A3 Management - From Structured Problem-Solving to Workplace Development (Part 1 of 2)

A3 Management: From Structured
Problem-Solving to Workforceg
Development
Part I 0f II
Company
LOGO

Why is problem-solving so challenging?
It takes a different kindIt takes a different kind
of thinking to solve a
problem than the kind
of thinking that producedof thinking that produced
the problem.
-- Albert Einstein
© 2011 Karen Martin & Associates 2

Deming’s PDCA Cycle
Plan
Develop
hypothesis
& design
experiment
DoAct
Conduct
experiment
Analyze
results &
take DoAct experimenttake
appropriate
action
© 2011 Karen Martin & Associates
Check Measure
results

What is A3?
The core of Toyota’s renowned management
systemsystem.
A structured method for applying the PDCA
(plan-do-check-act) approach to problem-(plan do check act) approach to problem
solving.
International designation for 11 x 17” paper.

Sample A3 Report
Plan Do, Check, Act
6

The A3 Report
 A concise “story board” that reflects the problem solver’s
discoveries and thought process along the waydiscoveries and thought process along the way.
 Limited “real estate” develops precise thinking.
 A “living document” that reflects the iterative nature of
problem solving and enables organizational learningproblem-solving and enables organizational learning.
 Highly visual – graphics, charts, maps, drawings, etc.
 “Making it pretty” isn’t the goal – hand drawn A3s are OK Making it pretty isn t the goal hand drawn A3s are OK.
 Neither the format nor the specific sections are set in
stone.
 Beware of using “templates.”
 Serve the iterative nature of the problem-solving process.

The A3 Report Should Reflect the Process
George Koenigsaecker, Leading the Lean Enterprise Transformation.

Benefits of the A3
 Creates consistency in how the
organization goes about solvingg g g
problems.
 Builds problem-solving capabilities
across the entire organi ationacross the entire organization.
 Trains everyone how to drill complex
problems down to their most essential
l telements.
 Forces a holistic/comprehensive view of
the problem and solutions; requiresp ; q
collaborative problem-solving.
 Reduction in “silo-ism”
 Th h t l d
 Thorough root cause analyses reduce
the risk of “band-aid” solutions.
9

Benefits of the A3 (continued)
 Ownership role drives accountability and reduces risk of
“it’s everything else’s problem ”it s everything else s problem.
 Stimulates data-driven decisions.
 Fairness and accountability replace blame and deceit. Fairness and accountability replace blame and deceit.
 Transparency re: problems spawns a commitment to
action.
 Develops deep organizational capabilities.

Problem-Solving Steps
1. Identify the problem
2 E l th bl d l
Plan
2. Explore the problem deeply
 What’s the true root cause?
3 Consider potential solutions
At least
50% of
th t t l 3. Consider potential solutions
 Hypothesize
4. Test solutions
the total
time
4. Test solutions
 Confirm hypothesis
5. Implement solution(s)Do
6. Measure results
 Did the hypothesis prove out?Check
A
7. Adjust as needed; prepare
to improve again
11
Act

Common Components of the A3 Report
Theme: Owner:
Plan Do, Check, Act
Theme: ________________________________ ________________________________
Background Countermeasures / Implementation Plan
Current Condition
Effect Confirmation
Target Condition / Measurable Objectives
Follow-up Actions
Root Cause & Gap Analysis

A3 Roles & Responsibilities
Problem owner
 Individual who’s accountable both for
the results and the process for
achieving results.achieving results.
 Problem owners have the authority to
engage anyone needed and the
ibilit t ll l tresponsibility to engage all relevant
parties.
CoachCoach
 Person teaching the owner the problem-
solving process.
 Typically the owner’s direct supervisor.
13

Coach / Mentor’s Role
Assure problem is relevant to the
organization’s annual business goals.
 Focus resource use on the relevant few rather
than the trivial many problems.

The A3 Process:
Define the Theme
What is our area of focus?
Articulating the right theme will force you to
focus on the right problem.
Should be closely aligned with organizational
goals to avoid spending limited time and
resources on trivial issuesresources on trivial issues.
Avoid judging, concluding re: cause, or offering
solutionssolutions.
 E.g.: Flawed order entry process vs. Streamline order
entry process
y p
17

Theme: “What is our area of focus?” Owner: Person accountable for results.
Plan Do, Check, Act
Theme: What is our area of focus? Owner: Person accountable for results.
• What?
• Who?
• Problem statement
• Context - why is this a problem? (visual)
Current Condition
Who?
• When?
• Where? (if relevant)
Di f t it ti
Context why is this a problem? (visual)
Effect Confirmation
• Diagram of current situation or process
• What about it is not ideal?
• Extent of the problem (metrics)
• What measurable results did the solution
• Diagram of desired state
• Measurable targets – how will we know that
achieve (or will be measured to verify
effectiveness)?
• Who’s responsible for ongoing
measurement?
Follow-up Actions
g
the improvement has been successful?
Root Cause & Gap Analysis • Where else in the organization can this
l ti b li d?• Graphical depiction of the most likely direct
(root) causes
solution be applied?
• How will the improved state be standardized
and communicated?

