|
|
|
|
A root cause analysis or a cautionary tale:Be careful what you look for. You just might find it.I must tell you from the outset that this story that a good friend told me just might be true because only truth can be stranger than fiction. He told me that he really wished it were fiction and allowed me to recount the tale only on the condition that I change the names and enough of the details to protect the guilty. "Why protect the guilty?" I asked. I already knew part of the punch line, how a once brilliant entrepreneur had somehow squandered millions of his investors' cash. Sam had promised to give me an example of some of the things that had gone wrong. Today we were exploring how a very large quality claim came about from their largest and longest standing European customer. That incident had been one of just a few key factors that had meant the difference between profit and loss for that year. Not a great thing for a struggling start-up wanting to be recognized by the bigger deal brokers. "Well, they may deserve the truth. But they won't understand it. I put them in the denial category; unconscious to any world beyond their own. Besides that, I'm not positive they wouldn't sue. " Sam sipped his coffee, glanced around the upscale Silicon Valley restaurant as if to make sure none of them were there, and went on in a low voice. " You know the type…" "Yeah," I almost whispered, "I know the type. I've turned down a couple of consulting opportunities with their kind. Just don't want to waste my time. Now, what's the real truth here? What is the root cause of the problem?" Our meals were getting cold. I don't know why I didn't eat. I could have. I guess I was just listening too intently and Sam, of course, was talking. "In all the years I've been doing root cause analyses I've learned two things. First, there's rarely only one root cause to a problem. And, second, even when you find the truth, people don't always want to hear it. I learned the second the hard way when I fired this client." "You mean they fired you." I corrected. "Hell no! I fired them; walked out the door and sent them a letter saying that I couldn't work with them any more '…due to the situation at the company.' The president knew what I meant but I'm not sure the Board ever caught on. They were good people but this was a small fish and the president was smooth. He had enough oil on the water and smoke in the air to make the Titanic disappear. "When I started consulting with them, we made tremendous strides on all fronts. They'd been around for about a decade (too long to still be a start-up by some standards) and, in spite of their sophistication in some areas, they just didn't have it in operations. It was a mess. You know me. That was just more motivation to do a great job. We installed a cost reduction program and quality system that really had the chance of being world-class. They could have picked up ISO or QSO certification pretty quickly but that's another story. They were even selling new products and picking up new customers on the basis of what appeared to be the best quality in the product class in the world. Not a bad place to be in for a company that couldn't even spell 'SPC' a few years before. "The shit hit the fan in June with fax from the customer; looked like it'd been written by a barrister. Legalese stands out when you're used to 'How are you doing?' and 'I'm looking forward to another evening at the theater.' kinds of communications. This one had no warmth. But, now that I remember, I think the phone call came first. The company sales rep got a call from his contact saying that there was a quality problem with the last lot of product and there'd be a fax coming. He wouldn't go into much detail over the phone other than to say that they had shut down the plant and wanted to know where the next shipment was and 'Was it from a different lot?'. They figured that they could re-start the line once it arrived and they had a chance to check it out thoroughly. In the mean time, they would be sure to carefully tally up the damages. "Well, the president was upset. 'What can we do to get this customer up and running again so we don't make this damage claim any bigger? Do it now!' Then, once he knew what the facts were about the inventories (zero) and the next shipment (two weeks late and now in a warehouse in New York), he went looking for the guilty parties. It seemed as though he was less interested in the cause than in finding someone high up in the company to blame. "I was on retainer so they brought me in to sort through the issues and help expedite the production of quality replacement product. The president also asked me to help guide the damage control team. He was too busy courting new investors and working on a new structure to help set up for an IPO. He had a grand scheme to make everyone rich. Or at least that's what he said. I wasn't too sure and had mentally written off my stock options. I'd discounted my consulting fees and taken options to help get them through the formative years. Lately, however, I'd begun to think my fees would be the best I'd get. "I flew in on Sunday night and met with the manufacturing team early the next day. They had