How to solve Case Studies IV Problem Analysis

By Christophe Mercier

The 4 types of Questions & their Patterns of thinking

A. What is going on? B. Why did this happen? C. Which course of action should we take? D. What lies ahead? 1. Situation Appraisal 2. Problem Analysis (PA) 3. Decision Analysis (DA) 4. Potential Problem Analysis (PPA)

Problem Analysis
Problem Analysis provides the skills needed to explain any situation in which an expected level of performance is not being achieved and in which the cause of the unaccepted performance is unknown

Cause & Effect Thinking

A problem is the visible effect of a cause that resides somewhere in the past We must relate the effect we observe to its exact cause Only then can we be sure of taking appropriate corrective action (to correct the problem and keep it from recurring)

The criteria that define a Problem

1. An expected level of performance is not being achieved 2. The cause of the unacceptable performance is unknown

Examples of Problems
From the day we introduced the computer, weve had nothing but trouble in getting inventories to balance. I just dont understand it Chef Jones was referred to us as a great Chef, but he certainly hasnt fulfilled expectations in this restaurant The beverage cost was kept under acceptable limits (24-25%) for years. Then, since March, it went up to 29-31% and we dont have the slightest idea of what happened

The Structure of a Problem

Performance SHOULD

The Structure of a Day ONE Problem

Performance SHOULD Some conditions required for achievement of the SHOULD never has existed OR never has functioned correctly since day ONE Performance ACTUAL

CHANGE

DEVIATION

DEVIATION

Performance ACTUAL

Past

Present

Past

Present

The Process of Problem Analysis

Problem Definition Description of the problem in 4 dimensions
Identity, Timing, Location & Magnitude

Case Study
The attached Beverage Sales and Cost Report shows a Month to Date beverage cost percentage of 31.54% You are a new Food and Beverage Manager in this hotel. The cost controller tells you that the beverage cost is too high compared to the companys standards and that this concerns requires your immediate attention

Extraction of key information in the 4 dimensions to generate possible causes Testing for the most probable causes May not be possible in a Verification of the true cause case

Problem Definition (or deviation statement)

We must define a problem exactly before we can describe, analyze and explain it. We define it with the DEVIATION STATEMENT, or NAME the problem It is important to STATE this NAME precisely because all the work that follow will be directed at correcting the problem as it has been named ! Although this sounds obvious, failing to name a problem often leads to inefficient and unproductive problem solving

In our example
The cost controller says: The beverage cost percentage is too high (31.54%) compared to the companys standards. What else is missing to have a clear Problem Statement?

Description of the Problem in 4 Dimensions, Identity, Location, Timing & Magnitude

IDENTITY (What is it were trying to explain) LOCATION (Where we observe it) TIMING (when it occurs) MAGNITUDE (How serious, how extensive it is)

In our example
IDENTITY: What beverage cost is too high? The report breaks it down to 5 categories LOCATION: Where is beverage cost too high? The report breaks it down to 8 outlets TIMING: When was the high cost observed first? During what shifts has it been observed since? MAGNITUDE: What is the extent of the problem? (percent) & how many sub-categories are affected?

IS and IS NOT (Basis for comparison)

We know that the beverage cost is is high, what could we gain by identifying an outlet or a category of beverage for which beverage cost COULD BE, but IS NOT high? Make a logical comparison for IDENTITY, LOCATION, TIMING and MAGNITUDE

Extraction of Key information in the Problems 4 dimensions to Generate Possible Causes

What is distinctive about Drink On The Beachs beverage cost and Dining on the Rocks? What is distinctive about Spirit costs and Wine costs?
here your analysis begins to reveal important clues to the cause of the problem (clues, not answers and explanations yet!)

Changes
When you have explored DISTINCTIONS in the 4 dimensions, you can ask:
Does the distinction suggests a CHANGE?

In our example, lets assume that the beverage cost has always been to high (no change has triggered a drop of performance, it is therefore a DAY ONE problem)

In Summary
Deviation Statement: DIMENSIONS IDENTITY LOCATION TIMING MAGNITUDE
SPECIFIC QUESITONS PERFORMANCE DEVIATION CLOSEST LOGICAL COMPARISON WHAT IS DISTINCTIVE ABOUT?

Generation of Possible Causes

IS IS IS IS COULD BE but IS NOT COULD BE but IS NOT COULD BE but IS NOT COULD BE but IS NOT

WHAT? WHERE? WHEN? EXTENT?

Somewhere in the list of distinctions and changes that emerge during PA, lies the explanation of CAUSE, provided that all relevant information about the problem has been obtained and included.
In our example, a category of beverage clearly stands out

Ishikawa Cause & Effect Diagram

Also called Fishbone, E-book p 36
People Process Product

Testing for most probable causes

The Ishikawa fishbone lists POSSIBLE causes which need to be verified
Is it the true cause of the problem? The true cause MUST explain each and every aspect of the deviation since the true cause created the exact effect we have specified. Effects are specific, not general.

Effect

Environment

Management

Material

IF (probable cause) is the true cause of the problem, then how does it explain why the cost of (IDENTITY) is observed only at (LOCATION)?

Verification of the true cause

To verify a likely cause is to prove that it did produce the observed effect. In our example verification was explained Sometimes no verification is possible Sometimes failure occurs (This is when there is too little data in the specification, insufficient identification of key distinctions or when assumptions have distorted judgment...

In Conclusion
The LOGIC of Problem Analysis defends conclusions that support FACTS, it sets aside those that cannot. It is a process that makes good use of the EXPERIENCE and JUDGMENT we possess. It helps us to use both in the most SYSTEMATIC and OBJECTIVE way possible.

The Process Reviewed:

Deviation Statement Verify the most probable causes

SpecificationDistinctions?

Test for probable causes

Changes?

Generate Possible Causes