A3 Thinking

© Operational Excellence Consulting. All rights reserved.
Thinking
A disciplined way of solving problems

© Operational Excellence Consulting. All rights reserved. 4
Contents
1. Introduction and Key Concepts of A3 Report
2. A3 Problem Solving Report: Step-by-step
3. Form & Style
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/a3-thinking-1524

Introduction to A3 Thinking
• A3 thinking is as much about developing good problem-
solvers as it is about effectively solving problems.
• Plan-Do-Check-Act (PDCA) is the basic philosophy
behind A3 thinking.
• There are seven elements of A3 thinking – the kind of
thinking that the A3 report tool encourages – and the A3
process that add some meat to the PDCA skeleton,
making it more actionable and useful.This document is a partial preview. Full document download can be found on Flevy:

What is an A3 Report?
• An A3 Report is a process used to
document and report the results
from the PDCA cycle.
• It is different from other types of
report in the way that all information
is disclosed on an A3 sheet
(11”x17” paper) developed and
popularized by Toyota.
• When applied to problem solving,
the A3 report indicates the steps to
use when solving problems.

Three Types of A3 Report
1. Theme
2. Background
3. Current Condition
4. Results
5. Remaining Issues/
Action Items
1. Theme
2. Background
3. Current Condition
4. Analysis/Evaluation of
Alternatives
5. Plan Details
6. Unresolved Issues
(optional)
7. Implementation
Schedule
1. Theme
2. Background
3. Current Condition &
Problem Statement
4. Goal Statement
5. Root Cause Analysis
6. Countermeasures
7. Effect Confirmation
8. Follow Up Actions
Problem Solving Proposal Status Update
The report can be easily developed by following the steps outlined below.

Typical Flow of a Proposal A3 Report
Report Theme:
Current Condition
Analysis / Evaluation
of Alternatives
Plan Details
Unresolved Issues
(optional)
Implementation
Schedule
Proposal
Background

When to Use a 50-Page Report
• When you don’t know what you’re talking about
• When you’re trying to hide the truth
• When you want to impress your professor
• When you own Xerox stock
• When you wish to create a clerical staff empire
• When you need to fill up your time
• When you get paid by the word
• To put your audience to sleep

Example 1: Problem Solving A3 Report
Source: Lean Enterprise Institute
ILLUSTRATIVE

Key Points for A3 Report
• Plan time to grasp the entire situation.
• Decide what kind of story you need to tell.
• No exact or specific look or format.
• Relate the story to company goals and values.
• Make your story flow in a logical sequence.
• Save words – use graphs and visuals.
• Fits on one page – use baby A3s for complicated stories
• Use bullet points – be specific, make very word count.

Problem Solving A3 Report Format
COUNTERMEASURES
FOLLOW UP
CHECK RESULTS
ANALYSIS
GOAL
CURRENT STATE
Detailed description of the current situation
(e.g. process flow, trend chart, Pareto analysis,
gap identification and problem statement).
Specific goal to address the gap or target state
from the current state.
Depiction of analytical techniques to uncover
the root causes of the problem or factors that
affect the problem in the current state.
Alternatively it may be a description of a
proposed target state to achieve.
A summary of who will do what by when in
order to resolve the problem situation or
achieve the target date.
Quantitative comparison of actual results
versus your goal.
Summary of follow up action items (e.g.
lessons learned, communication to other
parties, training, standardization, or other
areas).
BACKGROUND
Relevant historical data and information.
THEME Concise statement of what this A3 report is about.1
2
3
4
5 8
7
6

Step 1: Theme
• Examples of themes in services industries or
administrative functions:
Reducing errors in accounts payable
Improving employee retention rate
Reducing patient admissions time
Improving server uptime
Improving the quality of employee suggestions
• Themes can be extracted from your KPIs - Review
existing KPIs to look for poorly performing processes,
e.g. high rejects or scrap, poor on-time delivery, high
customer complaints, etc.

