WaveRider

Winning Strategy
Deployment for Continuous Improvement

Team 3

Juan Carlos Otalora-Rey,

Awalpreet Kaur Takkar,
Yuting Zhao,
Ayham Fattoum,
Suprateek Roy,
Marcin Czajkowski

Hoshin Kanri (Policy Deployment)

Typical Organisation

Low
performance

Aligned Organisation

High
performance

Source: Hutchins,2008

Hoshin Kanri: Success story

(1958)
Policy &
Planning

(1964)
Bridgestone
Hoshin
Kanri

(1970)
Japanese
Common
use

(1990s)
Worldwide

(1954)
Juran
Source: Lee & Dale, 1998

Hoshin Kanri: Approach

Source: Akao, 1991

Hoshin Kanri vs. Balanced Scorecard

Increases interdepartmental
cooperation
The planning process is
continuously improved, uses
and reinforces Plan-DoCheck-Act
Creates disciplined planning
system that is responsive and
flexible
Creates a common focus
throughout the organization
Planning is systematic

Pros

Long term commitment

The breakthrough objective
must be stable during a 3-5
year period

Cons

Hoshin Kanri vs. Balanced Scorecard

Hoshin
Kanri
Catchball

Breakthrough
performance,
alignment, and
integrated
targets for all
levels

Balanced
Scorecard
Comprehensive
Measurement

Policy Deployment: Overview

CHECK

Current
situation

ACT

PLAN

strategic
deployment
plan

Target
setting

DO

Implementing
plan

Review
Source: Lee & Dale, 1998

Current situation

WaveRider
s

Check
Business performance has been in decline over
the last 5 years:
a) Declining profits
b) Falling sales
c) Overproduction
d) High stockholding
)Rising costs or inefficiency
)ROCE decreased, due to capital inefficiency
)Poor debt recovery or lack of investment
)Overproduction, large quantities of stock
)Falling returns
)Stagnant UK Market
)Constant Market share over five years

SeaHorse

SeaSpray

WaveRider
s

Current situation

= WaveRiders
= Surf ZA

Check

= Hagen

Production Differentiation

SeaSpray

95

SeaHorse

90
Market Matrix

10

Better products

Other markets

EU(%)

UK market

UK(%)

Worse products

Product Distribution

Products/
Market

ZAH

WR

Porter Matrix for Competitor Analysis

SWOT

Check

Strength

Better
product than
competition
Trained staff
Good
production
potential

Weaknesses
Inefficient use of
Human Resource
Stagnant market
share over past
five years

WaveRider
s

Opportunities
Improvements
in marketing
techniques,
distribution
channels

Higher price as
compared to
competition

Explore foreign
markets

Complex
discounting system

Explore new
customers

Threats
Severe market
conditions in
UK since past
five years
Stagnancy of
UK market
Competitionprice

competitiveness

Stakeholders
interest

ACT

WaveRider
s

Ideal future
state

Company
activities

To become a leader in the market of

inflatable boats within Europe and UK

Reorganize
Finance and
HR
departments

Invest new
technology

Reorganize
the sales
team

Strategy 3

Increase
price by
2.5%

Open new
market

X-Matrix Approach

WaveRider
s

Policy Deployment - X Matrix

PLAN

Improvement
Priorities

RESOURCES

A
B

Increase the profits after tax to 1m

5 Year
Increase sales to 15m
Breakthrough
Objectives

D
E

Targets to
Improve

Annual
Gain
substantial European market share
Objectives

Improve company reputation through quality

WHAT

Reduce the operating costs by 10% improving efficiency

X-Matrix Approach

WaveRider
s

Policy Deployment - X Matrix

HOW

2 FAR
1

Annual
Objectives

RESOURCES

Targets to
Improve

Improvement
Priorities

Reor
Incre
gani
Reor ase Rese
ze
price
Fina Inve gani by arch
nce st ze 2.5% Euro
and new the
pea
HR tech sales
n
depa
nolo tea
Mar
rtme
gy m
ket
nts

5 Year
Gain substantial European market
share

Increase the profits after tax to 1m

Increase sales to 15m

Breakthough Objectives

PLAN

Improve company reputation through quality

Reduce the operating costs by 10% improving efficiency

X-Matrix Approach
Policy Deployment - X Matrix

X
X
X

2
1

Improving the quality and productivity

Improving the organization structure by moving wages and salaries
manager into financial department
Research pricing structure, discounting, distribution, competition,
product, and safety specifications in European market
European sales representative in the rescue sales team
Hire additional two leisure sales people (3Ex + 3In)

