RCCM ver2

1JANUARY 22, 2007

RCCM PRESENTATION ENG REV6© 2007 Danaher. All Rights Reserved

Root Cause Assessment &Countermeasure Development

RCCM

2

January 22, 2007RCCM PRESENTATION ENG REV 6© 2007 Danaher. All Rights Reserved

Goal Of This Training

Increase ability to lead your Increase ability to lead your organization in the identification organization in the identification

of Root Cause and the development of of Root Cause and the development of effective & sustainable Countermeasureseffective & sustainable Countermeasures

3


Ice Breaker

4


What RCCM ISN’T

FORM FILLING-OUT CONTESTFORM FILLING-OUT CONTEST

RCCM RCCM isis a process a process

5


The Differentiator

Know the Value Stream of Your Business

+The Ability to Lead and Drive RCCM

Process

=Superior Sustainable Results

6


Daily Management Relationship to Policy Deployment

Daily Management (KPIs)Daily Management (KPIs)Measures how we are servingMeasures how we are servingthe customer TODAYthe customer TODAYHow we are meeting current expectationsHow we are meeting current expectations

Policy Deployment MetricsPolicy Deployment MetricsMeasures how we are creatingMeasures how we are creating

sustainable competitivesustainable competitiveadvantage by striving for advantage by striving for world class performanceworld class performance

7


DAILYDAILYMANAGEMENTMANAGEMENT

KPI MISSKPI MISS

How Daily ManagementDrives RCCM

RCCM!RCCM!

PLAN ACTUAL

8


PD CRITICALPD CRITICALTHINKINGTHINKINGPROCESSPROCESS

ACTIONACTIONPLANSPLANS

RCCM!RCCM!

How Policy Deployment Drives RCCM

9


RCCM Process

VALIDATEVALIDATECORRECTCORRECTMETRICSMETRICS

DRIVE DRIVE TO ROOTTO ROOT

CAUSE CAUSE

DEVELOP DEVELOP COUNTER-COUNTER-

MEASURESMEASURES

Step 2Step 2Step 1Step 1 Step 3Step 3

10JANUARY 22, 2007


Do Your Metrics Measure Up?

1. Validate Correct Metrics

11


In this section you will:

Demonstrate the ability to identify correct metrics that support your PD improvement priorities and Daily Management

12


Am I measuring the right things?

Remove your personal bias Get a second opinion

Know your “mini business” and major value streams

Do KPI’s have a Causal Relationship? If……Then Examples:

Stock Outs KPI for OTD? PPV for OTD?

Is the Data Actionable?

13


Leading VS. Lagging Indicators

Instructions: In small groups, answer: List 10 metrics you have in your business. Label them as either Leading or Lagging Indicators. Why are they Leading or Lagging How can you turn Lagging to Leading?

Tools to Use: PD Action Plan, PD or KPI Bowler, Other business data you have brought

Time to complete: 15 minutes Report out time per group: 5 minutes Deliverable: One person per group will report out on findings

14JANUARY 22, 2007


Solving the Problem

#2. Drive to Root Cause

15



Demonstrate the ability to drive to root cause when there is a PD or KPI miss

16


Root Cause Defined

Root Cause Analysis is a process for identifying and “analyzing” the causes of problems in an effort to determine what actions should be taken to eliminate or prevent them.

17


Essential Elements of Root Cause Analysis Process

Must take advantage of people’s knowledge while preventing their biases from controlling the direction of the process

Focus on process not person!

Must involve pertinent data so that causal relationships can be identified.