Step 2: Background
• Document important background information that is
essential for understanding the extent and importance
of the problem.
• You must be aware of your audience, including their
background and information needs.
• If the background is not clear, the audience may not
understand what the report is about, resulting in wasted
time explaining what the presentation or report is trying
to accomplish.

Step 2: Background – Key Points
• Make the overall context of the situation as clear and as
visual as possible.
• Identify the target audience and write accordingly.
• Provide the necessary information that the audience
needs to know before going forward.
• Explain how this topic aligns with company’s goals.
• Include any other information, such as historical data,
dates, or names that might help the audience to
understand the importance of the problem.

Step 3: Current Condition
• This section is perhaps the most important in the A3
report. The objective is to frame the current condition in
a simple way for the reader or audience to understand.
• In it, the author draws a visual representation that
depicts the critical elements of the system or process
that produced the problem.
• This should involve the use of charts, graphs, tables or
other techniques to depict the current condition while
avoiding straight text summaries or bulleted points.

Step 3: Current Condition – Example of storm bursts to
highlight the problem areas
ILLUSTRATIVE
Customer
A
Market ForecastMonthly forecast
Supplier 2Supplier 1
Receiving
I
200
Production
Control
Weekly schedule
C/T = 2 min
C/O = 2 hr
Batch = 50
Uptime = 74%
Milling
2 People
I
1000
C/T = 2 min
C/O = 2 hr
Batch = 50
Uptime = 74%
Welding
5 People
I
4 min
C/T = 2 min
C/O = 2 hr
Batch = 50
Uptime = 74%
Painting
3 People
I
1500
C/T = 2 min
C/O = 2 hr
Batch = 50
Uptime = 74%
Inspection
1 People
Weekly
Production Supervisor
Shipping
(13 days)
I
1700
Customer
B
7 min 2 min2 min
5 days 10 days 15 days 8 days 13 days
Total Lead Time = 51 days
Value added time = 15 min
Daily
Kaizen
Kaizen
Note: C/T = Cycle Time; C/O = Changeover

Step 3: Current Condition
• The diagram quickly and effectively communicates the
core issues to others. It should help present “what is”
the problem, and if possible “what is not” the problem.
• By diagramming the system, problem-solving efforts are
focused on the system rather than on the people. This
should result in a more objective approach with less
defensive posturing.

Step 3: Current Condition & Problem
Statement - Review Questions
• Is the current condition clear and logically depicted in a
visual manner?
• How could the current condition be made clearer for the
audience?
• Is the current condition depiction framing a problem or
situation to be resolved?
• What is the actual problem in the current condition?This document is a partial preview. Full document download can be found on Flevy:

Step 4: Goal Statement
• The goal statement of the A3 report depends upon the
type of problem and type of A3 report.
• For problem-solving A3s, the goal statement should
address at least two fundamental issues:
How will we know that the project is successful at the end of
implementation, and
What standard or basis for comparison will be used.
• Simpler situations may only have one metric to verify
success. More complex cases where trade-offs are
involved (e.g. weight, cost, lead-time and complexity)
might involve several metrics.

Examples of Goal Statement
Step 4: Goal Statement
1. To reduce the mean delivery lead time from 14 days to
7 days by December 2014.
2. To improve the quality of product A from 95% to 98%
by December 2014.
3. To set up an infrastructure to deliver the full range of
our restaurant food menu to the eastern region of
Tokyo by June 2015.
ILLUSTRATIVE

Step 4: Goal Statement - Review Questions
• Is there a clear goal or target?
• What, specifically, is to be accomplished?
• How will this goal be measured or evaluated?
• What will improve, by how much, and when?

