HOSHIN KANRI HELPS TRANSFORM AN AUTOMOTIVE BUSINESS
A UK 1st tier automotive supplier, was struggling to compete on price with cheaper imports from manufacturing plants in Eastern Europe. Having already used Lean principles for a number of years, and having already seen significant gains, the Plant Director looked to move the Lean initiative to the next level by implementing Hoshin Kanri.
Although the organisation had seen productivity improvements of over 30% and quality defects reduce by over 70% inside the last 2 years from its Lean programme, constant price pressures of the automotive sector meant that in order to compete, the business needed to make additional savings.
Like many automotive organisations, the workforce was familiar with the main concepts of Lean. A process of making improvements on a regular basis themselves using Kaizen was already in place. However what was required was a complete review of the Lean programme, its direction and targets.
In order to do this, the process of Hoshin Kanri was introduced to the Senior Management Team. Hoshin Kanri is a process that ensures that the strategic goals of a company are aligned and it is used to drive progress at every level within the organisation.
Using this process helps eliminate the waste that comes from inconsistency of direction between departments that is seen in most organisations. More importantly the Hoshin Kanri process provides the Senior Management Team with a framework to communicate a consistent message.
One of the benefits of Hoshin Kanri is that it clarifies and aligns direction.
Having rolled out the process, all managers and Team Leaders had a clear set of targets and constant measures that could be used at every level of the business to check progress.
The Lean programme was then aligned with the Hoshin Kanri process and improvement effort was placed only on activity that would directly impact on the strategic direction of the business.
Alongside this, additional training was put in place for Team Leaders and Managers to help them further develop their skills in working with targets and performance measures at a team level. As all of the targets and measures were aligned, teams could see the effect that their part of the process was having on the overall business. In the Automotive sector, like many others, the ability to demonstrate this level of control is also key in winning new business.
Over the next 12 months the organisation saw an additional productivity gain of 15% with overtime significantly reduced.
The supplier managed to reduce its cost base to a point where it was comparable with the Eastern European competitors but won additional business based on its superior quality levels and customer service.
In short the Hoshin Kanri process had given the organisation the ability to align its activity and focus on driving out cost as a team, rather than each department focusing on what it felt was important.
The Hoshin Kanri process is now used annually to align activities with strategic goals and the process provides a framework that allows the Senior Management Team to measure every part of the business against its targets.