Root Cause Analysis

Contacts: Peter Fishman, Jennifer Caine

May 2001
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Agenda

 Description

 Applications

 Analytic Method

 Client Results
-Cable Co.

 Case Experience GXC

RootCauseAnalysis 2
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Description
 Root Cause Analysis is a comprehensive,
Description iterative approach to uncovering the true
drivers of process problems
- Highlights priority areas for problem resolution
- Used to understand performance gaps and to
prioritize areas for improvement
 Elements of root cause analysis include:
- Process mapping
- Fishbone diagrams
- Prioritization matrix

Client Cases Modules

Relevant Links  State Farm Insurance  Defection Root Cause Anal
 Riverwood ysis

 Schwan’s  Root Cause Logic Tree

 Redesign
GXC
Kickoff

GXC Disguised Cases

 Can Co

RootCauseAnalysis 3
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Agenda

 Description

 Applications

 Analytic Method

 Client Results
-Cable Co.

 Case Experience GXC

RootCauseAnalysis 4
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Applications

 Root Cause Analysis is applicable in identifying

Applications drivers for a full range of business problems in all
markets including:
- Manufacturing companies experiencing problems like high
costs, long cycle time, low throughput or high inventory
- Organizations with high overhead costs and inefficient
management structure
- Service organizations needing to improve customer
retention and understand loyalty drivers

 Root Cause Analysis reveals the key drivers behind

Benefits problems a business is facing and can lead to
significant results
- Improve manufacturing or service processes
- Decrease costs
GXC
- Increased quality and customer satisfaction

RootCauseAnalysis 5
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Agenda

 Description

 Applications

 Analytic Method

 Client Results
-Cable Co.

 Case Experience GXC

RootCauseAnalysis 6
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Analytic Method
Three steps are taken after a problem (or next level root cause) has been
identified

Prioritize Key Areas

Identify Issues “Peel the Onion”
for Improvement

 Gather data and conduct  Determine which issues  Probe further into the
interviews to highlight merit continued root issues to discover true
potential issues/problem cause analysis drivers
areas - Size of issue/
opportunity  Ask Why? Why? Why?
 Brainstorm possible root to uncover deeper
- Relation to other steps
causes in the process causes
 Perform process mapping - Impact downstream  Understand why
to identify potential - Difficulty of resolution process inefficiencies
underlying drivers of the were introduced
problem at various levels
 Repeat these three
- Identify process
disconnects steps if necessary
- Suboptimal steps  Establish targets and
GXC
 Create fishbone diagrams objectives for
to map areas of root actionable solutions
causes - Prioritization matrix
- Describe primary causes
and list sub-causes for
each primary cause
RootCauseAnalysis 7
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 Root Cause Logic Tree (1 of 2)
First level root causes are identified, then secondary level root causes and so
on…
Defection Root Cause Logic Tree

Why did you close your bank account?

Product
Price Location Agent Service features/Quality

Customer Agent
Fees Branch Competitor Agent left Poor Minimum
Service charges relocated moved Billing
closed location Interaction balance
Service
requirements

Branch
Per check ATM Monthly Changed Moved Moved ATM
charges charges Bounced account jobs within outside location
machines
check fee branch branch
fee
network network
area area New Existing
branch branch
location network

GXC

• Extensive probing required to uncover the specific customer

reasons for defecting
• Additional analysis required to understand root cause interaction
and system causes

RootCauseAnalysis 8
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Root Cause Logic (2 of 2)
Billing Service

Service/ Poor interaction with billing

Billing error late fees Payment schedules
employees

Don't
Too understand
high No leniency/ Not
Over- Bill Never Not knowledge-
difficult to Difficult to courteous Slow to process
billed billed Go to payment able/ helpful
received resolve reach changes
schedules under
late
"price"

Put me on Line Don't No human Policy Billing

hold too always return interaction changes errors
long busy calls
GXC

• Specific billing service root cause identified

• Probe for additional root causes

RootCauseAnalysis 9
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Fishbone Diagram
Fishbone diagrams are a useful way of brainstorming and organizing several
levels of root causes

E-Stop Manual stop Jog mode

Clean blankets Label change
Clean up
Stripper jam See jog mode
Check trip problem Line 3 mass system
Pin oven down Clear single filter
– infeed problem
Safety
Varnish check (2 per shift)
Pin chain failure Replace blanket
Machine related 6 cans check
Mechanical failures Replace plate
Printer
downtime
Start-up from slow Can stays on pin too long
Power blip speed or down
Dented can

UV flame sensor Low vacuum on belt

Belts break
on blower Back-up on stripper to conveyor
Tip over from washer GXC
Drive chain out of adjustment