“When we fail to
grasp the systemic
source of problems,
we are left to ‘push
on’ symptoms
rather than
eliminate
underlying causes.
- Peter Senge
The Fifth Discipline

Why? Answer
1
Why is there oil on the
floor?
Oil leaks from the cylinder rod
when activated.
2 Why did oil leak? The O-ring was cut.
3 Why was the O-ring cut? The rod was flawed.
4 Why was the rod flawed? Dirt in the oil abrades the rod.
5 Why did dirt get in the oil?
There are holes and gaps on the
upper plate of the tank.
Example of 5 Whys
ILLUSTRATIVE
Root cause of the problem

Step 5: Root Cause Analysis
ILLUSTRATIVE
Root Cause Analysis
72%
6%
80
40
20
Undersized
shaft
%
70
30
10
50
60
Pareto by Defect Type
Main
problem!
2%
20%
Grinder
burn
Others
Scratches
&dents
Undersized
Shaft
defect
Manual offsets
Grinding wheel setup
Contamination
Man
Grinding wheel
Clamp & locator
Spindle
Machine
Material
Dimensions
Hardness
Surface finish
Method
Grinding conditions
Coolant concentration
Wheel dressing

Step 6:
Countermeasures

Step 6: Countermeasures
• Countermeasures are described in terms of “what” (what
is the cause of the problem), “how” (how it was
investigated or implemented) “who” (who was
responsible for this countermeasure), “when” (when was
it implemented), and “where” (where was it conducted).
• “Why” the countermeasure is being conducted should
also be clear, if only from context, as well as a plan for
how to check and see if the intended effect is achieved
or not.
• If necessary, insert a diagram (e.g. future state map) that
illustrates how the proposed process or system will work.

Step 6: Countermeasures
Suspected Cause Action Item Responsible Due Finding
1. Dirt and contamination Daily 5S & PM tasks Tony (T/L) 11/2 Conducting daily. No issues.
2. Grinding wheel setup check Grinding wheel setup check Tony (T/L) 11/4 Checked out okay.
3. Manual offset function Check offset function Tony (T/L) 11/4 Checked out okay.
4. Spindle bearing loose Spindle bearing check Ed (Maint) 11/5 Loose bearing cap. Tightened.
5. Clamp & locator damage Clamp & locator check Ed (Maint) 11/5 Nothing abnormal.
6. Grinding wheel balance Grinding wheel check Tony (T/L) 11/5 Nothing abnormal.
7. Incoming part dimensions Measure part dimensions Janet (QC) 11/9 Within spec.
8. Poor material hardness Measure hardness Janet (QC) 11/9 Within spec.
9. Abnormal surface finish check Surface finish check Janet (QC) 11/9 Within spec.
10. Abnormal grinding conditions Grinding conditions check Mary (Eng) 11/13 Nothing abnormal.
11. Coolant concentration Measure concentration John (Maint) 11/13 Contaminated tanks. Replaced.
12. Wheel dressing check Check conditions Mar (Eng) 11/13 Nothing abnormal.
ILLUSTRATIVE
Countermeasures

Step 7: Effect
Confirmation

Step 7: Effect Confirmation
• Use measurements (e.g. data analysis or SPC) to
identify the real improvements based on the standard.
• Compare Pareto charts of “before” and “after”
improvement (see example on next slide).
• Are results as expected? If not, re-loop back to earlier
steps for further improvement.
• Measure related processes to ensure they are not
adversely affected.

Step 7: Effect Confirmation – Key Points
• Verify the effectiveness of the action items in total.
• Use the same standard as the one listed in the goal
section.
• Determine ways to verify the effectiveness of the items,
one by one if possible.
• Plan in advance for the data that will need to be
collected.
• Identify who will help collect the data and how frequently.

Step 8 : Follow Up
• Standardize the countermeasures.
• Update the QMS / SOP / Standard Work.
• Share success story. Determine best practices and
other learning points.
• If project was unsuccessful, address the causes to
prevent them from recurring. Loop back to previous
stages to correct and repeat actions.
• Document the success story.

