3.

Similarities and differences

The concept of Hoshin Kanri has been regarded as an approach to business policy deployment .This section is going
to compare Hoshin Kanri with the other two approaches Balanced Scorecard and Business Process Reengineering
and trying to find out their similarities and differences about policy deployment, based on the consideration of
performance management.Also this section is divided into three parts.Firstly a defination of the three approaches
would be defined by literature review.Secondly the similarities of the three approaches will be addressed.Thirdly
the differences of the three approaches will be addressed.
3.1 Defination of three approaches
The definations of three approaches are defined as the followings:
Honshin Kanri:(HK)
In Minzunodes words,Deploy and share the direction, goals, and approaches of corporate management from top
management to employees, and for each unit of the organisation to conduct work according to the plan. Then,
evaluate, investigate and feed back the results, or go through the cycle ofPDCA continuously and attempt to
continuously improve the performance of the organisation. [1]
Balanced Scorecard:(BSC)
According to Robert Kaplan and David Norton [2], The balanced scorecard retains traditional financial measures.
But financial measures tell the story of past events, an adequate story for industrial age companies for which
investments in long-term capabilities and customer relationships were not critical for success. These financial
measures are inadequate, however, for guiding and evaluating the journey that information age companies must
make to create future value through investment in customers, suppliers, employees, processes, technology, and
innovation.
Business Process Re-engineering:(BPR)
In Hammers words [3],the fundamental rethinking and radical redesign of business processes to achieve dramatic
improvements in critical contemporary measures of performance, such as cost, quality, service, and speed
3.2 Similarities
According to Minzunode [1], Honshin Kanri is an approach to help the coporate plan the deployment of the
performance management to improve and achieve the goal.Similarily, Balance Scorecard is seaking for the
coporates performance, alignment, and integrated targets to all organisations. [8]Also, for Business Process Re-
engineering is an apporach to rethink about the measurement of companys policy performance to achieve
improvement toward a plan. [3]
3.3 Differences
According to Roberts and Tennant
7
, Honshin Kanri is a holistic view of approach to deploy the organisationss
policies and looks for the performance improvemet.With respect to the Balanced Scoredcard, Kaplan and Norton
[4] noted that Balance Scorecard focus on the important metrics and followed by five steps about the deployment
of functional level that drive success- financial perspective with customer, internal process, learning and growth
perspectives.Furthermore,Business Process Re-engineering is a localized and incremental approach that delpoys
complex processes to less improve the overall effectiveness of business operation.[5]
According to Mizunode [1] Honshin Kanri and is an approach to seek for continuous improvement of the strategic
performance.Concerning Business Process Re-engineering Hammer [3] points out that it is an approach for
inventing new ways to dramatically improve the measures of performance such as quality, cost, service and speed.
As for Business Process Reengineering, the term reengineering is used to be a reason for the company to lay off
the employees and looks for new changes to improve the performance. In Davenport, Thomass words [6],... once
out of the bottle, the reengineering genie quickly turned ugly. Sougly that today, to most businesspeople in the
United States, reengineering has become a word that stands for restructuring, layoffs, and too-often failed change
programs.??On the contrary, according to Roberts and Tennant [7] Honshin Kanri and Business Scorecard [9] are
approaches that seek for a strategic and continuous improvement of existing process.

JIT vs MRP
JIT and MRP are completely unlike, but are complementary concepts used in
material planning and control. MRP stands for Manufacturing Resource
Planning, while JIT is Just in Time. MRP is a resource and planning tool that is
forward-thinking, and time-phased. The philosophy of JIT, on the other hand, is
based on the riddance of waste. One important feature of JIT is known as
kanbas, which is a method of performance based on restoring used material that
has no forward visibility.


While operating a manufacturing business, it is possible to operate only with
MRP, but the case isnt the same with JIT, because it does allow for forward
planning, which is a vital planning requirement when running a manufacturing
operation. There is a need to ensure that materials which cannot be replaced by
kanbas, can be availed when needed. This makes MRP a tool that gives more
control, while JIT increases the value of your processes.
There is a mistaken analysis of referring to JIT as a pull system, and to MRP as a
push system. This analysis can be greatly misleading. MRP is a system which
focuses on satisfying the requirements of the projected usage in a determined
time frame. JIT is very much focused on the current, real usage, where parts of
the production system are connected with the use of Kanbans, while the system
runs. It is this kind of linkage that is the main distinguishing feature between JIT
and MRP. The JIT system is dynamically linked, whereas MRP is not. This means
that JIT is most applicable when lead times are short, whereas MRP is suited for
longer lead times. To add to that, for computerized operations, you are better off
implementing MRP, than JIT.


