A Key Link for Lean Transformation – “A3” The A3 Process for Problem-solving, Proposals,

1. A Key Link for Lean Transformation – “A3” The A3 Process for Problem-solving, Proposals, and Lean Thinking

2. A Format for Planning and Proposing – “A3” • “A3” is just a paper size (international 11 x 17) • A3 planning began in the 60s as the Quality Circle problem-solving format. • At Toyota, it evolved to become the standard format for problem-solving, proposals, plans, and status reviews. • What is important is not the format, but the process and thinking behind it.

3. A3 Process • An A3 lays out an entire plan, large or small, on one sheet of paper. • It should be visual and extremely concise. • It should tell a story, laid out from upper left-hand side to lower right, which anyone can understand.

4. A3 Process • As a standard process, it becomes easier for you • to persuade others, and • to understand others. • It fosters dialogue within the organization. • It develops thinking problem-solvers. • It encourages front-line initiative.

5. A3 Process • It encourages PDCA. • It forces “5S for information.” • It clarifies the link between true problems and countermeasures. • It serves as an organizational learning tool. • It leads to effective countermeasures and solutions based on facts and data.

6. A3 Process In summary, the purpose of the A3 process is to: • structure effective and efficient dialogue to • foster understanding followed by agreement.

7. Acme Stamping Steering Bracket Value Stream Improvement 12/6/01 Shook/Verble Production Control Supplier Customer Daily Order Production Control MRP Supplier Customer S Pacemaker Cell Daily Order Weekly Schedule 4.5 days Lead Time I I I I I I S w w A A 23.6 days Lead Time • Countermeasures : • Create continuous flow in through Weld and Assembly • Establish Takt Time: Base the pace of work through Weld and Assembly on customer demand • Set new Weld-assembly cell as pacemaker for entire value stream • Establish EPEX build schedule for stamping based on actual use of pacemaker cell and pull steel coils from supplier based on actual usage by Stamping. • Reduce Changeover time in Stamping and Weld • Improve uptime in Weld • Establish material handling routes for frequent withdrawal and delivery • Establish new production instruction system with Leveling Box • Background • Product: stamped-steel steering brackets (left- and right-hand drive). • 18,400 brackets/month; daily shipments in pallets of 10 trays of 20 brackets. • Customer State Street Assembly is requesting price cuts and tightening delivery requirements. • Current Situation • Production Lead time:23.6 days • Processing time: only 188 seconds. • Large inventories of material between each process. • Long changeover times; downtime in welding. Future State Map Current State Map DELIVERABLES 1 2 3 4 5 6 7 8 9 10 11 12 RESPONSIBLE REVIEW Assy Spvr Mt’l Hndlg Spvr Mt’l Hndlg Spvr Prod Ctrl Spvr Plt Mgr VSMgr Plt Mgr, MH Mgr VSMgr Plt Mgr MH Mgr VSMgr PC Mgr Plt Mgr VSMgr CCF at Pacemaker Kaizen each c/t to <TT Weld uptime to 100% c/o reduction to <TT Pull at Pacemaker FG = 2 days KB Mt’l handling Leveling Box Pull from Stamping WIP = 1 day c/o < 10 min Pull from Supplier Info flow Daily delivery RM = 1.5 days • Analysis • Each process operates as isolated islands, disconnected from customer. • Push system; material builds up between each process. • Each process builds according to its own operating constraints (changeover, downtime, etc. • Plans based on 90 and 30-day forecasts from customer. Weekly schedule for each department. System is frequently overidden to make delivery. • Goals:Improve profitability while meeting tougher customer demands: • Reduce lead time – 23.6 days to <5 days • Reduce inventories: Stamping – <2 days • Welding – Eliminate • Shipping – <2 days Follow-up Confirm reviews and involvement of related departments: Production Control and Material Handling, Purchasing, Maintenance, Human Resources, Finance.

8. Creating an A3 Imagine clearly the story of the proposal you want to make, the improvement you want to initiate or the problem you want to solve.

9. A3 Outline • Outline items (boxes): • Theme • Background • Target • Action Plan • Investigation of facts, Current State • Analysis

10. A3 Outline • Outline items (con’t): • Countermeasures • Verification of countermeasures • Review/Critique • Possible next steps, further action Create between five and seven or so boxes, combining the appropriate above items to make your story as simple and clear as possible.

11. A3 Outline • Each item (box) should contain a graph, chart, or sketch. • Use words only when a graph, chart, or sketch cannot show the details of the contents, or it is impossible to explain the contents with a graph, chart, or sketch.

12. Which Tool Could Be Used … BACKGROUND Graph Sketch INVESTIGATION/CURRENT STATE Tally-sheet Histogram Pareto Diagram Graph Scatter Diagram Sketch Control Chart CS Map TARGET, OUTCOMES Chart Sketch ACTION PLAN Gantt Chart ANALYSIS Cause-and-Effect Fishbone Control Chart Relation Diagram Histogram Tree Diagram Graph Pareto Diagram Sketch Scatter Diagram COUNTERMEASURES Graph Chart Sketch FS Map VERIFICATION OF Pareto Diagram Graph COUNTERMEASURES Histogram Sketch Scatter Diagram Chart PREVENTIONS Sketch Chart REVIEW/CRITIQUE

13. Title: What you are talking about. Background Recommendations Why you are talking about it. What is your proposed countermeasure(s)? Current Situation Where do we stand? Where we need to be? Where we want to be? Plan What activities will be required for implementation and who will be responsible for what and when? Goal What is the specific change you want to accomplish now? Analysis -What is (are) the root cause(s) of the problem? -What requirements, constraints and alternatives need to be considered? Follow - up How we will know if the actions have the impact needed? What remaining issues can be anticipated? Verble/Shook

14. Proposal to Initiate A-3 Proposal Process 1. Objective:To establish a proposal and report process that supports PDCA using a one-page report format that captures current conditions accurately and concisely, and that facilitates the exercise of good judgment and timely and effective action. • 4. Basic Concept: • Simple: many documents to one page • Concise: easy to file • Complete: select important information • Better to use: graph rather than figures, sketch rather than sentences to equal a simple, concise, complete report • 2. Background: • Too much information (often from computers) sometimes results in missing the point. • Decisions are delayed due to time to read long reports. • Long reports obstruct clear communication. 5. Structure of an A-3 PLAN Background Target Action plan [Gantt Chart] DO (Try) Investigation & analysis: What is the problem? Show with graph, chart, or sketch. Countermeasures: with graph, chart, or sketch – State clearly when/where/who/what/why/ how CHECK (Reflect) Verification [target vs. result with graph, chart] ACTION (Adjust) Critique, preventions, further action 3. A3 Vs. Long Reports Legend: A: very good B: good C: bad ITEMS MANY ONE PAGES SHEET Easily, quickly shows whole story C A Makes deep Impression B A Flow of logic is clear, easy to see C A Captures the facts B A Clarifies thinking for creator C A Captures learning B A Easy to communicate to many B A Enables quick, effective decisions C A Easy to read C A Standardization C A 6. Training Plan Participants: xx people in each dept. Sessions date date date Concept introduction status Training in how to create status Actual practice status

15. An A3 Example

16. The A3 Thinking Steps • What is the problem? • Who owns the problem? • What is the root cause of the problem? • What are some possible countermeasures? • How will you choose which countermeasure to propose? • How will you get agreement among everyone concerned? • What is your implementation plan? What timetable? • How will you know if your countermeasure works? • What follow-up issues can you anticipate? What problems may occur during?