Sample Article

Hoshin Planning

A System For Planning and Implementing Continuous Improvement

In a Nutshell

Hoshin Planning is one of the titles commonly used in the Western world to describe Hoshin Kanri. This is a system of planning and deployment which evolved in Japan from Management by Objectives (MBO) and now used around the world by many leading companies.

Hoshin Kanri involves every part of an organization: first in selecting and defining a small number of key corporate goals; and then in contributing to the accomplishment of these. It is one of the pillars of Total Quality Control as practised in Japan, and similar approaches have been developed by a number of the Western companies which are pioneers in the field of quality management.

Hoshin Kanri differs from other systems of planning in that it makes extensive use of quality management principles and techniques. It may be thought of as quality management applied to the process of corporate planning.

History

The original development of Hoshin Kanri is inextricably entwined with the spread of quality management principles and practices within Japanese industry. These principles were first introduced by the Japanese Union of Scientists and Engineers in 1950, in an eight-day course with Dr. Deming as the guest lecturer. This led to the widespread use of the PDCA cycle (plan-do-check-act) and the 'seven QC tools' for the management of virtually any operation. This phase might be called Statistical Quality Control (SQC).

The idea of an integrated company-wide management system, bound together by a planning system, began to develop in Japan during the 1950's and 1960's. This was heavily influenced by:

the Deming Prize, established in Japan in 1951, which from the outset called for a system of planning
Peter Drucker's book The Practice of Management, which proposed Management By Objectives (MBO). This was published in Japanese in 1954
General Motors' divisional system, which was a novel concept at that time
Dr. Juran's lectures on general management.

By the late 1960's many Japanese companies had implemented MBO, and a number of leading companies – Bridgestone Tire, Toyota, Komatsu Manufacturing, and Matsushita – had developed their own innovative approaches, going far beyond the original concept. These innovations, which would form the basis for Hoshin Kanri, sprang from the formidable expertise in SQC which these companies had established, which at that time existed only in Japan.

The term 'Hoshin Kanri', referring to this new approach, became widely accepted in Japan in the mid-1970's. By the late 1970's the experience accumulated in industry had been distilled into a formalization of the principles, and the first books on the subject appeared. The first symposium on Hoshin Kanri was held in Japan in 1981, and in 1988 the Japanese Association of Standards published a series of works dealing with Hoshin Kanri practices.

In the USA, a few leading companies began to implement their own versions of Hoshin Kanri during the late 1980's, including Hewlett-Packard, Procter & Gamble, Florida Power & Light, Intel, and Xerox. Many of these companies have shared their experiences in the public domain, but Western literature on this subject started to become available only in the early 1990's.

Various names for this approach have been used in the West such as 'Hoshin Planning', 'Management by Planning', and 'Policy Deployment'. These are approximate translations of the Japanese phrase. None of them captures the subtleties of the original meaning, and all are slightly misleading in some way. However, none of these terms is in very wide circulation, even in those companies implementing Hoshin Planning. Most employees are simply aware of the workings of the system in use, and only a few specialists need to know more than this. The common English name 'Hoshin Planning' is used in this paper.

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