Generally, in MRP, there are two basic information types that are required:
Structural and tactical. Structural information includes the information about the
components used by the company, and the relationship between the different
items. Things such as the lead time and batch size rule are included in structural
information. The essential point about this information, is that it does
infrequently vary.
Tactical information includes such things as the current state of the operation, for
instance, pending sales orders, master production schedules, inventory levels,
and purchase orders. Obviously, the fundamental point about this information, is
that it frequently varies.
Summary:
JIT is Just in Time, while MRP refers to Manufacturing Resource Planning.
MRP is a resource planning system that focuses on the future, and is time phased,
while JIT does not provide for forward-thinking.
The JIT system is a dynamically linked system, that is better applied for short
lead times, while MRP is not linked, and is better suited for long lead times.
Whereas the JIT system enhances the value of processes, MRP will give you more
control.

JIT and MRP are completely unlike, but are complementary concepts used
in material planning and control. MRP stands for Manufacturing Resource
Planning, while JIT is Just in Time. MRP is a resource and planning tool
that is forward-thinking, and time-phased. The philosophy of JIT, on the
other hand, is based on the riddance of waste.
While operating a manufacturing business, it is possible to operate only with
MRP, but the case isnt the same with JIT, because it does allow for forward
planning, which is a vital planning requirement when running a manufacturing
operation. This makes MRP a tool that gives more control, while JIT increases
the value of your processes
Just in time (JIT) is a production strategy that strives to improve a
business return on investment by reducing in-process inventory and
associated carrying costs. Just-in-time production method is also called the
Toyota Production System.
Just In Time (JIT) is a production and inventory control system in
which materials are purchased and units are produced only as needed to
meet actual customer demand. When companies use Just in Time (JIT)
manufacturing and inventory control system, they purchase materials and
produce units only as needed to meet actual customers demand. In just in
time manufacturing system inventories are reduced to the minimum and in
some cases are zero. JIT approach can be used in both manufacturing and
merchandising companies.
benefits of jit
Reduced setup time. Cutting setup time allows the company to reduce or
eliminate inventory for "changeover" time. The tool used here is SMED
(single-minute exchange of dies).
The flow of goods from warehouse to shelves improves. Small or
individual piece lot sizes reduce lot delay inventories, which simplifies
inventory flow and its management.
Employees with multiple skills are used more efficiently. Having
employees trained to work on different parts of the process allows
Production scheduling and work hour consistency synchronized with
demand. If there is no demand for a product at the time, it is not made.
This saves the company money, either by not having to pay workers
overtime or by having them focus on other work or participate in training.
Increased emphasis on supplier relationships. A company without
inventory does not want a supply system problem that creates a part
shortage. This makes supplier relationships extremely important.
companies to move workers where they are needed.
Supplies come in at regular intervals throughout the production day.
Supply is synchronized with production demand and the optimal amount
of inventory is on hand at any time. When parts move directly from the
truck to the point of assembly, the need for storage facilities is reduced.
Minimizes storage space needed.
Smaller chance of inventory breaking/expiring.
If a manager has a satisfactory MRP or MRPII system in place, he should
look to JIT to simplify his processes as the first stage of implementation.
Once he has simplified his processes, it is much easier to implement a new
planning system although it is possible that the current planning system
may now be sufficient. If his current MRPII processes are poor, he should
follow the full ERP/MRP implementation plan although some
simplification should be carried out if possible.
In summary, MRP gets you in control whilst JIT helps you to improve your
processes



