Root Cost

Analysis
an invaluable problem-solving tool for any organization
 Lesson Outline
The Sub parts of Root Cost Analysis

• Four M’s
• Four P’s
• Five Why’s
• Ishikawa
• Fish Bowl Diagram
Root Cost Analysis

The easiest way to understand root cause analysis is to think about common
problems. If we’re sick and throwing up at work, we’ll go to a doctor and ask
them to find the root cause of our sickness. If our car stops working, we’ll ask
a mechanic to find the root cause of the problem. If our business is
underperforming (or overperforming) in a certain area, we’ll try to find out
why.

For each of these examples, we could just find a simple remedy for each
symptom. But these solutions only consider the symptoms and do not
consider the underlying causes of those symptoms—causes like a stomach
infection that requires medicine or a busted car alternator that needs to be
repaired. To solve or analyze a problem, we’ll need to perform a root cause
Root cause analysis (RCA) is the process of discovering the root causes of problems in

order to identify appropriate solutions. RCA assumes that it is much more effective to

systematically prevent and solve for underlying issues rather than just treating any

symptoms and putting out fires. Root cause analysis can be performed with a collection of

principles, techniques, and methodologies that can all be leveraged to identify the root

causes of an event or trend. Looking beyond superficial cause and effect, RCA can show

where processes or systems failed or caused an issue in the first place.

 • Focus on correcting and remedying
root causes rather than just symptoms.
• Don’t ignore the importance of
Core Principles treating symptoms for short term
relief.
There are a few core principles that
• Realize there can be, and often are,
guide effective root cause analysis,
some of which should already be multiple root causes.
apparent. Not only will these help the • Focus on HOW and WHY something
analysis quality, these will also help happened, not WHO was responsible.
the analyst gain trust and buy-in
• Be methodical and find concrete
from stakeholders, clients, or
patients. cause-effect evidence to back up root
cause claims.
• Provide enough information to inform
a corrective course of action.
• Consider how a root cause can be
 • The first goal of root cause analysis is to discover the root
cause of a problem or event.
• The second goal is to fully understand how to fix,
compensate, or learn from any underlying issues within the
root cause.
• The third goal is to apply what we learn from this analysis
to systematically prevent future issues or to repeat

Benefits and Goals of successes. Analysis is only as good as what we do with that
analysis, so the third goal of RCA is important. We can use

Root Cost Analysis RCA to also modify core process and system issues in a way
that prevents future problems. Instead of just treating the
symptoms of a football player’s concussion, for example,
root cause analysis might suggest wearing a helmet to
reduce the risk of future concussions. Treating the individual
symptoms may feel productive. Solving a large number of
problems looks like something is getting done. But if we
don’t actually diagnose the real root cause of a problem
we’ll likely have the same exact problem over and over.
Instead of a news editor just fixing every single omitted
Tips for performing effective
root cost analysis
Ask questions to clarify information and bring us closer to answers.
The more we can drill down and interrogate every potential cause,
the more likely we are to find a root cause. Once we believe we have
identified the root cause of the problem (and not just another
symptom), we can ask even more questions: Why are we certain this
is the root cause instead of that? How can we fix this root cause to
prevent the issue from happening again? Use simple questions like
“why?” “how?” and “so what does that mean here?” to carve a path
Work with a team and get fresh
eyes
Collaborating with others, whether it's a single partner or an entire
team, not only speeds up the solution-finding process but also
enriches it with diverse perspectives. By incorporating the insights of
others, we can gain a more comprehensive understanding of the
problem and identify solutions that we might have overlooked due
to our own inherent biases. This collaborative approach ensures that
our solutions are well-rounded, robust, and adaptable.
 Plan for future root cause analysis

• Understanding the Core Principles: A thorough grasp of root cause analysis methodologies
is crucial. This includes familiarizing oneself with techniques like the 5 Whys, Fishbone
Diagram (Ishikawa diagram), Fault Tree Analysis, and Root Cause Analysis (RCA). Each
method has its strengths and weaknesses, and understanding these nuances is key to
selecting the most appropriate approach for a specific situation.

• Defining the Scope: Clearly defining the scope of the analysis is paramount.
What are the boundaries of the problem? What systems or processes are
within and outside the scope? A well-defined scope prevents the analysis
from becoming overly broad or unnecessarily narrow.
• Data Collection and Analysis: Understanding data collection methods is essential. This
includes identifying relevant data sources (e.g., incident reports, maintenance logs,
customer feedback), gathering data accurately, and analyzing it using appropriate tools
 Remember to perform root cause
analysis for successes too
Root cause analysis is a great tool for figuring out where something went

wrong. We typically use RCA as a way to diagnose problems but it can be

equally as effective to find the root cause of a success. If we find the cause of

success or overachievement or early deadline, it’s rarely a bad idea to find out

the root cause of why things are going well. This kind of analysis can help

prioritize and preemptively protect key factors and we might be able to

translate success in one area of business to success in another area.

 Root Cause Analysis Techniques
RCA techniques While the outdated "4 Ms" framework
should be avoided, effective techniques like
1. 4 M’s 4 P’s, 5 Whys, Fish Bowl Diagram and
Ishikawa Diagrams remain crucial for
identifying and addressing root causes.
2. 4 P’s
Fish Bowl Diagram graphically maps
3. 5 Why’s potential failures, 5 Whys iteratively drills
down to the root cause, and Ishikawa
4. Ishikawa Diagrams visually categorize potential
causes.
5. Fish Bowl Diagram
By using these techniques inclusively and
focusing on systemic issues, organizations
can gain deeper insights, implement
effective solutions, and foster a positive
 Four M’s

Throwing ourselves into the world of business comes with a huge responsibility. Business

people must focus on improving and developing the process of production. The growth of

specific tactics and services of a company has a vital role and significant contributions to

make the profit grow. That is why the people who incorporate the world must require proper

research about what they need to do to make it possible. In line with that, this article can help

you with possible methods in building a solid production in your business. Join us to discuss

the definition and purpose of 4M root cause analysis and its example. Let us dig deep into

what ability it can offer that we can use in improving our business. In addition, we will know

the great tool that we can use in creating a 4M analysis method. Without further ado, buckle
The 4 M’s of Root

Cost Analysis:

1. Man

2. Machine

3. Method

4. Material

5. Other
 4 M’s

• Material - is the element that talks about the tangible thing we need
to use to achieve our goal or give a solution to the problem

• Method - is the tactics on how we can utilize the materials to

contribute to improving, solving, and achieving the goal for our grind.

• Machine - is a bit similar to the material. However, these are bigger

and much more useful than material. In some aspects, other
machines can be the producer of material that we will use.

• Man - can utilize all of this material and machines and make all the
methods possible.
 Four P’s

The four Ps or marketing are a “marketing mix” comprised

Key Takeaways
of four key elements—product, price, place, and promotion.
• The four Ps are the four essential

factors involved in marketing a product

or service to the public.

These are the key factors that are involved in introducing a
• The four Ps are product, price, place,
product or service to the public. Often referred to as a
and promotion.

marketing mix, they provide a framework that companies • The concept of the four Ps has been

around since the 1950s. As the

can use to successfully market a product or service to
marketing industry has evolved, other
consumers. Since the four Ps were introduced in the 1950s,
Ps have been identified: people,

more Ps have been added to the mix, including people, process, and physical evidence.

process, and physical evidence.

The 4 P’s of Root

Cost Analysis:

1. Product

2. Price

3. Promotion

4. Place
 Product
Creating a marketing campaign starts with an understanding of the product itself. Who needs it and why?

What does it do that no competitor's product can do? Perhaps it's a new thing altogether and is so

compelling in its design or function that consumers will have to have it when they see it.

The job of the marketer is to define the product and its qualities and introduce it to the consumer—the

basic marketing of a product (or service).

Defining the product also is key to its distribution. Marketers need to understand the life cycle of a

product, and business executives need to have a plan for dealing with products at every stage of the life

cycle.

The type of product also dictates in part how much it will cost, where it should be placed, and how it

should be promoted.

Many of the most successful products have been the first in their category. For example, Apple was the

first to create a touchscreen smartphone that could play music, browse the internet, and make phone

calls. Apple reported total sales of the iPhone for FY 2022 at $205.4 billion.3 In 2021, it hit the milestone of
 Price ( $)
Price is the amount that consumers will be willing to pay for a product. Marketers must link the price point to the
product's real and perceived value, while also considering supply costs, seasonal discounts, competitors' prices,
and retail markup.

In some cases, business decision-makers may raise the price of a product to give it the appearance of luxury or
exclusivity. Or, they may lower the price so more consumers will try it.

Marketers also need to determine when and if discounting is appropriate. A discount can draw in more customers,
but it can also give the impression that the product is less desirable than it was.

