How to do a root cause analysis

A snowy morning, a night in Hanover and missing the first day of a business trip in Berlin.

At first glance those three,
may not seem very much connected with a business lesson.

However, nothing further than this.
Business lessons are everywhere.

The valuable lesson I learnt to avoid issues in future trips and how to do a root cause analysis effectively.
All this – and some business examples – you will find in this post.

How to do a root cause analysis

Whether you want it or not
mistakes were,
mistakes are,
and mistakes will be part of your work experience.

As one of my managers used to tell me,
“If you are not making mistakes, you are not taking enough risks”

Take risks as fuel for your growth,
however, bear in mind that when you take risks, chances are higher that mistakes will happen.

It is crucial you understand what you can do – what it is in your hands – to ensure the same mistake will not happen again.

Let me introduce you to the RCA, also known as Root cause analysis, the simplest and most practical method to avoid the recurrence of mistakes.

What is a root cause analysis (RCA)?

Root cause analysis (RCA) is a methodology used in the supply chain (and many other industries) for identifying the cause (or causes) of an issue and developing the relevant actions to ensure there is no recurrence in the future.

To put it simply,
a root cause analysis will allow you to trace the problem to its origins and prevent the problem of happening again in the future.

Why conduct root cause analysis?

“Man is the only animal that stumbles over the same stone twice”

I truly like this quote,
as it really reflects the nature of human beings.

We are the only animals on earth, capable of making the same mistake twice.

You will be able to stop your human nature,
by developing effective root cause analysis for your supply chain problems.

What are the 4 steps in a root cause analysis?

A root cause analysis consists of 4 basic steps.
Defining the problem, identifying what is the reason that it is causing the problem, assessing what it is possible to do to mitigate the problem and preventing such problem from happening again.

Let’s use as an example of root cause analysis, my real-life example defined at the beginning of this post.
As a reminder, I was one day late for a business trip in Berlin.

Problem statement

The problem statement would be the same as answering the question: What did it happen?
The problem statement should be a simple sentence that defines all the situations.

It is key to define the problem statement as simple as possible, in a way that people that are not familiar with the topic can easily understand what it is the issue that you are facing.

Example of a problem statement: I arrived one day late in Berlin
The problem is that due to various reasons I arrived one day late for my business trip to Berlin.

Let’s deep dive, into what it was the real reason that made me one day late.

Root cause

The root cause would be the equivalent of answering the question: Why did it happen?
Which is the top one reason that would perfectly explain the problem?
Keep it simple.
Always think twice if the defined root cause is simple enough, and if you still doubt,
ask yourself if someone not familiar with the industry would be able to understand the situation without any further questions.
That’s the point you want to reach – when the root cause is self-explanatory

Example of root cause: Wearing summer tires in winter.
I was confident there would be not much snow, so I decided to take the risk and drive all the way from Amsterdam to Berlin. In the Netherlands, all was looking good almost no snow and very clean roads.
the situation got complicated while entering Germany. Too much snow and me with these summer tires – the decision was obvious let’s drive back to Amsterdam and restart the trip.
I would be late for the business trip.

Corrective actions

Once the problem happened,
what are the different actions that I can put in place to mitigate the problem as much as possible?

How I can mitigate the problem – in the case of the business trip, what I can do to reach Berlin as soon as possible?

Corrective actions, depending on the situation can be more than one action.

Example of corrective actions:

  1. Share heads up with my manager that I will be late for the business trip
  2. Book train tickets from Amsterdam to Berlin
  3. Book an overnight stay in Hannover (all direct trains to Berlin were fully booked)
  4. Take the first train in the morning from Hannover to Berlin

Preventive actions

While I cannot change the past, still I am able to influence the future to ensure the same problems do not happen again.
The preventive actions would be the set of choices you can define to make sure the same problem does not happen again

There can be more than one preventive action for a root cause analysis.
In the example of my business trip – which preventive actions I am doing every time I have a business trip:

  1. Validate the weather forecast for the time of my stay
  2. Take the car to the shop for a top-level check
  3. Work out alternative options for commuting (plane, train, rental car …)

As you can imagine, with such preventive actions chances are much lower than in an upcoming trip I would have an issue similar to I had with wearing summer tires in winter.