MRP and JIT (materials resource planning and just in time processing) are two methods of controlling production
and inventory levels for manufacturers. MRP focuses on production offinished goods based on forecast requirements,
while JIT focuses on production as a response to actual orders. Both MRP and JIT rely heavily on computerized
information processing.
Materials resource planning is a comprehensive system of raw materials ordering and production scheduling of
equipment and manpower based on forecast orders. It incorporates changes to orders into its scheduling process to
produce a dynamic production schedule. MRP embraces the concept of dependent demand: for example, if
production of finished product A requires three units of product B, and production of product B in turn requires four
units of product C and six of product D, then a production level of a specific number of units of product A requires all
the corresponding units of products B, C, and D to reach completion. For a complicated manufacturing process that
includes many components, an advantage of MRP is its ability to successfully organize the production of each
component so parts are ready when needed and the production process doesn't stall for lack of finished components.
In contrast, JIT is a manufacturing process that responds to actual orders. It relies on the timely delivery of exactly the
right raw materials in the right place to allow for production as orders are received. An advantage of JIT is its
reduction of the amount of raw material and finished goods on hand, which can reduce carrying costs and the
likelihood of spoiled or damaged inventory. It focuses on accurate production and leaves little room for production
errors. A disadvantage of JIT is that if suppliers fail to deliver raw material as scheduled, a halt in production can
occur because of the limited inventory in stock.
Different goals of MRP and JIT mean that each system works better under certain conditions. MRP is well-suited to
a production line that operates on a batch or special order basis. The system's ability to constantly adjust for
changing requirements makes it react well to variable orders. The JIT system works well in an environment of
repetitive orders of similar products. Suppliers can more easily respond to prompt delivery schedules for routine
orders of similar materials.
The emphasis in both MRP and JIT is on the reduction of waste in the production process. Both systems achieve
improvements in inventory levels. It is the intent of MRP and JIT systems to prevent lost production time, although
MRP is more responsive to fluctuations in production as it is a change-based system. Production under the JIT
system may be hampered by lack of capacity if unexpected orders are received.
Strategy 1: The 'Big Idea', Big Bang' or 'Big Change'

That's what I'd call a total transformation - whether it is personal or corporate change. The really Big Change happens
because the 'Big Idea' unites people and meets all their needs in one huge commitment to take action.

Everyone is on board - there are no dissenters and the change has to happen. There is enough energy in the system
or people to bring about that change. Usually the change is mandatory, and if it does not happen the organisation
may cease to function.

So the big Idea or 'Big Change' happens when there is enough pressure pushing for that change, and any barriers
crumble.

In corporate terms this can be when an organisation merges with another business or when the whole structure is
right sized and re-engineered - failing to do so would result in significant loss to the business.

In personal change, it's when the individual decides that they just cannot bear the pain associated with not changing
and they commit to create a new life for themselves. This may be beating an addiction, losing weight or taking control
of one's future and career and finances. But it is a major change and takes some time.

The Big Change works but the conditions which have to be satisfied to make the change stick imply a pretty
enormous undertaking.

Strategy 2: Relentless Improvement Step by Step

The second strategy that works effectively all the time is the one I favour. There is no hullabaloo, no coffee mugs or
tee shirts with empowering banner headlines proclaiming such phrases as "In Teamwork we trust", "Leadership is our
creed""The Customer is King" .etc.

No, this approach to change focuses upon small steps but with a substantial momentum so that change becomes the
culture of the business, or the core behaviour of the individual.

Knowing that each day we are committing to improving, reducing waste, winning new accounts, (however small),
reducing cycle time, containing costs, investing in improvements that engender results, is powerful. It confirms a thus
a positive ROI relating 'cause' to 'effect' and creates a habitual set of behaviours that lead to significant results.

This is also true for personal change. By altering just one or two aspects of our behaviour we can change our own
personal outcome. Simply by focusing on making small new choices, we can significantly shift our personal
performance.

Committing to a daily 10 minute power walk, or 15 minutes of stretching and yoga everyday on waking, will
significantly shift our energy levels and our mood, for the better.

Delaying the drinking of caffeine until the early afternoon will relieve our stress levels. Banishing the daily bagel and
choosing fruit each morning is a change that could have a major impact on our overall health.

Walking up stairs in the office, rather than taking the elevator, and choosing a new route to our workstation may
provide more variety and enlarge our social network. It's the little changes, or changes in our micro behaviour, that
impacts our macro behaviour.

Psychological Contracting with Self

It takes a great deal of commitment, time and energy to run 5 miles every morning. To take a ten minute powerwalk
or yoga takes a lot less commitment, time etc. And once you are out walking or stretching you'll find you want to do
more.

In this instance, what are the chances of people committing to the powerwalk? There is a greater likelihood that we
would commit to the small but steady and daily commitment to exercise than the larger goal of the 5 mile daily run.

It's the same in a corporate setting. People are more able to commit to continuous small improvements than the Big
Bang. It's all about making commitments and promises. I take it most staff can look to improve their performance by
1-3% over time and keep up the momentum. This is true personally or for business.

Personal and Corporate Kaizen

I was amazed about the statistical results I was about to hear when I visited a Toyota Plant in Japan. This was part of
a trip organised to witness Best Practice in Quality Improvement within ten companies.

We were to hear of the results of Quality through continuous and relentless improvement.

