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Advanced Research
Morgan Motor Company
IBMRS208R2 lesson #4KG van der Kooy
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Today
Analysing business processes by meansof Cause and Effect diagram
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An analysis tool that provides asystematic way of looking ateffects and their respective
causes Developed by Dr. Kaoru Ishikawa
of Japan in 1943
It is referred to as an IshikawaDiagram or a Fishbone Diagram
What is it?
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It helps determine the rootcauses
of a problem using a structured
approach.It encourages group participationand utilizes group knowledge of
the process.
It uses an orderly, easy-to-readformat to diagram cause-and-effect relationships
It indicates possible causes of
variation in a process.
Why implement this?
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It increases knowledge of theprocess by helping everyone tolearn more about the factors at
work and how they relate.It identifies areas where data
should be collected for furtherstudy.
Why implement this?
EXAMPLE OF A BUSINESS PROCESS>
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PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 1>
Submission of Billing toClient
Receive update ofnewly issued billings
Find and update clientsbilling statements
Locate includedclients file folders
File folders
Call each clienton update
BuyersInformation Sheet
Send Billing Statements
Locate included clientsBuyers Information Sheet
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STEP 1:
Decide on the effect to beexamined.
An effect may be positive (anobjective) or negative (a problem),
depending upon the issue that isbeing discussed.
Identify and clearly define the outcomeor EFFECT to be analyzed.
>POSITIVE pride and ownership over productive areas upbeat atmosphere that encourages the participation of the group
> NEGATIVE justifying why the problem occurred and placing blame easier for a team to focus on what causes a problem than what causes
an excellent outcome concentrate on things that can go wrong may foster a more relaxed
atmosphere which sometimes enhances group participation
PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 2>
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STEP 2:
Draw a horizontal arrow pointing to theright. This is the spine.
To the right of the arrow, write a briefdescription of the effect or outcome
which results from the process. Draw a box around the description of the
effect.
Draw the SPINE and createthe EFFECT box.
CAUSE-AND-EFFECT DIAGRAM , updated with STEPS 1 & 2>
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9/20 PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 3>
InaccurateSubmission ofBilling to Client
Effect Box
Spine
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Establish main causes, or categories,
under which other possible causes willbe listed. 8Ms of manufacturing 4Ps of service 3Ms and P
STEP 3:
Identify the main CAUSES contributingto the effect being studied.
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The 8 Ms (used in manufacturing)
Machine (Technology)Method (Process)Material (raw material, consumables, etc)Man Power (People)Measurement (Inspection)
Mother Nature (Environment)ManagementMaintenance
The 4 Ps (used in service industries)
PoliciesProceduresPeoplePlant
The 3Ms and P (often used)Methods, Materials, Machinery & People
STEP 3:
Identify the main CAUSES contributingto the effect being studied.
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Write the main categories your team has
selected to the left of the effect box.Draw some above and below the spine.
Draw a box around each category label and
use a diagonal line to form a branch from thebox to the spine.
STEP 3:
Identify the main CAUSES contributingto the effect being studied.
CAUSE-AND-EFFECT DIAGRAM , updated with STEPS 1, 2 & 3>
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Materials
PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 4>
InaccurateSubmission ofBilling to Client
Methods People
Machinery
Main Causes
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STEP 4:
Identify as many factors or causespossible and attach them as sub-
branches of the major branches. Fill in detail for each cause.
For each major branch, identify otherspecific factors which may be theCAUSES of the EFFECT.
CAUSE-AND-EFFECT DIAGRAM, updated with STEPS 1, 2, 3 & 4 >
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PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 5>
Materials
InaccurateSubmission ofBilling to Client
Methods People
Machinery
Ignorance
People fail to informclient thru call/e-mail
Unreliablemail system
Erroneoussorting
of billingstatementsInvalidlist ofupdates
Phone linedisconnected
Erroneous
Informationin BIS
No file forrecord of billingstatementsin clients folders
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STEP 5:
You can do this by askinga series of WHY questions.
Identify more detailed levels of causesand continue organizing them underrelated causes or categories.
