business strategy

Hoshin Kanri Strategic Planning Process: The Key to Driving Growth and Performance

Posted on by Adam Payne

In today’s highly competitive and ever-changing business environment, manufacturers need an effective way to align their teams and departments towards a unified strategic objective. The Hoshin Kanri Strategic Planning Process, originating in Japan, may just be the perfect answer to achieving this coherence. In this blog post, we will explore what Hoshin Kanri is, why it was developed, how you can implement it, and how it can help you align your team’s goals into an overarching strategy.

What is the Hoshin Kanri Strategic Planning Process?

Hoshin Kanri, which translates to “compass management” or “policy deployment,” is a strategic planning process designed to help organisations define their strategic goals, allocate resources, and ensure continuous improvement in their performance. It involves a top-down and bottom-up approach, with senior management setting the strategic direction and all levels of management/employees through-out the business implementing the strategy and delivering results.

Why was Hoshin Kanri developed?

The Hoshin Kanri process traces its origins to the 1950/60s when Japanese companies needed a method to effectively integrate innovation, continuous improvement, and long-term planning. The methodology was born out of Japanese management culture and, at its core, emphasises collaboration, communication, and organisational alignment. Over the years, the adoption of Hoshin Kanri has spread worldwide, thanks to its ability to link strategic goals with everyday operations.

How to implement the Hoshin Kanri Strategic Planning Process

Implementing Hoshin Kanri involves several steps:

  1. Establish strategic goals: Senior management identifies the organisation’s strategic objectives, which should be derived from the company’s vision and mission.
  2. Translate goals into measurable objectives: Break down strategic goals into smaller, measurable objectives. This helps clarify expectations, enables monitoring progress, and ensures everyone is working toward the same end.
  3. Cascade objectives throughout the organisation: Communicate the objectives to each department or team within the company. Managers must then translate these objectives into actions that their teams will undertake to align with the overall strategy.
  4. Monitor and review performance: Develop a system to review progress against the objectives. This involves tracking performance indicators, checking in with project milestones, and analysing the reasons for delays or variances.
  5. Annual and Quarterly Hoshin reviews: Conduct annual reviews to assess the performance and make necessary adjustments. Quarterly reviews should also be carried out to ensure that the strategy remains relevant and responsive to any changes in the business environment.
  6. Learn and improve: Encourage a culture of learning and continuous improvement through regular feedback, analysis of results, and identification of areas for improvement.

How Hoshin Kanri can help align your team’s goals

The Hoshin Kanri process is designed to facilitate organisational alignment and create a clear roadmap towards your strategic objectives. By breaking down high-level goals into measurable objectives and cascading them through all levels of the organisation, Hoshin Kanri can help ensure that everyone is working towards the same vision. This, in turn, fosters a sense of purpose and cohesiveness within the company, driving employees to work together as a unified force. Moreover, the process emphasises continuous improvement, which keeps teams motivated and focused on delivering their best performance.

Key Benefits of Hoshin Kanri

The Hoshin Kanri approach provides a number of benefits to organisations striving to maintain strategy alignment, emphasise innovation, and enhance organisational performance. Here are some of the key benefits:

  1. Alignment of Organisational Goals: Hoshin Kanri effectively aligns all levels of your organisation behind the same strategic goals. This ensures that every team and individual in your organisation understands their role and how their work contributes to the larger objectives.
  2. Improves Communication: By cascading goals throughout the organisation, Hoshin Kanri encourages clear, consistent communication between all levels of the company. This can help foster a greater sense of unity and teamwork, as well as prevent misunderstandings or disconnects between different teams or departments.
  3. Focus on Strategic Priorities: Hoshin Kanri emphasises concentrating resources and efforts on a few key strategic initiatives. This helps prevent spreading resources too thin and ensures that everyone’s efforts are focused on achieving the most important goals.
  4. Continuous Improvement: Hoshin Kanri promotes a culture of continuous improvement. By regularly reviewing and adjusting goals and strategies, organisations can ensure they are always moving forward and evolving to meet changing market demands.
  5. Performance Measurement: Through the continuous review process, Hoshin Kanri provides a way to measure the organisation’s progress towards its goals. Tracking key performance indicators (KPIs) and other metrics can provide valuable insights into organisational performance and highlight areas for improvement.

In implementing the Hoshin Kanri strategic planning process, organisations can unlock these benefits, driving better performance, increased alignment, and ultimately, achieving strategic goals.

Key Takeaway:

The Hoshin Kanri Strategic Planning Process is an invaluable tool for organisations seeking to achieve alignment and execute their strategic vision effectively. By implementing this proven methodology, you can create a clear roadmap for success, foster a culture of continuous improvement, and ensure that your entire team is working towards a unified strategic goal. If you’re looking to get the best from your Time, Money and Resources this is the way to do it!.

PS: 💡 If you would like to know more regarding Hoshin Kanri please do get in contact, Adam Payne our Managing Director has implemented this in a number of businesses, from SMEs to Global Power Houses with huge success.

