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Annual
Hoshin starts with the concept of homing in on the "vital few". Where
there is little change in operating conditions, a company still needs
to rely upon departmental management, but top management planning is
not required. However, where there is significant change, top management
must step in and steer the organisation. ("Hoshin" in Japanese means
a compass). This requires strategic planning (for future alignment to
identify the vital few strategic gaps), strategy management (for change),
and cross-functional management (to manage horizontal business processes).
Hoshin is, however, not a planning tool but an execution tool. It deploys
the "voice of the customer", not just the profit goals. Typically these
goals are cross-functional and relate to major objectives such as cost,
quality, delivery, safety, and people.
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Departmental
management should be relied upon for "kaizen" (i.e. incremental) improvements,
but breakthrough improvements which often involve cross functional activities
and top level support, should be the focus for Hoshin planning. (We can
note here similarities with related fields - Juran talks about the need
for project by project improvement to achieve breakthroughs which attack
chronic wastes, in BPR Davenport talks about "sequential alteration" between
continuous improvement and process re-engineering, and in Lean Thinking
Womack and Jones discuss kaizen and kaikaku.) See also the section on
Continual Improvement in "The Lean Toolbox".
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