Value and Cost Effectiveness of Conducting a Root Cause Analysis

Abstract

The formal Root Cause Analysis (RCA) process consists of a structured approach to identifying the underlying factors that result in the unwanted outcomes of one or more typically negative past events (chronic or sporadic). The process helps to identify what systems or behaviors need to be modified to prevent recurrence of similar outcomes. The fundamental driver of the RCA is to eliminate the causes that lead to the unwanted event rather than addressing the symptoms of the event. This generally leads to multiple corrective actions rather than a single solution. Based on various root causes analyses conducted by a department in Enbridge Pipelines since 2006, various benefits provided by RCA exercises are highlighted in this paper. The findings were mainly derived from completed RCAs as well as RCA team member surveys. Firstly, the cost effectiveness of the RCA process was identified as a primary driver for this exercise. For example, one RCA involving a multidisciplinary team of 8 members, costing approximately $35,000, led to $1M in recommended solutions generating $16M in potential savings. In other words, each of the 350 hours spent on the RCA produced $8,571 in savings underlining the value creation to the company. Secondly, the RCA process combined with the power of the team reflection led to the identification of new issues which were causing other revenue losses to the company. Because these issues were not part of the defined scope of the original RCA, their root causes were not be immediately assessed but nevertheless their impact could easily be quantified and forwarded to Management for review. The third benefit highlighted by RCAs is more of an educational benefit to team members and subsequently the organization. Through cross functional examination of the issues and events, the team members became aware and educated on issues that would not have otherwise been apparent. Additionally, by working through the RCA methodology, the team members enhanced their problem solving abilities which benefit their everyday work. In conclusion, other than identifying techniques to preclude unwanted outcomes and providing cost saving opportunities in a very cost effective manner, RCAs can be considered as an effective knowledge enhancement tool for an organization.