Breakthrough Ideas—A Key to Strategic Planning
In order to achieve breakthrough products and processes, it may be time to relook at your strategic planning process.
Strategic planning is an integral part of any organization’s long-term planning. It is a management activity that helps companies set priorities, focus energy, align resources, strengthen operations and processes, and help ensure that the workforce and other key stakeholders (i.e., supply chain) are working toward common organizational objectives. The outcome is strategic goals, agreement around intended outcomes/results, and an established organizational direction in response to a changing market or manufacturing environment.
When I taught a graduate course in strategic planning and project management, a key point was that strategic planning is a disciplined effort that produces fundamental decisions that drive projects and programs focused on taking the appropriate actions that help the organization succeed. As noted authorities on this idea Thomas L. Wheelen and J. David Hunger point out, “Many of the concepts and techniques that deal with strategic management have been developed and used successfully by [many] business corporations. Over time, business practitioners and academic researchers have expanded and refined these concepts. Initially, strategic management was of most use to large corporations operating in multiple industries. Increasing risks of error, costly mistakes, and even economic ruin are causing today’s professional managers in all organizations to take strategic management seriously in order to keep their companies competitive in an increasingly volatile environment.”1
Some might suggest that strategic planning is more suited for large corporations, thinking it is more cumbersome for small or mid-sized enterprises. I would suggest rethinking a famous quote from baseball great Yogi Berra: “If you don’t know where you are going, you are certain to end up somewhere else.”
Even for smaller ceramic industry companies, many benefits go along with strategic planning, as pointed out by Envisio, a cloud-based strategy execution and performance management software company:2
- It allows organizations to be proactive rather than reactive. With a strong strategic plan, organizations can be proactive rather than merely reacting to situations as they arise. Being proactive allows organizations to keep up with the ever-changing trends in the market and always stay one step ahead of the competition.
- It sets up a sense of direction. A strategic plan helps to define the direction in which an organization must travel and aids in establishing realistic objectives and goals that are in line with the vision and mission charted out for it.
- It increases operational efficiency. It guides management discussions and decision making in determining resource and budget requirements to accomplish set objectives—thus increasing operational efficiency.
- It helps to increase market share and profitability. Through a dedicated strategic plan, organizations can get valuable insights on market trends and consumer segments, as well as product and service offerings that may affect their success.
- It can make a business more durable. Business is a tumultuous concept. A business may be booming one year and in debt the next. With constantly changing industries and world markets, organizations that lack a strong foundation, focus and foresight will have trouble riding the next wave. According to reports, one of every three companies that are leaders in their industry might not be there in the next five years ... but the odds are in favor of those that have a strong strategic plan!
If you are a small or medium-sized manufacturing operation and want to embark on strategic planning, a number of resources can help you get started. One starting point is to do an internet search on “resources to help small and medium manufactures do strategic planning.” Another source is your local small business administration or even state resources. For example, the New York Manufacturing Extension Partnership (NY MEP) is a “network of organizations that provide growth and innovation services to small and mid-sized manufacturers in every corner of the state to help them create and retain jobs, increase profits, and save time and money.”3 Other states may have similar services.
As noted previously, a key outcome of the strategic management process needs to be innovation that helps the manufacturer retain its competitive advantage. In other words, the strategic management process needs to result in the output of breakthrough ideas that lead to new/improved products or processes that help sustain the organization for the long term. Hoshin Kanri is one tool (or improvement process) that integrates well with strategic planning (see Figure 1). Hoshin Kanri is a lean manufacturing tool that, in some circles, is not as well-known as some of the other lean tools, such as 5S, Kaizen, and Gemba. Nonetheless, it is a valuable tool that fits organically within your existing continuous improvement lean culture.
What is Hoshin Kanri?
Illinois-based manufacturing company Vorne Industries Inc. has a lean production website that provides insight into Hoshin Kanri:5
Hoshin Kanri (also called Policy Deployment) is a method for ensuring that the strategic goals of a company drive progress and action at every level within that company. This eliminates the waste that comes from inconsistent direction and poor communication. Hoshin Kanri strives to get every employee pulling in the same direction at the same time. It achieves this by aligning the goals of the company (Strategy) with the plans of middle management (Tactics) and the work performed by all employees (Operations).
Writing in an article entitled “The Important Advantages of Hoshin Kanri for Strategic Planning,” Jeff Roussel, vice president of Sales at KaiNexus, emphasizes that Hoshin Kanri has as its foundation identification of “…an organization’s breakthrough objectives and [that] create[s] a defined three- to five-year plan for achieving them. The process is associated with identifying the organization’s true north and aligning the goals and objectives of each employee with the strategic plan.”6
All ceramic manufacturing companies need the right strategies, structure, plans/programs and controls in place to optimize the return on their investments. In order to achieve breakthrough products and processes, it may be time to relook at your strategic planning process and consider Hoshin Kanri.
- Wheelen, Thomas L., and Hunger, J. David, Strategic Management and Business Policy, 13th Edition 2012, Pearson, Boston, Mass.
- Ong, Cara, “5 Benefits of Strategic Planning,” www.envisio.com/blog/benefits-of-strategic-planning.
- “New York State Manufacturing Extension Partnership (NY MEP),” FuzeHub, https://fuzehub.com/fuzehub-blog/new-york-state-manufacturing-extension-partnership-ny-mep.
- “What Is Hoshin Kanri?” Kanbanize, https://kanbanize.com/lean-management/hoshin-kanri/what-is-hoshin-kanri.
- “Hoshin Kanri,” Vorne Industries, Inc., www.leanproduction.com/hoshin-kanri.html.
- Roussel, Jeff, “The Important Advantages of Hoshin Kanri for Strategic Planning,” https://blog.kainexus.com/improvement-disciplines/hoshin-kanri/the-important-advantages-of-hoshin-kanri-for-strategic-planning.
Any views or opinions expressed in this column are those of the author and do not represent those of Ceramic Industry, its staff, Editorial Advisory Board or BNP Media.