Must lead to what actions must be taken to eliminate or prevent the problem. (COUNTERMEASURES)

18


Root Cause Analysis Process(Overview)

1. Clearly define the problem statement

2. Analyze gap data to develop pareto chart

3. Ask 5 Why’s to identify root cause(s)

4. Differentiate between Symptoms and Systems

5. Check your logic and eliminate items that are not causes. Check your trends. Evaluate special vs. common causes

6. What is Actionable?

19


Clearly Define the Problem Statement

Rank Order these Examples in terms of how clearly they define a problem:

Valve failed at 250 PSI Sales 15% below target: $178.5 M / $210M Project is 26 days behind schedule Customer Contact Call Abandon Rate is 24%, Target is 2% Seal in solenoid leaks

Using SMART to define a problem makes the countermeasure process relevant and impactful

Specific, Measurable, Actionable, Relevant, Time-Based

20


How to Analyze Gap Data

Identify facts surrounding the undesired outcome What has changed? What has not changed? When did the undesired outcome occur? Where in the process did it occur? What conditions were present prior to its occurrence? What controls or barriers could have prevented its

occurrence but did not? What are all the potential causes? Pareto the data

21


Run Chart

The simplest display of a trend with observation points over a specific time period

22


Pareto Chart

Graphically show drivers in descending order

23


The Right Data Analysis

Here is the problem

Sales Miss of $1.5M YTD

Miss by product

Miss by brand

Miss by region/geography

Miss by market/channel

Miss by key account or distribution

• Develop “standard work” for the gathering of the data for the analysis.

• Develop a standard process for working through the data

24


Multiple Paretos (5) Are Required to Get to Root Cause

Flow

NA / Row All Brand Trade Sales

-20000

0

20000

40000

60000

80000

100000

120000

$(00

0) PlanActualVariance

Plan 16000 36000 61000 81000 100,000

Actual 15500 35400 60500 80000 98500

Variance -500 -600 -500 -1000 -1500

JAN FEB MAR APR MAY

Pareto of Brand Miss by $

-1600

-1400

-1200

-1000

-800

-600

-400

-200

0

200

400

$(00

0)

$ of Miss

$ of Miss -1500 -200 -100 0 100 200

GLI Hydrolab Lachat ELE Hach ETS

Analysis of Miss by Product

-2000

0

2000Analysis of Miss byProduct

Analysis ofMiss byProduct

-1300 -700 -50 50

pH Cond Chlori Flow

Miss by Region

-1000

-500

0

Miss by Region

Miss by Region -800 -400 -200 -100

Domesti Domesti Internati Internati

pH pH Conductivity Conductivity

Miss by Market

-1000

-500

0

Miss by Market

Miss byMarket

-800 -400 -200 -100

Texas - Michig Korea - China -

Miss by Key Acct/Dist

-1000

-800

-600

-400

-200

0

Series1

Series1 -800 -250 -100 -50 -200 -100

OEM of

ABC of MI

DFG of MI

HIJ of MI

Yuil - Kore

Lost Bids

Problem StatementWhere -#1

Where -# 2Where -# 3

Where -# 4 Where -# 5

25


Problem: Sales Missed Plan by $500K This Month and $1.5M YTD

Where? - GLI sales were 2.0M below plan Where? - pH sales down 1.5M and conductivity down 500K Where? - pH and conductivity domestic sales down 1.3M and

international down 700K Where? – Domestic TX & MI down 1.2M, and Korea and China down

400K in pH and conductivity Where? – Texas down 800K due to poor account coverage at key

OEM, Michigan 400K down due to quality and delivery issues at 3 end-users, Korea – new distribution channel that lacks product and application knowledge, China – low price point pH and conductivity products introduced.

Use the 5 Why’s to drive to Root CauseUse the 5 Why’s to drive to Root Cause

Example

26


5 Why Analysis

Systematic method to drive to the true root cause(s) of a problem

Simply ask “why” in a step ladder approach until fundamental root cause is discovered.

Root cause is not simply listing the symptoms of a problem

Normally, after up to 5 steps, the true root cause(s) will be exposed

27


5 Whys – Jefferson Memorial Graph

Why?

Why?

Why?

Why?

29


Differentiate between Symptoms and Systems Issues

Your child has a fever, is this a symptom or a systems issue?

BE A SYSTEMS THINKER: Understand the Interdependence of everything!

