The Business Benefit of Root Cause Analysis, Ben Linders, SM/ASM Conference 2003

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The presentation will show how Root Cause Analysis (RCA) can be applied in way that it supports reaching the business goals of an organisation. It is based on collected data of RCA sessions (done for several years) and the impact on business results, and analysing this data together with non-quantitative information. This has lead to effective RCA methods, applied at specific points in the processes, with significant business results.

Also the role of RCA in Total Quality Management and Statistical Process Control is explained, including how RCA used results from Orthogonal Defect Classification for maximum result. Finally, RCA as a pragmatic implementation of the CMMI Causal Analysis & Resolution process area, is elaborated.

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The Business Benefit of Root Cause Analysis, Ben Linders, SM/ASM Conference 2003

  1. 1. 1 June 4, 2003 Ben LindersThe Business Benefit of Root Cause Analysis The Business Benefit of Root Cause Analysis SM/ASM 2003 Conference: June 4, San Jose, CA Ben Linders Operational Development & Quality Ericsson R&D, The Netherlands Ben.Linders@etm.ericsson.se, +31 161 24 9885
  2. 2. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders2 Overview • Purpose & Aim of RCA • Key Success Factors • Investigation of Business Results of RCA at Ericsson • Conclusions Enable R&D making quality products, cheaper, on time!
  3. 3. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders3 Ericsson, The Netherlands • Main R&D Design Center • Full product responsibility for Intelligent Networks – Strategic Product Management – Provisioning & total project management – Development & maintenance – Supply & support • 1800 employees, of which 400 in R&D Root Cause Analysis is done at: – Design Center: Projects, products, supply/support issues – Corporate level: Crash Commission, Telephone Exchange Outages
  4. 4. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders4 Purpose & Aim of RCA Definition: Technique to analyze a problem to determine causes that made that problem happen, and to define actions to prevent similar problems from happening Has to be a real & concrete (not imaginary/vague) problem, that has caused significant damage, with a sponsor who pays for the investigation and preventive actions. “We do not want such a problem to happen again!”
  5. 5. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders5 Examples where RCA can be used • Major product defects from test or customers • Significant project disturbances (off-track) • Re-occurring problems hampering business results Approach: - Analyze problem to find root causes - Define and implement corrective actions Method: Apollo Root Cause Analysis
  6. 6. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders6 Key Success Factors • Problem Selection • Knowledge & Skills • Communication
  7. 7. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders7 Problem Selection • Only problems with serious impact on business targets Target not met -> RCA -> causes -> actions -> target met • Organizations are limited in how much they can change – No more actions then you can implement – Prioritize RCA sessions i.s.o. actions • Use results from RCA cost/benefit investigation – How big was the loss due to the problem? – How much does a preventive action cost, and what is the benefit?
  8. 8. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders8 Knowledge & Skills Problem Analysis: Causes + Relationships First analysis, then solutions Session Moderation: Understand problem area Ask the right questions Main Problem to be investigated. Cause Level 1 Cause Level 1 Cause Level 1 Cause Level 1 Cause Level 1 Cause Level 1 Cause Level 2 Cause Level 2 Cause Level 2 Root Cause Level 2 Root Cause Level 3 Cause Level 3 Root Cause Level 4 Root Cause Level 4
  9. 9. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders9 Communication • To people working in the problem area: Learning • Preventive actions: What, when, how, who • Contribution towards organizational targets: Benefits Communication: A tool for organizational changes that are needed for meeting targets!
  10. 10. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders10 Investigation of RCA Master Graduation Assignment: • Evaluation of RCA • Business point of view • Contribution to targets: Cost, time, quality Investigated: Models: TQM, CMMI, ITU, ISO Cost/benefit of RCA sessions
  11. 11. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders11 Models Total Quality Management (TQM) Focus on Customer Satisfaction Capability Maturity Model - Integration (CMM-I) Improvements based on quantitative data International Telecommunication Union (ITU) Policy with thresholds for when to do RCA ISO 9001 Corrective actions based on quality problems
  12. 12. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders12 Cost/benefit of RCA • 12 RCA sessions, ~ 20 mhrs per session total • 190 Root Causes, 135 Preventive Actions • Cost/Benefit of 1:1.5 for design projects 1:2.5 for maintenance • Average cost preventive actions 162 hrs for design projects 115 hrs for maintenance Apply RCA primary for customer problems in maintenance Cost - Benefit Ratio 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Project1Project2Project3Project4Project5M aint1Project6M aint2Project7M aint3M aint4M aint5
  13. 13. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders13 Conclusions • RCA helped to improve Business Results • Most beneficial for maintenance + customer issues • Problem analysis skills and communication of results are very important RCA has proven to be beneficial: Use it!
  14. 14. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders14 Questions? Contact: Ben Linders Operational Development & Quality Ericsson R&D, The Netherlands Ben.Linders@etm.ericsson.se, +31 161 24 9885 ??????????????

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