Problem Solving Tools and Techniques by TQMI

Tools and Techniques

Business Problem Solving -

CONTENTS

• Introduction

• The Problem Solving Process

• Brainstorming

• Cause and Effect Analysis

• Checksheets

• Concentration Diagrams

• Process Flowcharts

• Data Handling and Display

• Pareto Analysis

• Force Field Analysis

• Ranking and Rating

• Solutions Effect Analysis

• Failure Prevention Analysis

• Problem Solving Summary

• What is Continuous Improvement?

• Checklist

INTRODUCTION

All organisations need to improve continuously. There is increasing pressure from customers, competitors, regulators and employees to do things better, faster and at lower cost.

CONTINUOUS IMPROVEMENT

Community Shareholders Competitors

Suppliers Government

Other Partners

Employees Technology Regulators

Customers

INTRODUCTION

The ability to prevent and solve problems is one of the essential skills which people need to help them address these challenges.

This guide explains a simple problem solving process and the tools you will need to help solve and prevent day-to-day, workplace problems. It will help you learn what the tools are, what they are

used for, how to use them and their benefits.

We have included a range of examples so that you have the opportunity to see the tools applied in different situations. They work just as well in manufacturing and service organisations, and in the public, private and non for profit sectors.

The problem solving process and tools can be applied by individuals and teams wherever they work in an organisation and whatever their role.

WHATEVER MADE

YOU SUCCESSFUL

IN THE PAST WON’T

IN THE FUTURE

INTRODUCTION

WHAT IS A PROBLEM?

Put simply, a problem is “a deviation from normal expectations.” So, if what you’ve got is not what you expected, or what you want, it’s a problem.

CURRENT SITUATION

DESIRED SITUATION

PROBLEM

INTRODUCTION

People often get muddled between problems, symptoms and solutions so it helps to understand the difference:

• A PROBLEM is a deviation from normal expectations

• A SYMPTOM is an effect of a problem

• A SOLUTION is a way to correct a deviation from normal expectations

The differences may seem subtle, but they affect the way you go about defining and solving problems. If you are not careful, you may be starting in the wrong place!

“Our problem is we need new equipment” This is a SOLUTION

“Our problem is poor morale” This is likely to be a SYMPTOM of more specific problems

“Our problem is how to speed up the ordering process”

This is leaping to solutions, without having defined the PROBLEM

“Our problem is which supplier to choose This requires a DECISION, not a problem to be solved

THE PROBLEM SOLVING PROCESS

What is it?

The Problem Solving Process is a methodical and effective approach for analysing problems and generating workable solutions to them.

When to use it

It can be used whenever you recognise that a problem exists and that a work process needs to be improved. It will enable you to define a problem fully, conduct an analysis of the causes of the

problem and work through to the point of identifying and implementing improvement solutions. It can be used by individuals, but most powerfully, by teams.


Why use it?

To dive headlong into implementing solutions often generates short-term improvements. However, this can fail to eradicate the problem entirely because only the symptoms, not the ROOT CAUSES of the problem have been dealt with. The problem solving process ensures you can identify quick fixes as well as permanent solutions to the ROOT CAUSES.

The Problem Solving Process

1. Identify Possible

Cause

2. Investigate

& Fix

3. Analyse Data &

Identify Root Causes


Solutions

5. Select & Test Solutions Define the problem Implementation stages

If viable: Review/re-start If not viable


The problem solving process has three separate phases. Firstly we must DEFINE THE PROBLEM. Then we can use the PROBLEM SOLVING WHEEL to come up with workable solutions to our problem. Finally, we go into the IMPLEMENTATION STAGES where we put our solutions into effect and see if they have solved our problem.

One or more of the tools and techniques, such as Cause and Effect Analysis, Pareto Analysis or Checksheets may be applied throughout the process. Each of the tools is described more fully on the following pages.

DEFINE THE PROBLEM

IMPLEMENTAION STAGES

PROBLEM SOLVING WHEEL


But first, let’s look at the problem solving process in more detail:

Define the Problem

It is often necessary to step back from your first thoughts on what a problem is, so that you truly understand what it is that needs to be solved.

Problem Definition questions provide a framework to specify more closely what a problem is. By asking what, where, when, who, how big?, we can begin to define a problem and understand its impact.

• What exactly is the problem? • Where is the problem? • When does the problem occur? • Who is affected by the problem? • How big is the problem?

It can also be helpful to ask questions about “what is outside the problem?” This helps identify the boundaries to a problem and may suggest where to look for solutions.

Problem definition example

From this Problem Definition we might want to find out what happened 6 days ago and why other teams aren't affected.


