Table of contents
Preface ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 3
Introduction ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
1. Scope ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
2.

Normative references ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5

3.

Terms and definitions ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

3.1

Policy Management5

3.2

Policy ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5

3.3

Priority issue ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

3.4

Objective ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6

3.5

Means

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

6

3.6

Action plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

6

3.7

Control point ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6

3.8

Control level ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6

3.9

Function ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5

6

3.10 Cross-functional team ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6
4.

Fundamentals of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6
4.1

Roles of activities that consist Total Quality Management (TQM) ・・・・・・・・・・・・・・・ 6

4.2

Key concepts of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・・・ 9

4.2.1

Purpose and scope of Policy Management ・・・・・・・・・・・・・・・・・・・・・・ 9

4.2.2

Three streams of Policy Management

4.2.3

Various types of PDCA cycle in Policy Management ・・・・・・・・・・・・・・・・・・ 12

4.2.4Founding Management principles of Policy Management ・・・・・・・・・・・・・・・・ 13

4.2.5

Entities which are managed by Policy Management ・・・・・・・・・・・・・・・・・・・ 14

4.3

・・・・・・・・・・・・・・・・・・・・・・・・ 11

Elements that make up a policy ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 14

5.

Processes of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 15

6.

How to implement Policy Management in a function ・・・・・・・・・・・・・・・・・・・・・ 18
6.1

Establishment of mid-term plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 18

6.2

Establishment and deployment of policy ・・・・・・・・・・・・・・・・・・・・・・・・・ 18

6.2.1

Output from establishment and deployment of policy ・・・・・・・・・・・・・・・・・・ 18

6.2.2

What to be aimed by the function – Establishment of policy of the function ・・・・・・・・・ 19

6.2.3 Close discussions for alignment ・・・・・・・・・・・・・・・・・・・・・・・・・・ 22
6.2.4
6.3

Preparation for implementation ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 24

Implementation of policies and its control ・・・・・・・・・・・・・・・・・・・・・・・・ 26

6.3.1

Implementation according to action plans ・・・・・・・・・・・・・・・・・・・・・・・ 26

6.3.2

Checking of the implementation status ・・・・・・・・・・・・・・・・・・・・・・・・ 26

6.3.3

Actions based on the results of checking of implementation status ・・・・・・・・・・・・・ 26

6.3.4

Change management: react to changes in internal and external factors ・・・・・・・・・・・ 26

6.4

Term-end review ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 27

6.4.1

Review for the part of policy deployed to lower-levels ・・・・・・・・・・・・・・・・・・ 27

1

6.4.2Analysis of gap between plan and actual for each policy and its causes ・・・・・・・・・・・ 27

6.4.3

Analysis from the viewpoint of Policy Management ・・・・・・・・・・・・・・・・・・ 28

6.4.4

Considerations on actions based on the results of analysis ・・・・・・・・・・・・・・・・ 29

6.4.5

Preparing review report and taking a review from upper-level manager ・・・・・・・・・・・ 30

6.5

7.

8.

Mental attitude as a manager ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 30

6.5.1

Matters to be understood by a manager ・・・・・・・・・・・・・・・・・・・・・・・・ 30

6.5.2

Treatment of subordinates as a manager ・・・・・・・・・・・・・・・・・・・・・・・・ 31

6.5.3

Considerations as a management in report, proposal and consultation ・・・・・・・・・・・・ 32

How to implement organization’s overall Policy Management ・・・・・・・・・・・・・・・・・・ 32
7.1

Top management leadership ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 32

7.2

Establishment of mid-and-long-term business plan ・・・・・・・・・・・・・・・・・・・・・・ 33

7.3

Establishment of organizational policy ・・・・・・・・・・・・・・・・・・・・・・・・・・ 34

7.4

Deployment of organizational policy ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 35

7.5

Implementation of policies and their management ・・・・・・・・・・・・・・・・・・・・・ 36

7.6

Top management diagnosis ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 36

7.7

Term-end review ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 37

Promotion of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 39
8.1

Education and training for Policy Management ・・・・・・・・・・・・・・・・・・・・・・・ 39

8.2

Preparation of standards, formats and tools for Policy Management ・・・・・・・・・・・・・・ 40

8.3

Evaluation of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 41

8.4

Linkage with evaluation of functions and individuals ・・・・・・・・・・・・・・・・・・・・ 42
・・・・・・・・・・・・・・・・・・・・・ 43

Annex A

Examples of formats for Policy Management

Annex B

Self-assessment of Policy Management ・・・・・・・・・・・・・・・・・・・・・・・・ 47

References ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 53

2

Preface
This Standard has been established by the Japanese Society for Quality Control (hereafter JSQC) through thedeliberations of the Technical Board, consisting of practitioners and academicians under the administrative
provisions of the JSQC.
This Standard represents work protected under the Copyright Act.
Note that one or several parts of the Standard may conflict with patents, patent applications after the laying open of
the applications, utility model rights or utility model right applications after the laying open of the applications. JSQC
shall not be responsible for confirming whether one or several parts of the Standard infringes upon any of these patents,
patent applications after the laying open of the applications, utility model rights or utility model right applications after
the laying open of the applications.