Step 8 : Follow Up – Key Points
• Look for similar processes in the department that can
benefit from these countermeasures.
• Ask whether there are any similar processes outside of
the department or plant that should know this
information.
• Consider whether there are any planning departments
that should be made aware of the change for the
purpose of improving future processes.This document is a partial preview. Full document download can be found on Flevy:

Example of a
Proposal A3
Report

Current Condition
ILLUSTRATIVE
Current Condition
Manufacturing Defects by Cause
100% of manufacturing defects that were examined in this survey are preventable
Interviews of 20 shop supervisor and lead personnel indicated minimal expertise in problem solving
- 50% have had no formal training in problem solving at any point of time in their career
- 40% have only introductory training on the topic at some point in their career
- 10% have had some more advanced training in their career and could provide examples
40%
Defect Categories
25
20
15
10
Other
Scratches
Nolabel
Misalignment
Incorrectassembly
70%
30%
Manufacturing
related
Engineering
related
2006 Defects Breakdown
Proposal A3

Recommendation
ILLUSTRATIVE
Recommendation
Use internal resources to conduct a formal problem-solving program over the next several months.
Proposal A3

Review Questions for Proposal A3 Reports
• Background
Is there a clear theme for the report that reflects the contents?
Is the topic relevant to the organization’s objectives?
Is there any other reason for working on this topic (learning
purposes)?
• Current Condition
What information does the audience need to find my proposal
compelling?
Is the current condition clear and logically depicted in a visual
manner?
How could the current condition me made clearer for the
audience?

Review Questions for Proposal A3 Reports
• Overall
What is the audience? Does this topic give them all the
information necessary to make a good decision?
What personnel are affected by this proposal? Have they all been
consulted?
Is the report clean, neat, and organized with good flow?
Is it readable and aesthetically pleasing?
Would I approve this proposal based only on the information
contained in it?This document is a partial preview. Full document download can be found on Flevy:

Background
ILLUSTRATIVE
Background
Implementing purchasing credit cards for purchases <$500 is expected to bring significant time
and cost savings
Purchases <$500 account for 47% of all purchases, but only 5% of total dollar outlay
A new procedure and controls were needed
Status Review A3

Remaining Issues/Future Actions
ILLUSTRATIVE
Remaining Issues/Future Actions
Activity Status Responsibility
Revise procedures Completed Purchasing
User and managerial review of revised
procedures
In-progress (complete by 4/21) Purchasing
Review and revise training In-progress (complete by 4/30) Training dept.
Company-wide training To start 5/1 Purchasing
Full company implementation To start 6/2 Purchasing
Status Review A3

Review Questions for Project Status Review A3 Reports
• Current Condition (con’t)
Is the current condition quantified in some manner or is it too
qualitative?
• Results
What results have been obtained in the project so far?
Are the results clearly indicated and quantified in some manner?
Has improvement actually taken place?
Are these the right metrics to show that improvement has been
made?
What else might explain the change in the metrics?
Have any areas been adversely affected by the change(s)?
For areas where the improvement is not as great as expected, is
it clear why or why not?

Form & Style
• Do not become slave to a format, but use the format as
a standard for starting your own A3 reports.
• Pay close attention to scope control, especially when
first starting out. Start on something relatively easy and
within your realm of control for the first attempt.
• Rely upon handwritten images, especially at first, for the
current condition and other sections of the A3 where
images or charts work better than pictures or texts. Once
your skill has improved or the content finalized, migrate
over to electronic formats.

Adapt the A3 Report to your Target Audience
• Although the A3 report is commonly presented using an
A3 sheet, care should be exercised if it is to be
presented to an audience (e.g. senior management in a
boardroom) as a PowerPoint presentation. This is
because depending on the level of detail, the
data/information or charts may be too small or too
cramped for the audience to read clearly.
• In such cases, it is recommended that the report first be
simplified further, and then if necessary, split into a few
slides to make it easier for the target audience to read.

A3 Reviews at Toyota
• If an individual’s concern could not be address, as a
courtesy, the author meets with that person to explain
why
• Each A3 is approved by an appropriate authority – this is
a process check and represents a tremendous
mentoring opportunity, because the A3 report makes the
person problem-solving approach and logic visible

Summary
• A3 Report is a powerful communication and visual tool
that highlights vital points.
• There are three types of A3 reporting – ‘problem solving’,
‘proposal’ and ‘status update’.
• Whether to use an A3 sheet or a PowerPoint
presentation to convey the story depends on your target
audience.
• The reporting process is powerful enough to cover any
concerns you may have.

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Operational Excellence
Consulting

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