FROM GIVEN EXAMPLE:
Q: Why is there an invalid list of updates?
A: Because the data was mixed up.
Q: Why was the data mixed up?
A: There was a problem with the manual organization of the files.
Q: Why is there a problem with the manual organization of the files?
A: Because there are no back-up files and since it was manuallyprearranged, inaccuracy is inevitable.
CAUSE-AND-EFFECT DIAGRAM , updated with STEPS 1, 2, 3, 4 & 5>
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PUTTING CAUSE-AND-EFFECT DIAGRAM TO TEST: STEP 6>
Materials
InaccurateSubmission ofBilling to Client
Methods People
Machinery
Ignorance
People fail to informclient thrucall/e-mail
Unreliablemail system
Erroneoussortingof billing
statements
Invalidlist ofupdates
Phone linedisconnected
ErroneousInformationin BIS
Assortedrecordsof billing
statementsin clientsfolders
Mixed updata
Inaccuracyinsortingdata
Manualfile
organization
Poortraining
Mixedup data
InaccuracyIn sortingdata
Ignorance
Wrong phone number/e-mail information
Erroneousinfo
in BIS
Inaccuracyinsortingdata
Manual file
organization
Notraining
Manual fileorga
nization
Skipping payingmonthly bills
Poortrainin
g
Nom
oney
Inaccuracyin sortingand givingout mail
Manua
l filesystem
Mixedupdata
Inaccuracyinsortingdata
Manualfile
organization
Mixed
up
data
Inaccuracyinsortingdata
Manual fileorga
nization
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It helps identify causes that warrant
further investigation. Use a pareto chart to determine the
cause to focus on first. See the balance of your diagram,
checking for comparable levels ofdetail for most of the categories.
A thick cluster of items in one area may indicatea need for further study.
A main category having only a few specificcauses may indicate a need for furtheridentification of causes.
If several major branches have only a few sub-branches, you may need to combine themunder a single category.
Look for causes that appear repeatedly.These may represent root causes.
Look for what you can measure in eachcause so you can quantify the effects ofany changes you make.
Most importantly, identify and circle thecauses that you can take action on.
STEP 6:
Analyze the diagram
CAUSE-AND-EFFECT DIAGRAM, completed>
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RECOMMENDATIONS from completed CAUSE-AND-EFFECT DIAGRAM>
Poor
training
Manualfile
organization
Poortraini
ng
Manual file
systemManual
fileorganiza
tion
Manualfile
organization
Materials
InaccurateSubmission ofBilling to Client
Methods People
Machinery
Ignorance
Peoplefail toinformclient thrucall/e-mail
Unreliablemail system
Erroneoussorting
of billingstatements
Invalidlist ofupdates
Phone linedisconnected
Erroneous
Informationin BIS
Assortedrecords
of billingstatementsin clientsfolders
Mixed updata
Inaccuracy
insortingdata
Manual
fileorganization
Poortraining
Mixedup data
InaccuracyIn sortingdata
Ignorance
Wrong phone number/e-mail information
Erroneousinfo
in BIS
Inaccuracyinsortingdata
Manual file
organizati
on
Notraining
Manual file
organizati
on
Skipping payingmonthly bills
Poortrai
ning
Nom
oney
Inaccuracyin sortingand givingout mail
Manual file
system
Mixedup
data
Inaccuracyinsortingdata
Manualfile
organization
Mixed
up
data
Inaccuracyin
sortingdata
Manual fileorganizati
Notraining
Manualfile
organization
Manualfile
organizat
ion
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ANALYSIS
The level of detail is well-balanced.
The causes poor/no training andmanual file organization/system arerepeated several times.
These causes stated above are theones that should be attended toand given action on ASAP.
RECOMMENDED SOLUTIONS Poor/No Training -> Give tutorials andseminars to new and old employees alike.Have people check employees performancesevery once in a while.
Manual File System -> Have a computer-based information system to maintain theorganization. It will not only give you back-upfiles but make the system work faster. Make
sure it is maintained and updated at all times.