3

JSQC-Std 33-001(E):2017

Guidelines for Policy Management(Note: this doccument is an official English translation of JSQC-Std 33-001:2016 written in Japanese. )1

Introduction
Contexts of an organization are ever changing: e.g., needs of customers and the society, technologies needed toprovide products and services which satisfy those needs, and values/knowledge/skills of employees. If theorganization wants to continue and develop its business, it is required to well understand these changes well andimplement improvements and innovations in a timely manner. Therefore, it is essential that top management
determines what to aim for based on situations in and around the organization, and that each function (e.g.,division, department, section, or group) implements improvements and innovations needed to achieve it. In theorganization where many people work, however, there are many cases where top management’s thoughts and theobjectives set are not well communicated to frontlines, efforts for improvement and innovation are put off becauseof daily operations, different functions are not well aligned, or information from the frontline are not used for
determination of objectives and plans. When these situations occur, precious efforts do not show the expected
effects. Policy Management is the activity which has been establishedto overcome these difficulties andpromote process improvements and innovations. It is based on the principle that “Quality is achieved through theprocess” (i.e., establishing and following the process in order to economically generate the planned products andservices), which has been developed in the field of Quality Management. If Policy Management is promoted
adequately, efforts for challenge becomes active and generates growth of people and joy in work. Policy
Management is the key to organization management to overcome changes, and furthermore, to tie changes tobusiness development. It greatly affects sustained success of the organization. Therefore, the whole organization
should address themselves strives for strengthening it.
This Standard consists of the fundamentals and processes of Policy Management, guidelines to implement
Policy Management, and the guidelines to organizationally promote Policy Management, and is applicable to any
types of organizations. Policy Management can be applied to any type of business, which include not only
manufacturing and service provision, but also project-based business, business which are implemented byalignment between multiple organizations, and non-profit business. The fundamentals of Policy Management are
discussed in Clause 4. After the process of Policy Management is outlined in Clause 5, how managers of eachfunction should implement Policy Management is discussed in Clause 6, based on the recognition that corepersons who implement Policy Management are managers of each function. Furthermore, how top management or
the persons who are responsible for Policy Management of the whole organization should implement Policy
Management is discussed in Clause 7. The key points for promoting Policy Management organization-wide are
discussed in Clause 8.
1

Remarks from Translation Working Group for this English version:

Usage of the word “Policy Management” as the translation of “Hoshin Kanri (in Japanese)” can misleading
the context of this standard from existing image of the English word. However, as “Policy Management” hadalready accepted widely in TQM, we use this name as the official translation.
4

This Standard should be used with JSQC-Std 32-001 “Guidelines for Daily Management” because Policy
Management can be more effective when implemented with Daily Management.
1. Scope
This Standard provides recommendations by the JSQC with regard to Policy Management as one of the major
activities of Quality Management.
2. Normative references
The following standard will be incorporated into this Standard by reference. Only the version of the stated year
will be incorporated. No revised versions and supplements will be incorporated.
JSQC-Std 00-001: 2011 Terminologies for Quality Control
3. Terms and definitions
The terms and definitions in JSQC-Std 00-001 and the following terms and definitions will be applied in thisStandard. The following terms and definitions include those cited from other standards and reproduced.
3.1 Policy Management
Activities to achieve policies by unity of purpose and priority approach with engagement of all functions andlevels
Note

Policy can include mid-and-long-term policy, annual policy and so on.
(Same as JSQC-Std. 00-001）

3.2 Policy
Overall intentions and direction of an organization, formally expressed by top management, relating toachievement of mission, principles, vision and mid-and-long-term business plan of the organization
Note 1

A policy generally includes the following three elements:
1) priority issues,2) objectives, and3) means.
Some organizations, however, do not include all three and separately define part of them.

