Root Cause Analysis is one of the best investments an organization can make in itself. Preventing a problem from recurring is like taking a wheelbarrow of money to the bank!
As for the ‘WIIFM?’ let’s start with this ‘cost of quality’ calculation that some organizations use. Here’s what I see most of them missing when they add up the cost of an error:
- Taking the phone call and sending it on to the right person
- Documenting the non-conformance
- Back and forth with the customer and documentation
- Initial exploration and documentation
- Root cause analysis and documentation
- Revisions to Documentation, processes, measurements, testing, purchasing, design, repackaging…
- First attempt at corrective action and documentation
- Second attempt at corrective action and documentation…revisions…and documentation!
- Retesting…new Inspection and Test Plan…and documentation!
- Shipping…and documentation…
- Did I mention ‘documentation’?!?
And so it goes – so many hidden costs that never make it to the profit line. Not only that, everyone involved can’t do their ‘real’ work generating revenue, either.
Speaking of profit, here’s a mathematical fact about profit: If you’re operating at a 2% net profit, look how much extra revenue you need if you make a $1,000 error:
$50,000 x 2% = $1,000
So you need an extra 50,000 in revenue to make up for a $1,000 mistake. That’s a lot of burgers!
The last thing I see often that indicates a weak Root Cause Analysis is the cause being identified as, ‘operator error’. Yes, it can happen but the research data confirms that operator error is the actual cause about 6% of the time. This means that 94% of the time, it’s either infrastructure, work environment or the process that let the operator make the error. Something to think about!
Finally, the steps you take in the corrective action phase will have a better chance of working if you use the process approach and risk-based thinking as you go. Follow the flow of work so you can anticipate what could go wrong downstream from the spot you’re making the change. Be sure to look upstream as well to see if there’s anything you need to do before the work flows to the newly minted process.
If you want to join us for a free webinar on Root Cause Analysis on July 27th at 12:00 noon EDT, feel free to sign up here: