Environmental Root Cause Analysis
Root Cause Analysis
The business encourages implementation of the techniques and practices involving the correct identifications of issues. The organizations encounter issues during their operations and deploy a number of techniques to eliminate the effects of problematic business processes. The technique used in the case study of Electronics International is based on the effects-based problem identification named as root cause analysis. It provides the advantage of identifying highest level cause. The guidelines for issues identification provide an insight of issues that can have a probable impact on the business performance. These issues are identified as a lack of coordination and business planning. The problem is also causing a considerable amount of financial loss for the business. IT is recommended to utilize third party supply chain services and warehousing facilities to eliminate the issues. Moreover the business should implement a policy for automated communications and resources sharing with all the strategic partners in supply chain. Implementation of both techniques can create an overall positive impact on business performance.
There are various problems that are associated with corporate, business, and functional levels. The corporations ranging from small to medium and large sizes face issues in their operations. However the issues require correct identification and their solution also have to be appropriate in order to mitigate their effects. The issues identification, options, alternative solutions, and selection of solution are important components of the root cause analysis technique. It is a process incorporated through root cause analysis. The issues are resolved through diligent identification, weighing the impact of these problems, and developing alternatives. These alternatives are then evaluated in terms of their suitability for the correction of situations as well as the economic impact in case of adopting a specific solution. It is also essential to understand that there are a number of techniques and solution to single problem faced in the business. The best option is selected on the basis of economic, functional, and operational viability in relation to the business perspective and severity of the impacts (Andersen & Fagerhaug, 2006).
It is observed that a number of techniques and approaches are available for solving business problems. A number of approaches imply that testing and evaluating the alternatives is required prior to fully implement devised solutions. Whereas other approaches argue that the key stakeholders of the operations where issues are exiting should be involved to correctly identify and remedy solutions. Deming a famous scientist also provides a problem solving solution through notable wheel approach. It is significant approach for continuous problem solving. The stages of the Damming’s wheel are Plan, do, check, and act. Through this approach the issues are analyzed, ratification measures are developed, the effects are evaluated, and the particular process in modified according to the results of the solution evaluations.
The company’s operations at the warehouse were having long line of trucks waiting to unload. The lead time for unloading trucks was increasing with every passing day and it had financial implication on the business on monthly basis. The supplier’s waiting time as well as the charges for the business was around $200 and the waiting time. The holiday seasons were the worst among all. As an option it is important to consider subletting some or part of the logistics operations to the third party supply chain solution providers. The presence of such organization in Canada is a significant advantage.
The trucking industry in Canada has evolved over the years. It has adopted numerous changes and instigated a number of business models for the businesses to fulfill transportation requirements of the market. The emergence of third party logistics suppliers is also one of the major industries in Canadian business. The inland transportation of consumer goods is one the major business. It takes the goods from major supplier and transports them to the major retailers. The businesses utilize the services of major supply chain solution providers and transfer their product to retailers for sales. The supply chain solution providers are trucking transportation, warehouse solution providers, inventory controls, customs brokerage, and order processing services.
It is important to identify correct issues with the business situations in order to later find out the appropriate options and solutions. The eradication of the issues is relevant to create an impact on the business performance. The issues related to the business operations require a diligent identification of factors, issues, and problems (Andersen et al., 2006). It is also important to raise issues within the business unit and priority of the issues is a significant factor in deriving the business towards solutions. The management of an organization is regarded as competent in case that correct issues are located.
Electronics International is facing issues with the long line of trucks waiting outside its warehouses for being unloaded. The lead time to unload the trucks was dependent on the quality and quantity of the products. The availability of fork lifters for unloading is also a factor for delays. The waiting time of the trucks was varied between 10 minutes up to 5 hours usually. It required a fork lifter to pick the products from the truck and place them in the appropriate place within the warehouse.
The retailers charge a fee for late arrival at their premises.
The heavy fines are experienced as 30 minutes delay can cause $1,000 for waiting. The carriers also charge for retention fee in case they have to wait. The accumulated fees for delays are experienced at the buyer’s facilities and later it is passed to the supplier, from where these are checked with the company and transferred to retailer. The Electronics International has been that they have faced two major issues. First the volume of products required delivery through a high number of carriers each day. The second major issue was the waiting time which caused them the delays. The business had to pay fees for retention of the carriers for long periods of time. The real cost to the business is the fuel, waiting time for driver, and most significantly the opportunity loss for delivery of other products. The business has incurred $7,000 loss in terms of the late appointment fees.
Environmental Root Cause Analysis:
It is important to understand the association of problems, impacts, and their causes to devise appropriate solutions for mitigation of the risks and issues occurring during the operations of a business. According to Andersen et al. (2006) each issue has a cause and in order to resolve the issues it is significant to identify the root cause of the issue. It is reasonability of the management to identify the correct causes of these issues and devise solution to eliminate these problems. Extensive amount of efforts are required to identify the issues. The resolution of the issues is an easy task after reaching the correct identification of the issue. The deployment of sophisticated techniques in the corporate world is a usual practice to identify and correct problems.
The root cause analysis is a problem solving technique adopting the exposure of the correct cause of the problem. The root cause analysis requires the identification of highest level of cause. The stages in root cause analysis can be defined in terms of a symptom which is regarded as a visible issue. These issues are the ones that can be identified without any high level technique. The symptom leads to a visible problem that is again the most vivid case of the problem. The next level is considered as the first level cause, followed by the higher level cause. The most important cause is usually located beneath the high level cause. It is important to locate that cause as it can provide the exact issue which is causing its occurrenceHeuvel, Lorenzo, and Hanson (2008).In case of Electronics International root cause analysis is performed and it revels following results presented in the summary format.