The Japanese had built the idea of' relentless improvement' into the culture of Toyota worldwide. The Quality
professional toyed with our delegates requesting information he knew we would not possess. He asked specifically
how our metrics for continuous improvement in European plants compared to the Japanese. Obviously, we did not
know the answer which gave him the opportunity to 'grandstand' with some outstanding data.

The Japanese manager then told us that the average Toyota employee generates 187 ideas for improvement each
year, of which 97% are implemented. Amazing figures and how embarrassing for our delegation knowing we probably
don't even record such data in the average business!

Metrics for Improvement

That means each year that the 60,000 employees in Toyota (at that time) would implement a total of 10,883,400
ideas. At the time Ford employed about three times that number.

I don't know what the Ford situation was, but the implications were immense - if Ford or GM or any other big
automotive builder was not capturing just as many ideas and implementing them, then everyday at close of business
they may be lagging behind Toyota in the race for product and service quality.

So, a continual drive for incremental change really pays off.
It works for personal change also. Running intensively 10 miles a day for Paula Radcliffe is fine and will prove her a
winner, however, the average adult seeking mental and physical fitness will only gain injury free results by focusing
on small and steady progress, rather than outlandish distances putting the body under undue strain and pressure.

Crash diets don't work. A steady and progressive switching of foods leads to gradual weight loss coupled with gentle
exercise - creating new habitual behaviours. Get rich quick schemes don't work.

Whether in corporate or personal change steady progress in new ventures enables you to differentiate between what
works and what does not.
What is KAIZEN ?

KAIZEN as originally defined in the book of: "KAIZEN, the Key to Japan's Competitive
Success", by Mr. Masaaki Imai, is:
KAIZEN means improvement. Moreover, KAIZEN means
continuing improvement in personal life, home life, social
life, and working life. When applied to the workplace
KAIZEN means continuing improvement involving
everyone - managers and workers alike.

KAIZEN is a Japanese word meaning gradual and orderly, continuous improvement. The
KAIZEN business strategy involves everyone in an organization working together to make
improvements 'without large capital investments'.
KAIZEN is a culture of sustained continuous improvement focusing on eliminating
waste in all systems and processes of an organization. The KAIZEN strategy begins
and ends with people. With KAIZEN, an involved leadership guides people to
continuously improve their ability to meet expectations of high quality, low cost, and on-
time delivery. KAIZEN transforms companies into 'Superior Global Competitors'.
Two Elements of KAIZEN
There are two elements that construct KAIZEN, improvement/change for the better
and ongoing/continuity. Lacking one of those elements would not be considered
KAIZEN. For instance, the expression of "business as usual" contains the element of
continuity without improvement. On the other hand, the expression of "breakthrough"
contains the element of change or improvement without continuity. KAIZEN should
contain both elements.
KAIZEN Concept in Our Individual Life
KAIZEN, as you could learn from the definition, is a common word and very natural
to individual, continuous improvement in personal life, home life, social life and working
life. Everybody deserves to and should be willing to improve himself/herself for the
better continually. "If a man has not been seen for three days, his friends should take a
good look at him to see what changes have befallen him" quoted from the old Japanese
saying, describes how natural KAIZEN is.
Maintenance, Innovation, and KAIZEN
In our concepts, three functions should happen simultaneously within any
organizations: Maintenance, Innovation, and KAIZEN. By maintenance, we refer to
maintaining the current status, the procedures are set and the standards are
implemented. People in the lower level of organization mostly do that, they maintain
their standards.
By Innovation, we refer to breakthrough activities initiated by top management,
buying new machines, new equipment, developing new markets, directing R&D, change
of strategy etc.
In the middle there is KAIZEN, small steps but continuing improvement. KAIZEN
should be implemented by the lower/middle management and the workers, with the
encouragement and direction of the top. The top management responsibility is to
cultivate a KAIZEN working climates and cultures in the organization.



KAIZEN in Organization


Insemination of KAIZEN into the Organization

Not a day should go without some kind of improvement being made somewhere in the
company. When KAIZEN is adapted in organizations and management perspectives, however,
it is easier to talk about it than to implement it. It is very natural that people will propose some
kind of change in their own work place, when they become unsatisfied with their present
conditions. Some of the improvements could be carried outright away. Perhaps, the boss won't
even notice them. However, when approval is required, several kinds of responses from the
boss could have taken place. The ideal situation is that the boss encourages their subordinates
to carry out their ideas. The boss then appreciates the efforts or gives recognition. That's what
people expect when they propose something. The positive response given by the boss will then
develop trust with the subordinates and stimulate other improvements. Cumulatively, this will
create momentum for continuing improvement.