Hoshin Kanri: Gain a Competitive Advantage With This Lean Management Approach (Free Template)

After the Second World War, Japan was faced with tremendous infrastructural damage and needed to begin the long, difficult process of repairing pretty much everything. During this time, Allied forces occupied Japan and oversaw the process of reparation – many American experts were enlisted to aid in the efforts to rebuild Japan’s economy and infrastructure, while at the same time ensuring no military force was re-established.

Among those enlisted was W. Edwards Deming (of the Deming Cycle and PDCA fame). One of the early goals was to begin production of new radios; the problem was, new management was unskilled, production facilities and raw materials were in short supply, and quality management was a big issue.

Long story short, Deming helped to spearhead the establishment of quality control initiatives focusing on top-level management taking responsibility for clearly defining quality policy and procedures. This kind of quality control framework came to be known as Hoshin Kanri, and it eventually proliferated beyond Japan and over to America and the rest of the globe.

A 2020 report by the IPMA Organisational Competence Baseline (IPMA OCB) explained that to execute business vision, mission, and strategy, implementation of the Hoshin Kanri approach – also referred to as Hoshin planning – is vital for lean and strategic management, and for future-proofing a business.

In this Process Street article, you will learn: What Hoshin Kanri is and its history, why you need to implement Hoshin Kanri in your business or line of work, and how you can do this using our free Hoshin Planning: Hoshin Kanri Policy Deployment Process Checklist.

You can navigate to the most relevant section for you using our quick links below. Alternatively, read on for a gentle introduction to the fundamentals of Hoshin Kanri.

Let’s go explore the concept of Hoshin Kanri!

The Hoshin Kanri methodology – also referred to as Hoshin planning – is a method used to alter a company’s strategy by setting new goals and objectives at every hierachical level in an organization. The approach was developed to improve company-wide communication and help to consolidate business goals and objectives.

Hoshin Kanri is a Japanese term that roughly translates to something like “compass management”. It’s also a lean management approach that incorporates principles of continuous improvement, a management method designed to improve efficiency and quality via small incremental changes to processes and procedures. Don’t worry about these terms too much for now; I’ll unpack them in more detail later on in the article.

For now, it’s enough to understand that Hoshin planning begins with the setting of breakthrough objectives.

What are breakthrough objectives?

Breakthrough objectives are targets that can only be achieved by significantly changing the way a business operates. This means dramatic alterations to an organization’s trajectory and policy, coordinated from top-down and also from bottom-up.

Hoshin kanri is a systematic annual process led by senior executives – and preceded by strategic management activities – for developing, deploying, and accomplishing policies (Policies = Priority Issues + Objectives + Strategies) through coordinated organization-wide activities and the rigorous application of the PDCA cycle” – Charles Allen Liedtke, Big Data in Hoshin Kanri

There are 7-steps to the Hoshin Kanri method, as follows:

Step 1: The development of an organization’s vision, mission, and values. Step 2:

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