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Root Cause AnalysisInstitute of Internal
Audits (IIA)
March 20, 2013
Introduction Terry Upshur- Director of Support Services with
the Inspector General of the U.S. House of Representatives
Lean Six Sigma - Master Black Belt
Certified Government Auditing Professional (CGAP)
Over 25 Years of Experience in Quality Assurance
Root Cause Analysis 2
Super-Bowl Champions Teams with better organizations
Teams with better players
Teams with better statistics
Teams with better records
Super-Bowl Championships are based on:
Teams with the best execution in the playoffs
Baltimore Ravens
Root Cause Analysis
3
Overview
Performance Improvement Principles
Root Cause Analysis
Tools and Techniques
Closing Remarks
Root Cause Analysis 4
Exercise Introduction
Scenario # 1 (Answer at the end of the training session)
The Plant Manager walked into the plant and found oil on the floor. He called the Foreman over and told him to have maintenance clean up the oil. The next day while the Plant Manager was in the same area of the plant he found oil on the floor again and he subsequentially raked the Foreman over the coals for not following his directions from the day before. His parting words were to either get the oil cleaned up or he’d find someone who would.
Copyright © 2004 Gene Bellinger5
Process Improvement
Process Improvement Using the Principles of Lean Six Sigma
Root Cause Analysis
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Lean Six Sigma Is the Integration of Two Powerful Business Improvement Approaches...
Root Cause Analysis 7
Goal – Reduce waste and increase process speed
Focus – Implementing Waste reduction tools
Method – Improvement events Value Stream Mapping
Goal – Improve performance on items Critical to Customer Quality (CTQs)
Focus – Use DMAIC with (TQM) tools to eliminate variation
Method – Management engagement, dedicated team effort
Six SigmaQuality, Cost
LeanSpeed + Waste Elimination
Lean Speed Enables Lean Speed Enables Six Sigma Quality Six Sigma Quality (Faster Cycles of (Faster Cycles of
Experimentation/learning)Experimentation/learning)
Six Sigma Quality Enables Six Sigma Quality Enables Lean SpeedLean Speed
(Fewer Defects Means(Fewer Defects Means Less Time Spent on Rework)Less Time Spent on Rework)
Efficiency Effectiveness
What is Six Sigma?
Six Sigma is defined as a method to discover customer requirements and meet them with minimal variation.
Supported by a suite of quality/statistical analysis tools
Concept of Y = f(x1,x2,…) introduced to drive focus on improving critical process inputs rather than just outputs (reports, services, deliveries, sales etc.)
Root Cause Analysis 8
Determine Critical X’s Y=f(x)
Root Cause Analysis 9
Process:Process:
InfoInfoSystemsSystemsReleaseRelease
Operating Budget
Training Budget
System Requirements
Delivery Time
Inputs(Factors)
Outputs (Responses)
Number of People
Operating Hours
Functional Requirements
Customer Interface
Skills Selection
Y
(x)
What is Lean? Lean is defined as a process strategy that uses
less of everything compared with the traditional process:
Less: human effort, space, investment in tools or information.
Reduces the number of steps (.90*.90*.90=.72)
Removes waste and non-value added processes and complexity
Drives speed and increases capacity
Root Cause Analysis 10
Lean Focuses on Eliminating Waste
Root Cause Analysis
Over Production
Over Processing
Motion
Waiting
Inventory
Transportation
Defects
ControlProcessWaste
11
TIMWOOD: An Acronym for WASTE
Transportation: Transporting something farther than necessary
Inventory: Excess stock of anything
Motion: Motion unnecessary to successfully completion the task
Waiting: Waiting for anything
Over-processing: Processing what the customer doesn’t want.
Over-production: Making to much
Defects: Work that needs to be redone
Root Cause Analysis 12
DMAIC Problem Solving Methodology
Root Cause Analysis
DefineDefine
MeasureMeasure
AnalyzeAnalyze
ImproveImprove
ControlControl
Define the opportunity from both business and customer
perspectives
Search for the key factors (critical X’s) that have the biggest impact on process performance and determine
the root causes
Understand the process and its performance
Develop improvement
solutions for the critical X’s
Implement the solution and control plan
13
Value Add – From the Customer Perspective
Root Cause Analysis14
Customer Value Add(CVA) Questions
Does the task add form, feature, or function to the process or service?