INSIDE THE PROBLEM OUTSIDE THE PROBLEM

WHAT? Backlogs of XYZ claims have increased Backlogs of ABC claims have remained static

WHERE? In Special Claims Processing Unit All other processing teams

WHEN? In the past 6 days Backlogs were acceptable over the past 3 months

WHO? 5 staff in the SCPU Staff in other teams

HOW BIG? Backlog has increased to 40 claims and is rising by 5 per day

No noticeable increase in claim volumes in other areas


THE PROBLEM SOLVING WHEEL

We use the five steps in the wheel to find workable solutions to a problem. It is a systematic way to find root causes and solutions.

STEP 1: Identify Possible Causes

Aim: To generate a list of all the possible causes of a defined problem.

1. Identify Possible Cause

2. Investigate & Fix

3. Analyse Data & Identify Root

Causes

4. Identify Possible Solutions

5. Select & Test Solutions

How: Using idea generation tools, individuals or teams identify possible causes that relate to the problem definition. Keep an open mind, do not judge any suggestions at this stage and don’t get side-tracked into trying to analyse other problems.


Main tools to use: • Brainstorming • Cause and effect Analysis

Other possible tools:

• Process Flowcharts


STEP 2: Investigate And Fix

Aim: To identify which possible causes actually contribute to the problem, and fix those that can be acted upon immediately.

How: Collect data about each possible cause and see if it is linked to the problem.

Don’t rely on peoples’ opinions to rule out possible causes; collect data and facts!

Implement any temporary fixes carefully and monitor the effect of any changes you make. Make sure that quick fixes are followed up with actions to address the root causes.


2. Investigate

& Fix


Causes


Solutions



Main tools to use: • Checksheets • Concentration Diagrams • Pareto Analysis • Data Handling and Display


• Process Flowcharts • Interviews and Questionnaires


STEP 3: Analyse Data And Identify Root Causes

Aim: To identify the root causes of a problem.

How: Use analysis tools to find the cause(s) which, if removed, will ensure a problem is solved and stays solved. Ensure you recognise the differences between “fixes” and

root causes.


2. Investigate

& Fix


Causes


Solutions


Main tools to use: • Pareto Analysis • Data Handling and Display


• 5 Whys • Process Flowcharts

Fixes vs. Root Causes – examples:


Problem Possible Fix Possible Root Causes

Errors On Expense Forms Re-train people Form needs simplifying and redesigning

High Staff Absenteeism Monitoring and disciplinary action

Poor leadership skills from line managers

Equipment Breakdown Remedial maintenance No system of preventive maintenance


STEP 4: Identify Possible Solutions

Aim: To identify possible solutions which could be used to

eliminate the identified root cause(s).

How: Use idea generation techniques and

involve those affected by the problem in

identifying possible solutions. Aim for as

many ideas as possible; don’t evaluate at

this stage. If you have done a thorough

analysis, the solution may be obvious though!


2. Investigate

& Fix


Causes


Solutions


Main tools to use: • Brainstorming


STEP 5: Select And Test Solutions

Aim: To select an effective, practical and implementable solution that will remove the root cause of a problem.

How: Use Ranking and Rating to select the best solution against the criteria agreed by those involved. Assess the impact of the chosen solution and ensure that it doesn’t

cause more problems than it solves. You may need to review what you’ve done and re-start if you can’t find a viable solution.


2. Investigate

& Fix


Causes


Solutions



Main tools to use: • Ranking and Rating • Solutions Effect Analysis • Failure Prevention Analysis


• Force Field Analysis

Financial tools such as Cost-Benefit Analysis and Payback Analysis can also be used to help with the cost justification of any solutions. Ask a Finance person if you need help with this.


Implementation Stages

Once a viable solution has been identified, you can move on to the Implementation Stages. This involves the implementation of the solution generated at the previous stage together with the

establishment of indicators to monitor the effectiveness of the solution.

Education, Training and Communication • Involve all those affected by the problem solution • Listen to feedback • Consider education and training needs

Implementation Planning • Identify planned activities and critical path • Identify measures and resource requirements • Involve and train those affected by the solution

Implementation and Follow Up • Implement your solution • Measure improvement • Follow up – make sure it sticks • Report on success

BRAINSTORMING

What is it?

Brainstorming is a technique that encourages creative thinking and the generation of ideas.

Why use it?

Rational or conventional thinking does not always solve a problem or get to the root cause. Brainstorming is a motivating and involving process which has the potential for providing innovative and alternative answers.

“WE CANNOT SOLVE OUR

PROBLEMS WITH THE

SAME THINKING

WE USED WHEN

WE CREATED THEM”

- Albert Einstein

BRAINSTORMING

What is it?

Brainstorming is a technique that encourages creative thinking and the generation of ideas.

Why use it?

Rational or conventional thinking does not always solve a problem or get to the root cause. Brainstorming is a motivating and involving process which has the potential for providing innovative and alternative answers.

When to use it

• To generate a list of potential problems to solve

• To identify possible causes of a problem

• To identify possible solutions to a problem

• To develop action plans

BRAINSTORMING

You will realise from this list, that Brainstorming is an integral part of many of the tools described here, including Cause and Effect Analysis and Process Flow Diagrams.