Miscellaneous jams

Oven failure Invertor jam Printer discharge

jam

RootCauseAnalysis 10
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Prioritization Matrix
Opportunities for actions should be assessed and prioritized based on
investment required and potential impact

High

2 1
Pursue First
Selectivity Priority

Magnitude
of Return Medium

4 3
Low Potential
Priority “Quick Hits”

Low GXC

Low Medium High

Ease of Implementation

RootCauseAnalysis 11
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Tips

 Enlist client operations personnel when brainstorming

possible root causes
 Understand the process as a whole by observing,
interviewing and process mapping
 Avoid spending time on detailed root cause analysis of
less leveraged or unavoidable issues
 Expose deepest level root causes if possible, in order to
address the problem from the bottom up
 Understand which root causes drive performance more
than others
 Reality-check hypotheses with client to stay on the
correct trajectory and to understand ease/difficulty of GXC

implementing solutions

RootCauseAnalysis 12
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Agenda

 Description

 Applications

 Analytic Method

 Client Results
-Cable Co.

 Case Experience GXC

RootCauseAnalysis 13
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Overview

Situation/Key Issues  Cable Co, a leading manufacturer of wire and cable was
struggling to hit operating targets for its industrial
division
 Objective was to improve the profitability of the West
Plant focusing on improving throughput
 A key element of Bain’s participation was to determine
the root causes of low capacity utilization in the West
Plant

Bain Approach  The Bain team with a client SWAT team diagnosed
several levels of root causes and developed solutions
- Diagnosed key gaps in capacity by benchmarking,
brainstorming and data gathering
- Prioritized key areas for further probing
- “Peeled the onion” on each target area
- Defined initiatives to address priority or quick hit areas for
improvement GXC

Results  Specific root causes and initiatives were identified for

several problems contributing to capacity loss

RootCauseAnalysis 14
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Client Example – Cable Co.
ILLUSTRATIV
E
Through benchmarking and tracking lost capacity at bottlenecks, Bain
identified and quantified performance gaps

30
Plant Throughput (Feet

20
of Finished Cable)

Process
Effectiveness
43%
10

GXC

0 Actual
Optimal Un-scheduled Trouble- Maintenance Setup Run Other Scrap
Throughput Downtime Shooting Downtime Loss Efficiency Throughput
Loss Loss

RootCauseAnalysis 15
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 Client Example - Cable Co.
Bain prioritized three performance gap areas for detailed root cause analysis

Sub-Optimal Capacity Utilization

Maintenance Set-up loss

Troubleshooting
Downtime

Wire/
Routine Post-
Compound Online machine Weld Waiting for Work Compound Reel/Coil Bobbin
Mechanical Accumulator setup
Valve Handling Break Maintenance Practices Changes Change
adjustments adjustments

GXC

Each level of root causes analysis

requires asking Why? Why? Why?

RootCauseAnalysis 16
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Client Example - Cable Co.

Brainstorming and detailed analysis of setup

loss revealed specific root causes
 Reel/Coil Boobin Issues
- Past-due rush orders
Percent of Total
- Materials shortages
Materials related loss
Other - Old tooling
Reel/Coil Bobbin Change
Scrap
100%  Compound Change Issues
Run Effic. Loss - Material/brazing variations
damage tooling
Compound
80 Troubleshooting Changes
- Extruder barrel must be purged
- Clean tooling
 Work Practices Issues
60 - Inexperienced operators due to
Maint job rotation
Dntm Loss Work Practices - Poor/missing hand tools
40 - Non-functioning equipment
 Screw Change Issues
Waiting for - Machine operators not
20 Setup Loss Maintenance/ authorized
GXCto change screws -
required to wait for maintenance
Screw Change
workers
0 Capacity Effectiveness Setup Loss Root Causes
- Excessive wait times
- Maintenance shifts not fully
Opportunity staffed

RootCauseAnalysis 17
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Client Example - Cable Co.

Organizing root causes along key dimensions clarified potential areas for
improvement

Scheduling Labor Equipment

Missing prybars

Varying skill No self-centering

levels tooling

No established training Unscheduled

Rush orders program maintenance downtime
break groupings
Chair-time mentality Broken wrenches
Set up time loss
Brazing dies burnt and broken
Tools not pre-staged