The A3 Process:
Background
Include a problem statement
 State the problem; do not offer a solution State the problem; do not offer a solution
Background – information for understanding the
importance and extent of the problem.
H d th bl l t t l ? How does the problem relate to company goals?
 How was the problem discovered? How long has it
been a problem?
’ ? What evidence demonstrates that there’s a problem?
 What degree of variation exists currently compared to a
previous state?
Tailor information for the audience.
Present information visually.
“S ll” th d f i t t f
“Sell” the need for improvement; create a sense of
urgency.
19

Sample Background Material
sss
Gray – highest industry quality scores
P l i d t lit (b h k)
FY 2008 FY 2009 FY 2010
Purple – average industry quality scores (benchmark)
Blue – client quality scores
20

Sample Background Material
0
00
21

Ask probing questions to assure proper
background has been obtained and
depicted as concisely as possible.
 Aiming for emotional impact – why is this a
problem?
Don’t tell the problem owner what to
include!
Teach visual display options is owner is
unfamiliar with them.u a a t t e

Potential Development Need
Become proficient in visual data display
options:
 Bar charts
 Histograms
 Trend / line charts
 Pie charts
 Pareto charts
 Etc.

Plan Do, Check, Act
• What?
• Who?
• Context - why is this a problem?
Current Condition
Who?
• When?
Di f t it ti
Context why is this a problem?
Effect Confirmation
• Diagram of current situation or process
• What about it is not ideal?
• Extent of the problem (metrics)
• Diagram of desired state
• Measurable targets – how will we know that
effectiveness)?
measurement?
Follow-up Actions
g
the improvement has been successful?
l ti b li d?• Graphical depiction of the most likely direct
(root) causes
and communicated?

The A3 Process:
Current Condition
Two primary goals
P id th di ith i f th t Provide the audience with an overview of the current
process.
 Demonstrate a fact-based understanding of the problem.
Content
 Provide a visual overview of the current state process or
system (strong use of charts maps graphs tablessystem (strong use of charts, maps, graphs, tables,
photos, etc.).
 Highlight key factors in the current state.
 Provide evidence of the problem (data)
 Avoid qualitative opinions.
 Avoid suggesting solutions or judging
 Avoid suggesting solutions or judging.
25

Plan Do, Check, Act
• What?
• Who?
• Context - why is this a problem?
Current & Target Conditions
Who?
• When?
I l d d t t i t bl
Context why is this a problem?
Effect Confirmation
• Include pre- and post metrics table
Metric Current State
Desired Target
Condition
Projected %
Improvement
Lead Time
Quality
Labor Effort
effectiveness)?
measurement?
Labor Effort
Morale/Turnover
Inventory Turns
Market Share
Follow-up Actions
l ti b li d?
Returned Parts
• Graphical depiction of the most likely direct
(root) causes
and communicated?

Ask probing questions to assure relevant
metrics have been selected.
 3-5 key performance indicators
 How will we know if we’d been successful?
27

Current State Documentation
Options
 Go to the gemba! – OBSERVE
 P f / dit d t Performance / audit data
 Mapping
 Value Stream Maps (VSM) - strategic Value Stream Maps (VSM) strategic
 Metrics-Based Process Mapping (MBPM) – tactical
 Spaghetti diagrams
 Documentation / job aid review
 Videotape / photos
 W k i t i Worker interviews
 Work samples
 Etc
 Etc.
28

Sample A3s – Current State
Poor
correspondencep
quality
Missing
inventory
resulting inresulting in
write-offs

The A3 Report:
Targets / Measurable Objectives
Purpose
 How will we know that the improvement has been
successful?
 What standard or basis of comparison will be used? What standard or basis of comparison will be used?
Pointers
 Use measurable objectives when possible Use measurable objectives when possible.
 Consider how data will be collected and shared to
evaluate the effectiveness of the implemented
solution(s).
 Begin planning for the Effect Confirmation section, but don’t
focus on it yet.
y
31

Target Condition vs. Effect
Confirmation
When setting target metrics, begin thinking
how you’ll confirm performance (effect
confirmation section).
 Who? How frequently? How?

