Telling the Story Using an A3 Report

Table of Contents

Less Can Be More in Report Writing

Problem solving is about thinking. But writing things down can help thinking. How can you document key information and decisions at each step in a way that you can share it with others, get their input, and make appropriate modifications using their input? Documentation of a complex problem-solving process brings to mind mountains of data, reams of paper, or in this day and age, perhaps an online database, which can be queried in multiple ways. Toyota has a simpler approach. It involves pencil, eraser, and one side of a piece of paper. It is often referred to as the “A3 report.” Why A3? Originally it was because much of the communication within Toyota across the various sites and across nations was by fax, and this was the largest size paper that could fit in a fax machine: 11 by 17 inches.

What can you possibly fit on one side of a piece of paper? Well, if you look at the A3 reports generated by experienced Toyota managers, the answer is a remarkable amount of information. What information is on the A3? The answer is: Only the most essential.

What is important about A3 reports is not the finesse with which you fill in the boxes and draw fancy graphics. It is the communication process. The A3 is an integral part of the problem-solving and decision-making process. It allows only the most critical information to be shared with others for careful evaluation of the thought process used, as a means of requesting support or advice, and for arriving at a consensus.

Many people outside of Toyota do not realize that the aggressive pursuit of waste elimination extends to all activities within the organization, including the presentation of information and the decision-making process based on the information. These presentations at Toyota are clear and concise, and it takes very little time to share the message. Formatting the activity in this way requires the distillation of information into a complete, clear, and easy to understand presentation. The story is told with a minimal number of words and is pictorial in nature. When properly presented, the information can be read or explained in five minutes or less so everyone understands and decisions can easily be made. A well-prepared A3 prevents a condition Winston Churchill once quipped about concerning a cumbersome report: “The length of this document defends it well against the risk of its being read.”

Outside of Toyota, most presentations of lean activities we’ve seen have lacked a basic structure that maintained focus and direction. They tended to wander, and the usual result is that many people are presented with excessive information with no clear logical flow, and much time is wasted on side conversations and sorting through the information. Notebooks of course notes and operating procedures and discussions of lean principles sit on the shelf, never to be read. The A3 report is designed not only to be read, but to be used as part of the problem-solving process.

Determining How to Use an A3

An A3 is used for many different types of story presentations at Toyota. They are not “reports” per se, but each should tell a story with a beginning, middle, and end. Figure 18-1 shows four different common types of A3 reports. One type makes proposals; the others are various types of reporting—from a problem solving story, to a story that gives the status of a project, to an information story. There is a natural flow between these story types. Often, projects will begin with a proposal story to get approval to invest resources in the project, and then, as the project progresses, there will be a story of the problem-solving process, status stories at key milestones in the project, and an information story to present the results. Each person crafts the A3 for the specific purpose of their “story,” but there are some standard formats taught within Toyota.

Figure 18-1. Four types of A3 stories

In some cases the A3 is used to propose a change, for example, in a process or the purchase of equipment (called “business cases” in some companies). For these “proposal stories,” it is necessary to complete an A3 with the problem statement, analysis of current conditions, a proposed action (the change or purchase), and the anticipated result (both cost and improvement expected). Sufficient information should be presented so a decision can easily be made. At Toyota any major expenditure is an important decision, and if sufficient information was not presented, the A3 preparer would surely be sent back to gather additional facts. A format for the proposal story is shown in Figure 18-2.

A “status story” reports at key milestones in an important project (Figure 18-3). Examples include an annual plan, a review of a project, and a design review in engineering a new product. This story must start with clear objectives, the approach to implementation, the total effect to date, and unresolved problems with accompanying actions. All proposal, problem-solving, and status A3 reports must have some action plan.

Figure 18-2. Proposal story

Figure 18-3. Status report story

An “informational story” is intended to convey information only. There is no evaluative component. It does not require a description of a problem; the only objective is to convey general information to an audience, inside or outside the company. Visualization is very important for an informational story, and there are many possible ways of organizing this type of presentation.