30


Systems vs Symptoms Exercise

Instructions: Break into teams and identify 5 examples of situations where

people fix a symptom rather than looking at the system. Tools to Use:

Fifth Discipline Pre-reading

Time to complete: 10 Min. Report out time per group: 5 Min.

31



Focus on:What Happened?

Tell the story!Where it Happened?

Give the background!When it Happened?

Be specific!Then go to the How / Why

Play Dominos!

This process will help you do systems thinking!

32


Causal Relationships

Check your logic and eliminate items that are not causes.

How? Check your trends. Look for themes Evaluate special vs. common causes. Stick Strictly to If…Then

Remember Quick Fixes often CAUSE unintended consequences Stabilizing the situation 1st allows you to see the

Causes clearly

33


Cause & Effect Diagram

Helps facilitate potential causes when data is not available

Used to identify, explore or display possible causes of a specific problem

Problem

34


Gas Mileage is less

than Automaker advertised

Machine

Carburetor Transmission

Auto

Manual

Tire Type

Radial

All Wx

Radio

Tire Pressure

Weight

Air Conditioner

2 Wheel vs 4 Wheel Drive

Method

TireRotation

Tune-ups

Ride Brakes

Fast Start

Maint. Sched.

Engine warm-up Time

Measurement

Gauge forTire Pressure

OdometerType

Estimate ofFull Tank

Manpower

DriverTraining

Driver

# of Passengers

Materials

Gas Type

Fuel Additive

Mother Nature

Highway or City

Terrain

A B

Oil Type

A B

Flat

Mou

ntai

nsAl

titud

e

Wind

Weather Conditions

Temperature

Humidity

Precipitation

Ice

Snow

Rain

Cause-And-Effect Diagram (CE) Cause-And-Effect Diagram (CE) ExampleExample

35


What is Actionable?

In the Short-Term These are corrective action around

Symptoms

In the Long-Term These are corrective actions around Systems

36


Exercise

Instructions: In small groups, (1) Define the Problem Statement for each

of your PD / KPI misses (2) Identify the top drivers of the miss (3) Complete one 5 Why iteration for one defined problem

statement Tools to Use: PD or KPI Miss Time to complete: 20 minutes Report out time per group: 5 minutes Deliverable: One person per group will report out on

results

37


2 Minute Review

Turn to the person next to you (or discuss by table) and share your key learnings from what has been covered in the session thus far

Each person has about 1 minute to discuss

One person from each pair will report back 1 item to rest of group

38JANUARY 22, 2007


Generate Solutions That Address Root Causes

#3. Countermeasure Development

39



Generate solutions that address root causes

Write effective countermeasuresComplete the countermeasure form

40


Having a PD miss and having to write CMs does not mean that someone has failed.

PD Targets, by their nature, should be aggressive stretch targets

Outstanding DHR organizations will normally be required to write numerous CMs each month

The development of countermeasures is not just a tool for PD. It is a process we should use whenever we miss a target!

Psychology of Countermeasures

41


Good countermeasure preparation will drive an organization to: productive self-criticism more robust systems closer customer contact a higher level understanding of the

marketplaceIs a team effortWill improve our processes


42


Short-term Countermeasure The purpose of Countermeasures is to

develop actions to quickly get back on target

Long-term Countermeasure Needed when the short-term countermeasure

is not sustainable Tend to address & resolve systemic issues

Countermeasure Types

43


Action Plans and Countermeasures

0

50

100

150

200

250

300

350

Goal

ActualAction Plans to hit the target

Countermeasures get you back

on plan

44


= Original Plan x = Progress at Review

Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec

Target Improvement

Planned Dates

Status (Past Due in Red)

Impact

Policy Deployment Action Plan

Review Team: * Next Review: *

Environmental Situation Summary: *

Improvement Priority Title: *Department/Location:

* Management Owner: * Date: *

2004

Core Objective: *Timeline

Owner (Lead is bold)

BOWLING CHARTBOWLING CHART

1st step in countermeasure development is to go check your action plan to see if you did what you said you would do!

Pro-Active – Action PlansRe-Active - Countermeasures

45


Countermeasure Overview

Writing effective countermeasures requires: A fundamental understanding of the metric

you are trying to improve Pareto analysis of the Right data Root Cause derived from 5 Why’s analysis

The best countermeasures lead to The best countermeasures lead to systemic improvements!systemic improvements!

46


Focus on fixing the processCountermeasures should be actionable

and have specific tasks, assigned owners, and completion dates – TBD, Ongoing, In Progress, are not acceptable

Follow the standard Countermeasure format (see next slide)

Writing Countermeasures

47


2. Visual to miss …

1. What is the miss …

Countermeasure Components

48


3. Visual to where is the miss …

3a. Visual to where is the miss … Next Level …


49


4. Why the miss? … 5 Whys Analysis

5. Action plan w/ owners, timing & impact …


50



51


Focus on the critical few…

May not get to100% of the

“Miss” in 30 days

Must be at“Point ofImpact!”

Run chart ofPlan vs. ActualSame data from

PD Bowler

Clearly defineOwnershipAnd timing!

Quantify theImpact!

Do you haveEnough?

Sometimes youWill have

Short-term andLong-term CMs

May needMore Paretos to“Peel-back-the

Onion”Define the RootCauses and

Quantify amount Of “Miss”

Know the “tie”to PD!

Countermeasure Key Points

52


Countermeasure Checklist

1. Does it “tie” to PD (is the “tie” clear)?2. Does it have a run chart showing plan versus actual data?3. Does the first level Parato show where the miss is?4. Does the second level Pareto show where the Point of Impact of the

miss is (i.e., get to root cause)?5. Is the Root Cause determined based on a 5 why Analysis at the point of

impacts 6. Is the Root Cause Statement made with quantified amount of miss?7. Are the Countermeasures focused on the critical few?8. Are there short-term as well as long-term countermeasures (if

appropriate)?9. Is the Ownership of each Countermeasure identified?10. Is the timing of each Countermeasure identified?11. Is the impact of each Countermeasure quantified and is there enough to

get you back to Plan?

53


Tips for Reviewing your Countermeasures in a PD Meeting

CM Form and Action Plans: Follow the CM form while presenting (run

chart to Pareto to prioritized RC and CM) Reference Action Plans when appropriate

Be Fact-Based: If you don’t know answer, say so and follow-

up laterPrioritize your time:

Focus on biggest impact items

54


Root Cause CountermeasuresTexas OEM down in pH due to poor account coverageTexas OEM - Not seeing the key decision maker and influencers to support price/value proposition, loosing on price

1. Develop/Implement sales call action plan for Texas OEM calling on Jim Carr (Engineering Manager) and Bill Jones (Application Specialist) resulting in being sole source supplier

Product –Attribute,Pricing,Quality & DeliveryExperiencing 15% out of box failures on conductivity probes, due to improper potting.

1.Manufacturing implementing process change to address air pockets in potting process

2.Site visits with new probe communicating process change and results to the 3 customers

Yuil Korea Need to develop sales specialist for pH and conductivity products to support Yuil sales team

1. Implement train the trainer program and forward application manuals

CompetitionBeijing Manufacturing introduced on new pH and conductivity sensor priced 25% below our current offering, lost 100K in order this month

1.Acquire competitive units and test functionality and specification to GLI current design.

2.Develop pricing, promotional, and value analysis for field sales organization and roll-out program

Root Cause to Countermeasures

55


Root Cause/Counter Measure Assessment & Development

Page #10

Focus 1st on Key Performance Indicators (KPI’s) Can’t focus on Policy Deployment if KPI’s are out of control

Daily Management (KPIs)Daily Management (KPIs)Measures how we are servingMeasures how we are servingthe customer TODAYthe customer TODAYHow we are meeting current expectationsHow we are meeting current expectations

Policy Deployment MetricsPolicy Deployment MetricsMeasures how we are creatingMeasures how we are creating

sustainable competitivesustainable competitiveadvantage by striving for advantage by striving for world class performanceworld class performance

Daily Management Relationship to Policy Deployment

Page #12

How Daily Management Drives RCCM

DAILYDAILYMANAGEMENTMANAGEMENT

KPI MISSKPI MISS RCCM!RCCM!