Ask probing questions to assure target
condition meets business needs.
It’s better to set stretch objectives and notj
quite reach them than set objectives that
you’re sure you’ll hit.y y
33

The A3 Report:
Root Cause Analysis
Show the root cause of the problem(s) identified
i th t t tin the current state.
Separate symptoms and opinions from cause-
d ff t d t i tiand-effect determination.
Consider which techniques will be most useful in
gaining root cause insightgaining root cause insight.
Identify additional tests, if needed, to establish
level of certainty re: cause and effectlevel of certainty re: cause and effect.
Summarize your findings visually.

Root Cause Analysis

Root Cause Analysis (RCA)
RCA is necessary to:
 Avoid jumping to conclusions.
 Avoid creating “band-aid” fixes
(addressing only the symptoms)(addressing only the symptoms).
 Select proper countermeasures.
 Design and implement lasting Design and implement lasting
solutions that truly eliminate the
problem.

Root Cause Analysis Tools
Simple problems
 Five Why’s
 Problem Analysis Tree
More complex problems
 Brainstorm causes (fishbone) If Brainstorm causes (fishbone)
 Tally frequency of most likely causes
(check sheet)
If
necessary
( )
 Identify relevant few (Pareto analysis)
for countermeasure development
p
38

Five Why’s Example
Problem: Report is taking too much of an employee’s time;
1. Why is the error report being prepared?
Problem: Report is taking too much of an employee s time;
team questions whether the report is needed
1. Why is the error report being prepared?
 My supervisor told me to.
2. Supervisor – Why are you asking for this report?
One of the standard reports to be prepared per my One of the standard reports to be prepared per my
predecessor – I have yet to determine its usage.
3. Predecessor – Why did you initiate this report?
 Report was required in the past because personnel in
order entry were making data input errors.
4. Data entry – Why were orders being input with errors?
 Orders received via fax were blurry and hard to read.
5. Data entry - Why were the fax orders hard to read?
 Fax machine was old and of low quality. It was replacedq y p
10 months ago and errors no longer are occurring.

Problem Analysis Tree
Problem: Documents are not being translated well and on time
Lost docs*
In physical transit
In cyberspace
In in-basket
No tracking
Large batches
Late or poorly
In out-basket
Poor
original
Confusing
formats
Faxed / poor
resolution
Late or poorly
translated
documents
Translation
Translator doesn’t
understand original
original
Translator
skills
Random
vocabulary
Selection
problems** Translator
understands
original, but still
poor translation
skills
Wrong
technical
vocabulary
Lack of training
No standard
Training
poor translation vocabulary
Poorly
expressed
No standard
Unclear
expectations
Poor editing
* Lost and found = 40%; lost & never found = 5%; stuck in system = 55%
** Rework on over 50% of documents
p
Uneven
workload

Cause-and-Effect Diagram
(aka Fishbone, Ishikawa)
Brainstorming tool used to identify most likely
causes for an undesirable effectcauses for an undesirable effect
Explores potential causes in 6 categories (6 M’s):
 People (“Man”) People ( Man )
 Material/Information - Inputs used in the process
 Method - Procedures, work instructions, processes
 Machine - Equipment, computers, tools, supplies
 Measurement - Techniques used for assessing the
quality/quantity of work, including inspectionq y q y , g p
 Environment (“Mother Nature”) - External & internal
Use other categories if appropriate

Cause-and-Effect Diagram (continued)
Effective brainstorming tool
 Forces teams to consider all possible causes
Decreases the likelihood that something is being
l k doverlooked
Shows us the possible causes, but not how
much each contributes if at all to the problemmuch each contributes, if at all, to the problem
Does not provide solutions / countermeasures

Cause-and-Effect Diagram
People Material / Info Method
Lack of experience No stnd spread sheet Changing scheduleLack of experience
Time availability
No sense of import
No stnd spread sheet
No standard work
Input rec’d late
Changing schedule
Budgets
Submitted Late
Email vs. FedEx
Forecast in other system
Manual vs. PC No milestones Weather delays
M hi M t E i t
System avail. $ vs. units
y
Dispersed sales force
Machine Measurement Environment