How can we increase sales?

Cold Calling

Social Media Email

Marketing

Online Marketing Networking

Television Advert

Radio Advert

BRAINSTORMING

Rules for Brainstorming

• Choose the right team and have a leader

• Ensure everyone knows the rules

• Define the problem/topic clearly

• Allow time for individual thought before generating ideas as a group

• Ensure everyone participates

• Generate as many ideas as possible

• Ban discussion and evaluation during the idea generation stage

• Record every idea, on a Flipchart

• Allow incubation time before evaluating the ideas

• Keep a relaxed atmosphere

BRAINSTORMING

Variations

Allow individuals to Brainstorm onto Cards or Post-it Notes (one idea per card), stick all the ideas on a wall, then arrange them into groups of similar ideas. This is sometimes known as an Affinity Diagram.

Online Sales

Social Media

Email Marketing

Offline Sales

Television Advert

Radio Advert

Direct Sales

Cold Calling

Networking

FOR EVERY EFFECT

THERE IS A

ROOT CAUSE

CAUSE AND EFFECT ANALYSIS

What is it?

A Cause and Effect Analysis is a way of identifying the possible causes affecting a problem and of recording these visually. Cause and Effect Diagrams show the relationship between a problem

(effect) and the factors which potentially affect it (causes). They are also known as Fishbone Diagrams and Ishikawa Diagrams.

They assist the search for the root cause of a problem by organising, in a systematic way, your knowledge and understanding of the factors which may contribute to a problem.


Cause and Effect Example

WHY IS THE MONTHLY REPORT

FREQUENTLY INCORRECT?

PROCESS PEOPLE

TECHNOLOGY MATERIALS

Measured on volume entered

No pre-entry checks

Batches too big

Not enough res-breaks

No automated checking

Boredom

No pre-entry checks

Untrained staff

New staff

Pressure of work No time

Lack of regular breaks

‘Bugs’ in the system Old technology

Keyboard ‘bounce’

‘Sticky’ keyboard

Poor environment / ergonomics

Inadequate software

Seating, lighting, heating

Incorrect data

Faxes of faxes

Illegible handwriting

Illegible copy

Temp staff


How to use it

1. Name the problem in terms of its effects, ideally including quantification.

2. Identify the major categories of causes.

3. Brainstorm to identify all the possible causes under each of the main cause headings (follow the rules of Brainstorming).

4. Analyse the possible causes and identify any linkages between the possible causes.

5. Evaluate the most likely causes, or combinations, and agree to focus on these for further

6. investigation or quick fixes.

PEOPLE PROCESS

Untrained staff No process Batches too big Does this

cause this?


Variations?

1. Write the possible causes on sticky notes or cards without reference to where they fit in the diagram; then arrange the cards into a Cause and Effect Diagram.

2. Use a Process Flowchart and Brainstorm the possible causes of problems around each of its steps.

Benefits

• Helps provide a systematic method for communicating with other people about a problem or situation that needs to be improved

• Encourages you to distinguish between the problem and its possible causes

• Encourages you to identify all possible causes, thereby increasing the likelihood that you won’t ignore the real causes


Ground rules for success

• Use large diagrams and ensure everyone can participate

• Examine the relationships and interactions between causes

• Define the problem effect clearly and don’t overload the diagram

PROBLEM

PROCESS PEOPLE

TECHNOLOGY MATERIALS


You may want to use the “5 Whys” technique to help you identify possible causes. This can help you add extra levels of ideas on your diagram.

The 5 Why: “Monthly Report Was Late”

WHY? Because the printer didn’t work

WHY? Because the paper got jammed

WHY? Because someone used the wrong paper

WHY? Because no-one knows what the right paper is

WHY? Because there is no written procedure or user training

Fixing the printer is not the solution

CHECKSHEETS

What are they?

Checksheets are a systematic way to collect and record data using a pre-prepared form or matrix. They list the items to be checked, with sufficient space for entering check marks against each of the items. They have a number of uses, such as counting ...

• ... the number of defects or errors that occur

• ... the frequency of occurrence of events such as accidents, complaints, enquiries, compliments

They are also useful for collecting data to identify trends before and after solving a problem.

CHECKSHEETS

A Checksheet for: “Reasons for late billing”

CAUSE JAN FEB MAR APR TOTAL

Unclear tariff rates 47

No information on addressee 6

Technical problems with system sold 18

Sales policy 3

Not informed of billing start date 6

Computer problems 5

Other 2

TOTAL 25 20 23 19 87

CHECKSHEETS

How to use them

1. Establish the categories in which to collect data

a. Brainstorm a list of potential categories, or

b. Examine some sample defects and attempt to classify them by category (i.e. identify categories by looking at existing defects)

The final list of categories must cover all possible defect types and the categories must be mutually exclusive.

2. Decide how long you will collect the data. Enough data must be recorded over a sufficiently long period to represent the process being studied. A rule of thumb is record data long enough to accumulate at least 100 check items.

