Since the beginning of commerce, companies have faced obstacles that impeded growth and stymied innovation. It’s the nature of business, and life. However, it’s the act of overcoming these obstacles that often leads to growth generation and innovation breakthroughs that seemed impossible beforehand. Insert root cause analysis. This blog will highlight three specific analytical tools crucial to effectively identifying and solving problems. Each are adaptable and easily implemented. The key is to be methodical and let the facts do the talking; all problems and obstacles have a story to tell.
Because of this, it almost goes without saying, to be a market leader, to be a titan of your industry, and to not get swallowed up by your competitors, you must identify and solve critical problems affecting your organization, efficiently and prudently. Because if you don’t, your competitors will, and they’ll eat your lunch before you even have a seat at the table. Furthermore, it’s essential to uncover problems that are symptoms of a deeper problem, and then prioritizing which to address immediately. Using the tools outlined below will force you to understand what the full story is and develop corrective actions to resolve the critical issues facing your business today.
3 Analytical Tools for Root Cause Analysis
1. SWOT Analysis
Performing a SWOT (Strengths, Weaknesses, Opportunities, Threats) as a team is often a great starting point because it spurs discussion and brings the most critical problems to light. It also helps the business understand what they do well and use those success strategies to solve problems in other areas.
To perform a SWOT analysis is simple at the surface, but how you do it will determine how comprehensive the results will be. Start by gathering a diverse team of 5–10 people, making sure this group is as diverse as possible. Bring together people from the shop floor, management, analysts, marketing, sales, etc.; the more diverse the group, the more divergent the conversation, and the better the results will be.
Next define the scope of the analysis. It may be broad (the entire business) or narrow (order fulfillment, for example). Build a 4-quadrant grid and label each one as “Strengths”, Weaknesses”, “Opportunities”, or “Threats” categories.
Finally, talk through each category as a group and add the pertinent information to the quadrants. Once completed, take a step back and draw conclusions from the SWOT diagram as a team. Use these conclusions to develop focus areas and drive root cause analysis efforts.
2. 5 Whys Analysis
Once a problem or problem area is identified — via a SWOT analysis or the like — it’s critical to identify the root causes. In short, to effectively solve a problem, you can’t just fix one symptom of the core problem because doing this will only be a temporary solution and could cause new problems to arise in other areas. Using the 5 Whys Analysis method will help ensure the problem root cause is identified.
The best part about using the 5 Whys method is that it’s super simple to use, yet provides powerful results. All you must do is identify a symptom of the problem and ask why this symptom is occurring, five times(ish). As a hypothetical, let’s assume that a certain finished material isn’t available during the order fulfillment process. Here are five sample questions with regard to this scenario, and their corresponding answers:
Why is material missing when the picker goes to retrieve it? Because no one is putting the material in the bin.
Why is no one putting the material in the bin? Because it was never manufactured.
Why was the material never manufactured? Because the order for manufacture was never placed.
Why was the order for manufacture never placed? Because the ERP system placed the wrong order for manufacture.
Why was the wrong order for manufacture placed? Because there are data integrity issues that are causing incorrect orders for manufacture to be placed.
As you can see in the example scenario above, the 5 Whys Analysis identified the root cause as to why the finished material wasn’t available during the order fulfillment process. Now, corrective actions can be taken to resolve future material loss; fixing the data integrity issues will result in correct order placement.
3. Fishbone (Ishikawa) Diagram Analysis
Originally developed by Dr. Kaoru Ishikawa, a Japanese quality control expert, the Fishbone Diagram is another great tool for understanding the root causes of a problem. Similar to a SWOT analysis, this is an excellent tool to facilitate a problem root cause analysis discussion with a group of people because it helps keep the conversation focused.
To begin a Fishbone Diagram Analysis the “head” of the fish is the identified problem. The spine of the fish extends from the head, and five main categories branch off: Man, Machine, Method, Material, and Environment. From each main category branch, Primary and Secondary causes branch off. Using the same order fulfillment example as above, below is the Fishbone Diagram that results from the root cause analysis:
Root cause analysis may seem overwhelming at times, but it’s practice and application are vital for the success of your business. Without it, an organization won’t be able to reach its potential. However, using these tools, along with strong root cause analysis facilitation practices (look for a future blog post) will be a difference maker in your organization. The best thing you can do is start using these tools today and continue to use them moving forward. As the old saying goes… Practice makes perfect.