Make Gains Through Lean Manufacturing


Deploying a Hoshin Kanri implementation pays off. EMMANUEL OBADINMA, ALLOY CASTING INDUSTRIES LTD., NEW HAMBURG, ONTARIO, CANADA; MORTEZA ZOHRABI AND FARHAD SAMSAMI, GLOBAL VALUE EXPANDERS (GVEX), NORTH YORK, ONTARIO, CANADA


M


etalcasters are looking for ways to increase profit-


ability through initiatives such as process improvement, lean manufac- turing, Six Sigma and quality/project management. Since the 1960s, many companies


have used Hoshin Kanri planning, which focuses on achieving a “vital annual stretch goal,” an ambitious long-term target. Interest in Hoshin Kanri now appears to be growing worldwide. As more large U.S. busi- nesses use it, it will extend to their supply chains. It is one of the most powerful planning tools available to organizations today, allowing for breakthrough innovations and con- tinuous improvement. Tis article explores the imple-


mentation of Hoshin Kanri at one metalcasting firm.


Management by Objectives


Te Hoshin Kanri process fits under the umbrella management philosophy of Total Quality Manage- ment (TQM). It interplays with Plan, Do, Check or Study & Act (PDCA) and Management by Objectives processes in achieving a high level of satisfaction and outcome during plan- ning and implementation (see Fig. 1). For one metalcaster, the first step was implementation of Management by Objectives as a culture of man-


32 | MODERN CASTING June 2014


agement. Tis was done to provide employees with the board’s vision and objectives, which were created using the Hoshin Kanri format. Te relationship between Management by Objectives and Hoshin Kanri also was established as an annual objec- tive. Before Hoshin Kanri, individual projects were not always linked to an annual objective. Hoshin Kanri is synonymous with


the PDCA planning cycle. By defini- tion, Management by Objectives is a process of agreeing upon objectives within an organization so manage- ment and employees understand what they are and buy in to them. Man- agement by objectives is a dynamic system that seeks to integrate the company’s need to clarify and achieve its profit and growth goals with management’s need to contribute and develop itself and the entire orga- nizational team. It is a demanding and rewarding style of managing a business consistent with the PDCA cycle as well as the basic concepts of Hoshin Kanri. The key to organizational


learning is to discover problems and solve them. Most of the time, organizations spend resources solv- ing the wrong problems, leading to serious losses. For a successful outcome, problem solving requires planning and coordination, includ- ing monitoring.


In the Hoshin Kanri process, the


two kinds of planned organizational activities are breakthrough activities and business fundamentals. Orga- nizations endeavor to identify these two activities to eliminate ambiguity during implementation. Te bottom line is that all specific improve- ments or changes to be made by the organization should contribute directly to the business objectives. Tis ensures the Hoshin Kanri strat- egies are being carried out properly and progressively toward achieving individual strategic goals.


Setting and Attaining Goals Hoshin Kanri strategic planning


leads to the identification of a few “Vital Goals” from the Management by Objectives. In this case, Hoshin Kanri was introduced as an annual strategic planning tool that uses the objectives. Strategic planning usually includes


a consideration of strengths, weak- nesses, opportunities and threats (SWOT analysis). Most of the time, the metalcaster’s business plan revolves around how to translate weaknesses into opportunities by developing an appropriate long-term business strategy. Tis company’s strategy involved a look at the following: • Capability Expansion: This means either machine capability expansion or market expansion—looking for ways to expand the business using


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