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Posted on by Adam Payne

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Manufacturing and The Internet of Things

Posted on by Adam Payne

The Internet of Things – IoT (Wikipedia) is the network of physical objects or “things” embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data.

The IoT has created a lot of conversations, some stating it’s all hype, some questioning it’s benefits more of something for the future and obviously the ones in support.

Now let’s not pretend here, the IoT is already here, we have smart houses, apps for lights, heating, music, etc. Recently, my neighbours installed a security system which allowed them to view, check, and switch their alarm on and off accessed from internet, this also alerted him to security issues around the property (the most important aspect). So we can’t say it’s not here already.

Now put this into the manufacturing environment.

Some renowned manufacturers have already started investing in hardware, software, and networking systems. Build the IoT infrastructure now to capitalise on its benefits.

I read in an article recently that GE anticipates $19 trillion in profits and cost savings projected over the next decade.

One major area I can see the benefit is Energy Efficiency. To be able to track all facilities, machines energy consumption on a granular level, this visibility will give feedback on a machines abnormal to normal status, something that we can action, countermeasure, control. It will highlight our waste, our areas for improvement, and better understanding of our costs and how to control them. And as stated this has to be a major benefit for manufacturing, something I certainly wanted as an Exec.

The ability to benchmark similar machines/resources, predict maintenance issues with surges in unusual energy consumption, highlighting the out of hours energy waste and being able to control and manage this. All of these will have a direct impact on the bottom line and this is just scratching the service.

The connectivity within production processes is another example, let’s say a machine is not running at optimal performance, this machine would send an alarm highlighting it’s situation to the production team, it could then slow itself down (as not to self-destruct) communicate with its upstream and downstream processes and slow them down limiting the amount of lost production and or downtime and controlling the standard in process stock.

Bosch’s Stefan Ferber stated “The Internet of Things allows for a new way of organising industry production: by connecting machines, warehousing systems and goods, we can create smart production systems that basically control each other without requiring any manual intervention.”

I will always remember the saying “ the Data will set you free” by allowing you to make “Informed Decisions”, can’t get much better than real time data, and that’s the possibility with IoT.

The Internet of Things global economic impact is massive. Approx. 25% of Global Manufacturers are already using IoT technology, this is expected to grow to 80% by 2025. In reading different articles/surveys most cannot put a definitive figure on the potential impact but the range is between $1.9 to $14.4 trillion dollars on the global economy.

Digital Manufacturing Stats from ASQ:

The American Society for Quality (ASQ) surveyed manufacturing companies that have digitised their processes and found astounding results:

  • 82% increased efficiency
  • 49% experienced fewer product defects
  • 45% increased customer satisfaction

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Manufacturing Websites, to web or not to web?

Posted on by Adam Payne

Recently I started a discussion regarding SMEs and their websites, the discussion started with this quote “an interesting observation this week whilst working, how many SMEs lack an all singing all dancing website. What’s the reason, with 90+% of people now looking on line this should be a priority.” Now all singing all dancing to me means bringing a Return on Investment. Here some excellent extracts and comments from the people involved, I’ve tried to get a balance within the discussion, and this is not my area of expertise.

Ashley Pearce: “In research I conducted recently an overwhelming number of those involved with Business Development in the UK Manufacturing Sector didn’t understand the actual function of a website.
Where does it fit in? Is it just a standalone item? Is it our “Digital shopfront“? Is it relevant in our industry?
These were common questions that we arrived at after a short discussion with most. It’s what inspired a number of articles explaining the “System of Modern Sales & Marketing” over on the Manufacturing Network UK Blog.
Fundamentally a Website is often NOT, but SHOULD be seen as, “Part of a System” for attracting, nurturing and converting leads into customers. Can you see the many ways your website & web presence CAN contribute to the system?”

Ashley Pearce: “For me, the most effective way to explain how a website “Fits in” has been to direct them towards the subject of “Inbound Marketing” – with FAIR WARNING. As we say over on the Manufacturing Network Blog almost weekly, “Wear Your Manufacturing Industry Blinkers” when reading anything about marketing your business online.

Most of the information, content and articles out there explaining how it works is NOT written for you, the UK Manufacturer. I think this is why an Integrated approach to Online Marketing and Offline Sales for UK Manufacturing has been very slow to evolve. Lack of “Context” – Explained in the UK Manufacturing Industry context, we may start to see some savvy marketers leaping ahead of the competition”

Garry Taylor: “There is a feeling that unless you can get on the first 2 pages of Google there’s no Point having a Web page. as we don’t actually do sales transactions over the Internet we view as an online brochure with the blog giving any up to date info and an opportunity for feedback plus, small companies are being pushed to pay per click. Everyone knows most people clicking on your sight are not buying so you pay for nothing.”

Richard Stinson: “I spent many years in the engineering sector, from toolmaker to technical sales and I had the privilege of working directly and indirectly with many SME’s as well as the giants like Rolls and BAE. I came to realise quite quickly that the big boys have regular web trawls looking for potential suppliers, just in case their current suppliers let them down or become swamped with work. They literally have a file of reserve suppliers on their list found online. The moral of this story is that unless the SME’s had an effective web presence they were overlooked for many of these lucrative contracts.”