Does the task enable a competitive advantage (reduced price, faster delivery, fewer defects)?
Would the customer be willing to pay extra or prefer us over the competition if he or she knew we were doing this task?
Example CVA Activities: Improved Safety Shorter Deliver Times Fewer Errors Accurate Reporting
Non-Value Add (NVA)
Questions If the customer knew we were
doing this, would they request that we eliminate the activity so we could lower our prices?
Does the task fit into either of the other two categories?
Can I eliminate or reduce this activity?
Typical NVA Activities: Over Inspecting Transporting/Moving Stocking/Storing Rework Loops Multiple Signoffs Document Handling
Business Value Add (BVA) Questions
Does this task reduce owner financial risk?
Does this task support financial reporting
requirements? Would the process of
producing/selling the service break down if this task were
removed? Is this task required by law or
regulation? Typical BVA Activities:
Reconciliations Internal Audits
Invoice Processing IRS/OSHA/EPA Reporting
Internal Financial Reporting
Question
How does all of this relate to audit?
Root Cause Analysis
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Function of a Finding
A finding allows us to understand what occurred, how significant the occurrence was, and how we may be able to reasonably protect against its reoccurrence.
Root Cause Analysis
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Root Cause Analysis and FindingsRoot cause analysis the elements of a audit findings
Criteria – What should be
Condition - What does exist
Effect – The impact of the difference
Cause – Why the difference exist
Recommendation – What is a possible remedy?
Root Cause Analysis
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Definition of Root Cause AnalysisA process of determining the causes that led to a nonconformance, event or undesirable condition and identifying corrective actions to prevent recurrence which (when solved) restores the status quo or establishes a desired effect.
Root Cause Analysis 18
Purpose Root Cause Analysis helps to identify what, how, and
why something happened, thus preventing recurrence.
Root causes are underlying, are reasonably identifiable, can be controlled by management and allow for the generation of recommendations.
The process involves data collection, cause charting, root cause identification, recommendation generation and implementation.
Only when you are able to determine why an event or failure occurred will you be able to specify workable corrective measures.
Root Cause Analysis 19
Understanding Root Causes To fix a problem it must be clearly defined. In a
lot of cases the symptom is identified and not the underlying problem.
For example, buying expired milk is not an inspection failure its a recall system failure.
Questions to ask are: What is the scope of the problem? What else is affected by the problem? How often does it occur? What impact will this have on the larger
population?Root Cause Analysis 20
Determining Root Causes
Four steps you can use to identify the Root Cause
Data Collection & Prioritization Pareto Analysis
Cause Charting Cause and Effect Diagram (Fishbone)
Root Cause Identification
Recommendation Generation and Implementation
Root Cause Analysis 21
Exercise All who are active IIA members (Stand)
All that are members of the IIA DC chapter
All who have at least two IIA certifications
All who have volunteered with the chapter in the last two years
All who would like to volunteer with the chapter
Root Cause Analysis
22
Data Collection Data collection provides information and an
understanding of causal factors.
Good data collection techniques involve: Data Types – Attribute or Discrete
Good/Bad, Counts or Percentages Planning – When, Who, How, Stratification Check Sheets - Consistency of Data
Collection Measurement System Analysis
Ensure the data collection process is “Repeatable and Reproduceable”
Root Cause Analysis 23
Root Cause Analysis 24
Pareto Chart A Pareto chart is a graphical tool to prioritize multiple
problems in a process so you can focus on areas where the largest opportunities exist.
Pareto charts are a type of bar chart in which the horizontal axis represents categories of interest.
By ordering the bars from largest to smallest, a Pareto chart can help you determine which of the defects comprise the “vital few”, and which are the “trivial many.”
The Pareto principle states that 80% of the effect is generated by 20% of the causes. We want to focus on the 20%.
25
Sample Pareto Chart: Processing Errors
Count 73 18 13 8 7 5Percent 58.9 14.5 10.5 6.5 5.6 4.0Cum % 58.9 73.4 83.9 90.3 96.0 100.0
Count
Perc
ent
Exception OtherNew ResATGHSTQ/TAHHG
140
120
100
80
60
40
20
0
100
80
60
40
20
0
Pareto Chart of Processing Errors
Cause Charting Provides a structure for analyzing the
information and identifying gaps and deficiencies in knowledge.
