm
ent
Mar
ketin
g D
epar
tmen
t
Eng
inee
ring
Dep
artm
ent
Fin
ance
Dep
artm
ent
Sal
es D
epar
tmen
t
Hum
an R
esou
rces
Dep
t.
Mat
eria
ls D
epar
tmen
t
= Primary Responsibility
= Secondary Responsibility
TOP LEVEL MATRIXTOP LEVEL MATRIX
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Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Annual BreakthroughObjectives
Top LevelImprovement
Priorities
Targets to Improve
SECOND LEVELSECOND LEVEL
SCORECARDSCORECARDDanaher Business System Office - Policy Deployment 1998
Primary Responsibility Secondary Responsibility
Resources
Top Level Improvement
Priorities
3-5 year Breakthrough
Objective
AnnualBreakthrough
Objectives
Target s to Improve
TOP LEVELTOP LEVEL
SCORECARDSCORECARD
Scorecards are Created for All HP Matrices
2nd LevelImprovement
Priorities
Title
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The Review Process – Ensure Plan and Learn
• Execute to the plan and perform daily, weekly and monthly reviews of each action plan (Daily Mgt.)
• Reviews are designed to keep the Hoshin Plan on track- Improvement Action owners don’t come to be evaluated- The intent is to present the results of self assessment
• The review team provides focused assistance primarily around the owner’s analytical process and preparation.- What did you plan to do? (Plan)- What did you actually achieve? (Do)- How does actual vs. target compare (CHECK)- Standardize what’s working, implement countermeasures and/or plan again as
required. (ACT)
Execute To The Plan
Conduct Regular ReviewsP
C
A D
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Manage Daily Management Through Leadership Standard Work
• Embed the Hoshin Plans into Leadership Standard Work
• Make the Hoshin review process part of the daily, weekly and monthly audit process
• The key is to constantly monitor progress and drive accountability to the lowest level
$136k monthly miss is due to Delayed Evaluation Kit Development, Insufficient Sales Prospects and Delayed Print Engine Delivery.
Problem Statement:
What
Short-Term: 10/28/03
Long-Term: 12/15/03
CountermeasuresHow Much (Impact)
$61
Who
Short-Term: MJFLong-Term: JBR
RZ/ MJF
Addressed Root Cause: Delayed Print Engine DeliveryExecute kanban re-sizing process for Printos at once per quarter frequency (currently twice-per-year…which is not frequent enough for ramping production).
DW/HW
Addressed Root Cause: Delayed Evaluation Kit DevelopmentShort-Term: Assign additional Engineer to complete evaluation kit development (delayed one month) in time for ITMA show.Long-Term: Update Tollgate process to include Engineering development for necessary targeted-vertical launch kits.
Addressed Root Cause: Insufficient Sales ProspectsExecute Sales Funnel Targets for UK 'T' Shirt outlet…twice per week follow-up on Sales Funnel Targets with Sales Engineer.
Third Level HP Countermeasure SheetImprovement Priority:Targets to Improve:
Process and organization to grow Printos sales in textiles and ceramicsIncrease Printos valve/module sales in textiles & ceramics from $100k to $2,500k in 2003
$48
When
$27
10/15/03
10/22/03
Run Chart
$0$50
$100$150$200$250$300$350$400$450$500
2003 Plan2003 Actual
2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $4532003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Pareto (the "Why" you missed)
0%
10%
20%
30%
40%
50%
Percent 45% 35% 20%
Delayed Evaluation Kit Development
Insufficient Sales
Prospects
Delayed Print Engine Delivery
Run Chart
$0$50
$100$150$200$250$300$350$400$450$500
2003 Plan2003 Actual
2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $4532003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Pareto (the "Why" you missed)
0%
10%
20%
30%
40%
50%
% 45% 35% 20%
Delayed Evaluation Kit Development
Insufficient Sales Prospects
Delayed Print Engine Delivery
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5 Why Analysis
• Systematic method to drive to the true root cause(s) of a problem
• Simply ask “why” in a step ladder approach until fundamental root cause is discovered. Root cause is not simply listing the symptoms of a problem
• Normally, after up to 5 steps, the true root cause(s) will be exposed
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Action Plans vs. Countermeasures?
Inventory Reduction Plan
0
10
20
30
40
50
60
J F M A M J J A S O N D
Plan Actual
Action Plans are proactive – they address how to achieve a particular goal from the jump off point (JOP) to the stretch target
Countermeasures are reactive – they address how to get back to plan when a goal is missed for a period
HP miss Jump Off Point (JOP) to stretch target
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• Establish the Growth Agenda for Today’s HP Review• Financial Review• Hoshin Planning
- Road Blocks to Growth, Major
Predetermined Topics
- Established HP Growth Initiatives
- New Product Development
- Remaining HP Elements (Q, D,C)• KPI’s• People/Org. Issues• Other Business
5%
15%60%
20%
Monthly HP/ISC Review Agenda FormatM
onth
ly P
D is
typi
cally
an
8 ho
ur m
eetin
g
Follow a typical MOR session
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Hoshin Planning Summary• Aligns Strategy and Execution
• Systematically develops and links plans from organizational vision to operational tactics
• Ensures deep and common understanding and maximizes ownership and buy-in to plan
• Requires thoughtful, detailed planning for each and every improvement action
• Consistently assesses actual performance vs. plan and addresses issues and learns from the process
All Employees are Engaged in the Process
Questions?