This is the seventh in a series of posts on using performance excellence tools. In the two previous posts we looked at some basic data analysis tools including:
- Bar charts
- Histograms
- Line charts
- Pareto charts
- The 5 Whys
This post broadens the discussion of the basics of data analysis to look at an advanced tool the Cause and Effect Diagram also called the Fishbone Diagram. One quick look at it and you see why it is called a Fishbone Diagram (Figure 1).
Figure 1 Cause and Effect Diagram
The C&E diagram allows you to delve deeper into the details of a potential cause of a problem. The level of detail depends on how deep you want to go, how deep you need to go (at some point you may hit diminishing returns for your effort), how deep you can go (there may be limitations on data availability, etc. that constrains you), and resource constraints (time, people etc.).
There are a number of various ways to use this tool. Most are geared towards manufacturing and assembly processes. There is a method for transactional problems which is what will be described here.
For our demonstration the invoice team has discovered that nearly 15% of the invoices are paid after their due date incurring substantial late fees.
An easy way to think of the C&E diagram is as a detailed 5 Whys. Just as in the 5 Whys you start by posing the problem.
Problem: 15% of invoices are paid late.
This is placed in the problem block of the diagram.
Figure 2 Problem statement
A formalized approach to labeling the causes for service based processes is the 4P’s which are policy, process, plant and people. But you are not limited to these. You can use them, some, all, more, or less. For our problem we will use them.
Now you start brainstorming for the root causes.
- The basic use of brainstorming is identifying a wide range of ideas and solutions to existing or new problems
The basic rules for brainstorming are:
- Quantity, not quality is the goal so extreme ideas are welcome. Think outside the box. There are no bad ideas.
- No verbal or non-verbal criticism of ideas.
- No discussion of ideas. An idea is offered and no one should be allowed to comment on it, either pro or con.
- Asking for clarification is OK, but should be focused and brief. While there is no discussion of the idea, it is alright to ask for clarification of the idea.
- No belaboring ideas or telling of war stories (be succinct).
- Piggy backing on ideas is OK. If someone’s comment triggers an idea related to it, offer the new idea.
The backbone of the fish points to the problem. Off of the backbone attach each of the causes. Now start adding in the causes for each.
Figure 3 The Causes
You continue adding causes and sub causes delving deeper until it is no longer adding value.
In our problem we can note two causes that are repeated.
- Lack of training
- Outdated policies and processes
A root cause could be management’s frugality towards spending on back office operations.
Process Improvement for Non-Profits 