An entire book could be written about each of these applications. Instead we will focus on one of the most complex and in-depth uses of an A3: problem solving.

The A3 Problem-Solving Report Process

Problem solving uses multiple formats at different stages of the process depending on what is being presented and when in the process the information is presented. There are three distinct stages in the problem-solving process. First is the proposal stage, when the proposal story is used. There are actually two levels during the proposal stage. The initial proposal is made to gain consensus on whether a problem should be addressed. If agreement to move forward is established, the next level of the proposal stage comes after the identification of root causes. At this time a proposal is generally made to gain acceptance and approval of the proposed solutions.

After the proposed countermeasures are accepted and implementation begins, the process moves into the second stage, the status reporting stage using a status report story. This stage provides information and updates to others to verify that the activity is progressing on schedule. It is also an opportunity to question and explore the completeness of thinking, and to provide additional resources if necessary to complete the activity as scheduled.

The third stage is the final reporting at the completion of the activity. At this time there is generally no need to further question the details of the activity itself. The focus is on the completeness of the result. Generally, the final presentation is not made until the countermeasures have successfully eliminated the problem and the desired results have been achieved. The primary purpose of the final report is to acknowledge the activity and the success of the team or individual. It is a celebration of good thinking and good process. It’s also a time to ask, “What’s next?” What is the next problem that will be “picked up”?

Table 18-1 shows the three stages during the problem-solving process and how the A3 is used during each. Before actually deciding to begin a problem-solving activity, it is important to evaluate the problem in the context of other issues. If the problem statement step is completed as outlined in Chapter 14, this information can easily be used for comparison. Alternatives can also be explored, such as who should work on the problem, how many people, and what time frame (depending upon the urgency of the problem). The initial proposal of a problem should bring up many questions to ensure that the problem has been correctly identified and that approval to move forward is warranted.

Before During After
Proposal Presentation Status Reporting Final Report
Overall comparison with other problems Clarify objectives Provide guidance Consider other options

Gain consensus and approval

Progress check Verify direction of activity

Provide guidance Provide additional support

Provide additional resources

Verify successful completion and achievement of results

Celebrate success Evaluate further considerations

Table 18-1. A3 Problem-Solving Report Process

After agreement has been reached to pursue a proposal, frequent status reports occur. Depending on the activity, it may be weekly or monthly. The initial portion of the A3 (problem statement and analysis, discussed in Chapter 15) does not change for each update. That information is of a historical nature and is briefly reviewed as a “refresher,” but the data does not change (unless an additional cycle of PDCA was necessary). The A3 is used to show the status of implementation and current improvement results. The status update will include information regarding the remaining time until completion, delays in the progress and plans to return to the plan, and any challenges or issues requiring support from others. One commonly made mistake is to wait too long after the plan falls behind schedule before making a contingency plan. This can put an activity behind schedule.

Outline for an A3

Putting your story together on a single piece of paper always follows the same basic format; however, the actual content and space dedicated to each section will vary. Figure 18-4 shows the basic layout of an A3 “problem-solving story,” with each section identified and the flow of information shown with arrows. Begin with a heading that has the “theme” of the activity, the preparer’s name,the date, and any other relevant information such as plant or department. Then the page is divided into two parts down the middle.

Figure 18-4. A3 problem-solving story format and flow

In most cases, the Problem Definition and Description (the problem statement) and the Problem Analysis fill the entire left-hand side of the sheet, as can be seen in the figure. Of this half of the paper, the bottom two-thirds is generally reserved for the analysis, and the top one-third for the problem situation. The analysis is the heart of the process, and most of the space should be dedicated to it. Without a thorough and accurate analysis, any solutions implemented will be misguided and won’t yield an effective result. In some cases, if the problem is especially complex and involves many issues, the analysis may spill over to the right side of the paper. These are guidelines, not hard and fast rules because the format should fit the story, not the other way around. If a section of the story requires more or less space, then adjust accordingly.

