1. Investigating Loss Incidents to Determine the Underlying Causes

2. Overall Objective  To find at least 3 underlying causes for each loss incident that is investigated

3. Course Overview –I. Introduction/ Loss Incident Investigation Models –II. Identifying Underlying Causes

4. Unit I - Loss Incident Investigation Models  Lesson I- Introduction *What is a performance discrepancy? *What are the rewards and benefits of adopting “new” performance? * Why are establishing training objectives so important?

5. Performance Discrepancy Supervisors’ failure to investigate loss incidents to determine the underlying causes

6. Training… Training for your supervisors may be needed when:  There is no description of the performance discrepancy  Valuable feedback to management is lost.  The cost consequences of the performance discrepancy is not addressed

7. Unit I - Loss Incident Investigation Models * Lesson I *Remember- -The Heinrich one-cause accident investigation model -The Multiple causation theory

8. Reports Analyzed for Causes

9. Lack of Knowledge  10% (60) of 600 supervisors were asked to define or give an example of an underlying cause.  None was able to  All asked, “What’s an underlying cause?”

10. Lack of Knowledge (continued) TThese 60 supervisors were asked to state the cause of this loss incident: AAn employee used a ladder with a defective foot. The ladder shifted and the employee fell to the ground. NNot one supervisor asked for more details NNo supervisor gave an underlying cause.

11. Example of Performance Discrepancy  Incident description: “Employee stepped on a wooden pallet. A wooden slat broke and the employee’s foot went through the pallet skinning his ankle.”

12. Example of Performance Discrepancy (Continued)  Cause of Loss Incident: “ Employee was careless.”  Corrective Action: “Told employee not to step on pallets.”

13. Answers Not Found  Why did employee step on pallet?  Was the employee trying to reach something that is part of his job?  Does the item he was reaching for need to be placed lower?  Should a permanent step be placed there for employee to climb on?  Why wasn’t this considered during design?

14. More Answers Not Found  Was employee’s action defined in the standard operating procedure?  Was the pallet in the aisleway?  Is there adequate storage for pallets.  Who placed the pallet there?

15. Still More Answers Not Found  Do we inspect pallets or wait until they fail before we remove them?  Was this a new pallet?  Do we need to change the specifications for our pallets? Can we???

16. And More Answers Not Found  Was this pallet being taken from service?  Has pallet failure in the past resulted in product damage?  Did an employee report this faulty pallet?  Were new pallets on back order?

17. Even More Answers Not Found  Was pallet outside an aisleway?  If so, why was employee walking there?  Was being there part of his job?  How many and how often do employees walk where the pallet was?  Should a permanent walkway be placed where the employee was walking?

18. Valuable Feedback to Management Lost  What is process engineering’s method of walkway placement?  Equipment placement?  What is Facilities Engineering’s method of determining storage size?  Storage placement?

19. More Valuable Feedback to Management Lost  Does Engineering include loss prevention protocol in their Standard Operating Procedures?  Do line managers have a method for employees to report hazards?  Do line managers have a way to follow up on removing reported hazards?  Did Scheduling make a rush order?

20. Even More Valuable Feedback to Management Lost  Does Quality Control randomly test incoming materials for compliance to specifications?  Does Purchasing keep records of vendor quality?  Records of vendor on-time deliveries?  Did Sales promise a customer an unreasonable delivery date?

21. Expected Results from Performance Improvement  25% reduction in the number of loss incidents within one year after end of training Philip Rivers: This was one-half the reduction with my previous employer Philip Rivers: This was one-half the reduction with my previous employer

22. Dollar Savings = $6,000,000  Assuming a 25% decline in the costs of loss incidents.

23. Expected Losses w.o. Training Philip Rivers: Assuming 3% inflation Philip Rivers: Assuming 3% inflation

24. Unit II- Identifying Underlying Causes  Upper line – Ex. Plant Manager  Process Engineering – Ex. P.E. Manager  Facilities Engineering – Ex. F.E. Manager  Legal – Ex. Legal Manager  Maintenance – Ex. Maintenance Manager  Human Resources – Ex. H.R. Manager  Purchasing- Ex. Purchasing Manager

25. Unit II- Identifying Underlying Causes  Scheduling – Ex. Scheduling Supervisor  Accounting- Ex. Accounting Manager  Quality Assurance – Ex. Q.A. Manager  Sales and Marketing – Ex. S & M Manager

26. Non-monetary Support Needed  Have all your first-line supervisors attend.  Make it clear to the supervisors that you want to better serve them.  Make it clear to the supervisors that you want their feedback on causes traceable to your department.  Promptly remove underlying causes identified in your department.

27. You Want To Better Serve Them First-line Supervisors Quality product competitively priced w/o loss incidents First-line Supervisors Are Management’s Customers Staff & upper line managers

28. You Want Their Feedback Staff & upper line managers Underlying cause data Better staff support First-line Supervisors Quality product competitively priced wo loss incidents Use of Loss Incident Investigative Data