CASE-1 STUDY PROJECT

TQM objectives management process in MOTOR COMPANY -

Hoshin Kanri

BILAL MASOOD

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 CASE-1 TQM objectives management process in MOTOR COMPANY
Q1-A. Evaluate the Hoshin Kanri based approach of objectives management adopted by
MOTOR COMPANY, in relation to the nature of their business in the automotive sector;
could this type of approach be adapted for an organization operating in the health or
education sector?
TQM in MOTOR COMPANY Automaker-objective management process
The aim is in the company mission. MOTOR COMPANY automakers has the policy of customer
satisfaction with company objectives fulfilled with total quality management satisfaction and trust.
The company is first quality conscious and has deep concerns on production and sales quality. The
company also have policy of employees’ betterment and training. TQM of the company has three
elements
• Quality of design
• Quality of production
• Quality of sales and services

Figure 1: OMP MOTOR COMPANY

System elements: Objective management process, improvement activities, standardization and
cross functional management
Basic principle: customer satisfaction and respecting people
People development: train and educate the people/employees
The company believes in following quality standards.
• with best quality products

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 • efficient production process.
• The employee’s betterment is the one of main objective of the industry through, education
and training with keeping the high moral.
Basic TQM principles
1. Quality first
2. Customer satisfaction
3. Keeping all facts in mind
4. Process orientated approach
5. Controlling sources
6. Respecting customers and employees
7. PDCA approach
As MOTOR COMPANY company is TQM based company, it is also important for company to
develop TQM promotion structure ran by committee.

Figure 2: TQM promotion structure

The objective is to involve all stakeholders in quality products development in every aspect.
Putting customer centric organization.
Objective management process by MOTOR COMPANY
PLAN = Planning, breakthrough process, create an objectives plan, implementation of plan
DO =implementation
CHECK=diagnosis
ACT= action of plan
Step 1-Selected breakthrough issues
Daily management
The company should act on daily basis objectives these activities include production, safety,
accounting and HR. Breakthrough objectives need 4Ms man, machine, materials and method.

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The break through issues are what is market doing, what is competition, what customer expects,
what is to be achieved.
Sources
• Company mission and vision
• Midterm plans
• Business plans
• Annual objective plans
• Influences of internal and external
SWOT analysis and PESTEL analysis
Objective proposal sheets -OPS: This help us to target the objectives. Where the company stands
and what are the targets
It is defined under following steps
1. Objective
2. Understand current situation
3. Proposed target
4. Gap between proposed and current situation
5. Analyzing the factors -fish bone diagram
6. Key factors
7. Strategies
Overhead cost reduction
Objective: Plan the overhead cost reduction of FY2008, Understanding the current situation
NMUK
Current situation: The overhead performance is to be increased and overhead cost should be
reduced. The target for the overhead cost For NISA is about 10 ponds 2007 graph 1. In 2007 the
overhead performance should be 130 weighted volume graph 2.
The proposed target: Target committed per car is 92.9 ponds and target are 90.76 pounds per car.
There is certain other cost which are shown in the pie charts. Which should be reduced. The utilities
have the highest cost.

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 Graph 1 and Graph 2 overheads

Pie cart 1 and Pie cart 2 usage of funds

Gap between proposed and current target:
Vehicle and powertrain-the gap between proposed and current target of 2007 is higher and FY
2008, 2009 and 2010 is projected. The plan 2008 sub is reduced to -8% and 2007. The proposed
target for FY09 AND FY 10 are 110.64 and 115.62 M-pounds.

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 Figure 3: overhead reduction vehicles and power train
Overhead reduction--X12C submission jan08-The overhead cost reduction for the cars only
oppeme X12 is 78.61 and reduced from 23.18. NMUK X12c is 101.89 reduced from 13,90. The
cost goes on reducing, which is required

Figure 4: Overhead reduction for cars

Analysis of factors: The fish bone diagram shows the factors which are responsible for the
bottle necks.

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 Figure 5: fish bone diagram
Factors: -
Accountability: People do not follow actions and rate is low
Benchmarking: Targets to be achieved
Purchasing policy: Out source is needed
Usage control: No spent up to the budget
Negotiation of contract: Contractors resisting and 5S not used
Global directions: Forex
Strategies

The overhead target is to be achieved; the target is of 90.76 per car. The strategies under
consideration are

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1-review the costs
2-use budget responsibly
3-review documents
4-Review what is important, maintenance and stores, Use statistical tools
5-CO2 reduction, review contracts, allocate the costs
6- review vendors per piece price, review FOREX
Step 2-Create annual plan
How and what are the objectives
• SMART
o Specific= within the boundaries
o Measurables= did you achieved your target
o Achievable = what and how to do
o Realistic= with in time budget and business context
o Timely =with in time limit

Figure 6: Catch ball process [8]

Catch ball process is the two-way system of information. Top management sets the goals and send
to lower level. Catch ball moving back and forth target and means. Everyone must be included in
this process and giving inputs. Ever one has the voice. The process takes place up and down to the
hierarchy.