Note 2

Direction expressed by managers in an organization based on top management policy may be referred
to as policy.
e.g. division manager’s policy, branch office manager’s policy and plant manager’s policy

Note 3

An extra term may be added to policy in order to make it clear that it is a policy for a specificmanagement field.
e.g. quality policy and environmental policy(Same as JSQC-Std. 00-001）

3.3 Priority issue
What an organization must focus on according to criticality, then address and achieve(Same as JSQC-Std. 00-001）

5

3.4 Objective
Goals sought, and aimed for, in efforts to achieve the purpose(Same as JSQC-Std. 00-001）
3.5 Means
Measure selected to achieve objectives(Same as JIS Q 9023:2003）
3.6 Action plan
Program intended to specify the resources and their operational process necessary to carry out means to achieve
objectives(Same as JSQC-Std. 00-001）
3.7 Control point
Items selected as the rating scale to manage the achievement of the objective（Same as JIS Q 9023:2003）
3.8 Control level
Value or range which the process in the stable or planned condition shows
Note 1The process can be evaluated whether it is in the stable or planned condition by comparing the actual
value with the control level.

Note2

Control level can be expressed as average value or average value ± 3 × standard deviation.
（Same as JSQC-Std. 00-001）

3.9 Function
Individual unit which consists an organization, assigned to a certain mission and role
Note 1

A function typically consists of a manager who supervise it and more than one members.

Note 2A function can be divided into smaller functions. Examples of function include division, department,
section, or group.

3.10 Cross-functional teamTeam formed by collecting all relevant knowledge and skills available in different functions in order to address
an issue that is hardly solved by a function on its own
Note 1

Cross-functional team includes personnel from design, manufacturing and service provision,engineering, quality, sales and other relevant functions. It may also include customer and/or partner.

Note 2

Cross-functional team is a type of improvement team.

4．Fundamentals of Policy Management
4.1 Role of activities that consist Total Quality Management (TQM)
Total Quality Management (TQM) is the activity;- whose aim is the long-term success through the provision of products and services that meet the needs ofcustomers and society as well as the satisfaction of employees,- for maintaining, improving, and innovating processes and systems,- by all functions and levels of the organization,to achieve effective and efficient organizational management in a dynamic business environment.

6Core activities in TQM are the maintenance-plus-enhancement, improvement and innovation of processes andsystems (Fig.1).
- Maintenance-plus-enhancement (management in a narrow sense): activities which set the current or
extended level as a target and ensure that the job does not deviate from the target, and when it deviates fromthe target, the job can be restored quickly and enhanced to achieve higher performance- Improvement: activities which set a higher target than the current level or extended level, and then solve
problems and achieve tasks repeatedly.
- Innovation: drastic changes in processes or systems by the introduction and application of new know-how
from outside of the organization or other functions in the organization, different from themaintenance-plus-enhancement and improvement activities which are based on the enhancement of theknow-how through operations and learnings of processes or systems in the organization.
Maintenance-plus-enhancement and improvement are collectively called “improvement” in a broad sense.
It is important to implement maintenance-plus-enhancement, improvement and innovation in a balanced manner.
Maintenance-plus-enhancement alone cannot maximize the potential of the process and system. It leads to amannerism, reduces the interests in the process and system, and lowers the performance gradually. On the other
hand, improvement and innovation alone cannot sustain achievements. This reduces motivation towards
improvement and innovation, and results in poor performance. It is important that job know-how obtained throughimprovement and innovation becomes inputs to the maintenance-plus-enhancement and utilized, while issues andproblems which are difficult to solve by maintenance-plus-enhancement become inputs to the improvement andinnovation.

Performance (Outcomes/abilityof process/system）

Improvement
Maintenance-plusenhancement
Innovation
Maintenance-plusenhancement
Improvement

Maintenance-plusenhancement

Time

Fig. 1 Maintenance-plus-enhancement, improvement and innovation
An organization is required to systematically address Quality Ensurance, Policy Management, Daily
Management, Small Group Activity, and Education and Training on Quality Management in order to constantly
implement maintenance-plus-enhancement, improvement and innovation with the participation of all the functions
and at all levels of the organization, and link it to the provision of products and services that meet the needs ofcustomers and society as well as the satisfaction of employees (Fig. 2).
7