Alan Kent: “Whilst I can appreciate that having a web site might bring you some business, not having one will definitely bring you none. I do feel that it is becoming a bit BS5750-ish though as having a fancy web site costs money that many SMEs would rather channel into capital equipment or a decent salesman who will definitely generate revenues. I can recall putting in a lot of effort into attaining BS5750 in the 1990s which cost a lot of time and money and brought in no sales leads whatsoever. At the time no-one had realised that it was simply a way of showing that you had a process and was never expected to generate leads but without it, you would definitely get no leads.”

Chris Davis: “There are loads of things you can do here. Small web site intelligently constructed .. put stuff on eBay and Amazon have a blog use social media .. Wiki presence .. the list goes on but none of these are difficult or really expensive. It’s not an option to not have a cyber presence?”

Jeremy Wisner: “The topic concerns the need for an ‘All singing/dancing’ website. For many SMEs, operating in specialist niches, it is questionable about the return on such a site. Absolutely, a solid and informative web presence is a must (largely for contact information and credibility). However, it is in the nature of many niche-SMEs that they will know who their potential customers are and will be cultivating B2B relationships via more direct approaches, rather than hoping to WOW website visitors. Niche products and services, by nature, often require specialised knowledge to explain to USP to potential buyers. Of course, retail is a whole different discussion.
90%+ will look online, yes. However, I’d argue that for the niche players, the hard yards have already been covered by the ‘song and dance’ created offline – backed up by effective SEO work – which again strengthens credibility.”

Adam Payne: “Disagree with you Jeremy, when I look at the SMEs including two that we were looking to acquire in a niche market, had limited website presence and no sales and marketing function, relying on word of mouth and guess how they were performing. If you are looking to expand your business you need an online presence, again as an example, recently I was supporting a company to try and source stretch forming, the search was not easy due to again lack of online presence and SEO setup, I ‘m sure to god there are businesses in the UK, but they missed a big opportunity. Now this is not my area, but if you are happy as a business then you stay as you are, but rest assured someone will be around the corner waiting to pounce if you are not bringing in customers, if you are looking to expand you need multiple marketing pillars and a top website is one of those with an inbound marketing approach (blog showing expertise, contact form with call to action, etc).”

Ashley Pearce: “This discussion thread has done a great deal in exposing the core beliefs that sit behind the reason / purpose / ultimate aim behind a website for a B2B Sales focused business.

The purpose of a website for B2C or retail is completely different. The website can have more to do with sales and sales fulfillment than it can with building the confidence of a prospect and developing a relationship.

Just because they look the same on the outside and are accessed via a web browser does not mean they are the “same thing”.

Fact 1: You are not going to receive sales through your company website in the manufacturing industry. You’re not selling products, you’re selling capability.

Fact 2: Buyers do their searching a researching online before EVER reaching out and asking for information, requesting a quote or expressing interest.

Lesson: If your website doesn’t start a conversation with the Buyers and Engineers visiting it, you will be overlooked…”

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Leadership Alignment

Posted on by Adam Payne

Leadership teams still operate in silos. Commercial don’t talk to operations and vice versa, individual objectives are not aligned to the business needs, Quality stands alone. Your business may have a company vision but is this realised/disseminated throughout the organisation and most importantly of all, is your leadership team aligned to it.

Creating a clear company vision is key to your organisation’s success, but how do you make sure everyone on your leadership team agrees? Now this doesn’t mean that your team need to get on together but it does mean they are fully focussed and completely in agreement on what needs to be delivered.

Make sure everyone on your leadership team is on the same page with a crystal-clear vision for your organisation by AGREEING on the answers to these questions. REMEMBER AGREEING AS A TEAM!.

This walk-through helps your team clarify and agree on your company vision and priorities.

 

What are your Core Values?

What are the 3-5 characteristics that define who you are as a company, culture and leadership team?

 

What is your Focus?

What is it your business excels at? What is its core competence? What’s your purpose?

 

What is your 10 year Vision?

What is the goal you are all working towards? What does the finish line look like?

 

What is your Marketing Strategy?

Who is your ideal target market? What are your Unique Selling Points you need to tell to the world? What is your proven process for doing business with your customers? What’s your guarantee?

 

What is your 3 year Strategy

What is the Revenue, Profit and Measurable goals (remembering KPI’s drive behaviour so make sure you have the correct ones)? 3-5 bullet points on what your business will look like in 3 years.

 

What is your 1 year plan?

What IS the plan, what are the 3-7 most important things that must be done within the next 12 months? (Less is More)

 

Quarterly Milestones

What are the most important things your team must do in the next 90 days to ensure they hit the 1 year plan to put you on track to make your 3 year Strategy a Reality?

 

Implement a governance process to ensure execution.

Give time, Space and co-ordination of problem solving so that the organisational barriers are removed.

REMEMBER AGREEMENT AT EVERY QUESTION BEFORE YOU MOVE ON

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