diff --git a/bin/agent-loop.sh b/bin/agent-loop.sh
index ff892d34..79bab5ee 100755
--- a/bin/agent-loop.sh
+++ b/bin/agent-loop.sh
@@ -143,6 +143,14 @@ run_worker() {
 
     # Generate prompt
     prompt=$(bash "$(dirname "$0")/agent-dispatch.sh" "$AGENT" "$issue_num" "${repo_owner}/${repo_name}")
+    dispatch_rc=$?
+    if [ $dispatch_rc -ne 0 ]; then
+      log "WORKER-${worker_id}: DISPATCH FAILED #${issue_num} (rc=$dispatch_rc) — key validation or config error"
+      # ANDON Alert: CRITICAL — loop startup (key validation) failure
+      "$(dirname "$0")/andon-alert.sh" "CRITICAL" "agent-dispatch failed for ${AGENT} (issue #${issue_num}) — check API keys/tokens" "${AGENT}-loop" 2>/dev/null || true
+      # Exit worker — watchdog will handle restart/ESCALATION
+      exit 1
+    fi
 
     CYCLE_START=$(date +%s)
     set +e
@@ -236,13 +244,25 @@ print(json.dumps({
         log "WORKER-${worker_id}: UNVERIFIED #${issue_num} — $verify_details"
         mark_skip "$issue_num" "unverified" 1
         consecutive_failures=$((consecutive_failures + 1))
+        # ANDON Alert: CRITICAL on 3rd consecutive failure
+        if [ "$consecutive_failures" -eq 3 ]; then
+          "$(dirname "$0")/andon-alert.sh" "CRITICAL" "3 consecutive failures on ${AGENT}-loop (issue #${issue_num}, unverified)" "${AGENT}-loop" 2>/dev/null || true
+        fi
       fi
     elif [ "$exit_code" -eq 124 ]; then
       log "WORKER-${worker_id}: TIMEOUT #${issue_num} (work saved in PR)"
       consecutive_failures=$((consecutive_failures + 1))
+      # ANDON Alert: CRITICAL on 3rd consecutive failure
+      if [ "$consecutive_failures" -eq 3 ]; then
+        "$(dirname "$0")/andon-alert.sh" "CRITICAL" "3 consecutive TIMEOUT failures on ${AGENT}-loop (issue #${issue_num})" "${AGENT}-loop" 2>/dev/null || true
+      fi
     else
       log "WORKER-${worker_id}: FAILED #${issue_num} exit ${exit_code} (work saved in PR)"
       consecutive_failures=$((consecutive_failures + 1))
+      # ANDON Alert: CRITICAL on 3rd consecutive failure
+      if [ "$consecutive_failures" -eq 3 ]; then
+        "$(dirname "$0")/andon-alert.sh" "CRITICAL" "3 consecutive FAILED exits on ${AGENT}-loop (issue #${issue_num}, exit=${exit_code})" "${AGENT}-loop" 2>/dev/null || true
+      fi
     fi
 