CHECKSHEETS

3. Design the checksheet.

4. Brief those who have to collect the data. Everyone collecting the data must understand the categories in the same way so that each person’s data recording is consistent with everyone else’s.

5. Record information consistently and honestly, so that you have valid data to analyse.

CHECKSHEETS

Benefits

• They encourage you to distinguish between data categories

• They enable you to collect data in a systematic way

• They organise data in a form which makes it easy to use for other purposes; e.g. development of a Pareto Diagram, or to identify trends


• Ensure the categories are comprehensive and mutually exclusive

• Let people know what the purpose is and what the data will be used for

• Those involved in solving a problem should help design the Checksheet

• Repeat the data collection after implementing improvement solutions

CHECKSHEETS

Variations

They may also be used for reminders of tasks to be carried out in a process; i.e. as Checklists.

Task Date Required Done Done By

Book venue 1st June RC

Invite customers 15th June IS

Arrange hospitality etc. 21st June

“THERE IS ALWAYS SPACE FOR IMPROVEMENT,

NO MATTER HOW LONG YOU’VE BEEN IN THE

BUSINESS.”

- Oscar De La Hoya

CONCENTRATION DIAGRAMS

What are they?

Concentration Diagrams are pictorial Checksheets and are among the simplest of tools to set up for data collection. They are visual displays of how often and where faults, defects or problems occur, on a product, on a form, or in a process. By recording the occurrence of defects, they tend to show a concentration of problems in specific areas.

How to use them

1. Define the fault under investigation.

2. Provide a large drawing or picture of the product, form or process where the fault is occurring.

3. Leave on display for an appropriate period and ask people to mark on the diagram each time a fault occurs and where it has occurred.

4. After a sufficient period analyse the diagram to identify points of fault ‘concentration’.


Concentration Diagram Example

x x x

x

x x

x

x x

For example showing production damages and defects on apparel production


Concentration Diagram Example

Source: https://www.police.uk/city-of-london/cp/crime/

Showing crime in a London area



• Ensure the categories are comprehensive and mutually exclusive

• Let people know what the purpose is and what the data will be used for

• Those involved in solving a problem should help design the Checksheet

• Repeat the data collection after implementing improvement solutions

Variations

The diagram could be based on:

• A map or site plan • A diagram of a product or machine

• A Process Flowchart • A form or data entry screen

PROCESS FLOWCHARTS

What are they?

Process Flowcharts are used to show the steps in a process. These include the inputs and outputs as well as the intermediate steps and decision points.

A process is a series of activities that converts an input to an output, by doing work. Process Flowcharts create a common understanding of the steps involved in carrying out any process. They can be used to highlight opportunities to streamline a process, making it both more effective and more efficient.

PROCESS

INPUT OUPUT

PROCESS FLOWCHARTS

Sequence Flowchart

Raise Recruitment

Request

Write Job Advert

Authorise Recruitment

Place Job Advert

Receive Applications

Select Shortlist

Arrange Interviews

Interview Candidates

Select New Recruit

Appoint New Recruit

Separate Process

No

If nobody suitable

PROCESS FLOWCHARTS

How to use them

1. Define the process – agree on the start and end boundaries.

2. Identify the actual process steps – brainstorm to identify the current steps (use Verb + Noun names; e.g. Select Shortlist).

3. Arrange the process steps in sequence, linked by arrows; if some activities occur in parallel, arrange them beside each other (if the flow is top to bottom) or below each other (if the flow is left to right).

4. Analyse the resulting diagram – clarify any outstanding misunderstandings; transfer the diagram to paper.

PROCESS FLOWCHARTS

Analysing the Flowchart

Look at the Diagram and ask:

• Are all the steps necessary?

• Are any steps missing?

• Where could delays or errors occur?

• Can the process be simplified?

• Do the outputs meet customer requirements?

For the process inputs and outputs:

• Are there clear, specified and agreed standards?

• Is there adequate feedback?

Processes only exist to meet the requirements

of customers. Who are the process customers and what

do they think?

PROCESS FLOWCHARTS

For each process step:

• Do people have the necessary skills?

• Are the facilities/equipment adequate?

• Is it possible to measure performance?

• Is the step necessary? (what value does it add?)

• What impact would defects or errors have?

Benefits

• Capture and combine knowledge of everyone involved with a process

• Help ensure a common understanding of how a process works

• Reveal opportunities for improvement

• Develop ownership of the process through teamwork

The results we achieve depend on how well

people design, operate and improve our

processes.

PROCESS FLOWCHARTS


• Define the boundaries of the process before beginning to construct the Flow Diagram

• Involve people who operate the process and know the current situation

• Analyse the resulting diagram rigorously, using data and challenging questions

• Work logically and dispassionately – remember the aim is improvement

• Focus on how the process meets the needs of its customers, not on existing constraints or organisation

• Don’t get “hung up” on producing the world’s most perfect Flow Diagram; use the symbols only if they add to peoples’ understanding of the process

Variations

A variation on the linear, Sequence Flowchart above is the Responsibility Flowchart, which identifies who does each step.

