Root Cause Analysis
Institute 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 Bellinger
5
Process Improvement
Process Improvement Using the
Principles of Lean Six Sigma
Root Cause Analysis
6
Lean Six Sigma Is the Integration of Two
Powerful Business Improvement Approaches...
Lean
Six Sigma
Speed + Waste Elimination
Quality, Cost

Goal – Improve performance on
items Critical to Customer Quality
(CTQs)
Focus – Implementing Waste
reduction tools

Focus – Use DMAIC with (TQM)
tools to eliminate variation
Method – Improvement events
Value Stream Mapping

Method – Management
engagement, dedicated team effort

Goal – Reduce waste and increase
process speed


Lean Speed Enables
Six Sigma Quality
(Faster Cycles of
Experimentation/learning)
Six Sigma Quality Enables
Lean Speed
(Fewer Defects Means
Less Time Spent on Rework)
Efficiency
Root Cause Analysis
Effectiveness
7
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
(x)
Y=f(x)
Inputs
(Factors)
Outputs
(Responses)
Operating Budget
Training Budget
System Requirements
Number of People
Operating Hours
Functional Requirements
Process:
Info
Systems
Release
Customer Interface
Skills Selection
Root Cause Analysis
9
Y
Delivery Time
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
Defects
Control
Process
Waste
Over Processing
Inventory
Motion
Waiting
Root Cause Analysis
Transportation
11
Over Production
TIMWOOD: An Acronym for WASTE


Transportation:
Inventory:
Transporting something farther than necessary
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:
Root Cause Analysis
Work that needs to be redone
12
DMAIC Problem Solving Methodology
Define
Define the opportunity from both
business and customer
perspectives
Measure
Understand the process
and its performance
Analyze
Search for the key factors (critical X’s)
that have the biggest impact on process
performance and determine the root
causes
Improve
Develop improvement
solutions for the
critical X’s
Control
Root Cause Analysis
13
Implement the
solution and control
plan
Value Add – From the Customer
Perspective
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

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

Root Cause Analysis
14
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




Question
How does all of this relate to audit?
Root Cause Analysis
15
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
16
Root Cause Analysis and Findings
Root 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
17
Definition of Root Cause Analysis
A 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

Root Cause Analysis
Ensure the data collection process is
“Repeatable and Reproduceable”
23
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%.
Root Cause Analysis
24
Sample Pareto Chart:
Processing Errors
Pareto Chart of Processing Errors
140
100
120
80
80
60
60
40
40
20
20
0
Exception
Count
Percent
Cum %
HHG
73
58.9
58.9
TQ/TA
18
14.5
73.4
GHS
13
10.5
83.9
25
AT
8
6.5
90.3
New Res
7
5.6
96.0
Other
5
4.0
100.0
0
Percent
Count
100
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
Cause and Effect Diagram
(Also Called Fishbone)

What


When


A tool to represent the relationship between an effect
(problem) and its potential causes by category type.
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
Example: Fishbone Diagram
Material
Machine
Discovery of different
discount rates occurs too
late in process
Methods
Computer screens
Updates
Product
Shortages
Power Failures
Master customer discount
table not up-to-date
Management Policies
Incomplete Training on
common complaints
Marketing metrics
counterproductive
Mother Nature
Billing process not
accurate
Too many “jumps”
Measurements
Manpower
Root Cause Analysis
28
Effect: Too many
price adjustments at
check-out
Not enough staffing during
peak times
Unfamiliarity with procedures
For vacation
notification
Notification of
absence
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
impact
 Time
 Cost
 Manpower
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)

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
Root Cause Analysis
33
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

See Jefferson Memorial Handout
Root Cause Analysis
36
Jefferson Memorial
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.
Businessweek March 14, 2006 , Keith McFarland
37
Definition of the 5 Whys

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.)
Root Cause Analysis
38
Benefits of the 5 Whys

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
39
Root Cause Analysis
Ask "Why?" 5 Times
Effect
Computer Storage Costs Too High
1. 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
______________
1. Why?
2. Why?
3. Why?
4. Why?
5. Why?
Root Cause Analysis
5. Etc….
40
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 Bellinger
42
Table Top Exercise

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.
Root Cause Analysis
43
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
Questions?
 Terry
Upshur
terry.upshur@mail.house.gov
Closing Remarks
46