From Operational Loss to Proffit
Strategy Deployment - Hoshin Kanri
The purpose of Strategy Deployment is to make it possible to get away from the status quo and make a major performance improvement.
Strategy Deployment ensures that everyone in the company is aware of the overall vision and targets, and the way that these are translated into specific requirements for their own behavior and activities.
With Strategy Deployment, top management vision can be translated into a set of coherent, consistent, understandable and attainable policies and actions that can be applied at all levels of the company and in all functions of the company. When these actions and policies are applied, they result in a vision becoming a reality - and major, continual improvement in performance.
At each level, the policy is translated into policies, targets and actions for the next level down.
The Business Need
BTA were engaged to assist the Senior Management Team of a manufacturing site who were struggling to deliver on the organisational objectives. The business was making a substantial loss and questions were being raised over the continued viability of the site. Had it not been for some 'key account' customers the decision to close the facility would have been easy, but the risk associated was to great and an alternative solution needed.
A site strategy was required with Annual Improvement Priorities identified that would demonstrate delivery of the overall corporate objectives within a given timescale.
BTA supported and facilitated the senior leadership team in the process of Stratergy Deployment, successfully using the technique to establish a strategy for the site. The creation a of Top Level Strategy Deployment document identified and mapped out the 3 year objectives of the business and the target to improve during the first 12 month period. Once identified the Annual Improvement Priorities were agreed and a method of measuring and reporting on progress created.
The site strategy was cascaded down to department level, with further support from BTA provided to ensure full understanding and to establish confidence in the use of the SD process by the middle management team.
A meeting structure was proposed and addopted by the business for the communication of progress on a monthly basis.
Department Strategy Deployment documents give clear visibility of objectives for the current year and their linkage to the Top Level Strategy.
Project Master Schedules are developed to ensure that targets are achieved within the given timescale by those assigned accountability.
A Strategy Deployment Tracking Chart clearly demonstrates performance against plan and allows the re-assignment of resources to be prioritised to facilitate recover from any under performing areas.
A £3.0M reduction in operating cost was delivered in the first year, the site is now profitable and the risk of closure removed. The site is now held up as a model example for turnaround within the organisation. The SD process has become an intergrated part of the business management system with plans to introduce this process right across the organisation.