How do you perform a root cause analysis effectively?

An effective root cause analysis is not that one when
you easily define the problem,
you clearly state the root cause,
and how to mitigate it and avoid going further.
People normally finish the root cause here. Wrong. This is not the end.

It is key you share the conclusion of the analysis with the people impacted (and the people who could face at some point in the future similar issues.

Why is that important?
Mistakes will keep happening,
however, it is key to get the learnings out of it and develop the relevant action plan to ensure the same exact mistake does not happen again.

On top of this, root cause analysis is time sensitive, the sooner you perform the root cause analysis the better.
Why? You will still be able to influence the corrective actions area and you will be showing a sense of urgency to the issue to your peers and your managers.
If an issue has severe business impacts, it is key to jump into it as soon as possible.

Root Cause analysis examples in Supply chain

Example of under shipping trend. (under shipping = shipping fewer products than expected)

Problem statement: (what happened)Limited capacity in a distribution centre
Root cause: (why it happened)Under shipping trend for the last 3 months in a row
Corrective action: (how to mitigate)
Promotion activities to be launched with top 3 customers
Donate products to charity organizations
Preventive action: (how to avoid it in the future)
Intervention in forecasting for the next 3 months, 50/50 approach
Top 50 products – connect with top 3 customers to understand their future plans
Implement statistic model for rest of portfolio

Example of wrong master data maintained in the system.

Problem statement: (what happened)Customers wrongly invoiced
Root cause: (why it happened)Wrong maintenance of customer master data using a new VBA tool (Macro)
Corrective action: (how to mitigate)
Extract list of customers touched by VBA tool (Macro)
Remove all the master data for impacted customers
Maintained the correct master data
Perform a four eyes check
Sign-off action is completed and correct
Preventive action: (how to avoid it in the future)
Try new VBA tools in test environments
Implement 4 eyes check when massive changes in the system

Example of wrong information sent to the wrong recipient.

Problem statement: (what happened)Wrong invoice sent to the wrong customer  
Root cause: (why it happened)Human mistake during backup
Corrective action: (how to mitigate)
Apologize for the mistake
Ask for the deletion of the email
Share correct invoice  
Implement financial compensation
Sign-off action is completed and correct
Preventive action: (how to avoid it in the future)
Automate delivery of emails to recipients
Delay delivery of emails to customers
4 eyes check t- correct recipient including in the distribution list

You can read more about how to delay the delivery of emails here .

FAQ Root Cause analysis

Shall I perform a Root Cause analysis every time I have a problem?
Yes, every time you have a problem that has a considerable impact on the business,
I would recommend you perform a Root Cause analysis

In which format shall I do Root cause analysis?

The best format to do a Root cause analysis would be in a word document (or comparable software) that you can simply copy into the body of an email or include as an attachment.

When shall I perform a Root cause analysis?

A root cause analysis shall be performed every time you have an issue that has a severe impact on the business.
Once the root cause is clear, I would recommend you finalize the root cause analysis no later than 7 days after the issue happened.

With whom shall I share the Root cause analysis?

The root cause analysis should be shared with all the counterparts who have been impacted by the issue or could at some point in the future face similar issues.

Which tools are used for root cause analysis?

For performing a root cause analysis, you can use the body of an email, a word document, a google document, or a notepad… it is not so important the tool you use, but how you define the 4 steps of the root cause.

What is the simplest method of root cause analysis?

The simplest method to conduct a root cause analysis is using the 4 steps root cause.
4 simple steps: Define the problem, state the reason or reasons causing the problem, how to mitigate the problem and how to avoid reoccurrence going forward.

Root cause analysis is one of the very powerful examples you can bring in your future job interviews, if you want to nail your next job interview, I recommend you read more details here.

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