The A3 REPORT

Developing an Organization of Thinking

Problem Solvers
Topic Outline
Introduction
The A3 Thinking Process
Toyotas SECRET:
The A3 REPORT
I. Background
II. Current Conditions
III. Goals/ Targets
IV. Cause Analysis


V. Proposed Countermeasures


VI. Plan
VII. Follow-up

New domestic plant expansion has massive technical
requirements that must be translated from Japanese
documents to English. The size and complexity of the
projects are creating errors & delays.
I. Background

Cost overruns, delays and errors due to:
Sheer volume of documents
Multiple & varied vendors (pricing, quality, ease)
Involvement of various departments & working
style.
II. Current Conditions

Simplify and standardize the process
Reduce costs by 10%
III. Goals/ Targets

Challenge of translating from Japanese to English
Multiple varied vendors create a complex, non-
standard process
Overall improvement can be defined by reduction
in cost overruns
IV. Cause Analysis

Simplify and improve process performance by
choosing one vendor based on competitive bid
process.
V. Proposed Countermeasures

Evaluate current vendor.
Identify new vendor candidates
Develop bid package and distribute.
VI. Plan

Monitor cost to proposal
Review performance at the end of one year.
Put contract up for bid again if performance fails
VII. Follow-up
Create Robust Process for Translating Documents
Goals
1. Get decisions made.
2. Distribute authority to the level needed for good decision
3. Align people and teams on common goals and learn for
constant improvement.
4. Solve the problem at hand
5. Make the process of problem solving transparent
6. Make the process of problem solving teachable in a
manner that creates an organization full of thinking,
learning problem solvers
V. Proposed Countermeasures
VII. Follow-up
Support Launch Objectives with Accurate, Timely Document Translation
II. Current Conditions

Quality: 0 Defect at Launch
Delivery: 100% on-time
- Level weekly volume (Heijunka)
- Consistent short lead time with
predictable delivery
Cost: 10% decrease Rework down; overtime down
III. Goals/ Targets
I. Background
IV. Cause Analysis
VI. Plan
II. Current Conditions
I. Background

New domestic plant expansion has massive technical
requirements that must be translated from Japanese
documents to English. The size and complexity of the
projects are creating errors & delays.
I. Background

Cost overruns, delays and errors due to:
Sheer volume of documents
Multiple & varied vendors (pricing, quality, ease)
Involvement of various departments & working
style.
II. Current Conditions
The A3 can be used as a mechanism
to prevent from jumping ahead to a
solution. We can simply be an
investigator and let the needs and facts
of the situation speak for themselves.
Rather than the answer, we must
simply state succinctly, What is the
Problem?
II. Current Conditions
I. Background
An A3 tells a complete story, with a
beginning, a middle and an end.
Every A3 is no more than a visual
manifestation of a problem-solving
thought process involving continual
dialogue between the owner of an
issue and others in an organization.
Current conditions are always
based on facts derived from the
gemba the place where the work
takes place. Real facts about the
real work are derived from careful
investigation on the part of the
author.
II. Current Conditions
I. Background
A3s employ visual methods to share
information and thinking. This
helps condense key facts into
meaningful visual shorthand
storytelling tools that help pack a
great deal of data into an elegant
presentation
II. Current Conditions
Defining the problem simply and
powerfully represents the most
important part of any A3.
Effective A3s persuade others by
capturing the right story with facts (not
abstractions) and communicating the
meaning effectively.

Quality: 0 Defect at Launch
Delivery: 100% on-time
- Level weekly volume (Heijunka)
- Consistent short lead time with
predictable delivery
Cost: 10% decrease Rework down; overtime down
III. Goals/ Targets

Cost overruns, delays and errors due to:
Sheer volume of documents
Multiple & varied vendors (pricing, quality, ease)
Involvement of various departments & working
style.
II. Current Conditions

Simplify and standardize the process
Reduce costs by 10%
III. Goals/ Targets
A problem is something that presents
itself as a barrier to the organization
achieving its goal. Articulating this
problem requires the author to identify
the gap between current state and the
desired performance at any given time.
The root cause or reason the gap exists is
identified through examining the way the
work is currently being performed and
asking why the problem occurs. If the
root cause is clearly defined, effective
countermeasures can be easily developed.
IV. Cause Analysis

Challenge of translating from Japanese to English
Multiple varied vendors create a complex, non-
standard process
Overall improvement can be defined by reduction
in cost overruns
IV. Cause Analysis
V. Proposed Countermeasure

Simplify and improve process
performance by choosing one vendor
based on competitive bid process.
V. Proposed Countermeasures
KS
8/8/08
DP
8/7/08
A3 proposals typically use the word
countermeasure rather than
solution. Countermeasure refers to
the way that proposed actions are
directly addressed to existing conditions.
More importantly, the wording
recognizes that even apparent
solutions inevitably create new
problems. Once a countermeasure is in
place, it will create a new situation, with
its own set of problems that will require
their countermeasures.
V. Proposed Countermeasure

Simplify and improve process
performance by choosing one vendor
based on competitive bid process.
V. Proposed Countermeasures
KS
8/8/08
DP
8/7/08
The A3s process explores a set of
potential countermeasures rather
than just one solution. By
examining a range of potential
choices, individuals uncover a
broader and more meaningful
basis for dialogue, analysis and
agreement.
V. Proposed Countermeasure

Simplify and improve process
performance by choosing one vendor
based on competitive bid process.
V. Proposed Countermeasures
KS
8/8/08
DP
8/7/08
Note that effective
countermeasures can be produced
only by speaking with everyone
who touches the work. And so
producing a viable plan requires
meaningful input from everyone.
V. Proposed Countermeasure

Simplify and improve process
performance by choosing one vendor
based on competitive bid process.
V. Proposed Countermeasures
KS
8/8/08
DP
8/7/08
All A3s include the initials or
names of the author and manager.
The Value of the A3 process to the
manager cannot be overemphasized.
The manager now has a tool to
mentor and establish alignment.
The individual now has the means to
propose answers to problems that he/
she owns, to create authorization to
act and to manufacture the
authorization needed to see the
proposal carried out.
VI. Plan
KS
8/8/08
DP
8/7/08
Producing a realistic plan through
the A3 process shifts the basis of
decision making from formal
authority to ownership of the
problem itself. By developing a
mastery of the issues at hand and
involving the players in the process,
the A3 author earns the authority to
propose and move forward an
effective plan.

Evaluate current vendor.
Identify new vendor candidates
Develop bid package and distribute.
VI. Plan
VI. Plan
Every action plan includes a schedule for hansei, or reflection to identify problems,
develop new countermeasures and communicate improvements to the rest of the
organization. A3s are part of a learning cycle of continuous improvement which is
why a key Toyota saying is,

No problem is a problem.
Midterm review
Prelaunch review
Ensure ongoing collaboration
Monitor system weekly. All
metrics', especially quality
and delivery

Monitor cost to proposal
Review performance at the end of one year.
Put contract up for bid again if performance
fails
VII. Follow-up
V. Proposed Countermeasures
VII. Follow-up
Support Launch Objectives with Accurate, Timely Document Translation
II. Current Conditions

Quality: 0 Defect at Launch
Delivery: 100% on-time
- Level weekly volume (Heijunka)
- Consistent short lead time with
predictable delivery
Cost: 10% decrease Rework down; overtime down
III. Goals/ Targets
I. Background
IV. Cause Analysis
VI. Plan