Improvement
Priorities
Annual
Objectives

Rese
arch
Euro
pean
Mark
et

RESOURCES

Incre
ase
price
by
2.5%

Reorg
anize Inves
Finan t Reor
ce new ganiz
and techn e the
HR
olog sales
depar
tment y team

s

HOW

WaveRider
s

Targets to
Improve

5 Year
Breakthough
Objectives
Gain substantial
European market
share

Increase the profits after tax to 1m

Increase sales to 15m

PLAN

Improve company reputation through quality

Reduce the operating costs by 10% improving efficiency

X-Matrix Approach

WaveRider
s

Policy Deployment - X Matrix

X

Introducing new financial package for Euros

Improving the quality and productivity

X
X

X
X X

Incre
ase
price
by
2.5%

Reorg
anize Inve
Finan st
ce new
and tech
HR
nolo
depar
tment gy

Reor
gani
ze
the
sales
team

Rese
arch
Euro
pean
Mar
ket

X
X

Improving the organization structure by moving wages and salaries

x
manager into financial department
Research pricing structure, discounting, distribution, competition, product,
3
x x
and safety specifications in European market
2 European sales representative in the rescue sales team
x
1 Hire additional two leisure sales people (3Ex + 3In)
x x x

Achi
eve
Improvement

winn
Priorities
Incre
ing Capi
ase
prom tal
the
otion expe
ratio
al nditu
of
strat re of
Targets to
Annual
sales egies 150 Redu
Improve
Objectives
in Redu to a k on ce
Euro cing mark tech admi
pe to wast et nolo nistr
UK e and spen gical ative
to defec d of adva costs
5 Year
40/6 ts by 250 ncem by
0 20% k ent 10%
Breakthough Objectives
A

Gain substantial European market share

Increase the profits after tax to 1m

Increase sales to 15m

Improve company reputation through quality

PLAN

RESOURCES

HOW
MUCH

X-Matrix Approach

WaveRider
s

Policy Deployment - X Matrix

X

X X 6 Introducing new financial package for Euros

X
5 Improving the quality and productivity

x
x

Improving the organization structure by moving wages

x
4

and salaries manager into financial department
X

Research pricing structure, discounting, distribution,

X
3 competition, product, and safety specifications in

European market

x x

X
2 European sales representative in the rescue sales team x x x

Improvement
X
X
x
Priorities
1 Hire additional two leisure sales people (3Ex + 3In)

x x
x x

RESOURCES
Annual
Targets to
Achie
Incr
Objectives
Re ve
Improve
ease
du winni
Reor
Re
cin
ng Capita
pric
gani
or
5 Year
g prom
l

Breakthough Objectives
ze Invga e by Res
Increa wa otiona expen
Fina est niz 2.5 earc
se the ste l
diture
ratio
an
strate
of Redu MD FD PD HR
nce ne e % h
of d gies to 150k ce
and w the
Eur
sales def a
on admi
HR tec sal
ope
in ect marke techno nistr
Europ s
t logical ative
depahn es
an
e to by spend advan costs
rtme olo tea
Mar
UK to 20 of cemen by
nts gy m
ket
40/60 % 250k
t
10%

PLAN

Action Plan

WaveRider
s

DO

Self-Assessment
Review

Monthly Gantt Chart checks and updates

Revision of actions where required
Annual assessment of X-matrix objectives
Generation of new X-matrix

How it Works?

Catchball

WaveRider
s

The Challenge

WaveRider
s

Long term commitment

The breakthrough objective must be stable during a 3-5 year p
eriod

2011 BUSINESS PLAN

WaveRider
s

VISION

PURPOSE

OBJECTIVE
S

To become a leader in
the market of
inflatable boats
through achieving a
substantial share of
the European market,
and be recognized for
constant focus on
customer-satisfaction
and quality.

The purpose of this

plan is to
communicate through
all levels of the
organisation, the new
business strategy,
which is being aimed
at, through realization
of a shared goal, and
hence deriving the
means to achieve it.

Gain substantial
European market
share
Improve company
reputation through
quality

Conclusion

WaveRider
s

It is not enough to do your best; you must know what to do,

and then do your best.
W. Edwards Deming

References
Newcomb, J.E. (1989), Management by policy deployment, Quality, Vol. 28 N
o. 1, pp. 29-30.
Lee, R. G., & Dale, B. G. (1998). Policy deployment: an examination of the theor
y. International Journal of Quality and Reliability Management, 15, (5), 520-540.
Akao, Y. (1991). Hoshin Kanri policy deployment for successful TQM. Productivi
ty Press: Weston
Hutchins, D. (2008). Hoshin Kanri the strategic approach to continuous improve
ment. Gower House: England
Kaplan, R.S., and Norton, D.P. (1992). The Balanced Scorecard - Measures that
Drive Performance. Harvard Business Review: Boston
Makarenko, Y. M. (1981), X-matrix simplex method, Dokl. Akad. Nauk SSSR,2
59, No. 1, Pp 30-33.

Thank you
Questions/ Suggestions Welcome..