If customers start taking their business elsewhere, you have a problem. It’s important to act quickly to resolve the issue.
Consider an example. Executive managers of a plastics manufacturer have found the organization is steadily losing market share to competitors. Using Hoshin Kanri, they hope to determine why customers are leaving to remedy the issue.
Hoshin Kanri initiatives can be divided into stages — planning, execution, and reflection. Each stage maps to steps in the Plan-Do-Check-Act, or PDCA, cycle. The planning stage maps to the Plan phase of PDCA.
Before you take action, you need to decide what you want to achieve. Successful planning involves setting goals and objectives for the initiative. In the manufacturer’s case, one objective is to reduce operating costs to 5% below those of their closest competitor.
You’ll also need a way to monitor progress toward your goals — that’s why determining metrics is another part planning. You’ve also got to identify tactics for implementing the plan and assign specific responsibilities to the staff involved.
The manufacturer’s management team sets the metric of reducing operational costs by $2 million using the tactic of 5S to develop more ergonomic, cost-effective production processes.
Then, during the execution stage, the do and check phases of PDCA are performed. It’s time to implement tactics and use metrics to monitor performance. In the case of the plastics manufacturer, staff members carry out their assigned responsibilities and the management team analyzes weekly cost and revenue reports to measure progress toward target metrics.
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