Table: Root Cause Analysis:
Late Appointments Fees
Delivery Unload at Warehouse
Improved coordination with suppliers
Large Volumes of Products
Large number of trucks coming in from suppliers.
Products delivery planning and scheduling
First Level Cause
10 minutes to 5 hours
Retention time fees from carrier to supplier
From supplier to retailer
Planning and coordination with suppliers
Higher Level Cause
Time Required to unload trucks at warehouse
Fork Lift Availability
Various Products sizes
Internal planning for delivery and availability of resources
Poor Communications and Delivery Planning
Supply Chain management
Integration of ERP systems
Third party Supply Chain Management Services.
Integrated Planning and communications.
Use of Technology and information sharing
The root cause analysis presented above has determined that the availability of the resources for planning and coordination with supplier require improvements. The solutions for supply chain management are required. A coordinated approach for management of the communications functions can facilitate the resolution of issues. The supply chain and Enterprise resources planning are important for retail business. The business focus should be to integrate communications with their suppliers. The coordination with the suppliers should be improved to facilitate appropriate functioning of delivery and planned resources should be dedicated to provide accurate information and appointments.
The development of alternatives is essential in business planning and control. The issues identified above should be addressed in order to achieve higher results. The options for Electronics International are derived to assist efforts for batter coordination and implementation of the supply chain solutions. The management is considering following options to mitigate issues.
The first option is to design and development of supply chain using internal resources of Electronics International. The suppliers should be given appointments through a technological system based on the volume and load of the trucks. The resources required for unload of trucks from suppliers should be made available and reporting at the gate on which delivery is expected to arrive, prior to the truck arrival. It is only possible through diligent planning and effective communication with suppliers.
Third party suppliers for supply chain solution should be contracted to provide an automated process for delivery receipt, warehouse facilities usage, and delivery to the customers. The supplier should be able to access, plan, and coordinate with the company in order to facilitate smooth functioning of the complete logistics process. The delays in delivery offload should be minimized through usage of own as well as third party facilities. The business can also take advantage of developing a system through allocating access to the supplier’s system on behalf of Electronics International to plan and coordinate deliveries. The supplier facilities can also be used to directly pick shipments from suppliers and deliver them to appropriate retailer distribution centers.
The recommendations are based on the results of issues identification, environmental root cause analysis, and evaluation of alternatives. The recommendations are also focused on technological solutions.It is recommended to take advantage of the technology and install RFIDs to the shipments of suppliers for tracking the shipments in advance. The usage of technology offers multiple costs saving solution to automate supply chain processes. The advance intimation of deliveries can improve the process of deliveries including the retention time and penalties in terms of fees and loses for making the carriers to wait in long line to enter Electronics International facilities. It is also recommended to gather information about the third part supplier solutions. Totalline transport can be used as a subcontractor of the company to provide supply chain services and warehousing solutions where appropriate. Following key features of the solution provider makes it a batter choice for the business.
The Totalline transport company started its operations in 1987 with a single truck and examined at a phenomenal pace through extensive business growth and offering of various services. The business enjoys a sales volume of $42 million in 2002 and its operations are spread around Canada and USA. The company has 160 trucks in their fleet. The business operations of the company are scattered around three major areas including warehousing and freight solutions across Canada, guaranteed time delivery services, and trans-border and international freight services. Totalline Transport offers warehousing solution and it is also one of the major contributors of company business totaling up to 60% of the share.
The business is focused on catering electronics, high tech goods, and risky products. The risky products include the ones that hold a significant risk factor for damage during transportation. The focus of the company is contrary to its competitors. The company’s mission to provide success to their customers revolves around the notion that drivers, package, and delivery item appears attractive at the time of delivery. The focus is also on-time delivery with minimal overages, shortages, and damages. In addition to transportation the company also offers a warehousing service to its clients. There are over 200 customers with a requirement of delivery to over 2000 retail points. The company operates 26 distribution centers in the country.
The retail business requires the adoption of sophisticated techniques and practices to automate and share information with the suppliers, retailers, and distributors in order to reduce cost and minimize possible loses. The electronics retail industry has a thin margin for business operations. Hence it is required to deploy sophisticated techniques to implement solutions that are based on the diligent planning and control. In case of any issues the business should consider deployment of techniques to identify issues and eliminate alternative options to improve business performance. The techniques implemented for root cause identification provides a significant insight in the issues and related approaches to eliminate these problems.
The approach for problem solving through root cause analysis is categorized as a reactive approach. The root cause of the issue is identified and resolved after a problem occurs and as a result creates some negative impacts on the business process. It is also worth mentioning that a number of techniques incorporating the ratification of issues after they have actually created a significant impact on business performance are not much appreciated. The approaches taking into account the possible issues prior to occurring are far more beneficial for business than the root cause analysis. It enables the business to incorporate changes before undergoing a serious loss or impact on its operations, functions, and performance. FEMA and FMECA are tools with can cater the requirements of identifying issue before they can create an impact and eliminate their causes. The failure mode and effects analysis (FMEA) enables the business to identify and prevent the issues before occurring. The failure mode effects criticality analysis provides the assessment of criticality as an addition to the prior tool (Andersen et al., 2006).
Andersen, B., & Fagerhaug, T. (2006). Root cause analysis: simplified tools and techniques. USA: ASQ Quality Press.
Heuvel, L.N.V., Lorenzo, D.K., & Hanson, W.E. (2008). Root Cause Analysis Handbook: A Guide to Efficient and Effective Incident Investigation. USA: Rothstein Associates Inc.
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