- Quality Ensurance: Organizational systematic activities to ensure, confirm and demonstrate that the needs ofcustomers and society are met. Although sometimes confused with inspection, claim handling, preparation for
external audits and so on, it has a broader meaning. It includes “Process Ensurance” which establishes theprocess that can produce the targeted product and service effectively and efficiently and allows customers topurchase products and use services with confidence, and “New Product Development Management” whichdevelops new products and services to meet customers’ needs effectively and efficiently. Active practice of all
three systemic activities of maintenance-plus-enhancement, improvement and innovation are essential as afoundation of Quality Ensurance.
- Daily Management: All activities to effectively achieve the objectives with regard to the job that every job
unit of the organization is charged with. To put maintenance-plus-enhancement into practice, it is essential toclarify job roles and the processes to perform them as well as factors affecting job performance and methodsof controlling them, and to establish a system to perform the processes and methods steadily. The organization
should also establish the ways to measure the performance, and when results which contradict the normal
results are obtained, steadily investigate their causes and take actions.
- Policy Management: Activities to achieve policies by the unity of purpose and priority approach withengagement of all functions and levels. To put the improvement and innovation into practice in areas where
only maintenance-plus-enhancement is not sufficient, it is essential to establish strategies and objectives to
respond to changes in the customers’ needs and the business environment and to deploy priority
issues/objectives/means and rotate Plan-Do-Check-Act cycle continuously.
- Small Group Activities (Small Group Improvement Activities): Activities of forming small teams, whichenable close communication for the issues and problems faced in Daily Management and Policy Management,challenging the issues and problems in a speedy manner, and achieving skill enhancement, self-actualization,and development of trust. It includes cross-functional team activities, project team activities in a job unit, andQC circle activities by frontline employees.
- Education and Training on Quality Management: Activities for systematic human resource development sothat members of an organization acquire values, knowledge and skills to effectively and efficiently attainproducts and services that satisfy the needs of customers and the society. It is important as a premise for active
maintenance-plus-enhancement, improvement and innovation, and includes establishing a hierarchy-wise andfield-wise education and training system, preparing opportunities for learning through practice, and setting
targets for required skills and developing them in a planned manner.
Quality Ensurance

Improvement
Innovation

Maintenance‐plus‐
enhancement
Small Group Activities
Daily
Management

Policy Management

Education and Training on Quality Management

Fig. 2 Role of each TQM activity in the implementation ofmaintenance-plus-enhancement, improvement and innovation
8

4.2 Key concepts of Policy Management
4.2.1 Purpose and scope of Policy Management
There are many cases where efforts which exceed the ordinary level, are required to achieve business objectives.
Policy Management is the activity to implement these efforts effectively and efficiently in an organization which
comprises of many people.
Since the business plans, Daily Management and Policy Management are closely interrelated, it is common to
confuse between them. “Business plans” in this Standard means all plans to be implemented by an organization toachieve its purpose, including mid-and-long-term business plan, business strategies to achieve it, annual businessplan, action plans to be implemented by individual functions for daily operations. The organization needs to surely
rotate Plan-Do-Check-Act cycle of its business plans. As for the relations between business plans, Daily
Management and Policy Management, it is recommended to understand that the activities for realizing businessplans are both Daily Management and Policy Management (see Fig. 3).

Business Plan

Achieved by both

Policy Management＋ Daily Management

Fig. 3 Relations between business plan, Daily Management and Policy Management
Once objectives are determined at upper level business plans, the following two activities are required toachieve them:a) Activity to ensure the part which has been attained (maintenance-plus-enhancement), andb) Activity to newly address the part which is insufficient (improvement and innovation).
While Daily Management corresponds to activity a), Policy Management corresponds to activity b), i.e., activity toidentify issues and problems which are not covered by Daily Management, to be addressed, which are not coveredby Daily Management, based on object-oriented thinking and priority approach, and to achieve and solve them(see Fig. 4).
Changes in business environments require improvement and innovation of existing processes. Although changesof process can be expected to produce big effects, they also may increase risks of unexpected failure or trouble. To
suppress such risks, it is essential to consider and take countermeasures sufficiently beforehand under Policy
Management as well as to implement standardization of operations and detection detect and correction ofabnormality and correct abnormalities thoroughly under Daily Management.
Balance between Daily Management and Policy Management generally depends on function, and businesssituations and TQM development stage even in the same function. In many cases, however, Daily Management
covers most of the areas, whereas Policy Management address the areas which cannot be covered by Daily
Management.
Note 1

As for operations implemented by projects like new product development, the part which can be doneby the existing processes (ordinary project management processes) should be addressed not by Policy
9Management but by Daily Management. However, the part which is difficult to be handled by existingprocesses and requires process improvement and innovation (e.g., introduction of new technologies ordesign method, or enhancement of alignment with other functions), such as drastic reduction of
number of design changes, big reduction of development schedule or correspondence to new
regulation, should be addressed by Policy Management.
Note 2

Balanced Scoredsard (BSC) covers whole business plans without distinguishing the above
differences.