Maintenance wait time Compounds drive setup

frequency

Troublesome
compounds

GXC

Process Material

RootCauseAnalysis 18
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Client Example - Cable Co.
Brainstorming and detailed analysis revealed specific root causes of
maintenance downtime loss…
Percent of Total
Materials related loss
Other
Scrap
100%  Significant downtime
Run Effic. Loss
Other amounts are driven
80 Troubleshooting
by:
- Limited preventative
Valve maintenance
60 - Poor equipment
Maint
Dntm Loss calibration
Accumulator
40 - Missing spare parts
 Scheduled
20
Setup Loss Mechanical maintenance is used
to address current
0 problems rather
GXC
than
Capacity Effectiveness Setup Loss Root Causes
Opportunity
insuring against
unforeseen
equipment failures

RootCauseAnalysis 19
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Client Example - Cable Co.
And root causes of troubleshooting downtime loss

Percent of Total
Materials related loss
Other  Other Issues:
Scrap
100% - Lack of brazing and die
Run Effic. Loss maintenance training
Other - Inexperienced operators
80 Troubleshooting  Routine Issues:
Routine
Post-Setup - Varying brazing techniques
60 Adjustments - Build-up on welding dies
Maint
 Online Adjustment Issues:
Dntm Loss Online
40 Machine - Preferred settings vary
Adjustments between operators
 Temperature
20 Compound  Screw RPMs
Setup Loss
Handling  Payoff/ takeup
GXC
speeds
0
Capacity Troubleshooting  Compound Handling
Effectiveness Root Causes Issues
Opportunity - Inexperienced with some
compounds
RootCauseAnalysis 20
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Potential Opportunities
Bain identified potential opportunities for addressing the root causes of
capacity loss

Set-Up Loss Maintenance Downtime Troubleshooting

 Process  
Dedicate maintenance Compound reduction
- Self-centering tooling coverage to all machines  Brazing die
- Provide tools/aids to reduce
set-up time  Improve effectiveness of preventative
- Add longer life tooling where preventative maintenance maintenance
appropriate program  Training on welding
- Determine actual tooling life  Track and schedule repair technique
 Machine orders  Capturing machine
- Capture and repeat machine  Execute minor repairs during settings for repeat
settings
set-up products
- Modify machines to promote
quick change  Stock adequate spares
- Improve make ready  Repair all outstanding
methods and procedures
equipment deficiencies
 Scheduling - Pay offs
- Freeze production schedule - Take ups GXC

- Reduce number/type of - Cameras

compounds - Temperature controllers
- Gauges

RootCauseAnalysis 21
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Client Example – Cable Co.

Detailed initiatives were identified for each root cause

Status after 1 Month of

Sample Opportunity Initiative Implementation
 Track and schedule  Institute work order  Being instituted on
repair orders system machines
 Identify/ prioritize  Ongoing
routine maintenance
 Repair outstanding  Install closed loop  Capital request in
equipment deficiencies cooling system process
 Install software  Complete (#2)
- Ongoing on other lines
 Stock adequate spares  Have extra points on  In process
hand - Transmissions being
- Transmissions rebuilt
- Pumps
- Valves
 Improve effectiveness  Train operators on  Complete
of preventative video jet printer PM GXC

maintenance program

RootCauseAnalysis 22
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Summary

 Unplanned downtime is primary source of

capacity problem. Main drivers include:
-Poorly functioning equipment
-Lengthy setups
-Troubleshooting
 In terms of opportunity:
-Downtime drivers are very addressable
-Fact base exists to support root cause analysis
-Historical/ recent performance indicates high process
effectiveness levels are achievable
 Plant must also address supervision, work force GXC

and maintenance support issues in order to

sustain improvement gains

RootCauseAnalysis 23
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Agenda

 Description

 Applications

 Analytic Method

 Client Results
-Cable Co.

 Case Experience GXC

RootCauseAnalysis 24
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Case Experience

GXC
Client/Code Case Objective/Approach Industry Year Office/VP Relevant Slides
Summary

• Schwan’s/ • Organizational design • Wholesale • 93 • Boston/ • yes • Lessons Learned

SWN Trade/ Ehrsam
Distribution
• BICC Cables • Turnaround strategy • Low tech • 98 • Boston/ • yes • Deck
Co./ B15 manuf. Johnson

• State Farm I • Customer • Insurance • 94 • Boston/ • yes • Lessons

nsurance/ S Retention/Loyalty Bechek Learned
TM

• State Farm I • Customer • Insurance • 94 • Boston/ • yes • Lessons Learned

nsurance/ S Retention/Loyalty Bechek
TJ

• Motorola/ • Reengineering • Communic • 95 • Boston/ • yes • Lessons Learned

MSO ations Novich

• “Can Co” • Growth strategy capability • Can

GXC
module manufacturing

• Riverwood • Profit Hunt/Manufacturing • Packaging/ • 96 • Boston/ • yes • Several

/RVW Optimization Containers Bechofer

RootCauseAnalysis 25
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.