Operations

Why You Should Link Hoshin Kanri

with A3 Problem-Solving
By Mark Reich
July 30, 2020

With A3 tightly linked to hoshin, an organization will not only

solve problems but also will have the opportunity to innovate new
ways of operating throughout the business

Most people who know at least a little about lean know about hoshin kanri (aka
strategy deployment) and A3 problem-solving. But evenHoshin Kanri
those who know a lot
Remotely:
about lean may not fully appreciate how these two lean practices should work
together. Aligning and
Executing on
In 2014, I wrote “A Body Needs a Skeleton and Muscle to Work,” which
Your
described the fundamental thinking behind the linkage of hoshin kanri and A3
Organizational
problem-solving. In that post, I compared an organization to a human body. If
Objectives
we think of an organization like a human body, the management system
represents the skeleton that holds the organization’s structure together. And A3
problem-solving functions like the muscle to generate Join us for a live
movement andonline
action.
course to sharpen your
Problem-solving capability in an organization gets stronger through practice
leadership skills and discover
just as our muscles get stronger through exercise. a proven method for
successfully executing your
An organization that integrates daily problem-solving with a robust long-term-
strategy.
oriented management system yields greater performance gains than an
organization with only one or the other, or when the two practices are not
linked. The relationship between the management system and problem-solving
methods—particularly the linkage between the two—is crucial to optimize
organizational effectiveness. Combined, the two practices improve how an
organization:

1. Plans what it does.

2. Executes on those plans.

3. Continuously improves.

Daily Management and Practical Problem-Solving

Most organizations, whether a manufacturer, builder, restaurant chain, hospital,

or whatever, must manage on two time horizons — daily and mid-long term. To
handle both simultaneously requires that you have both a daily management
system and a strategic planning system. Likewise, each system needs a
corresponding problem-solving methodology and toolset to address issues that
arise.

For example, if an assembly line is having difficulty meeting its daily output
goals, operators will work to fix the problem immediately, within the hour, or at
most within the day. This type of problem-solving is called Troubleshooting or
Type 1 problem-solving by Art Smalley, in his book Four Types of Problems.

In lean operations, Type 1 problem-solving, which helps achieve stability, is

enabled by establishing clear standards that allow operators to address a
deviation from standard quickly or to improve based on the standard
continuously. The practice works exceptionally well in any operation that is
repeatable (and much is repeatable though so many companies think they are
unique and their work is non-repeatable).
The root cause of this same problem, not meeting daily output, however, may
also be a structural issue. For example, if we look across the assembly line and
realize that a shortage of Team Members causes our output problem—we need
500 people a day on the line but are only able to consistently staff 470—that’s a
problem that must be addressed using a longer-range problem-solving method.

Further, if the root cause cannot be resolved through daily management and
problem-solving, it’s a strategic business problem. This type of issue likely is
caused by one or more structural issues and may result in losing business to
competitors. Several years ago, I worked closely with an appliance
manufacturer where this issue occurred. Unable to meet customer demand, it
lost floor space at Home Depot, which set them back significantly against their
competitors. This type of problem cannot be handled purely through daily
management and problem-solving.

The Relationship of Hoshin Kanri and A3 Problem-Solving

Combining hoshin and continuous improvement through A3 problem-solving

results in better performance gains greater than either practice deployed alone.
Based on what I learned at Toyota, I define hoshin kanri as problem-solving at
the strategic, structural level — it focuses on innovation and drives creativity.

Hoshin kanri is a system that engages everyone in the organization not merely
as problem-solvers, but also as innovators. Built on top-down and bottom-up
idea generation system, hoshin kanri pushes the organization to a higher
competitive level based on innovative thinking across the organization. I often
show this graphic to represent the essential thinking:

So how does A3 problem-solving fit in? If we think about the issue discussed
earlier, of missed production goals caused by a workforce shortage, you can
imagine many possible root causes. The problem could be caused by wages,
working conditions, the general labor market, the culture in the production
plant, management issues, the level of automation, or many other reasons. It’s
also possible that the problem is not unique to this plant, but something that all
the company’s plants are experiencing. Operators cannot solve issues such as
this by troubleshooting.
To solve a structural problem such as this, you need a problem-solving method
that prioritizes and resources this issue at the corporate level and in alignment
with many parts of the organization, including manufacturing, engineering,
human resources, finance, or other departments. The best method is to have A3
problem-solving embedded within your hoshin kanri plan. With A3 tightly
linked to hoshin, an organization will not only solve problems but also will have
the opportunity to innovate new ways of operating throughout the business.

Toyota tackled problems with missed production over the last twenty years by
building its A3 problem-solving muscle within the structural skeleton of its
hoshin. This approach allowed Toyota to innovate how to manufacture vehicles
by reducing the work’s difficulty, not the number of people needed to do it. Its
innovations enabled a broader range of people to complete work tasks more
efficiently. While at Toyota, I probably wrote or coached about 500 A3s, and
they were predominately used to address problems derived from hoshin
priorities at the corporate or functional level.

Problem-Solving = Innovation

Linking A3 problem-solving with hoshin ensures companies engage people

throughout the organization to solve corporate-level or organization-wide
problems.
In John Shook’s book Managing to Learn, the protagonist, Desi Porter, is
assigned a problem to solve related to document translation quality and speed.
While his task starts as a seemingly simple problem, he discovers that it is quite
complicated and that solving it will require the involvement of engineers,
vendors, and other parties.

Further, Desi can clearly see how his A3 links to and supports the higher-level
hoshin objective — launching a new production plant on time — that Ken
Sanderson, his boss, is working to achieve.

Ultimately, hoshin and A3 problem-solving are symbiotic. Like our skeleton and
muscle, one does not work as effectively without the other. Hoshin kanri is
needed to define and gain alignment on critical strategies across the
organization, while A3 is used to solve the problems discovered in executing
those strategies.

Written by: Mark Reich

About Mark Reich

During his extensive career, Mark has led lean transformations and coached executives in various
companies and business sectors. Clients include GE Appliances and Ingersoll Rand (manufacturers);
Michigan Medicine and Mt. Sinai (healthcare systems); Turner Construction; Kroger (retail); Legal
Seafood (hospitality); and Microsoft (software). As LEI’s chief engineer, strategy, Mark leads…

Comments (2)