PLAN ACTUAL

Page #11

How Policy Deployment Drives RCCM

PD CRITICALPD CRITICALTHINKINGTHINKINGPROCESSPROCESS

ACTIONACTIONPLANSPLANS

RCCM!RCCM!

Page #13

RCCM Process

VALIDATECORRECTMETRICS


DRIVE TO ROOTCAUSE

DRIVE DRIVE TO ROOTTO ROOTCAUSE CAUSE

DEVELOP COUNTER-

MEASURES

DEVELOP DEVELOP COUNTERCOUNTER--

MEASURESMEASURES

Step 2Step 2Step 2Step 1Step 1Step 1 Step 3Step 3Step 3

56


First Question is“Did I do what I said I was going to do

in the Action Plan?”

Page #13

RCCM Process

VALIDATECORRECTMETRICS


DRIVE TO ROOTCAUSE

DRIVE DRIVE TO ROOTTO ROOTCAUSE CAUSE

DEVELOP COUNTER-

MEASURES

DEVELOP DEVELOP COUNTERCOUNTER--

MEASURESMEASURES

Step 2Step 2Step 2Step 1Step 1Step 1 Step 3Step 3Step 3

Step 1Validate Metrics

Step 2Drive to Root Cause

Step 3Develop Countermeasures

Am I measuring the right things?

Remove your personal bias Get a second opinion

Know your “mini business” and major value streams

Do Metric’s have a Causal Relationship? If……Then

Is the Data Actionable?

Root Cause Analysis Process(Overview)

1. Clearly define the problem statement

2. Analyze gap data to develop pareto chart

3. Ask 5 Why’s to identify root cause(s)

4. Differentiate between Symptoms and Systems

5. Check your logic and eliminate items that are not causes. Check your trends. Evaluate special vs. common causes

6. What is Actionable?


Focus on:What Happened?

Tell the story!

Where it Happened? Give the background!

When it Happened? Be specific!

Then go to the How / Why Play Dominos!

This process will help you do systems thinking!

How to Analyze Gap Data

Identify facts surrounding the undesired outcome

What has changed?

What has not changed?

When did the undesired outcome occur?

Where in the process did it occur?

What conditions were present prior to its occurrence?

What controls or barriers could have prevented its occurrence but did not?

What are all the potential causes?

Pareto the data

Countermeasure Overview

Writing effective countermeasures requires: A fundamental understanding of the metric you are trying to improve Pareto analysis of the Right data Root Cause derived from 5 Why’s analysis

Focus on fixing the process

Countermeasures should be actionable and have specific tasks, assigned owners, and completion dates –TBD, Ongoing, In Progress, are not acceptable

Follow the standard Countermeasure format (see next slide)

Countermeasure Checklist

1. Does it “tie” to PD (is the “tie” clear)?2. Does it have a run chart showing plan versus actual data?3. Does the first level Parato show where the miss is?4. Does the second level Pareto begin to show the why of the miss

(i.e., get to root cause)?5. Is the Root Cause Statement made with quantified amount of

miss?6. Are the Countermeasures focused on the critical few?7. Are there short-term as well as long-term countermeasures (if

appropriate)?8. Is the Ownership of each Countermeasure identified?9. Is the timing of each Countermeasure identified?10. Is the impact of each Countermeasure quantified and is there

enough to get you back to Plan?

Causal Relationships

Check your logic and eliminate items that are not causes.

How? Check your trends. Look for themes Evaluate special vs. common causes. Stick Strictly to If…Then

Remember Quick Fixes often CAUSE unintended consequences Stabilizing the situation 1st allows you to see the

Causes clearly


Good countermeasure preparation will drive an organization to: productive self-criticism more robust systems closer customer contact a higher level understanding of the

marketplace

Is a team effortWill improve our processes

Documents

RCCM ver2