The right-hand side of the paper is generally reserved for the Implementation Plan, as the figure shows, the Results, and the Future Steps. The results section usually fills most of the right-hand side. This represents the relative importance of each section in the process. The entire purpose of the activity is to improve results, so this should be the focus of the right side of the A3. Remember when we said that if the analysis is thorough and accurate the root causes would be obvious? If the root causes are obvious, the solutions will be as well. This connection must be clear in the story. If it is, there’s less need to outline the details of implementation. Think about it this way: If you get the analysis right and have effectively implemented a countermeasure, the desired result should occur. If the result was less than expected, there is either a flaw in analysis, identification of effective countermeasures, or poor execution.

If space is at a premium for a complex problem, the future steps section can be minimized with little impact on the overall A3. Again, the actual space utilized for each section of a problem-solving activity should be based on the significance of the material to the overall story. The most important information should consume the greatest amount of space.

Formatting Tips

Completion of A3s is somewhat of an art. There isn’t a single way to fill one out, but there are a few guidelines that help make the information easier to understand. We have covered many of these in Chapters 13 through 17, but they bear repeating here:

  • Avoid excessive verbiage. A picture is worth a thousand words. Present data in a graphic form that is quickly and easily understood.
  • Use a consistent format for similar information. Pay particular attention to the scale on charts. Similar data compared with a different scale can be visually misleading and very confusing.
  • Use line graphs in the problem description section (the first section) because they show the trend of the issue. Do not use Pareto graphs or pie charts. These are analysis tools, not problem description tools.
  • If you must use words, use bulleted statements rather than sentences, and keep it to three or four bullets per section to summarize the main points.
  • Make sure that any charts, graphs, or wording is sized so it is easily read.
  • When using a comparison tool such as a pie chart or Pareto chart, avoid comparing too many issues since this will make the data very small and difficult to Also, these are “separation tools” that allow the isolation of the “significant few from the trivial many.” Anything past the top five is not one of the significant few and does not merit attention.
  • Avoid the use of colored charts and graphs. When photocopied, the color doesn’t show, and if you use color to identify elements, that clarity will be lost. Yes, we know you can use a color copier, but it’s very expensive, and not everyone will have one when you want a copy! This brings up a related point: Don’t try to make a poor problem-solving activity look good by using fancy, colorful material. If your A3 is all fluff and no substance, it will be As Einstein said: “If you are out to describe the truth, leave elegance to the tailor.”
  • While we’re on the subject of charts and graphs, we must mention the use of Microsoft Excel for charting purposes. It is a handy tool, but like any tool, it’s only as good as the The main problem is that the default settings do not always provide the best result. Settings such as scale, markers, and lines are adjustable, and you must pay particular attention to font size and style. The size may automatically adjust and be out of balance with other similar charts. Make sure you change them for clarity and ease of understanding.
  • Use arrows to show the flow of information so the reader knows the relationship of each part of your story.
  • Avoid acronyms and technical Remember that your audience may include people who do not know the jargon.
  • Use your sense of visual balance. Make sure the story is carefully spaced and elements are aligned. It’s distracting to view similar information, such as charts, in different sizes.

Final A3 Version of Problem-Solving Story

Figure 18-5 is a completed A3 of the problem case in Chapters 13 through 17. You may observe some of the problems mentioned above in this A3. If so, that’s good. You can apply that learning to your own A3s. There is no perfect A3. Each time we do one we can always find ways to improve the content or the format. Our goal is not to be perfect, but to communicate information effectively.

This document is printed across two pages here for clarity, but it is in fact a single one-page document.

Figure 18-5. Completed example of an A3

Figure 18-5. (Continued )

Many people look at this A3 and immediately think that it is “too busy” or “complicated.” This is a normal reaction to a very involved A3. There is a lot of information fit into a small space. If this A3 were presented to you, you would see that in fact the entire story can be explained in about three and a half minutes and is quite clear. The following text would be used to explain this A3, and it is presented as a reporting of results (the activity is complete):

As you can see [pointing to the trend graph in “Define the Problem Situation”], the fabrication line was consistently below goal for units per hour, and at the end of last year it had gotten worse. As a result of being under the units per hour goal [point to the overtime graph] there was approximately $80,000 per month in overtime cost, which was increasing, and also our late shipments to the customers [point to the late shipments graph] were increasing. If we did not take action, this problem most likely would have gotten worse. [End of the Problem Situation section.]

