When Does Your Analysis Reach a Point of Diminishing Return?
We all fall on both sides of the fence when solving problems. We are either on the receiving end of problems to solve or we are the requestor for others to solve. @AdamMGrant posted an image on his social media showing the decision-making process of an optimist and people pleaser. I enjoyed the post and have plans to reference it in a variety of applications in the future. One application that comes to mind is the decision-making process on when to do a thorough investigation into the root cause of a production delay or not.
As a leader, you know you want to prevent delays from reoccurring. Yet, you know that there is a duration that still provides a return on investment. You know this duration is somewhere between nothing and a lot. So where is it? Is it two hours? Or is it four hours? Then when conducting the root cause failure analysis (RCFA), when does the analysis almost become academia versus creating value?
Consider a hypothetical operating unit (XYZ Operating Unit) that had 100 unplanned delays in 2021 for a total of 6000 minutes of unplanned delay. The duration of the delays was anywhere between one minute and 480 minutes in their duration. I have seen many times in applications such as this that the operating unit’s leader defaults to saying carte blanche, any delay over 4 hours requires a root cause failure analysis.
The problem that I have with that approach is that this is the organizational hierarchy making an opinionated threshold. Where did this magical 4-hour duration come from? From the operator's point of view, the operating unit has no control of that selection and truly does not own the number. Instead, it is the arbitrary opinion of the leader in this example.
So how can we switch the ownership of the threshold or the RCFA trigger from the opinion of the leadership to a value that embraces the continuous improvement that the team members of the operations own? Consider an example where the leader of the operating unit states that the mission this year to improve our reliability is to devote the resources to perform two RCFAs per month. Looking at last year’s performance, at two per month, the magical number would be the individual delay duration of the 24 longest delay from last year. This becomes the team’s RCFA trigger. In the image below, the duration of the 24th delay is 50 minutes long and the 25th delay is 45 minutes long. So if we do two RCFAs per month in the example here, we cover more than 80% of last year’s total duration of delays.
We know how much the RCFA costs to conduct and we know the cost of unplanned delay's duration. We are now connecting the duration to an investment. The trigger should be set so that the cost of the RCFA is less than the business cost experienced.
We know how much the RCFA costs to conduct and we know the cost of unplanned delay’s duration. We are now connecting the duration to an investment. The triggers should be set so that the cost of the root cause investigation is less than the business cost experienced by the company.
The triggers used to initiate an RCFA investigation should encompass all aspects of the business including major safety incidents, environmental violations, product quality issues, high maintenance costs, and production downtime events. - PharmaManufacturing
Now consider if we wanted to do three RCFAs per month. We transition from 80% of last year’s delays to 89%. This is the classic definition of diminishing return, whereas if we do one more RCFA per month with the same amount of human capital, we only solve 9% more of last year’s total duration. However, consider a scenario where resources are sparse, and the team can only invest one per month. The trigger then becomes 195 minutes, covering 65% of the previous year’s delays.
The other bit of value that I have seen with this approach of rebranding RCFAs as an investment is that at this unique trigger versus an organizational hierarchy opinion, the threshold is owned by the operating unit. It is not the organizational hierarchy’s number, the number completely belongs to the operating unit. It is an organic trigger year-over-year. Therefore, when the operating unit is down unplanned, the team knows their unique trigger. They know they have committed the resources to devote a certain amount of human capital to problem solve delays once this trigger is tripped.
Without clearly formalizing under what conditions a root cause analysis must be conducted, organizations will lack consistency in their maintenance approach. - MaxGrip
With this approach, there will be months where a team may do three, and there are months when the team may do zero. The approach here is instead the agreement that going into the year the team will commit to doing a certain amount based upon the results of the previous year’s performance.
So many operating unit leaders want an RCFA done on an opinionated set duration. And to the point that @AdamMGrant is making, the team takes the direction and applies the resources to solve the problem while forgetting how many other things they are committed to. The trigger approach rethinks our RCFA approach to be investing in the future, versus reacting to the arbitrary threshold of the organizational hierarchy.