A3 refers to standardized communication format, a disciplined process of expressing complex thoughts accurately on a single sheet of paper. A3 is a standardized technical writing methodology to create a report on one side of a standard size piece of paper to guide problem solving and achieve clear communication across functional specialties. There are four types of different A3 forms:

Hoshin management (a.k.a. policy deployment) is an effective tool for aligning an organization toward the achievement of broader goals or objectives and allowing that organization to react quickly to a changing environment. In a lean organization, hoshin kanri is generally an annual planning tool that aligns the organization’s long-term vision with its shorter-term activities while also aligning the efforts of people in the organization with the goals of the organization.

There are six primary components to hoshin. The first of these is company vision – the long-term vision of where the company wants to go, what it is, and what it wants to become. The annual hoshin complements company values. There are four phases to hoshin at Toyota:

1. Strategic planning. Strategic planning has different levels in a broad sense, it can mean developing a ten-year strategic plan identifying the specific target market for the entire company. Hoshin is not used for this except as a vehicle for considering a set of short-term steps to achieve the long-term vision. Like other strategic planning approaches, hoshin identifies problems and opportunities based on company performance and other environmental data (including shortcomings from previous hoshin). This, in turn, can be used to develops a near-term, future-state vision based on these factors.
2. Hoshin deployment. Deployment statements must be based on facts and data, be operationally viable, and be aligned with the six primary hoshin components. At each level of deployment, the participants go through a goal-negotiation process called catchball. This catchball process allows participants to develop a clear understanding of the hoshin and enables the hoshin recipient to “enroll” in the objectives.
3. Controlling through metrics. Both results and means are measured and reviewed on a regular basis in a PDCA methodology.
4. Check and act. During the year, managers measure actual progress against the goal and make necessary adjustments. In most cases, managers are required to develop a fallback plan that they can implement if the difference between the goal and reality is too great

A key to using hoshin effectively is to close the loop through rigorous reviews at each level. Each pair of levels must first agree on the critical few objectives for the year and how they will be measured. Although problems are addressed during this performance review, the meeting focuses on the hoshin – the specific objectives of the individual to meet the high-level strategic objectives.

The ringi system is a more formal decision-making process used for handling significant decisions. In the ringi process, a small team of people with the necessary expertise is assigned to analyze some specific issues or challenge and recommend a solution. At the conclusion of the analysis process, the team creates a decision document called a Ringi-sho, which outlines the challenges, the countermeasure, and the potential implications, both positive and negative, of adopting the proposal. The team then meets with all managers who will be affected by the proposal and requests their approval. Sign off on the proposal is traditionally done with a manager’s hanko, a personal stamp used only by managers at a certain level.

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
Bill Gates, president and CEO, Microsoft

Companies around the world are trying to find ways to accelerate product development, seeing this as a way to improve competitive advantage. In many cases, their efforts to speed up the PD process focus on advanced technology. Successful utilization of such tools and technology depends on the ability to customize them in a way that makes them exclusive and integrates them uniquely to the company using them. This successful implementation in Toyota is due to that it is important to recognize that this occurs only because Toyota has had the foresight and discipline to customize tools and technology to fit within a broader framework, one that includes people and processes.

“Achievement of business performance by the partent company through bullying suppliers is totally alien to the spirit of the Toyota Production System.”
Taiichi Ohno

A Part is Not a Part, and A Supplier is Not a Supplier

When customers buy cars, they do not care who makes the engine, radio, seat, carpet, etc. they want and expect reliable quality and hold the automaker totally accountable for anything that is not up to their expectations. Toyota recognizes this and makes sure that every car part reflects Toyota quality. To achieve this and makes sure that every car part reflects Toyota’s PD process and lean logistics chain.

Other companies largely failed in emulating the Toyota model because they have not grasped the concept of true partnering. When the market gets though and there are serious earnings pressures, they have been less than forthright with suppliers, vacillating between public statements of commitment to partnership and trust and then unilaterally cutting supplier prices after signing contracts. They have even cut off suppliers in the middle of contract, resourcing it to a lower bidder. Toyota (as the supplier’s most demanding customer) to the contrary works on improving the supplier’s efficiency. For example when Toyota noticing that they were paying suppliers for many key parts above the lowest prices competitors paid globally, it issued a new target for all key suppliers as part of a program. The new program asked suppliers to reduce prices by 30 percent for the next model line; typically this would over a period of about three years.