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 Figure 7: Midterm plan-MTP & TQM
Step-3-Casual cascading
Cascading
• Goals= what are the outcomes
• Strategies= what approach will take
• Objectives= steps to achieve strategies
• Tactics= tools and steps
Levels of cascading
• department manager
• section manger
• engineer
These things can be done using Hoshin kanri objective management process and continuous
process improvement PDCA

Figure 8: Figure objective management and deployment process

Step-4-Objective management process and TQM-HOSIN KANRI (Policy development)
MOTOR COMPANY key principles
• Look on the process with results
• Top down and bottom up approach
• Look to the facts and data’s
• How to achieve targets approach
• Team work
• Catch ball approach and PDCA

PLAN = Planning, breakthrough process, create an objectives plan, implementation of plan

DO =implementation

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CHECK=diagnosis
ACT= action of plan

Figure 9: OMP MOTOR COMPANY

Plan implementation
Break down the plan. Each objective will become a new plan for lower levels. Review the plans
monthly. Use the master schedules. The master schedule will help to do the all activities. This can
me done on MS Project. visual management boards, control charts and review forms.

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 Figure 10: Master schedule

Figure 11: Control charts

The control charts help to get the target for future and control within the set limits.
Planning tables: Shows the action and document status with responsible persons. Showing
complete action plan.
Step 5-Diagnosis the review form RF1 is used to see the results and process. To identify good and
bad points. Diagnosis check by cascading and catch ball.

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 Figure 12: Score cards

Figure 13: Visual amagement

Step-6-Action
Used to find the objectives, which are failing, remedial action activities, allocation of resources
and problem occurrence
• Problem solving

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 • Analyses of current situation
• Identify the root cause
• Develop a counter measure
• Standardizing the counter measure
• Simplify the feed back
Objective -Achieve 38M-EU in business
Compare- 8.5M last month, make it to 20M
Control – chasing the target by forecasted

The variance is calculated under the current situation and predicted or forecasted.

Factors analysis -The inventories must go down.

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Changes required and corrective actions

Corrective action: reviews the sales operation

Reviews
Monthly, annual and quarterly
Conclusion and recommendation: -
Setting the target for the will increase the profit of the company. The target is achievable. The fish bone
diagram gives the overall problem factor directions. The catch ball process will give the proper
communication in the industry. The continuous process improvement will take place continuously until
the target is achieved, then PCDA will be made. The project management master schedule and visual
management boards will give the over look at the progress. The variance from the forecasted will give the
track of the current project. Lowering the inventory and utilities will give the profit and track the
forecasted task.

Q1-B- -This type of approach can be used in health care and education sector.

A-Education Hoshin Kanri [10]

Create a educational models
Step-1 establish the mission and vision statement, motto quality policy of the institute
Step-2 select the break though process, SWOT and PESTAL analysis for the institute. Effecting
of external factors.
Create a steering committee
• Objective =to increase the quality of education and number of student grades

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 • Understand the current situation=
o student teacher ratio
o admitted students
o teacher training and level
o increasing students’ grades
o reduce other expenses
• Proposed target- set the limits for target
• Gaps = explain the gap between the current and required situation
• Fish bone diagram
• Key factors
Step-3 create the annual plan for institute-- catch ball
• Budget, bills, wages, utilities, building expense etc
• number of students passing,
• number of students admitted,
• number of teachers,
• other staff
• Increase students’ grades and education quality
• Training of teachers and employees
• Earnings
• Use online system
Step-4 implementation Cascade goals
Step-5 implementation -objective management process -PDCA-Hoshin
Use master schedule to check the progress of plans
Use control charts
Hoshin matrix
Step- 6 Diagnosis -identify good and bad points
Deployment and Action
Step-7 Reviews
Weekly, month and early

Figure 14: PDCA [10]

Q1-C-Health care Hoshin Kanri

Create a Health care models

Step-1 establish the mission and vision statement, motto quality policy of the Hospital
Step-2 select the break though process, SWOT and PESTAL analysis for the Hospital. Effecting
of external factors.
Create a steering committee
• Objective =