PROCESS FLOWCHARTS

Responsibility Flow

Exte

rnal

Sa

les

Inte

rnal

Sa

les

Co

stin

g D

ept.

P

lan

nin

g D

ept.

Receive Enquiry

Complete Request

Form

Produce Cost

Estimate

Sign Off Cost

Estimate

Pass To Planning

Produce Lead Time Estimate

Respond To

Customer

Produce Completed

Estimate

“YOU CAN’T MANAGE

WHAT YOU DON’T MEASURE”

- W. Edward Deming

DATA HANDLING AND DISPLAY

What is it?

Various techniques designed to help you gather and display data in pictorial form.

Why use it?

A picture is “worth a thousand words!” and therefore aids communications and adds impact to your readers. In addition, it is more likely to highlight trends and relationships in data.

How to use it?

Techniques included are:

• Tally Sheets • Frequency Distribution • Histograms

• Line Graph • Pie Charts • Scatter Graphs


Tally Sheets

Provide a quick and adaptable way of recording data. They are also known as Checksheets.

Two quick conclusions can be drawn from this Tally Sheet. Complaints occur most frequently in the last week of the month and on type “B” complaints.

Customer Complaints - May

Complaint Type Week One Week Two Week Three Week Four Total

A 9

B 24

C 5

D 2

Total 10 6 7 17 20


Frequency Distribution

169 170 171 172 173 174 175 176 177 178 179 180

Height of Males (centimetres)

Freq

uen

cy

The tally results produce a 'bell shape' curve of the Normal Distribution displaying AVERAGE and SPREAD.


The normal measure of the average is known as the MEAN. The mean is calculated by adding all the values together and dividing by the number of values. This gives you a summary measure of

the central point of the data.

Two other measures of the average are the MEDIAN and the MODE.

The median is the middle value when the values are arranged in ascending/descending order.

The mode is the most commonly occurring value in a set of data.

The simplest measure of spread is the RANGE between the highest and lowest values.

The most accurate way of measuring spread is the STANDARD DEVIATION, which is the average difference between the values and the mean.


Frequency Histogram

Histograms show the frequency distribution over a range of values. They show how frequently the measurement values occur. The main use of a histogram is to assess the variability in a population, or in a process.

The height of the bars in a histogram indicates how frequently that value of data occurs. The tallest bar is the most frequently occurring data value.

If you have a wide distribution, it is more likely that common causes of variation are present. It may be difficult to remove enough of these causes to narrow the overall range of variation present in a process.


Histogram

0

5

10

15

20

25

30

35

169 170 171 173 174 175 176 177 178 179 180

Nu

mb

er

of

Me

n

Height in Centimetres

This Histogram was drawn from the Frequency Distribution data.


Line Graph

A Line Graph (also known as a Run Chart) is a graphical representation of a variable, plotted over time to show a trend. Line Graph uses include:

• Determining visually, but not statistically, the stability of a process; i.e. is it “in control”?

• Monitoring progress towards a desired goal

• Determining whether a process exhibits a cyclic or any other type of pattern


Line Graph

Week 1 2 3 4 5 6 7 8 9 10 Etc.

Shortages 32 78 128 84 60 2 136 120 110 42

0

20

40

60

80

100

120

140

160

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Nu

mb

er

of

Ite

ms

Date/Week Number

In this Line Graph we are plotting the number of shortage items from orders each week.

Shows a situation out of control - but, nevertheless, there is an underlying trend.


Pie Charts

Shows a complete set of data and the proportions represented by each component of the whole, at any one point in time.

Pie charts are used to emphasise a particular segment and relative proportions.

25%

20%

20%

25%

10% It can be used to show, for example:

% of different products sold

% of different error types

% of different customer groups

% of different stock items held

% of different staff grades


Scatter Graphs

The scatter graph is a graphical method of determining the relationship between two or more variables, for example to see if there is a cause and effect relationship.

Draw the cause axis horizontally and the effect axis vertically.

Correlation is the term which indicates how the two variables are related. Scatter Graphs can be used to show a positive or negative correlation between two variables, or to demonstrate that there is no correlation.


Scatter Graphs

x x

x x

x x x x

x x x

x x x

x x x

x x x

x x x x

x x x

x x

x

Strong Weak None

• Do we get more errors when we get more work? • Do we get more complaints because we've sold more products? • Do we get longer queues when we've got fewer staff?

Line of best fit


Line of best fit

Having drawn the scatter diagram, can a straight line be drawn to represent the relationship between the variables?

A line of best fit does not prove a cause and effect relationship between the two variables. It is evidence that further investigation is worthwhile to test the theory further.

With a positive correlation, the value of one variable increases in line with the other variable. With a negative correlation, the value of one variable decreases as the other one increases.