Cause Charting can also take the form of process mapping. The process map is simply an illustration that depicts the steps or events leading up to an occurrence.
Root Cause Analysis 26
What A tool to represent the relationship between an
effect (problem) and its potential causes by category type.
When Carried out when a root cause needs to be
determined.
Why To help ensure that a balanced list of ideas have
been generated during brainstorming. To determine the real cause of
the problem versus a symptom. To refine brainstormed ideas into
more detailed causes.Root Cause Analysis
27
Cause and Effect Diagram(Also Called Fishbone)
Root Cause Analysis28
Effect: Too many price adjustments at
check-out
Machine Methods
Measurements Manpower
Updates
Not enough staffing during peak times
Discovery of different discount rates occurs too late in process
Computer screens
Billing process not accurate
Too many “jumps”
Master customer discount table not up-to-date
Incomplete Training on common complaints
Unfamiliarity with proceduresMarketing metrics counterproductive
Notification of absence
For vacation notification
Management Policies
Material
Mother Nature
Power Failures
Product Shortages
Example: Fishbone Diagram
Root Cause Identification Use the Cause Charts and subject matter
experts (SMEs) to gain a proper understanding of the event.
Asking the right questions will help address the actual problem and not the symptoms.
Types of questions to ask: What is the scope of the problem? How many problems are there? What is affected by the problem? How often does the problem occur?
Root Cause Analysis 29
Root Cause Identification
Tools used to assist with Root Cause Identification:
Data Analysis Pareto Charts Fishbone Diagrams 5 Why Technique Brainstorming Affinity Diagrams
Root Cause Analysis 30
Root Cause Identification Reduce the list of potential root causes
Rank root causes using Pareto Analysis (Statistical)
Rank the items in order of significance (Organizational)
Identify the items with the most significant impactTimeCostManpower
Root Cause Analysis 31
Root Cause Identification Confirm potential root causes relate to the
overall problem Validate/Verify that root causes identified have
a causal relationship with the desired output Ensure the legitimacy of the measurement
system Ensure results are repeatable and
reproducible
Note: If you cannot state the problem simply, you do not fully understand the problem.
Root Cause Analysis 32
Addressing the Root Cause(s)
Root Cause Analysis 33
Conduct Value Add Analysis Ensure that items identified will add
value to the organization or customer Ensure that the items are required by
regulation or policy Confirm that the item does not add value
and is not needed or required
Recommendation Implementation
Things to consider prior to implementation: Determine the impact the root causes will
have on critical inputs (X) Estimate impact of the root cause on
over-all output (Y)
Root Cause Analysis 34
Recommendation Implementation (Management)
Implement recommendations based on: Significance to organizational goals and
objectives Availability of personnel, finances or
other essential resources Complexity of the implementation
Evaluate controls required to maintain corrective actions after implementation.
Root Cause Analysis 35
Jefferson Memorial
Root Cause Analysis 36
See Jefferson Memorial Handout
Jefferson Memorial
Businessweek March 14, 2006 , Keith McFarland 37
A few years ago National Parks managers noticed the Jefferson Memorial was crumbling at an alarming rate. When they asked why, they found out it was being washed far more often than other memorials. For most organizations, the analysis would stop here. The solution is clear, right? Adjust the cleaning schedule to match those of the other memorials.
Unfortunately, that solution would have only led to a very dirty Jefferson Memorial. Because when Parks managers asked about the reason for the frequent washings, they found it had an exceptionally large amount of bird droppings deposited on it every day (no, this isn't a metaphor -- it really happened). What's the solution now? Erect scarecrows? Declare open season on pigeons?
Luckily, National Parks managers kept inquiring. And when they asked why the birds seemed to soil Jefferson at rates higher than they did so to Kennedy or Lincoln, they discovered the Virginian's memorial harbored an incredibly large population of spiders upon which the birds were feeding. And the population of spiders had exploded because of an abundance of midges (tiny aquatic insects) in and around the Memorial.
By now, you have the routine down. When Parks managers asked why so many midges congregated on the Jefferson memorial, they learned what any fly-fisherman finds out his first day on the river: Midges are stimulated to emerge and mate by a unique quality of light (for the rivers of my home state of Utah, it usually falls between 11 a.m. and 1 p.m. on a cloudy day).
