Help Manual

Contents






Sigma Magic Help Version 17

Hoshin Analysis

Overview

Often, companies fail not because of a lack of strategy but because of a lack of execution. Creating a vision is easy, but implementing it is far more complex. Hoshin Kanri is a strategic planning method derived from Japanese lean companies that tie execution with strategy. The Hoshin matrix is a one-page visual of your objectives, measures, targets, and action items. There are four quadrants in the Hoshin matrix: breakthrough objectives, annual objectives, top-level improvement priorities, and action programs or targets to improve. All four quadrants feed each other and show the alignment between the elements. This ensures organizational buy-in, and hence the chance of success is increased.

Hoshin helps ensure the organization stays focused and committed to the direction because everyone can see how things tie together. It ensures the vision is tied to the selected activities. It ensures that annual goals are clear and helps an organization focus on the vital few instead of focusing on too many projects using a shot-gun approach.

To add this tool to your workbook, click on Lean and then select Hoshin Analysis.

Inputs

Click on Analysis Setup to open the menu options for this tool.

Setup

A sample screenshot of the setup menu is shown below.
Input Dialog
1
Analysis Type: Specify the template format for this analysis. This selection is not enabled since there is only one format available.
2
Num Rows: Specify the number of rows on the template. You can specify up to 10 rows for this setting. The number of rows dictates the size of the Hoshin Plan template.
3
View Example: Click on this button to add an example worksheet. You can use the example to understand how others have filled out the template or use the example as a starting point and modify it to meet your needs better.
4
Help Button: Click on this button to open the help file for this topic.
5
Cancel Button: Click on this button to cancel all changes to the settings and exit this dialog box.
6a
Create Button: Click on this button to save all changes and update the worksheet layout.
6b
OK Button: Click on this button to save all changes and compute the outputs for this analysis.

Checklist

A sample screenshot of the checklist menu is shown below.
Input Dialog
1
Checklist: The input dialog box asks a set of questions concerning the Hoshin plan that you are creating. This is just a checklist to ensure you have thought about all the aspects of creating the Hoshin plan.
  • Ensure that before you create the Hoshin, your vision, mission, and values are aligned to your desired state. Since the starting point of the Hoshin is your mission and vision.
  • After you complete the Hoshin plan, you should ensure that the 3-5 years objectives are breakthrough objectives. Without a proper stretch target for the organization, you may not be able to achieve all that you can for your organization.
  • In addition to developing breakthrough objectives, they should also be realistic. If the targets are not practically achievable, your organization may lose hope and not plan to accomplish those objectives.
  • Ensure you have properly translated the 3-5 year objectives to your annual objectives. Watch out for the hockey stick-type plans where the majority of the objectives are accomplished in the future and not in the immediate future.
  • After the Hoshin plan has been developed at the top level, you will need to cascade it through the lower levels in the organization, and they can develop their own Hoshin plans. This will ensure that the entire organization is working towards the same goals.
  • Finally, it is not just about creating the plans. Once you have taken the time to create the plans, you also need to have a regular cadence to review the results and check against the plans so that you can course-correct if required.
2
Status: The status of whether the checklist has been answered is listed on the right.
Outputs On the worksheet, you will need to enter the Hoshin plan. This plan should ideally be created by senior management working closely and ensuring proper input and feedback from all team members. The best way to fill out the Hoshin matrix is as follows:
NumDescription
1First, fill in the bottom portion of the Hoshin matrix, which lists the major, top-level goals the senior leadership team has created. This is your 3-5-year strategy, and all your annual objectives, targets, and actions should be aligned to reach these organizational objectives.
2Next, you must translate the 3 to 5-year breakthrough objectives to your annual objectives. Hoshin helps you break down big objectives into yearly outcomes for your teams. You will need to consider which of these objectives you must accomplish to meet your targets.
3Next, fill out the top portion of the worksheet, which are your top-level improvement priorities. These make up the high-level to-do list for your team. These are the top-level priorities your management needs to ensure that the delivery can be part of their annual incentive reviews.
4The improvement priorities are measured against the final set of measurable targets to improve. Different teams may have different targets to improve. To ensure organizational focus, only the most important elements should make it to the top-level Hoshin matrix.

Verify

If you click the Verify button, the software will perform some checks on the data you entered. A sample screenshot of the dialog box is shown in the figure below. Verify The software checks if you have correctly specified the input options and entered the required data on the worksheet. The results of the analysis checks are listed on the right. If the checks are passed, they are shown as green-colored checkmarks. If the verification checks fail, they are shown as a red-colored cross. If the verification checks result in a warning, they are shown in the orange exclamation mark, and finally, any checks that are required to be performed by the user are shown as blue info icons.
1
Item: The left-hand side shows the major tabs and the items checked within each section
2
Status: The right-hand side shows the status of the checks.
3
Overall Status: Shows the overall status of all the checks performed. If all the checked items are okay, the status image in the header will show a green checkmark. If any checks fail, then the status image in the header will show a red cross mark.

Outputs

Click on Compute Outputs to update the outputs. There are no specific calculations for this tool. If you have answered all the questions in the input dialog in the affirmative, then the Hoshin matrix tool will indicate that the plan is okay. If the Hoshin plan worksheet contains errors, they are highlighted so that you can fix them. When all the errors have been cleared, the following dialog box is displayed. Outputs 2 The most important output of this exercise is the annual plan that you create with your leadership team, which includes specific measurables and targets to improve. This plan can be rolled out and executed by your team.

Notes

Here are a few notes regarding this analysis:
  • In the current tool, the number of rows of data you can enter for each side of the Hoshin matrix is 10. It is intentionally kept small so that you can focus on the most important elements.

Examples

The following examples are in the software's Examples folder.
  • Select a department and create a Hoshin plan for that department (Hoshin 1.xlsx).


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