     # ── METRICS ──
diff --git a/bin/andon-alert.sh b/bin/andon-alert.sh
new file mode 100755
index 00000000..e7a2411b
--- /dev/null
+++ b/bin/andon-alert.sh
@@ -0,0 +1,118 @@
+#!/usr/bin/env bash
+# andon-alert.sh — Real-time signal light for the factory floor
+# Part of Timmy_Foundation/timmy-config issue #347
+#
+# Usage: andon-alert.sh <SEVERITY> "<MESSAGE>" "<LANE>"
+#   andon-alert.sh "CRITICAL" "Groq API key expired" "agent-loop"
+#   andon-alert.sh "WARNING" "Gemini rate limited 10 times in a row" "gemini-loop"
+#   andon-alert.sh "HALT" "Jidoka quality gate triggered" "jidoka-gate"
+#
+# Severity levels:
+#   INFO    — logged only
+#   WARNING — logged + Telegram
+#   CRITICAL— logged + Telegram + loop paused (flag file)
+#   HALT    — logged + Telegram + loop killed + flag file
+
+set -uo pipefail
+
+SEVERITY="${1:?Usage: andon-alert.sh <SEVERITY> <MESSAGE> <LANE>}"
+MESSAGE="${2:?Usage: andon-alert.sh <SEVERITY> <MESSAGE> <LANE>}"
+LANE="${3:?Usage: andon-alert.sh <SEVERITY> <MESSAGE> <LANE>}"
+
+# Normalize severity to uppercase for comparison
+SEV_UPPER="$(printf '%s' "$SEVERITY" | tr '[:lower:]' '[:upper:]')"
+
+# ── Config ──
+HERMES_HOME="${HERMES_HOME:-$HOME/.hermes}"
+LOG_DIR="$HERMES_HOME/logs"
+ANDON_LOG="$LOG_DIR/andon-alert.log"
+ANDON_FLAG_DIR="$HERMES_HOME/andon-flags"
+ANDON_CRITICAL_DIR="$HERMES_HOME/andon-critical"
+ANDON_HALT_DIR="$HERMES_HOME/andon-halt"
+TELEGRAM_TOKEN_FILE="$HOME/.config/telegram/special_bot"
+TELEGRAM_CHAT="-1003664764329"
+
+mkdir -p "$LOG_DIR" "$ANDON_FLAG_DIR" "$ANDON_CRITICAL_DIR" "$ANDON_HALT_DIR"
+
+timestamp() { date '+%Y-%m-%d %H:%M:%S'; }
+
+log() {
+    echo "[$(timestamp)] [$SEVERITY] [$LANE] $MESSAGE" | tee -a "$ANDON_LOG"
+}
+
+send_telegram() {
+    if [ -f "$TELEGRAM_TOKEN_FILE" ]; then
+        TELEGRAM_TOKEN=$(tr -d '[:space:]' < "$TELEGRAM_TOKEN_FILE")
+        if [ -n "$TELEGRAM_TOKEN" ]; then
+            # Build message text
+            text="${SEVERITY} — ${LANE}: ${MESSAGE}"
+            # Send via Telegram API
+            curl -sf --max-time 10 -X POST \
+                "https://api.telegram.org/bot${TELEGRAM_TOKEN}/sendMessage" \
+                -d "chat_id=${TELEGRAM_CHAT}" \
+                -d "text=${text}" >/dev/null 2>&1 || true
+        fi
+    fi
+}
+
+# ── Actions by severity ──
+case "${SEV_UPPER}" in
+    INFO)
+        log "Info event — no further action"
+        ;;
+
+    WARNING)
+        log "Warning issued — sending Telegram alert"
+        send_telegram
+        ;;
+
+    CRITICAL)
+        log "Critical issue — sending Telegram + pausing lane"
+        send_telegram
+
+        # Create CRITICAL pause flag for this lane
+        # The lane file signals any loop to skip work until cleared
+        CRITICAL_FLAG="$ANDON_CRITICAL_DIR/${LANE}.flag"
+        echo "$(timestamp) — $MESSAGE" > "$CRITICAL_FLAG"
+
+        # Also touch general flag for Andon board visibility
+        touch "$ANDON_FLAG_DIR/${LANE}.critical"
+        ;;
+
+    HALT)
+        log "HALT condition — sending Telegram + killing loop processes"
+        send_telegram
+
+        # Create HALT flag with reason
+        HALT_FLAG="$ANDON_HALT_DIR/${LANE}.flag"
+        echo "$(timestamp) — $MESSAGE" > "$HALT_FLAG"
+
+        # Touch general flag for Andon board
+        touch "$ANDON_FLAG_DIR/${LANE}.halt"
+
+        # Kill processes associated with this lane
+        # Convention: process names contain the lane identifier
+        case "$LANE" in
+            agent-loop|claude-loop|gemini-loop|groq-loop|grok-loop|gemma4-loop)
+                pkill -f "${LANE}.sh" 2>/dev/null || true
+                ;;
+            jidoka-gate)
+                pkill -f "quality-gate" 2>/dev/null || true
+                ;;
+            watchdog)
+                # Do not kill watchdog itself; this alert is about a restart that already happened
+                ;;
+            *)
+                # Generic: try to kill by lane name
+                pkill -f "$LANE" 2>/dev/null || true
+                ;;
+        esac
+        ;;
+
+    *)
+        log "ERROR: Unknown severity '$SEVERITY'. Must be INFO, WARNING, CRITICAL, or HALT."
+        exit 1
+        ;;
+esac
+
+exit 0
diff --git a/bin/pane-watchdog.sh b/bin/pane-watchdog.sh
index 76d2eec7..1fe0d3cc 100755
--- a/bin/pane-watchdog.sh
+++ b/bin/pane-watchdog.sh
@@ -359,6 +359,8 @@ handle_stuck() {
     if [ "$attempts" -ge "$MAX_RESTART_ATTEMPTS" ]; then
         log "ESCALATION: $target stuck ${attempts}x — manual intervention needed"
         echo "ALERT: $target stuck after $attempts restart attempts" >&2
+        # ANDON Alert: CRITICAL — watchdog exhausted restart budget
+        "$(dirname "$0")/andon-alert.sh" "CRITICAL" "Watchdog failed to restart $target after ${attempts} attempts — manual intervention required" "watchdog" 2>/dev/null || true
         return 1
     fi
 
@@ -367,6 +369,8 @@ handle_stuck() {
 
     if restart_pane "$target"; then
         log "OK: $target restarted successfully"
+        # ANDON Alert: WARNING — watchdog restart succeeded
+        "$(dirname "$0")/andon-alert.sh" "WARNING" "Watchdog restarted pane $target" "watchdog" 2>/dev/null || true
     else
         log "FAIL: $target restart failed (attempt $attempts)"
     fi
diff --git a/bin/start-loops.sh b/bin/start-loops.sh
index f9c0f47b..481c614d 100755
--- a/bin/start-loops.sh
+++ b/bin/start-loops.sh
@@ -23,6 +23,10 @@ log() {
 log "Running model health check..."
 if ! bash "$SCRIPT_DIR/model-health-check.sh"; then
   log "FATAL: Model health check failed. Aborting loop startup."
+  # ANDON Alert: CRITICAL — loop startup blocked
+  if [ -x "$SCRIPT_DIR/andon-alert.sh" ]; then
+    "$SCRIPT_DIR/andon-alert.sh" "CRITICAL" "Model health check failed — loops not started" "startup" 2>/dev/null || true
+  fi
   exit 1
 fi
 log "Model health check passed."