already put together a plan to get the next shipment off the NY docks and onto a 747 heading across the Atlantic. The lab was re-measuring the retained product samples from both lots. They'd done a pretty good job of damage control and now it was a waiting game to see what the quality control department had to say and what the shippers would do. We assumed the customer was right and moved on to finding out what had caused the problem he had identified." The waiter came by with more coffee. Sam paused but didn't even look up. "We weren't hungry," I said, not wanting to insult the chef, and the waiter cleared the table. It was quiet. The breakfast crowd had cleared out and except for a couple of three-piece suiter's in another corner of the restaurant, we were now in the mid-morning calm. I waited not wanting to break the train of thought any further. I was hooked and needed to hear what the rest of the story was. Maybe I could learn something. I finally spoke up after a half a cup. "Tell me, Sam. What did you find when you did your root cause analysis? You did do one didn't you?" "Yeah, we did but it was like pulling teeth. I just couldn't understand it. You'd think they'd never done one before. I was beginning to think that all the time I'd spent training this team had been wasted. Maybe I'd done a crappy job. I could understand why the production manager (the Kid) could have reason to be defensive. After all it was his production line that had turned out the product in question. And maybe his boss, the director of manufacturing, could be a little touchy. But why was everyone else including the VP of manufacturing looking uncomfortable? Even the director of quality was shifting in his seat like someone had poured tar on it before he sat down. The, usually 'I know it all.' senior product engineer was quick with some answers and ready to close the books. "Wait," I said "don't you think we should dig a bit deeper and find out what really happened here? I thought you guys knew how to do these root cause investigations. You've certainly had the practice lately with other issues. "Well, the process went on in fits and starts like we were giving birth to a porcupine the wrong way. Here's what we found. "The product was out of dimension because the midnight shift operator had not verified that one of the machines was working in tolerance. Since all of the parts were co-mingled into one lot, his bad stuff couldn't be sorted from the good. All that was needed now, according to the engineer, was to fix the machine and reprimand and re-train the operator. Problem found and solved. We were done. 'Thanks for the help.' The team said. 'We knew this would be easy. Sorry to inconvenience you.' "''Okay,' I said, "then why didn't the shift supervisor find the problem on his quality checks and how did this batch make it past the quality control department? What did the shift supervisor reports show and do they conform to the operating procedures?" "Well, ah, we umm can't find them." The Kid stated. "They're not important anyway. "Why not?" I asked. "We just don't need them because we found the cause and now we're going to fix it." said the Kid adamantly. "I want to see them anyway. I'll wait while you send someone out to look for them. Let's go on." I suggested even more adamantly. "Well, we discussed things for another half hour or so until the foreman returned. He looked a little pale. 'Ah, another guilty party.' I thought. 'Too bad. He's a really competent guy otherwise.' "The foreman said 'I couldn't find any reports.' "'Any?' I asked. "'Any.'" He stated reluctantly. 'There aren't any. We aren't keeping the reports any more.' "Why not?' I almost shouted. "The procedures are in revision and we don't have any." The foreman was looking at his feet now. Wondering, I think, if they could get him out of the conference room fast enough. "I had my first glimpse of the porcupine. "'I thought we worked on those last fall and you were going to have the revisions in place by the first of the year.' "The Kid squirmed on his tarry seat, lifted his chin and said, ' just haven't been able to get them done. Nobody is helping me. The engineers are always too busy and it takes too long to get stuff through the quality department. It's not my fault. I told you last fall we needed more people.' "I glanced around the room to the engineers, the quality people, and the rest of the managers and asked if this was true. I won't bore you with the details but believe me there was enough double talk and smoke blowing to have set a new Guinness record. You could have died from blood loss getting poked by all the fingers in the air. I instructed the team that we would adjourn until the next day while they researched the problem. "I went off to report to the president. I told him that we had found that the machine had gone out of control and the operator hadn't found it 'Good,' he said, 'I hope disciplinary procedures are under way.' I told him that I thought there was more to the problem and we were meeting again tomorrow before anyone was disciplined. 