Techs Moving Product
Skill Set
Man
Man Power Flexing Between Families
Schedule
MachineMethods
Batching
Blue affect productivity
Yellow Most affect TAT
Estimates
Sap Data Entry
Shared Equipment
FIFO for Repair Units
Cherry Picking Troubleshooting
Variation in complexity
Data Collection
GMP
R
Complaints Sent to W.R.
Testing Guidelines
Tech Documentation
Ease of Use Flex Schedule/Breaks
Repair TAT
Reason
Low Backlog
Planning
No Std Repair
Productivity
Non Standard Bench Set Up
Bag Refill Process
Labor Time Collection
Demand Variation
Bag Refill Process
Component Parts
Feed Back Frequency
Shipping By product Line
MaterialsMeasures
Incorrect Dates Recorded
Environment

Check Sheets
Helps collect and record process data in an
i d ?organized way?
 How often are various events occurring?
P id f t b t t d i d tProvides facts about a process to drive data-
based conclusions.
Include the “likely candidates” from the CauseInclude the likely candidates from the Cause-
and-Effect diagram.
Basis for Pareto analysisBasis for Pareto analysis.
Note: Data collection must be easy and time-
limited or it won’t happen
limited or it won t happen.
45

Root Cause Analysis: Late Shipments
Check Sheets Quantify Occurrences
Reason TallyReason Tally
Material shortage ||||| ||
Quality issue requiring |||||Quality issue requiring
rework
|||||
Staffing/absenteeism ||||||
Order entry error ||||| |||||
Changing customer ||||| ||||| |||
requirements w/ no
adjustment to expected
delivery
||||| ||||| |||
Equipment failure |
46

Pareto Analysis
Named after Wilfredo Pareto (18th century Italian
economist/statistician) who discovered the 80 20economist/statistician) who discovered the 80-20
principle.
 20% of the people held 80% of the wealthp p
Focuses our attention on the VITAL FEW issues
that have the greatest impact to avoid spending
th TRIVIAL MANYenergy on the TRIVIAL MANY.
A type of bar graph that displays
information/data in order of significanceinformation/data in order of significance.
A visual aid for defining & prioritizing problems.

Pareto Chart
Credit Application Delayspp y
2909
86%
100%
97%
94%
3000
3500
90%
100%
2493
77%
86%
2500
nces
60%
70%
80%
41%1500
2000
Occurren
40%
50%
60%
627
561
1000
20%
30%
40%
561
242
180
0
500
0%
10%
20%
No Signature Insufficient Bank
Info
No prior address Current
Customer
No Credit History Other
Reason for Delay

Teach root cause analysis tools if owner
isn’t yet proficient.
Ask probing questions to make sure truep g q
root cause has been found.
49

Nailing the Plan phase of
PDCA is the mostPDCA is the most
important step in the
entire problem-solving process.

Planning Reminders
Background
 Need to quantify the problem to reduce
subjective / emotional responses
 Financial Financial
 Labor effort (which can be monetized)
 Lead time / responsiveness (which can be
monetized)
 Market share
 Compliance-related Compliance-related
 Problem definition – proper scoping is vital!
 Include a precise problem statement in
p p
background section.
51

Planning Reminders (continued)
Target Condition / Desired state
Li t t t d f t i t th l ti ! List targeted performance metric, not the solution!
 Must include measurable objectives
 Include both % improvement and the raw numbers (fromInclude both % improvement and the raw numbers (from
what to what)
Root cause
 You cannot solve a problem without knowing it’s root
cause!
 Avoid making assumptions “Do you think or do you Avoid making assumptions - Do you think or do you
know?”
 When multiple root causes exist, quantify and select
the relevant few for countermeasure development.
52

Plannning Reminders (continued)
Displaying information visually aids
tremendously in the absorption rate of thetremendously in the absorption rate of the
information
 Pie charts, trend charts, graphs, bar diagrams, , g p , g
 Drawings
 Photographs
P bl t fi hb di P t h t Problem trees, fishbone diagrams, Pareto charts
 Value stream maps, process maps
 Representations of the people involved Representations of the people involved
 Anything that communicates information more quickly
and effectively than words

Thursday – Part II – Do, Check, Act
Theme: Owner:
Plan Do, Check, Act
Theme: ________________________________ ________________________________
Current Condition
Effect Confirmation
Follow-up Actions
Root Cause & Gap Analysis

In Summary
A3 reports should become a standardized formA3 reports should become a standardized form
of currency for problem-solving, dialogue, and
decision making in your organization creatingdecision-making in your organization– creating
an organization of “scientists” who continually
i ti d hi lt th himprove operations and achieve results through
constant learning from the work at hand.

For Further Questions
7770 Regents Road #635
San Diego, CA 92122
858 677 6799858.677.6799
ksm@ksmartin.com
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A3 Management - From Structured Problem-Solving to Workplace Development (Part 1 of 2)

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