Fig. 4

Relations between Daily Management and Policy Managementfrom the viewpoint of “purpose”

From the viewpoint of “procedures,” when insufficient parts are identified in the operations which are
addressed by Daily Management on SDCA (Standardize-Do-Check-Act) cycle, in addition to Daily
management, issues/problems should be picked up and addressed by Policy Management on PDCA
(Plan-Do-Check-Act) cycle. When issues/problems are achieved/solved, the obtained know-how is standardized
and utilized in Daily Management (see Fig. 5).

10

＜Daily Management＞
Analysis anddeploymentof a job

Clarification of
mission androle

Clarification of ajob process＜Problem solving and Task
achieving in Policy Management＞

Understanding thecurrent situation
Goal setting

Theme selection
Standardizationof the processD

S tandardize

A

P

C

A

C

D
Analysis

Determination ofcontrol points andcontrol level

Pursuit andrecurrence preventionof abnormal causes

Detection and sharingof abnormality/
immediate remedy

Fig. 5

Plan formulation

Standardization andingraining of control

Effectconfirmation

Examination andimplementation ofcountermeasures

Relations between Daily Management and Policy Managementfrom the viewpoint of “procedures”

Policy Management is closely related with mid-and-long-term business plan and business strategies to achieve it.
However, Policy Management is not intended to be used to develop the mid-and-long-term business plan andbusiness strategies. The mid-and-long-term business plans and business strategies are mainly decided based onorganization’s business decision lead by top management. Business plans of each term implemented based on the
mid-and-long-term business plan and business strategies, especially parts regarding improvements and innovations,
are managed by Policy Management.
Note

In some literatures, establishment of mid-and-long-term business plan and business strategies is includedin Policy Management. However, in this Standard, management of each term business plans based on
mid-and-long-term business plan and business strategies is focused.

4.2.2

Three streams of Policy Management

Policy Management basically comprises of three streams: deployment, integration and reacting toenvironmental changes (see Fig. 6).
-

Deployment: Objectives of the uppermost ranks in the organization pertaining to vision and mission are
deployed to more specific means based on linkage between objective and means in line with the levels of
the organization. They are basically deployed from the upper level to the lower levels of the organization but
close discussions for alignment between horizontal and vertical levels is needed.

-

Integration: Along with confirmation and evaluation of status of achievement of objectives and status of
implementation of means in each function, issues and problems at the lower level are integrated to the issues
and problems at the upper level based on linkages to the objectives and means, and validity of11

Technical Board Members for Guidelines of Policy Management

Chairman

Mamoru Sumimoto

National Institute of Technology and Evaluation

MemberYukihiro Ando

TQM Consultant

Hidetoshi Kumai

Ricoh Co., Ltd.

Tadashi Saito

Okaya Electric Industries Co., Ltd.

Kazunori Sakai

Advics Co., Ltd.

Seiji Takahashi

GC Co., Ltd.

Tomio Terasawa

Nippon Steel & Sumitomo Metal Corporation

Takeshi Nakajo

Chuo University

Nobuzumi Fujii

Sanden Holdings Corporation

Tetsuya Miyakawa

Takenaka Corporation

Kenji Murakawa

Maeda Corporation

Masaya Yamada

Sekiso Corporation

Kazuyoshi Yamamoto

Sekisui Chemical Co., Ltd.

Drafting Committee Members for Guidelines of Policy Management

Chairman

Kenji Murakawa

Maeda Corporation

MemberYukihiro Ando

TQM Consultant

Hideaki Arai

Komatsu Ltd.

Yozo Ito

Aisin Seiki Co., Ltd.

Hiroyasu Iizuka

Sekisui Chemical Co., Ltd.

Hidetoshi Kumai

Ricoh Co., Ltd.

Takeshi Nakajo

Chuo University

Kenzo Nagahara

Process Management Techno

Yoshito Mitsufuji

Bunka Gakuen University

54Translation Working Group for Guidelines of Daily Management

ChairmanYukihiro Ando

TQM Consultant

MemberMamoru Sumimoto

National Institute of Technology and Evaluation

Takeshi Nakajo

Chuo University

Kenji Murakawa

Maeda Corporation

Shu Yamada

Keio University

Prem K. Motwani

Jawaharlal Nehru University

Translator

Contributors Vern Campbell (Canada)
Kiran Deshmukh (India)
Charles Allen Liedtke (U.S.A.)Jan Gillet (U.K.)
J. Ravikant (India)

55