UNIQLO, headquartered in Japan, is a global manufacturer of casual wear. Like its competitors Gap and Zara,
UNIQLO creates low-priced, fashion-forward garments for younger buyers.

What makes UNIQLO unique is that its products are innovative and high-quality. It accomplishes this by
purchasing fabric in large volumes, continually seeking the highest-quality and lowest-cost materials in the world.
The company also directly negotiates with its manufacturers and has built strategic partnerships with innovative
Japanese manufacturers.

UNIQLO also outsources its production to partner factories. That gives it the flexibility to change production
 Promotion
The goal of promotion is to communicate to consumers that they need this product
and that it is priced appropriately. Promotion encompasses advertising, public
relations, and the overall media strategy for introducing a product.

Marketers tend to tie together promotion and placement elements to reach their
core audiences. For example, in the digital age, the "place" and "promotion" factors
are as much online as offline. Specifically, that means where a product appears on
a company's web page or social media, as well as which types of search functions
will trigger targeted ads for the product.

The Swedish vodka brand Absolut sold only 10,000 cases of its vodka in 1980. By
2000, the company had sold 4.5 million cases, thanks in part to its iconic advertising
campaign. The images in the campaign featured the brand's signature bottle styled
as a range of surreal images: a bottle with a halo, a bottle made of stone, or a
bottle in the shape of the trees standing on a ski slope. To date, the Absolut
 Place
Place is the consideration of where the product should be available—in brick-and-mortar
stores and online—and how it will be displayed.

The decision is key: The makers of a luxury cosmetic product would want to be displayed in
Sephora and Neiman Marcus, not in Walmart or Family Dollar. The goal of business
executives is always to get their products in front of the consumers who are the most likely
to buy them.

That means placing a product only in certain stores and getting it displayed to the best
advantage.

The term placement also refers to advertising the product in the right media to get the
attention of its target audience of consumers.

For example, the 1995 movie GoldenEye was the 17th installment in the James Bond movie
franchise and the first that did not feature an Aston Martin car. Instead, Bond actor Pierce
THE 5 WHYS OF

ROOT COST

ANALYSIS AND ITS

IMPORTANCE.
 THE 5 WHYS
The 5 Whys Technique is like peeling an onion – it helps you uncover the underlying reasons
behind a problem, layer by layer. By repeatedly asking “why” at least five times, this
method digs deep to reveal the root cause of an issue. It’s a simple yet powerful
problem-solving approach that aims to get to the heart of the matter rather than just
addressing surface-level symptoms.
5 Whys Technique: A method that involves iteratively asking “why” five times to unveil the
fundamental cause of a problem.

Frequently Asked Questions About 5 Whys

• What is the primary goal of the 5 Whys Technique?
• Is the 5 Whys Technique limited to specific industries or sectors?
• How does the 5 Whys Technique contribute to continuous improvement?
• Can the 5 Whys Technique be used for complex problems with multiple contributing factors?
How to conduct the 5 WHYs
Step 1: Identify the Problem
Before diving into a 5 Whys analysis, it’s crucial to clearly identify the problem or issue at
hand. This step sets the stage for the entire process and ensures that the focus remains on
addressing the right concern. Take the time to gather relevant data, observe patterns, and
consult with team members or stakeholders to gain a comprehensive understanding of the
problem.
Step 2: Ask ‘Why’ Five Times
Once the problem is clearly defined, it’s time to start peeling back the layers. The process
involves asking “why” five times, not necessarily limited to five questions but enough to
delve deeper into the underlying causes of the problem. Each “why” serves as a gateway
to uncovering additional factors contributing to the issue. This iterative approach helps in
identifying not just one cause, but multiple interconnected elements that may be at play.
By consistently probing deeper with each “why,” you can reveal hidden complexities and
nuances that may have been overlooked initially. This method allows for a more thorough
understanding of the situation, paving the way for effective solutions that address root
When to use the 5 Whys?
The 5 Whys Technique is a versatile problem-solving approach that can be applied in
various scenarios to uncover root causes and drive continuous improvement. Here are two
key situations where the 5 Whys Analysis can be particularly beneficial:
Recurring Issues
• The 5 Whys Technique is especially useful when dealing with recurring issues. Whether
it’s a manufacturing defect that keeps resurfacing or a persistent customer complaint
in the service industry, this method helps identify the underlying reasons behind these
repetitive problems. By repeatedly asking “why,” it becomes possible to trace the issue
back to its root cause, allowing for targeted solutions that prevent reoccurrence.
Process Improvement
• Organizations constantly strive to enhance their processes and workflows for increased
efficiency and quality. When seeking to improve existing procedures, the 5 Whys
Technique serves as a valuable tool. By systematically analyzing the factors
contributing to inefficiencies or bottlenecks, teams can gain insights into how processes
can be optimized at their core. This method enables organizations to make informed
decisions about process improvements based on a deep understanding of the
THE ISHIKAWA METHOD