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 Introduce 5S
Introduce VSM
Staff training
Reduce the number of surgical failures and deaths = no failure
• Understand the current situation=
o Patient to staff ratio
o Number of employees
o Cleaning of hospital= bad
o Waste disposal=bad
o Number of medical failures= high
o Staff not using six sigma
o training of doctors = average
o reduce other expenses = utilities, bills, building expense etc
• Proposed target- set the limits for target
• Gaps = explain the gap between the current and required situation
• Fish bone diagram
• Key factors
Step-3 create the annual plan for institute-- catch ball
• Budget, bills, wages, utilities, building expense etc
o Patient to staff ratio = increase it
o Number of employees
o Cleaning of hospital= use 5s
o Waste disposal= proper technique
o Number of medical failures= reduce it
o Use six sigma
o training of doctors = high
o reduce other expenses = utilities, bills, building expense etc
Step-4 implementation Cascade goals
Step-5 implementation -objective management process -PDCA-Hoshin
Use master schedule to check the progress of plans
Use control charts
Hoshin matrix
Step- 6 Diagnosis, -identify good and bad points
Deployment and Action
Step-7 Reviews
Weekly, month and early
Conclusions: -
The MOTOR COMPANY model can successfully applied to the healthcare and education.
QUESTION -2. Discuss the leadership, commitment and strategic requirements of the type
of approach used in MOTOR COMPANY.
Answer
1-Leadership
The leaders should be multitalented and having great multidimensional skills
• Seders set strategic directions
• Encourage others
• Foster creativity

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 • Create change
• Build strong teams
• Communicate
2-Role of leaders in Hoshin and Commitment

Figure 15: Role of leader in Hoshin

Giving the direction to organization, it is very important for the leader to start with mission and
vision statement. This provides the foundation for the planning. Then under the guidance of leader,
teams work on the hoshin within the time limit to support the goals. The process of Hoshin
development can be time taking. This should be done under the guidance to trained hoshin leader.
The best describes the hoshin is the inclusion- every one included. Everyone has the feeling under
the guidance of leader as the part of team. The leader develops a cross functional team. The leader
develops the team before the hoshin. The leader makes sure that team is working good and
optimally. The leader must know, who are stake holders.
The communication is the vital process.
Interpersonal communication
The leader influences the people and action. The interpersonal skills with communication are
required. The leaders must be motivating the team members with proper communication. The main
part of interpersonal commination is how good you listen and give directions to team members.
As you are dealing in Hoshin the process of listening and giving directions are important.
Organizational communication
The organization communication is also very important in the hoshin process like catch ball. The
face to face meetings is done in the process with middle management, team and top management
The organization communication takes place by catch-ball process [8], fig-14, in which the
information flows both direction with negotiation and alignment

Creating the change

creating the vision and mission
• what you want and what is the organization
• clearly identify the future concerns
Creating vision statement
• What is the business
• What is the future of organization?
• Who are the customers with their expectations?
• What you want to make this organization

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Individual changes
What skills are needed to make a change
Which kind of training is required?
What is needed to be changed
How the teams and people react to the changes
Team changes
How to motivate the team
How to train the team
How the make team work to make a change
Organizational changes

Figure 16: organization change

What are the complex changes?
There is need to organize the system
Environmental changes
Look for available resources
Current state of environment
What technology is needed
Do the changes affect the stake holders?
3- Strategic requirements
There are certain strategic requirements for the hoshin process.
1-how would you be planning including the strategic planning
2-how would the make team and leaders.
3-What are the weaknesses during the planning
4- How the plan about SWOT and PESTAL analysis
5- how the major shift in technology is addressed
6- how to address the environment, product, Customer, technology, market and product
7- Sustainability of company on long term bases
8- Define the goals with current strategic plan
9- Time line of planning and achieve the goals
10-Development of the action plan’
11- how to address the Human resource, financial and other resources in the planning
12- Define how to create modifications in the strategic plan.
13- properly define teams and human resource.
14- how to measure Effectiveness of plan

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Conclusion
The proper use of leadership models with strategic plan will help to track the set target. It will
create the working and motivated environment in the industry, with good change.

