Welcome to a brief overview about the A3 tool. At the end of this presentation you should have a good general understanding of the A3 tool, its various sections and a pretty good idea of how you too can use this highly effective lean tool at your company. The A3 tool and A3 Thinking comes to us by way of the Toyota Production System. Toyota in turn got their PDCA approach from Walter Shewhart and Edwards Deming, who both originated and popularized the PDCA approach during the first half of the 20th century. This Plan-Do-Check-Act approach is a key foundation of Toyota’s continuous improvement and lean Manufacturing System. PDCA shows up in so many of the lean tools because it is fundamental to the implementation and use of lean. The A3 is one of those PDCA based tools. It is not hard to understand or use, it is very visual, and can be used for problem solving, project management, and continuous improvement efforts in general. Let’s begin with why these are called A3 reports. A3 refers to the paper size, with the closest equivalent in North America being an 11 X 17 paper size. Of course you can use whatever paper size you want to for producing an A3. I actually like using 13 X 19 paper also call A3+ when I print out A3s simply because the larger the paper size the easier it is to see all of the information on the A3. Again, what size you use is up to you. The general purpose of the A3 tool is to document and show, with an emphasis on showing, all on one page the results of the Plan-Do-Check-Act process. Think of this as a way to get what might normally be several pages of information all onto one page so that the project or initiative can be seen at a glance. The A3 template is a guideline for addressing the root causes of a problem or initiative in the workplace so that nothing gets missed and the PDCA process is pursued in a consistent and systematic way. As you will see in the rest of this video the A3 walks you through all of the key PDCA steps and helps to make sure that the team behind the A3 is not taking any shortcuts to their goal. You might ask at this point whether the A3 tool is simply another fad tool or whether team members within a company – and in the real world – actually accept its use. I can say that my experience of implementing this tool at the last five companies that I’ve worked at was generally positive. The teams that were taught to use the A3 tool were consistently accepting of the tool. Interestingly, senior management at each of the companies found the tool very engaging. I think this was in part due to managers being able to quickly understand how things were progressing with an A3 project without having to sit through a long team presentation or having to study the details tied into the project or initiative. As an indication of how much interest there is, I have been asked several times to train senior management on the use and theory behind the A3 approach after presenting team A3 projects to senior staff. Plus, it isn’t just senior management that takes an interest in the A3s; project team members find the tool straight-forward to use and easy to comprehend. Customers who may see the A3s during tours or audits at your company will form a great opinion of your problem solving organization. Suppliers will develop a better appreciation of your company’s focus on facts to resolve issues. I can’t tell you how many customer audits have gotten top marks due to having active A3s always at hand to share with the auditors. Lets go over the thoughts behind A3s. These can be summarized as seven elements. First, it is really a thinking process, thus, A3 Thinking, which is logical and proceeds through the same steps in a systematic way. Second, the information on the A3 is presented in a factual, nonjudgmental way. The information is meant to reveal the facts on the ground as they are discovered by the team. There are no hidden agendas here. Third, the A3 provides a means of sharing what the project’s results were, as well as the means used to get those results; those means being a root cause analysis, individual actions taken on by the team, etc. Forth, only the information deemed essential is shared using the A3; actually, there isn’t enough room to do otherwise. The other main point here is the information is put into a visual format whenever possible – graphs work better than grids with numbers. Fifth, the A3 shows how the team’s efforts are aligned with the company’s overall strategy and local objectives. It becomes clear that the specific A3 is not some fantasy project. Sixth, the A3 allows for a consistent approach that can be adapted across the organization. And finally, the A3 is a structured approach to problem solving; this is contrasted with whoever has the biggest title using their opinion to surface the root cause of the problem. Here we see a blank A3 template that is commonly used for problem solving. The left side of the A3 corresponds to the first step in the Plan-Do-Check-Act process; the right side covers the other three steps: Do, Check and Act. The flow of the A3 follows the PDCA process steps. We start with the problem, or initiative’s Background; we go from there to the Current Condition, the Goal, and then the Root Cause Analysis. From here we jump to the right side with the Countermeasures, then the Effect Confirmation, and finally the Follow-up Actions. You can see that the whole left side of the A3 corresponds to the Plan portion of the PDCA approach. As is apparent, planning gets the most, fully 50%, of the attention. The right hand side of the A3 captures the action steps. The Theme section, or the A3’s title, gives a name