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Hoshin Planning

Is Hoshin planning simply the latest management term "du jour" or a useful technique that helps managers achieve organizational goals in their daily operations?

The Japanese term, "Hoshin Kanri," means "shining metal" + "pointing direction," or compass. This approach to quality and strategic planning was brought to the U.S. in 1983 where it was pioneered by Toyota. As defined by GOAL/QPC, the consulting firm that brought the process to the U.S., Hoshin planning is that part of an organization's planning system which identifies, develops, audits, and modifies a specific plan to focus the organization's efforts on the breakthroughs required to achieve the strategic vision of the organization.

Simply stated, Hoshin planning provides the process whereby everyone in the organization knows what direction to go. Hoshin planning can be used by frontline managers and team leaders as a guide for developing individual and team performance plans.

Benefits of Hoshin Planning. At the heart of Hoshin planning is the organization's strategic plan, which is based on its mission and is customer-driven. This is the role Hoshin planning provides the Defense Logistics Agency's (DLA) Defense Contract Management District (DCMC), NE. DCMC develops a tactical plan that is comprised of objectives based on the major strategic objectives stated in DLA's strategic plan. Eighteen specific performance goals for the year are developed based on key objectives, strategies, and goals. Individual targets are set through identification of critical work processes. As DCMC's Karen Cleves observes, "Hoshin planning gets everyone involved in the process. It is a tool that helps point to the direction of the District for the next 3 to 5 years."

Captain Robert Zentmyer, an instructor at the Naval Medical Quality Institute at the Naval School of Health Sciences, notes that Hoshin planning put everyone in the organization on the same path. He credits Hoshin planning with the following:

• Orchestrating the direction of the organization.
• Aligning the organization vertically, with all the "arrows in the same direction."
• Selecting breakthrough areas for reaching the vision.
• Getting everyone on the same sheet of music.
• Helping ensure that the plan is used.

Performance management programs fit well with Hoshin planning. Using Hoshin planning as the compass by which to guide the performance plans of individuals and teams can be a natural way to keep everyone headed in the right direction.

Origianlly published on August 1994.