Development of Strategic Quality Metrics for Organizations Using Hoshin Kanri

Abstract

Often in organizations there is a disconnect between the long-term strategy and their improvement efforts. Organizations may have a vision; however, their daily continuous improvement activities may not be linked to the vision. Conversely, an organization may be very organized with respect to daily functions but not have any long-term goals. Effective planning is critical for creating an organizational strategy and vision. Lean and Six Sigma are both powerful tools for continuous improvement that are widely used to increase quality, productivity, profitability, and market competitiveness. Six Sigma is focused on reducing variation using a problem solving approach and statistical tools. Lean focuses on eliminating waste and improving flow using various Lean principles and their respective approaches. As stand-alone tools, companies can achieve strong improvements. However, many companies realize suboptimal results due to poor project selection and inappropriate tool selection. The Lean and Six Sigma philosophies drive continuous improvement; however to realize significant improvements, organizations must link their continuous improvement efforts to their strategic vision and goals. Therefore, an integrated approach to process improvement using Lean principles and Six Sigma begins with a strategic approach to identifying gaps between the current and future state. The final goal of this integration is to holistically optimize the entire process of value flow by eliminating waste and controlling variation. One of the techniques that companies can adopt to systematically make progress in implementing the organization’s vision into its daily process is Hoshin Kanri. This technique encourages employees to reach the root cause of problems before searching for solutions, create sustainable plans for implementation, incorporate performance metrics, and take appropriate action for implementation. Though developed in Japan, this technique is based on Deming’s classic Plan–Do–Check–Act improvement cycle. Hoshin Kanri drives the long-term strategic vision of the organization down throughout all levels of the organization. Lean and Six Sigma initiatives are then tied to the long-term success of the organization. In this chapter, Hoshin Kanri will be presented as a strategic approach to implementing Lean and Six Sigma to achieve long-term results.