Importance How to use

What is ISHIKAWA METHOD?
An Ishikawa (or fishbone ) diagram should be created once the problem
statement is written and data has been collected. An Ishikawa diagram should
be viewed as a graphical depiction of hypotheses that could explain the
failure under investigation.
It serves to quickly communicate these hypotheses to team members,
customers, and management. Hypotheses that have been investigated can also
be marked on the Ishikawa diagram. This should quickly show that they are not
the cause of the failure
 Is Ishikawa method is
Well, technically yes!. This tool is also called
"Fishbone Diagram", since it has the parts of the sometimes referred to as
skeleton of a fish, head and fishbones:
• In the head, which emerges from the central the “FISH BONE
spine, is the part where you will put the effect or
problem that is occurring. DIAGRAM” method?
• In the main fishbones will be placed the
categories of possible causes that belong to the
6Ms of production (man, machine, material,
method, mother nature and measurement).
• In the secondary fishbones will be placed the
possible causes that can cause the mentioned
problem to occur. There may even be even
minor fishbones that determine minor causes.
 How to perform an Ishikawa
Diagram?
Ishikawa diagram should be structured as a "brainstorming" with a multifunctional team, which will
allow us to categorize all possible ideas.

One way to proceed would be as follows. We could use a whiteboard and marker or any digital media
that replaces them.

We are going to use the example of a quality issue at a cell phone factory where a device was
distributed with a problem in which the flash did not work for the customer. The manufacturing
process is performed by an operator manually assembling the components and then connecting it to
a machine that checks and detects that the flash is working.
Step 1. Identification and problem definition
All participants must agree on the identified problem (effect).
In the example we have used, it is clear that the definition of the problem (the effect on
the client) would be: "Mobile Camera Flash does not work".

Step 2. Documentation of the problem

All participants must agree on the identified problem (effect). In the example we have
used, it is clear that the definition of the problem (the effect on the client) would be: "Why
is there a Hydraulic Leak?".

Applied to our example it would look like this:

Hydraulic is leaking
Step 3. Categorization of causes (standard)
• Machine: all causes related to the machinery in charge of producing the product, including
here also tooling (injection molds, stamping dies, etc...). It may include technical problems of
alignment, etc., problems inherent to the type of machine selected for production.
• Method: refers to the production process and also to all those operations and methods that
contribute to its realization.
• Manpower: includes all labor used for the production and distribution of the product. This is
one of the categories that should be used the least. Never ask "Who" but "Why".
• Material: this category refers to all causes related to raw materials, purchased components,
consumables... used for production or service to the final customer. The causes here are
usually incorrect specifications, mislabeled, incorrectly stored, expired, etc...
• Milieu (mother nature and environment): includes all those causes related to weather and
environment, be it floods, earthquakes, and other events. Most of these environment-related
factors can be foreseen and managed in the factory.
• Measurement: causes related to inspection and measurements (distance, volume,
temperature, pressure) either manually or automatically. Sometimes measurements may not
 Summary
Root Cause Analysis (RCA) is crucial for identifying and addressing the underlying causes of problems,
beyond simply treating symptoms. Techniques like the 4 Ps (People, Processes, Plant/Equipment,
Products/Materials) and the 5 Whys provide structured approaches to investigate root causes. Visual
tools like the Ishikawa (Fishbone) Diagram and 4 M’s help in identifying and mapping potential causes.

Key takeaways:
• Focus on systems, not individuals.
• Use inclusive language.
• Continuously review and improve the RCA process.

By effectively using these techniques, organizations can prevent future problems, improve efficiency,
and enhance overall performance.
 References

• Five Whys Root Cause Analysis /Author. (2023, February

22). 5 Whys Root Cause Analysis. [Link].
• What is Root Cause Analysis?/ Tableau Software. (n.d.). What
is Root Cause Analysis?
• Total Manufacturing. (n.d.). Ishikawa Diagram. Total
Manufacturing.
• Moubray, J. (2023, February 22). 7 Powerful Root Cause
Analysis Techniques. [Link].
Thank you for Listening!

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