It just so happens park managers were inadvertently creating this unique quality of brightness by turning the lights on the memorial just before dusk. This one variable caused the whole chain of events -- lots of midges, lots of spiders, lots of bird droppings, lots of effort on the part of the cleaning crews, and finally, the crumbling of the statue.
The solution ended up being pretty simple, and actually saved the Parks Department money: Just wait until dark to turn on the lights.
Definition of the 5 Whys
Root Cause Analysis 38
The 5 Whys is an iterative question-asking technique used to explore the cause-and-effect relationships underlying a particular problem.
The primary goal of the technique is to determine the root cause of a defect or problem. (The "5" in the name derives from an empirical observation on the number of iterations typically required to resolve the problem.)
Benefits of the 5 Whys
Root Cause Analysis 39
Help identify the root cause of a problem.
Determine if there is a relationship between different root causes of a problem.
Simplicity; easy to complete without statistical analysis.
Effective when problems involve human factors or interactions.
Root Cause Analysis 40
______________1. Why?
2. Why?3. Why?
4. Why?5. Why?
______________1. Why?
2. Why?3. Why?
4. Why?5. Why?
Computer Storage Costs Too High1. Why? Users keep too many large files as email attachments
2. Why? Users don’t know that this results in an extra charge to the company
3. Why? Email policy not communicated
4. Why? Official email policy not defined
5. Etc….
Computer Storage Costs Too High1. Why? Users keep too many large files as email attachments
2. Why? Users don’t know that this results in an extra charge to the company
3. Why? Email policy not communicated
4. Why? Official email policy not defined
5. Etc….
EffectEffect
Ask "Why?" 5 TimesAsk "Why?" 5 Times
Root Cause Analysis
5 Why Example
Refer Back to Scenario #1
How would you suggest the Plant Manager address the oil on to the floor?
Do you see an opportunity to use any of the tools we discussed?
See Scenario #2
Root Cause Analysis
41
5 Why Example (Scenario #2)The Plant Manager walked into the plant and found oil on the floor. He called the Foreman over and asked him why there was oil on the floor. The Foreman indicated that it was due to a leaky gasket in the pipe joint above. The Plant Manager then asked when the gasket had been replaced and the Foreman responded that Maintenance had installed 4 gaskets over the past few weeks and that each one seemed to leak. The Foreman also indicated that Maintenance had been talking to Purchasing about the gaskets because it seemed they were all bad. The Plant Manager then went to talk with Purchasing about the situation with the gaskets. The Purchasing Manager indicated that they had in fact received a bad batch of gaskets from the supplier. The Purchasing Manager also indicated that they had been trying for the past 2 months to try to get the supplier to make good on the last order of 5,000 gaskets that all seemed to be bad. The Plant Manager then asked the Purchasing Manager why they had purchased from this supplier if they were so disreputable and the Purchasing Manager said because they were the lowest bidder when quotes were received from various suppliers. The Plant Manager then asked the Purchasing Manager why they went with the lowest bidder and he indicated that was the direction he had received from the VP of Finance. The Plant Manager then went to talk to the VP of Finance about the situation. When the Plant Manager asked the VP of Finance why Purchasing had been directed to always take the lowest bidder the VP of Finance said, "Because you indicated that we had to be as cost conscious as possible!" and purchasing from the lowest bidder saves us lots of money. The Plant Manger was horrified when he realized that he was the reason there was oil on the plant floor. Bingo!
Copyright © 2004 Gene Bellinger42
Table Top Exercise
Root Cause Analysis
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Problem Statement 1: You have to spend more and more money on your utility bills.
Problem Statement 2: Your boss is unhappy because he has received work-papers that don’t meet this expectations.
Problem Statement 3: You frequently arrive to work late in the mornings and you are faced with disciplinary action if you don’t correct it immediately.
Problem Statement 4: You do not have enough money to retire comfortably.
Table Top Reporting Each group take 5 minutes to report on 5
Why Exercise
What were your questions
What were some potential root causes?
Root Cause Analysis
44
Closing Remarks Appreciate that Process Improvement is a
proven and established methodology that has been successfully implemented by corporate, academic, and government agencies.
You have gained an appreciation for the value of Root Cause Analysis and the part it plays in responding to recommendations
You have become familiar with the 5 why process and find it useful.
Closing Remarks 45