to the project. Nothing complicated here; the title should describe clearly what we are doing. The next section is the Background section. This can be a short paragraph, some bullet points referring to budget objectives or site objectives or even a small graph showing what has been the general trend for the issue. There are two things to keep in mind here: Number one – the Background should be easily understood by company employees who will be reading it; Number two – it is always a good idea to give some thought to tying the background information to the company’s current goals or initiatives. This is the gateway to explaining why the A3 is here in the first place. The Current Condition, or problem statement, is important. Here we want to be very clear about what we are going to achieve. For example, getting new products to market is currently taking 12 to 18 months from concept to sitting on a retailer’s shelf; our competition is doing the same thing in 10 months. We are losing market share because we are not as an nimble as our competition. Try to use visual means to help illustrate this current condition, as opposed to text, lists, etc. The Goal section is simply stating what the goal is going to be. Perhaps in the previous new product introduction example our goal might be to go from concept to the retailer’s shelf in 9 months, and the timeline for accomplishing this by the end of the calendar year. We might use a key performance indicator, like new product introduction cycle time, to measure our progress, and possibly also measure quarterly changes in market share as another progress indicator. The Root Cause Analysis section is where the team is engaged to brainstorm what are the drivers, or root causes, that need to be tackled in order to address the A3’s problem. The 5-Whys is a method that is commonly used here. I often use a fishbone, or Ishikawa, diagram approach with the team to gather all of their input associated with what may be causing the problem in the first place. The tool used is not so important here. What is important is to brainstorm with the team to surface things that they feel underlie the problem. The Countermeasure section usually comes directly out of the Root Cause Analysis section. To use another example: if the team determined that one of the root causes of supplier poor delivery performance was a lack of clearly spelled out performance expectations on the company’s purchase orders, then one of the countermeasures might be to educate the suppliers by establishing quarterly business reviews with them, or another action might be to draft new boiler plate terms and conditions that will spell out the company’s delivery requirements on every purchase order that is issued. The bottom line here is the Countermeasure section is a list of action items that need to be completed in order to meet our A3 objective. The Effect Confirmation section is the area where the team is holding itself accountable. This accountability is accomplished by measuring how we are doing in meeting our goal. Effect Confirmation helps to answer the question of whether the actions that we are taking are having the desired effect. Are they “moving the needle?” For instance, if this A3 was focused on reducing the company’s inventory the Effect Confirmation section might show a graph of the dollar value of the company’s inventory on a monthly basis along with another graph showing the monthly inventory turns KPI. The last section is the Follow-up Actions section. You can think of this section as the one where we implement what we have learned throughout the A3 process steps, with the objective being sustaining the improvements achieved – that is, preventing backsliding. This is also where we can capture things that can be done to continue the improvement cycle. Employee education and training might be one follow-up action that appears here if it was determined that new employees being brought on board did not possess the knowledge necessary to be effective in supporting the A3’s overall goal. The A3 template fosters Plan-Do-Check-Act thinking, while at the same time keeping the team focused on solving problems that are important to the company. The constant updating of the A3, along with the very visible Effect Confirmation section, means that progress toward the goal is never in question. Of course lack of progress is equally visible and would require renewed efforts. I will close with the observation that management consistently applauds the use of this A3 approach because it is visual, easy to understand, and is constantly updated; all of which makes a manager’s life much easier. If you wish to dig deeper into A3 Thinking and explore the many ways that the A3 template can be utilized here are few books that I can recommend: First is “Understanding A3 Thinking” by Durwood Sobek and Art Smalley. I would consider this to be the definitive guide to the A3 Thinking approach, and I have assigned this book numerous times at companies that I have worked at. There is also “Managing to Learn” by John Shook. Mr. Shook dives deeply into using the A3 approach for not just problem solving, but also for management development. Finally, there is “A3 Problem Solving” by Jamie Flinchbaugh. Mr. Flinchbaugh’s book is also a good general introduction to the application of lean thinking through the use of A3s. I hope that this was a relatively quick and painless introduction to A3 Thinking and the A3 tool. If you would like to get started with your own A3 you can download the template for free from my Do-It-Yourself lean web site at: www.DIYLean.com Best of luck on your A3 Thinking journey!