The hoshin planning concept has its origin in the Japanese words hoshin kanri. In Japanese, the term hoshin refers to compass, pointing the direction or shinning metal. It is essentially a goal that comes with an instruction manual to address the company business need. Kanri on the other hand means control or management. It is the management of not only resources but processes as well.
There are 7 important steps involved in the hoshin planning process. The first involves the identification of important issues faced by the company/business. The second involves the establishment of objectives to address the issues. In the third step is where the company defines its overall goals. In step four, strategies are developed to support the goals formulated in step 3. Step five is concerned with the definition of sub goals that support the strategies developed in step 4. In step six, indicators or metrics for measuring the performance of the process are established. The establishment of business fundamental measures is carried out as the final step. It is important to note that only the top management is allowed to handle/deal with the first three processes.
Thus, the Hoshin planning process is a strategic planning/management methodology that is used for defining the key objectives of a company or organization. It is also used to ensure the implementation of business fundamentals necessary to effectively run a business on a day to day basis. It is intended to help a company/organization focus on shared goals to avoid wasting resources and communicate goals to all leaders in order to utilize and magnify the collective knowledge. It is also intended to assist an organization hold participants accountable for achieving their part of the over all plan and create an organization that is accountable. It is worth noting that in this management system/process, employees at all levels of the organization take part.