The term Hoshin Kanri means “policy management” and is often translated as "direction setting," a critical task for any organization. It's important to have a long-term plan and make sure everyone in the organization understands that plan
The strategic planning system of Hoshin Kanri originated in Japan following World War II, but it has since spread worldwide and is often used in Lean organizations. This process involves setting objectives, coming up with a vision, and determining what strategies to use to reach those objectives.
An important part of Hoshin planning is communication; leaders must pass plans down through the business so that everyone involved sees and understands them. Hoshin Kanri is a top-down approach with managers setting goals and implementation being carried out by employees and effective communication will help people align their work with the organization’s larger goals.
Hoshin planning uses process similar the PDCA cycle to implement plans and follow up on them with the steps Think, Plan, Implement, and Review. Although slightly different from PDCA, the same principles are deeply embedded into Hoshin Kanri, which was influenced by Deming’s teachings of quality control principles. After the overarching goals have been established, managers will need to develop objectives and plans to effectively meet those objectives.
Plans developed with Hoshin are often set for a long period of time such as a year, and the cyclical process allows managers to plan for the future and not just what is happening in the present. At the end of that time period, results are measured against objectives. Reviews can also be implemented on a monthly or annual basis.
Simply put, Hoshin planning helps businesses keep sight of larger goals while also handling day-to-day work. It ensures every level of the company is working towards the same goal while reducing the waste resulting from inconsistent direction and poor communication.