In the latest episode of the Manufacturing Executive Podcast, host Joe Sullivan sits down with Mark Reich, a former Toyota executive and current senior coach at the Lean Enterprise Institute, to discuss the Japanese strategic planning methodology known as Hoshin Kanri. Born out of Toyota’s practices, Hoshin Kanri focuses on building alignment from the executive suite to the shop floor, driving meaningful action at every level of the organization.
Reich, who spent over 23 years at Toyota as the process owner of Hoshin Kanri for North America, shares his insights on the common pitfalls manufacturing organizations face when strategy becomes detached from reality, and why company visions often remain stuck as slogans rather than catalysts for genuine change.
“Those kind of objectives as you can imagine those cross primary functions across the organization you can’t develop and launch that mower without involving of course product development might lead that. But production has to be involved because you got to make it marketing in sales has to be involved because somehow you have to generate some some way for the for customers to know you’re going to have this product some marketing plan.”
Reich emphasizes the importance of both vertical and horizontal alignment in breaking down high-level strategies into actionable steps. By defining multi-functional, focused corporate-level objectives and then breaking them down to the department level, organizations can clarify specific activities and targets while engaging leaders and employees to build capability and foster people development.
The role of the CEO in leading the Hoshin Kanri process is crucial, as they must engage people in a structured way, reward leaders who can lead without authority, and ensure that desired behaviors are aligned with company goals. Reich also stresses the importance of effective leader behavior in creating a culture where problems are seen as opportunities for improvement, and leaders provide support and coaching to help resolve issues.
If you say we want people to work together as a team and then you reward people just for having achieved something that only in their area that actually is a detriment potentially to other areas in business. You’re not walking the talk.
When implementing Hoshin Kanri in an organization, Reich recommends starting with a model area or pilot to test the methodology and learn from the experience before spreading the approach across the entire company. Involving the CEO and key leaders is essential to understand their roles and expectations throughout the process.
For those interested in learning more about Hoshin Kanri and other lean thinking practices, Reich directs listeners to the Lean Enterprise Institute website (lean.org), where a wealth of information and resources are available. His book, “Managing on Purpose,” serves as a practical workbook for organizations looking to implement the Hoshin Kanri methodology based on his experiences helping companies across various industries.
As manufacturing organizations navigate the challenges of aligning strategy with execution and engaging employees at all levels, the lessons from Toyota’s Hoshin Kanri methodology, as shared by Mark Reich, provide a valuable framework for driving meaningful change and fostering a culture of continuous improvement.
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