QUESTION -3. What role could bench marking play in the development of the OMP -
objective management process methods used?
Answer
Bench mark player of OMP
The steps of bench making as follows. Now integrate the OMP into bench marking.
Benchmarking is process to measure the performance regarding external elements.
Introduction.
The TQM objective management process integration into benchmarking with 5 phase
process

Figure 17:- bench marking process

1. PHASE 1: PLAN
• identify to benchmark
MOTOR COMPANY objective management process
PLAN = Planning, breakthrough process, create an objectives plan, implementation of plan
DO =implementation
CHECK=diagnosis
ACT= action of plan
• Partners
Customers, employees, sponsor and management and External companies’ competitors
• Data collection method

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 Survey, interviewing, Annual reports, Forecasting and brainstorming
2. PHASE TWO: FIND
• Determine current performance.
Overhead cost reduction
• Future performance
Proposed target reduction 92.9 pounds per car. There is a gap between the proposed
and current values
The overhead cost reduction will give business to MOTOR COMPANY more and this
will help to outclass other companies.
3. PHASE THREE: COLLECT
• Communicate finding
The fish bone diagram is used to find the factors effecting i.e. Accountability,
purchasing policy, usage control, contracts, global directions
• Goals
The overhead target is to be achieved; the target is of 90.76 per car. The strategies under
consideration are
1-review the costs
2-use budget responsibly
3-review documents
4-Review what is important, maintenance and stores, Use statistical tools
5-CO2 reduction, review contracts, allocate the costs, this will outclass other companies.
6- review vendors per piece price, review FOREX
4. PHASE FOUR: ANAYSE Fig23 MOTOR COMPANY OMP
• Develop a action plan
Hoshni kanri, Use catch ball and PDCA technique
• Implement the action and monitor
Use master schedule, visual management board, Hoshni matrix, deploy matrix, Control
charts and review forms

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Recalibrate
Forecasting technique with checking variance, Lowering inventories
Corrective action with reviews
5. PHASE FIVE: IMPROVE
• Attain leadership position
Catch ball process in the phases,
Executives, managers, mid managers, supervisors and employees

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 • Practice process
ITTARATE – PDCA [10] fig-31
Conclusion
The benchmarking with OMP will give more business to MOTOR COMPANY and will help to
get market capture. The introduction of new green products will also help MOTOR COMPANY.
This process will help to track competitors.

References
[1] MOTOR COMPANY Power 88 - MOTOR COMPANY Global, https://www.MOTOR
COMPANY-global.com (accessed 4-10-2021)

[2] Hoshin Kanri, Visual Strategic Planning, student work book, learnfirm.com (accessed 4-10-
2021)

[3] Richard Ennals, Hoshin Kanri, The strategic approach to Continuous Improvement

[4] PESTEL Analysis - Learn how to do it and key points of pestle analysis
(assignmenthelpshop.com) (accessed 4-10-2021)

[5] What is SWOT Analysis? (visual-paradigm.com) (accessed 4-10-2021)

[6] Sorin-George Tomaa, Paul Marinescua, Global Strategy: The Case of MOTOR COMPANY
Motor Company

[7] A Nicolaides and P. Harding, Evaluation of the MOTOR COMPANY Plant Management
System as a global
improvement tool and the role of Hoshins

[8] What is Hoshin Kanri Catchball? (kanbanize.com) (accessed 4-10-2021)

[9] Vinh Sum Chau, Barry J. Witcher, Dynamic capabilities for strategic team performance
management:The case of MOTOR COMPANY

[10] Hanaa Ouda, A Proposed Systematic Framework for Applying Hoshin Kanri Strategic
Planning Methodology in Educational Institutions

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Appendices
Hoshin Kanri

Figure 18: Hoshin Kanri four components

Hoshin kanri has four components [3]
• Ho-direction
• Shin-focus
• Kan-alignment
• Ri-giving reasons
Foundation of hoshin kanri as following [2]
• inclusion-everyone included
• creativity -new ideas
• communication-everyone should know
Hoshin principles
• Clear indication how organization is performing’
• Set targets
• Include every one

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 • Sound decision making
• Put resources on objectives
Model

Figure 19: Hoshin Kanri Model

Project
7 step process
1. Current status
2. Develop breakthrough process
3. Define annual objectives
4. Cascade goals
5. Execute annual objectives
Reviews
6. Every month reviews
7. Every year reviews
Who is involved in Hoshin activities?

Figure 20: Who is involved

Everyone is included in this process giving their inputs, Hoshin involves in voice of customer.

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 Figure 21: Process
Hoshin include the vision and mission down to the process executed by the teams using
continuous improvement process. You must know the organization profile.
Measuring the organization
Efficiency, effectiveness, capital, human capital, innovation, process and customer
Hoshin matrix
Target are those, which we are trying to achieve
Target is what and means how we are going to achieve there. These are objectives, goals and
strategies.

