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Toyota's Secret: The A3 Report

One key management tool that is part of Toyota Motor Corp.’s widely heralded production system is a report that Toyota calls an A3. The structure of an A3 report is simple: It involves a standard template that conveys information within a series of boxes. However, this simple structure plays an important role. Using the panels within the A3 report template, an employee authoring an A3 can perform a number of important tasks that are part of problem solving: establishing the context of the problem and describing the current situation; identifying the outcome that is desired; analyzing the situation to determine the causes of the problem; proposing possible approaches to address it; creating an action plan; and setting up a follow-up process.

Furthermore, the use of A3 reports allows managers to mentor employees by teaching them skills that are important to Toyota’s culture–such as how to analyze the root causes of a problem and avoid leaping to conclusions about possible solutions.

Author John Shook, who helped Toyota develop and deliver training programs to support its overseas expansion, explains how A3s are used and includes a visual example of an A3 report. He maintains that A3s can help teach problem-solving skills within an organization’s ranks.

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