PARETO ANALYSIS

What is it?

The Pareto Principle, which underpins Pareto Analysis, says that a small number of causes of problems (the vital few) have a great effect on performance, while a large number of causes (the trivial many) have a much smaller effect. It is also known as the 80/20 Rule whereby 80% of problems are the result of 20% of the causes. The principle is named after Vilfredo Pareto, a 19th

Century Italian economist whose research showed that 80% of the wealth was owned by 20% of the population.

PARETO ANALYSIS

The main purpose of Pareto Analysis is to enable the identification and separation of the main issues from other less significant issues. Attention can then be focused on finding the

causes of the most important problems. They can also be used to make comparisons, e.g. between different processes, or before and after improvement.

20%

80%

The ‘Vital Few’ Causes

PARETO ANALYSIS

How to use them

1. Identify the problems to be investigated, the categories of data and the means of collecting the data.

2. Develop a Checksheet for collecting the data.

3. Collect the data using the Checksheet.

4. Develop and complete a data sheet with the data arranged in decreasing order of size (e.g. frequency, cost or time).

5. Construct the Pareto Diagram, including scales, bars, cumulative curve and cumulative values.

PARETO ANALYSIS

Pareto Data Table

This is the Pareto Data Table from the previous Checksheet example: 'Reasons for late billing'.

Causes Frequency Cumulative Frequency

% Cumulative

A Unclear tariff rates 47 47 54 54

B Technical problems with systems sold 18 65 21 75 C No information on addressee 6 71 7 82

D Not informed of billing start date 6 77 7 88 E Computer problems 5 82 6 94

F Sales policy 3 85 3 98 G Other 2 87 2 100

PARETO ANALYSIS

Pareto Diagram

0

20

40

60

80

100

120

0

5

10

15

20

25

30

35

40

45

50

A B C D E F G

%

Fre

qu

en

cy

Causes

Frequency

Cumulative %

Cut Off

The data in this graph relates to the Pareto Data Table on the previous page.

PARETO ANALYSIS

Benefits

• Simplifies and clarifies your understanding of the problem you are trying to solve by focusing on the areas of most importance

• It is easier to reduce the most frequently occurring problem by half than to reduce a rare occurrence to zero

• Quick results build confidence

• Many causes produce multiple types of defects. Removing the causes of one problem often also removes the causes and therefore occurrences of other problems

• Enables comparisons to be made between different processes

PARETO ANALYSIS


• Avoid dealing with the symptoms rather than the causes of problems

• Use categories in the diagram which are mutually exclusive

• Use Pareto Analysis as a means of increasing knowledge of a problem

• Make sure the data is representative of the problem, taking into account the effect of day-to-day variation

• Don’t ignore problems that are not among the most frequently occurring. They may, for example, have a big effect on cost and perhaps be fixed easily

FORCE FIELD ANALYSIS

What is it?

Force Field Analysis is a tool for identifying the forces which help or hinder a change you want to make.

Why use it?

• To improve any situation that requires a change

• To understand what is working for and against any proposal

• To identify which forces cannot be changed

• To help plan how to overcome barriers to change


How to use it

1. Construct a Force Field Diagram, with the improvement target defined and brainstorm positive and negative forces.

Positive

Negative

+

-

Desired Improvement Target


How to use it

2. Analyse the diagram using an analysis sheet to determine the degree of ability to change and the effect of each force.

3. Decide a course of action which encourages the positive and discourages the negative forces by selecting those forces which have received a high score on the analysis sheet.

Variations

Rather than doing a full scoring analysis, ask people to vote on the strongest positive and negative forces (3 votes for each). Then focus on actions in the six highest scoring areas.


Force Field Analysis Example

Positive

Negative

+

-

Target: Improve accuracy of expense claims

Knowledge of Company

Policy

Knowledge of Revenue

Rules

Thoroughness of

Claimants

Thoroughness of Approver

Clarity of Claim Form

Ease of use of Claim Form

System Knowledge

Complexity of Company

Policy

Complexity of Revenue

Rules

Dishonesty System Complexity

No. of Payment Methods


Analysis Sheet

Ability to Influence

Effect Overall

Knowledge of Company Policy 5 6 30

Knowledge of Revenue Rules 5 2 10

Thoroughness of Claimants 3 6 18

Thoroughness of Approver 2 3 6

Clarity of Claim Form 10 8 80

Ease of use of Claim Form 8 6 48

System Knowledge 5 1 5

Cannot influence: Complexity of Revenue Rules; Dishonesty

Ability to Influence

Effect Overall

Complexity of Company Policy 1 4 4

Complexity of System 5 2 10

No. of Payment Methods 4 1 4

Positive Forces Negative Forces



• Be clear about the target for improvement

• Ensure maximum participation in brainstorming the forces

• Identify those forces which can and can’t be influenced

• Include action on both the positive and negative forces

RANKING AND RATING

What is it?