Figure 22: What and how matrix

For every “what”, the “how” is to be answer
X- matrix-relationship matrix
Relationship between target and each mean is analyzed.
Give organization objectives. It gives design and strategy on one table.

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 Figure 23: Relation matrix
1. Target: Target is what and means how we are going to achieve there. These are objectives,
goals and strategies.
2. Importance weightage: Rate the importance to the target 1=lowest, 5=highest
3. Competitive assessment: numeric value to target, importance rating to target and
competition. More work =1.3 and less work par =1.1
4. Competitive index: Competitive assessment * importance weightage. Which target is
importance to stay in market?
5. Owner: Responsible person to work on target. Goals to be met. Measure them and updating
them.
6. Measure: Quantitively value of target progress and KPI having four categories
i. Customer
ii. Employees
iii. Financial
iv. Progress
7. Actual: provide clear picture otherwise benchmark it, if not available
8. Goals: What you are trying to get or achieve in numeric values. They are related to
competitive assessment and competitive index.
9. Means: Mean is the action, how company will achieve the target. It is a daily activity.
10. Relationship matrix: Relationship between target and each mean is analyzed\
11. Importance: importance of each mean is written. Priority is given to highest value.
12. Difficulty: How difficulty is getting the means 1 to 5
13. Actuals, goals, measure and owner: for each mean give the value of goals measure, owner
and actuals

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 MOTOR COMPANY company
MOTOR COMPANY is a Japanese automobile company with headquarter in japan. MOTOR
COMPANY produce wide range of car also the luxury brands. The MOTOR COMPANY
company is the sixth largest car manufacturer in the world. MOTOR COMPANY automakers
new technology of hybrid cars.
Vision statement: Enriching people’s lives.
Mission statement: To provide unique and innovative automotive products and services that
can deliver superior measurables value to all stakeholders.

As MOTOR COMPANY company is TQM based company, it is also important for company to
develop TQM promotion structure ran by committee.

Figure 24: TQM promotion structure

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 Steering committee

Figure 25: Steering committee

executive management gets training on hoshin
1- Review the last year plan and gathering the data. Top management meet the middle management
and develop the strategical plan
2-Exactive meet the middle management: goals to support plan -catch ball
3- middle management put together goals, strategies, charter and budget
4- middle and executive meet- set action plans and review them with necessary changes. catch
ball
5- action team- team charter developed with project action plan
6-action team and management-reviews- catch ball

Figure 26: Annual planning

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Annual plans

Figure 27: Planning types

Figure 28: SWOT analysis [5]

This process defines the strength, weakness, threats and opportunities
PESTEL analysis

Figure 29: PESTEL analysis [4]

The PESTAL analysis has following segments

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P=Politics,E= Economics,S= Social,T= technology,E=Environment,L= legal

MOTOR COMPANY power 88 [1]

There are four foundation and six pillars in MOTOR COMPANY power 88 concept and it is a
mid-term plan of aa business. The plan emphasis on company growth worldwide including new
market segments. It is a business plan of six years from 2011 to 2016.

Figure 30: MOTOR COMPANY power 88

Pillar -1 Strengthening barns power: The company targeted to improve its engineering and
business, sales, marketing and value creation of the customer.
Pillar -2 Enhancing sales power: Another important aspect is to increase the sales from 6000 to
7500 units
Pillar -3 Enhancing and powering quality: the company is aiming to create top quality products
Pillar -4 Zero emission: The seven new electric model cars will be introduced.
Pillar -5 expanding business: The global market share will be increased from 4.6 to 6.4
Pillar -6 Cost: greater number of units will give company to have cost effectiveness
Foundation 1 -people: Cross functional and cross regional teams are created this will increase the
strength of company globally.
Foundation 2 -alliance: Alliance is the vital source to strengthen the company.
Foundation 3 -processes: Making process efficient and effective
Foundation 4 -products: To develop 51 new product models

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 Figure 31: Figure Link between ISO and NPMS [7]
Link between the informal MOTOR COMPANY system and ISO
MOTOR COMPANY Corporate social responsibility helps to develop society in general.

Figure 32: Figure CSR MOTOR COMPANY [7]

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 Figure 33: MOTOR COMPANY plant management system [9]
Deploying the Hoshin plan
Separate Hoshin matrix defining the separate action plan with complex deployment

Figure 34: Matrix deployment

The review process starts from bottom to up and deployment process goes from top to bottom

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Figure 35: deployment process

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