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DANAHER BUSINESS SYSTEM
Manufacturing
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Service
Design
Marketing
Kaizen \ki-zen\
A continuous improvement mindset. Everything that we do today can be improved.
Kaizen has no end.
K K K K
K
TIME
Where Do We Begin?
How To Get Started?
STRATEGIC POLICY
PLAN DEPLOYMENT
DAILY
FOCUS FOR
What game are MANAGEMENT OUR KAIZEN
we playing? KPIs EVENTS
How do we win? VALUE
STREAM
MAPPING
What is Policy Deployment?
Sustained Improvement
That Result In
Sustained Competitive Advantage in
Quality, Delivery, Cost and Innovation
To
ToBuild SustainableCompetitive
BuildSustainable CompetitiveAdvantage
Advantage
Strategic
Strategic
Objective
Objectiveisis
Improvement
Policy Achieved!
Achieved!
Deployment
KAIZEN
Policy
Deployment
KAIZEN
Policy
Daily
Deployment Daily Mgmt
KAIZEN
Daily Mgmt
Daily Daily Mgmt
Mgmt Mgmt
Year 0 Year 1 Year 2 Year 3 Year 4
What Does Policy Deployment
Mean To Leaders?
Key
Leaders Breakthrough
(PD)
Kaizen
Daily
Management
Front Line
Associates
(KPIs)
% of time spent
Far
How
Working captital from $12M to $8M
OTD from 75% to 89%
Operating profit from 6% to 9%
Objectives
Breakthrough
Annual Policy
3-5 Year
How
Priorities
What
Top Level Improvement
Breakthrough Objectives
Improve
Target to
How Much
Cory - VP Engineering
Ted - VP HR
Who
Resources
Robin - VP Operations
Primary Responsibility
Andrew - President
Secondary Responsibility
PD Matrix
What Is A 3-5 Year Breakthrough?
Q Improve grade of service for call center from 72% to 99% in 3 years
D Improve OTD to customer request date from 80% to 98% in 3 years
C Increase operating profit 25% in 3 years
I Grow product line A sales +300% in 3 years
Represents HOW FAR you need to improve in first year to meet 3-5
year breakthrough objective
Rule of thumb is 30-50% of your 3-5 year target in the first year
Avoid the hockey stick
Annual breakthroughs exceed budget targets
Process oriented
Should lead to the creation of sustainable, results-oriented processes not short-
term tasks
Focused
Meets Current or Emerging Customer Needs
Limited to the Critical Few
Measurable
Process must be something that can be measured
But not a Measure itself
DHR
S&P 500
DHR +4,295%
S&P 500 +425%
Difference +3,870%
Mar-98
Mar-99
Mar-01
Mar-02
Mar-03
Mar-04
Mar-06
Mar-97
Mar-00
Mar-05
Mar-07
Mar-08
Mar-09
Mar-10
Mar-96
Mar-90
Mar-91
Mar-92
Mar-95
Mar-93
Mar-94
CNBCs highest performing stock in past 20 years (1989-2009) with 2,500% growth
Further reading on PD: Hoshin Kanri
Industry Week (October 2007): Strategic Deployment: How To Think Like Toyota
Manufacturing Engineering (Mar 2006) Strategy Deployment: Linking Lean to Business Strategy
Quality Digest (May 1997): Strategic Planning With the Hoshin Process
Hoshin Kanri - The Strategic Approach to Continuous Improvement by David Hutchins, Gower publishing, 2008
Hoshin Kanri for the Lean Enterprise: Developing Competitive Capabilities and Managing Profit by Thomas L. Jackson,
Productivity Press, 2006