Ranking is the structured process of placing a number of options in order of preference, by using a scoring system called rating. It is a decision-making tool.

Why use it?

• To assist the choice of the best option (e.g. which problem to solve, which solution to implement)

• To make the choice less emotional and more logical

• To increase the ownership of the chosen option

• To maximise the effective use of available resources

RANKING AND RATING

How to use it

1. List the options.

2. List the selection criteria.

3. Categorise the criteria into “essential” and “desirable”.

4. Test the options against the “essential” criteria.

5. Rate the remaining options against the “desirable” criteria.


• List the options and agree the criteria before doing any evaluation

• Separate out the essential and desirable criteria

RANKING AND RATING

Ranking and Rating: Example

Selection Criteria Possible Projects

Essential A B C D E F

Improves Service

Highly Visible

3 – 5 Months To Do

Saves Time

Desirable Weight

Saves Money 10 10 10 4 6

Low Cost 7 5 4 0 5

2 – 3 Months To Do 7 7 7 0 2

Totals 22 21 4 13

RANKING AND RATING

In the example above we are trying to decide which is the best project to carry out. Project A meets all the essential criteria and scores best against the desirable criteria. It is our first choice project, closely followed by Project B.


• List the options and agree the criteria before doing any evaluation

• Separate out the essential and desirable criteria

SOLUTION EFFECT ANALYSIS

What is it?

A Solution Effect diagram is a Cause and Effect diagram in reverse.

Why use it?

• To check if your solution solves the problem

• To compare effects of different solutions

• To ensure your problem does not cause bigger problems

• To identify what other actions may be necessary to implement your solution successfully


How to use it

1. Identify the solution to be tested (e.g. Implement new I.T. system).

2. Identify the major categories to be used (e.g. Money, Materials, People, Process).

3. Brainstorm to identify the effects of the solution, for each of the major categories.

4. From the diagram, analyse the potential effects and identify the key actions required to ensure successful implementation.

Effect

MONEY TECHNOLOGY

PEOPLE PROCESS


Solution Effect Analysis

Implement Problem Solving

Training

MONEY MATERIALS

PEOPLE PROCESS

Lost production Consultants

Overtime

Quality improved

Rooms

Pens

Flipchart

Projectors

Co-ordinator

Ensuring attendance

Communications Manager briefings

Working together

Attitudes

Skills

Trainers

Furniture

Follow up

Evaluation

How many?

Cover / Temps

Paper

Screen


Variations

Brainstorm positive effects on one side of each line and negative effects on the other, or use different coloured pens (green for positive, red for negative).


• Use large diagrams

• Test your proposed solution in theory, before implementation

• Involve a representative selection of those affected by a proposed solution

• Check whether the effects are not worse than the original problem

• Identify unexpected results – be creative

• Do not ignore any adverse effects

• Follow Brainstorming rules

FAILURE PREVENTION ANALYSIS

What is it?

Failure Prevention Analysis is a tool which will help you to anticipate problems before they happen.

When to use it

• On any new activity

• Whenever a significant change is planned

• Where consequences of failure are potentially major

How to use it

1. Identify the potential problems by brainstorming “what could go wrong?”

2. Rank each possible failure by designating a probability and consequence factor, using a scale of 0-10 for each. Calculate an overall risk rating by multiplying the two factors together.


FPR Example: Launch a New Product

Possible Failure Probability Consequence Overall Rating Ranking

Late delivery of raw materials 8 1 8 6

Unable to obtain raw materials 1 10 10 5

Machine not suitable 3 10 30 2

Machine not available 5 10 50 1

Paperwork not available 6 3 18 5

Operator training not carried out 3 2 6 7

Methods of measurement not determined

3 7 21 3

The highest risk

of failure here is that the ‘machine

won't be available'

when needed.


3. Examine the root causes of the key potential failures.

4. Identify actions that prevent failure (or re-think the decision to implement if failure cannot be avoided or minimised).

In some cases, it must be recognised that there will always be a risk of failure, because all the root causes cannot be eliminated. In these cases action should be taken to minimise the risk of failure or minimising the effects of any failure.

In other words, you may need to identify both:

• Preventative Actions

• Contingency Actions



• Have a clear understanding of the activity to be analysed

• List the possible failures before evaluating them

• Rank the potential failures, noting both probability and consequences

• Be clear whether internal (e.g. cost), or external (e.g. customer satisfaction) consequences are to be compared

• Look to eliminate root causes

• Involve those who may be affected by a solution in identifying 40 and analysing the risks

FPA is a great technique to involve all those people who say:

• "We tried it before and it didn't work"

• "It'll never work because..."

• "They'd never let us do it"

• "It's a good idea but..."

