IENG 451
Planning Functions
Responsiveness
Customer Satisfaction
Cost + Quality +Dependability + Flexibility + Time + Service
6 Dimensions of Competition
Continuous
+ R&D + Advanced Tech. + Integration
Improvements
People & Systems
Structural Prerequisites
Customer Driven Strategy
Planning Functions
• Operational
– How do we manage day to day
• Financial
– How do we allocate resources
• Project
– How do we achieve a specific goal
• Strategic
– What do we want to be when we grow up
Problems
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Unrealistic goals
Goals are arbitrary
Inadequate focus
Planned activities are not regularly reviewed
Data is over analyzed
Lack of communication; vertical and/or
horizontal
Mission & Strategy
• Def: The corporate mission outlines a firm’s values,
intended markets and product, broad goals and
objectives, core competencies, and strategic
capabilities.
• Def: The corporate strategy states how a firm will
achieve its goals and objectives
What is Strategy?
• Distinguishing strategy from tactics:
– Strategy is the overall plan for deploying resources to
establish a favorable position.
– Tactic is a scheme for a specific maneuver.
• Characteristics of strategic decisions:
– Important.
– Involve a significant commitment of resources.
– Not easily reversible.
Effectiveness and Efficiency
Leaders
Ineffective
Effective
Efficient
Death
(fast)
Success
Inefficient
Doing Things Right
Managers
Doing Right Things
Death
(slow)
Survival
Managing Complex Change
Vision
Skills
Incentives Resources Action Plan
Change
Skills
Incentives Resources Action Plan
Confusion
Incentives Resources Action Plan
Anxiety
Vision
Vision
Skills
Resources Action Plan
Vision
Skills
Incentives
Vision
Skills
Incentives Resources
Action Plan
Gradual
Change
Frustration
False
Starts
Strategic Process
Strategy Formulation
Strategy Implementation
Assess
Environmental
Factors
Mission
&
Strategic
Goals
Competitive
Analysis
* Strengths
* Weakness
* Opportun
* Threats
Assess
Organizational
Factors
Specific
Strategies
* Corporate
* Business
* Functional
Carry
Out
Strategic
Plans
Maintain
Strategic
Control
One of the Tools
Competitive Analysis
• SWOT
– Strengths
– Weaknesses
– Opportunities
– Threats
Macroprocesses
• Juran
Inspect
Customer
– anatomy of macroprocess does not match that of the
functional organization
– Functional goals often at a heavy price of
macroprocess
– There should be a clear responsibility for macroprocess
Forced Choice Model
Organization Position
• Mission
• Objectives
• Strengths, Weaknesses
• Forecast Operational needs
• Major Future Programs
Environmental Assessment
• Economic Environment
• Key regulatory issues
• Major technology forces
• Opportunities, threats
• Competitor strategies
Strategic Options
Action Plans
Contingency Plans
Hoshin Kanri or Policy Deployment
• The Company develops a 3 - 5 year plan
• The Senior Executives develop the current
years objectives.
• Catchball occurs
– The process is interactive
– Teams report up
– Management delivers feedback
Hoshin Planning
Elements of Hoshin Planning
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Plan-do-check-act
Nemawashi
Catchball
Control department
A3 thinking
Elements of Hoshin Planning
• Plan-do-check-act
– Macro, 3-5 yrs, senior management
– Annual, operating managers
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Nemawashi
Catchball
Control department
A3 thinking
Elements of Hoshin Planning
• Plan-do-check-act
• Nemawashi
– Process of consensus building that creates
alignment
– Stakeholders; management, workers, customers
• Catchball
• Control department
• A3 thinking
Elements of Hoshin Planning
• Plan-do-check-act
• Nemawashi
• Catchball
– Company develop a vision and toss to senior
mgmt
– Sr. mgmt translate vision to hoshins and toss back
– Give and take until consensus is reached
• Control department
• A3 thinking
Elements of Hoshin Planning
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Plan-do-check-act
Nemawashi
Catchball
Control department
– Breakdown functional silos
– Control dept., quality, would coordinate crossfunctional activities
• A3 thinking
Elements of Hoshin Planning
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Plan-do-check-act
Nemawashi
Catchball
Control department
A3 thinking
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One page story communication tool
Hoshin planning A3
Problem Solving A3
Proposal A3
Current Status A3
4 phases of Hoshin Planning
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Hoshin generation
Hoshin deployment
Hoshin implementation
Final evaluation
4 phases of Hoshin Planning
• Hoshin generation
– Eg; we will reduce defect rates by 20%
• Hoshin deployment
• Hoshin implementation
• Final evaluation
4 phases of Hoshin Planning
• Hoshin generation
– Eg; we will reduce defect rates by 20%
• Hoshin deployment
– Here’s how we can achieve this goal
• Hoshin implementation
• Final evaluation
4 phases of Hoshin Planning
• Hoshin generation
– Eg; we will reduce defect rates by 20%
• Hoshin deployment
– Here’s how we can achieve this goal
• Hoshin implementation
– Activities required to implement hoshin; e.g.;
defect data collection, analysis
• Final evaluation
4 phases of Hoshin Planning
• Hoshin generation
– Eg; we will reduce defect rates by 20%
• Hoshin deployment
– Here’s how we can achieve this goal
• Hoshin implementation
– Activities required to implement hoshin; e.g.;
defect data collection, analysis
• Final evaluation
– Year end assessment of each hoshin