An analysis of our production losses [point to the first graph in “Problem Analysis”] showed that we were losing time during the operation cycle, and our available run time was reduced because of cleaning time. We were spending 30 minutes per shift for cleaning and wanted to reduce that to 15 minutes per shift [point to the chart]. Observation of the work area showed that contaminants were not being contained properly, causing additional cleaning time. Reducing the cleaning time by 15 minutes per shift will increase the units per hour by 2.5.

Observation and analysis of the work steps indicated 10 seconds of walking time for this operation [point to the yamazumi, or stack chart]. The worker flow diagram [point to the diagram] shows that the location of parts and equipment was causing excessive walking time. A reduction of one-half of the walking will be a five-second savings per cycle, which will yield an additional seven units per labor hour. [End of the Problem Analysis section.]

To get some temporary relief from this problem we decided to perform cleaning during lunch and breaks [point to each countermeasure in the “Action Plans to Correct Problems” as it is mentioned]. We had a temporary cleaning service that performed that task until we could implement the permanent countermeasure to more effectively collect the dirt. Also, we taped cardboard boxes to certain locations on the machine to capture dirt temporarily. This made the clean-up easier. These short-term countermeasures were completed immediately. During the second week we changed the layout of the work area and repositioned the start button. These changes reduced walking time and reduced the cycle time. Our permanent countermeasure was to enclose the bottom of each machine with a skirt to further reduce the cleaning requirement.

We needed to make some modifications to the dust collection system, and each machine was modified as well. This task required the support of maintenance and engineering, and we planned to complete one machine per week over a four week period. We checked progress each week to make sure we were on target. These are permanent countermeasures that will reduce the cleaning requirement to 15 minutes. [End of the Action Plans to Correct Problems section.]

We started to see immediate results when we implemented the temporary countermeasures [point to the first graph of units per hour in “Results of Activity”]. We completed a simulation of the new work layout and proved the result as well, and when the layout changes were made, the units per hour increased. For the past four weeks our units per hour has been consistently above the goal, and our process has stabilized. Also, our overtime costs and late shipments have been reduced [point to graphs]. We were not specifically targeting floor space reduction, but did get a reduction when the layout was changed [point to bulleted statements in “Summary of Results”]. [End of the Results of Activity section.]

Although these results were sufficient to achieve our goal, we have identified further opportunities for improvement [point to “Future Steps” section]. We can install an automatic unloading device on the machine and further reduce the handling time, which will reduce the cycle time. There are additional opportunities for dirt containment, and we will continue to reduce the need for cleaning in the work area. We have other issues that cause late shipments, and we have targeted that as the next improvement activity to tackle. That team will begin to evaluate the situation next week. [The end!] Are there any questions or comments?

Final Comments on A3s

A disadvantage to the 11-by-17-inch A3 is that though it is almost the size of two 81⁄2-by-11-inch pages together, the layout is different (landscape versus portrait). This causes sizing problems when trying to copy and paste an A3 from Excel into another format. When an A3 is copied and pasted into a space with a different aspect ratio (from 11-by-17 to the layout of this book, for example), the resulting changes to fonts and graphs may not be desirable. When you print an A3 to 81⁄2-by-11 paper, the printer will automatically adjust to 64 percent, and the resulting copy may have very small print. If you paste into PowerPoint, some details may be lost because of this aspect ratio difference. Partly for this reason, and partly to eliminate even more waste, parts of Toyota have been moving to A4 reports (81⁄2 x 11). Most of the American Toyota associates we know who have struggled to learn to get information down to an A3 format are horrified by the thought of an A4 report.