PROBLEM SOLVING SUMMARY

The problem solving process and tools should be used:

• By individuals and teams

• By all functions within an organisation

• As part of a Continuous Improvement strategy

Good problem solving is the result of:

• An effective, systematic process

• Disciplined use of appropriate tools

• Teamwork and collaboration


Effective teams result from:

• Strong leadership

• A supportive environment

• Strong communication between team members

• The ability to listen

• The ability of team members to build on one another’s ideas

The Matrix on the following page will help you identify which tools to use at each stage of the Problem Solving process.


Define the problem

Identify possible causes

Investigate and fix

Analyse data and identify root cause

Develop possible solutions

Select and test solutions

Implementation stages

Brainstorming

Cause and Effect Analysis

Checksheet

Concentration Diagrams

Process Flowcharts

Data Handling and Display

Pareto Analysis

Force Field Analysis

Ranking and Rating

Solutions Effect Analysis

Failure Prevention Analysis

WHAT IS CONTINUOUS IMPROVEMENT?

Continuous Improvement is a process that enables organisations to ensure they are continuously meeting agreed customer requirements, at the lowest cost, by releasing the potential of all employees.

It means:

• Our customers decide what the standards are

• We may need to balance the different needs of customers, partners and other stakeholders

• Reducing our total costs by getting things on time and right first time, every time

• Avoiding waste and delays by eliminating errors

• Only doing the right things – that meet customers’ and partners’ needs – adding value not cost

• Continuously challenging the way we do things to see if there is a better way

• Harnessing everyone’s commitment to improvement, including leaders, employees, suppliers and other partners


It is not

• A luxury

• Just meeting our own standards

• Doing things on the cheap

• Optional

The Problem Solving Process, plus the tools and techniques, are essential elements of a Continuous Improvement strategy.


Cause

2. Investigate

& Fix

3. Analyse Data &

Identify Root Causes


Solutions

5. Select & Test

Solutions

Define the problem Implementation stages If viable: Review/re-start If not viable


Successful Continuous Improvement needs to be controlled and managed just like any process. Some of the most common causes of failure of the Continuous Improvement process include:

• Lots of activity and few early results

• Lack of strategic focus and planning

• No key targets and measures

• Seen as a “bolt-on” to the daily work

The key is to focus on achievement and avoid the “activity trap”, where everyone appears busy, but nothing improves.

There are some fundamental things that need to be in place to support Continuous Improvement and ensure success.


CONTINUOUS IMPROVEMENT

Leadership Plans and

Priorities

Teams And Tools

Support For

People

The Problem Solving Process

fits here.


In this Guide we have focused on a problem solving process and a set of basic improvement tools that can be used by teams and individuals.

In addition to this, we need:

• Clear direction and leadership from managers at all levels

• A way to prioritise improvement opportunities and include these in our overall plans

• Time, training, encouragement and support for people when they get involved in improvement activities

Some of the most successful organisations have used problem solving as a starting point for their improvement processes. Today it is integral to the way they address areas for improvement.


Improvement process evolution

Most organisations go through a series of distinct phases in their Continuous Improvement journey ...

Phase 1: Survival

• Recognising threats and business challenges • Prioritisation of key areas for improvement by senior management • Managers and staff are trained in problem solving • Teams and individuals work at solving problems, using the tools • Quick wins and improvements are achieved • Quantified benefits are demonstrated – failure costs are reduced • Facilitators work with, and provide support to, improvement champions


Phase 2: Prevention

• Key business processes are identified • Managers and staff are trained in process management • Processes are owned, managed and brought under control • Customer satisfaction improves as a result of process improvements • Managers coach staff in improvement skills

Phase 3: Continuous Improvement

• Customer delight is the goal • Staff are truly empowered and fully involved in improvement activities • Processes are benchmarked and achieve world class performance • Self-Assessment using an Excellence Model is integral with business • planning • Achieving award winning scores in national quality awards


The road to Excellence is never-ending.

Continuous Improvement is a journey,

not a destination.

CHECKLIST

Yes No Comments

1. Defined the problem fully?

2. Decided who to involve in helping to solve the problem?

3. Identified all the possible causes?

4. Carried out any quick fixes to sort it out now?

5. Collected data to quantify the problem?

6. Analysed the data to identify the root causes?

7. Identified possible solutions?

8. Chosen a workable solution?

9. Tested your solution?

10. Put together a plan for implementation?

11. Implemented your solution?

12. Measured the results to see if your solution worked?

ABOUT TQMI Ltd

TQMI Ltd. – The Continuous Improvement Specialists

TQMI is a management consultancy and training provider specialising in Continuous Improvement. We help organisations achieve excellence through consulting, coaching and training. Our extensive experience covers all Continuous Improvement tools and approaches including: Kaizen, Six Sigma, Lean, Lean Six Sigma and the EFQM Excellence Model. We have worked with some of the country’s leading organisations to help them outperform, improve processes, engage staff, delight customers and maximise results.

CONTACT DETAILS

TQMI Ltd - Charter House, 63 Main Street, Frodsham, Cheshire, WA6 7DF

Tel: 01928 734 266

Fax: 01928 736 628

www.tqmi.co.uk

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