'Don't waste a lot of time on this. We've too much other important work to be done. The engineers are behind on their revenue research projects and I don't want them tied up on a wild goose chase!' I assured him that I understood and we'd be efficient. "The next morning we met again. The mood was not good. Nobody seemed to be able to keep eye contact. And nobody had any answers. "I figured it was time to take off the gloves and be efficient, as the president had insisted. I asked again why the procedures weren't written. I went around the room. Everyone said they'd done their part but the Kid kept whining that he'd had no support. It took a while and people were getting bruised but a piece of truth was finally born. The porcupine was working hard. The revisions, it seems, had sat on the Kid's desk for months and he hadn't gotten around to finishing them. The rest of the team had stopped asking for them because there was no response. "'So,' I said, drawing a flow chart on the board, 'The problem could have been prevented in any of the following things had happened:
"'Note,' I said, "that there is nothing on here about the operator screwing up and being to blame. It looks like everyone else but him is responsible.' "'You guys are always trying to pin problems on me! I ain't gonna put up with that crap. Everyone here knows they're more to blame than I am.' The Kid was giving the porcupine a push. "I could tell, as if I wasn't already feeling the heat, that the ice was melting and maybe I was one of the people out in the middle of the lake. 'Okay, you write up the report as you see fit. I think I've helped clarify this as much as I can.' While Sam was talking, I was scribbling out a flow chart just trying to put some sense around what he was saying. Root cause analyses are like that. You really need to put pen to paper to sort out the garbage and find the clarity. If you want to take a look at it, I kept it here. It's no work of art but the picture was becoming clear…I thought. "I asked the director of manufacturing to stay. I asked him why this performance issue with the Kid had not been taken care of. He said his boss wouldn't let him and that the human resources manager was giving him lots of heat about having put too much pressure on the Kid. 'My hands are tied,' he said. "I found his boss, the VP of manufacturing, in his corner office looking through a stack of mail about a foot high. "What do you think?" I asked him. 'Let me close my door.' He said and proceeded to pull out a four-inch thick file. 'This is the Kid's performance record. It's not a pretty picture.' "Why don't you fire him?" I asked. "His incompetence seems to be the ultimate root cause of this problem. I don't know why everyone else isn't lobbying you to do the same thing. The director of quality ought to be screaming." "The VP looked at me for quite a while and then said softly, 'You're right but you're forgetting a few things here. The Kid is the human relations manager's son and the human relations manager is the president's wife. Oh, and the quality manager is the president's uncle. And I'm waiting for my options to kick in when we have our IPO. We're all in it for the IPO and we're going to get rich. The rest of this stuff is just the usually BS that you have to put up with along the way. Nobody cares about the reality. It's just gotta look good enough to sell on the Street.'" "I nodded, thanked him for his candor, and went off to write my letter firing the client. I later heard that the Kid left that fall to take a nice promotion at another company. I understand he lasted about six months before they replaced him. Nepotism couldn't save him there." Sam took a sip of coffee. I took the opportunity to ask him, "Did they make their IPO?" "Not yet. I think the better houses are as smart as we give them credit for, the medium houses are cautious enough, and even the bucket shops haven't bitten on this one yet. There's just too much competition in Silicon Valley for reality to stay hidden all the time. Garbage stinks even when you package it up real pretty. Let me tell you the rest of the story. It's quite a tale." "Would you like to see the lunch menu?" the waiter asked. I looked up with a start. The place was already beginning to fill with the smartly suited men and women of the downtown executive suites ready to perform the delicate ballet of true power lunches. They were contemplating menus and the sweet fees they would desert on once the deal was done and the IPO was out the door. My eyes hit my watch. I had to go! Four cups of coffee on an empty stomach and a lunch meeting with a client down the road…I really had to go. "Sam, I gotta go. Thanks for the story. I'm not sure what I can do with it but maybe one of these days I can write it up as a case study." I threw a fifty on the table for our twenty-five dollar breakfast and ran out the door, stopping only long enough to make room for my next cup of coffee. There are some priorities that you just can't dodge. I haven't seen Sam lately to get the rest of the story but his cautionary tale of a root cause analysis well done but gone awry keeps playing in my head. Not everyone, it seems, always wants the truth to be found. More real-life examplesRoot Cause Analysis Training for those of you who do want to find the truth.
|
Cost Reduction & Profit Improvement
|
