Root Cause Analysis
Do you believe that unwanted situations within an organizations are about 95% related to process problems and only 5% related to personnel problems? In my views, they are 100% related to personnel problems. :) We always assume that everyone in the organization doing their best to do the right things, but everything ends up screwed up. Actually, the root cause of these situations is local optimization with no global thought involved. When we are working 'in' the process we are not working 'on' it. The person managing or owning the business process should have reasonable knowledge of the process he owns, the technology and the people involved therein.
The Plant Manager walked into the plant and found oil on the floor. He called the foreman over and instructed him to have maintenance clean up the oil. On the next day he again found oil on the floor in the same area of the plant. He thought it must be a process problem. To find the root cause of the problem, he asked the foreman 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 replied that maintenance had installed three gaskets over the past few weeks and all were seemed to leak.
The Plant Manager immediately approached the Maintenance and understood from them that they were all bad and Purchasing had already been informed about the faulty gaskets. 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 informed that they had been trying continuously for past two months to get the supplier make good on the last order of gaskets that were all seemed to be bad.
The Plant Manager then asked the Purchasing Manager why they were purchasing from this supplier when they were so disreputable. The Purchasing Manager said because they were the lowest bidder when quotes were received from various suppliers and as a process they always purchase from the lowest bidder. The Plant Manager then asked the Purchasing Manager why they are continuing with this lowest bidder and he indicated that he had received the direction from the VP Finance.
The Plant Manager then went to talk to the VP Finance about the situation. When the Plant Manager asked the VP Finance why Purchasing had been directed to always purchase from the lowest bidder, the VP 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 to find that he was held the reason there was oil on the plant floor.
The Plant Manager walked into the plant and found oil on the floor. He called the foreman over and instructed him to have maintenance clean up the oil. On the next day he again found oil on the floor in the same area of the plant. He thought it must be a process problem. To find the root cause of the problem, he asked the foreman 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 replied that maintenance had installed three gaskets over the past few weeks and all were seemed to leak.
The Plant Manager immediately approached the Maintenance and understood from them that they were all bad and Purchasing had already been informed about the faulty gaskets. 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 informed that they had been trying continuously for past two months to get the supplier make good on the last order of gaskets that were all seemed to be bad.
The Plant Manager then asked the Purchasing Manager why they were purchasing from this supplier when they were so disreputable. The Purchasing Manager said because they were the lowest bidder when quotes were received from various suppliers and as a process they always purchase from the lowest bidder. The Plant Manager then asked the Purchasing Manager why they are continuing with this lowest bidder and he indicated that he had received the direction from the VP Finance.
The Plant Manager then went to talk to the VP Finance about the situation. When the Plant Manager asked the VP Finance why Purchasing had been directed to always purchase from the lowest bidder, the VP 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 to find that he was held the reason there was oil on the plant floor.
One may find this scenario somewhat funny, and laugh at the situation but it is often all so true in numerous variations when you reach the last Why? doing Root Cause Analysis.
Labels: Manufacturing, Process Improvement
posted by Narayan Mantri at
6:43 PM
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