But more important than the size of the reports and the technical details in crafting and printing them is that the A3 is only as good as the process that generates it. Without a good problem-solving process, you will not get a good A3 report. Behind the scenes, a key to generating an A3 report is nemawashi—the process of getting consensus. The nemawashi can be viewed as a type of ringi sho— a proposal being circulated. Each time a person looks at it, he or she will have some reactions and some input. If you are not open to the input, there is no point in showing it to them. The A3 is then modified as you go. In some cases it’s the product of a team project, and the team must all agree to the report. By the time the A3 is presented to an executive group for decision making, everyone in the room should have seen it and agreed to it. At Toyota it is common to have just five minutes to present the report before a decision is immediately made.

Historically, the A3 was taught by the supervisor, but not in a classroom. It was part of the craft of being a Toyota professional. In the United States, Toyota discovered that American managers lacked some basic management skills taken for granted at Toyota, including A3 report writing, so a special class was designed to teach all managers. It started out as a one-day course and then was reduced to a half-day course. As the course was developed, it became clear there were prerequisites as in a college course. A prerequisite course on practical problem solving was needed.

Many companies who learn about A3 report writing find it seductive. We’re all overwhelmed by the amount of paperwork in our company—whether it’s physical paper or virtual reporting on the computer. One side of one sheet of paper is awfully appealing. Unfortunately, the seductive appeal of the report is also its chief weakness. It’s easy to treat an A3 like a nice new toy. It becomes a dictate from management to use them. Everyone learns how and spends a lot of time outdoing each other to create fancy graphic creations, cramming more and more information on the page. This is not the point. The point is to communicate, gain consensus, solve problems, and get results.

Reflection Activities

If you’ve been completing the reflection section of Chapters 14-17, you will have completed your problem-solving activity. The A3 can be used as a format and guide during your activity, and as a summary report after the problem is solved. The following questions are specifically aimed at a post-problem-solving report, but could also be used to organize your ideas and information as the problem is being solved. Use the problem you completed in Chapters 14-17 and your information to complete the following tasks.

1. Starting with a blank sheet of paper, complete the heading of the A3 report. Include:
a. Your name
b. The theme of the problem (describe the objective of solving the problem)
c. The name of the work area, department, facility, etc.
d. The date of the report

2. Complete the problem situation section.
a. Depict the problem graphically.
b. Show the effect of the problem on other important business conditions.
c. Use arrows to show the flow of information and lead the reader’s eye along the correct path.
d. Use no more than four bulleted statements to explain the problem situation, the effect, and the rationale for “picking up the problem.”
e. Is there a compelling reason to solve this problem? (The significance should be clear.)

3. Complete the analysis section.
a. Use charts, graphs, and diagrams as much as possible to show the narrowing of the problem and the selection of the main causes.
b. Avoid lists of possible causes, likely causes, etc. Use data to depict the facts.
c. Ensure that your analysis flows step by step, progressing from the problem to the root cause(s). (It is a graphic version of the Five-Why process.)
d. Use arrows to show the flow of information and to assist the reader.
e. Verify that you have identified true root causes. (They must meet the four criteria outlined in Chapter 15.)

4. Complete the action plan.
a. Identify short-term temporary and long-term permanent countermeasures.
b. For larger tasks, were you able to break the task into smaller increments that could be completed at designated intervals?
c. Have all actions been completely implemented?

5. Show the results of your activity in the results section.
a. Show the effects of specific actions on the results graph (indicate implementation dates).
b. Has the improvement been sustained?
c. Depict the effect of the improvement on the related business indicators shown in the problem statement section.
d. Use no more than four bulleted statements to describe the results.

6. Explain the next steps for your activity.
a. Is it necessary to continue working on this problem?
b. Is additional support needed from others?
c. How will you transition responsibility for sustaining the results?
d. Explain whether you will pick up another problem and what it will be.

7. Review the completed A3 with others to solicit feedback. Pay particular attention to any questions or clarification that is needed. These are indications of items that are lacking in your presentation. Use this information to improve your next A3. This is practicing the art of hansei (reflection and application of lessons learned).