Investigating Loss Incidents to Determine the Underlying Causes

Overall Objective

To find at least 3 underlying causes for each loss incident that is investigated

Course Overview

– I. Introduction/ Loss Incident Investigation Models

– II. Identifying Underlying Causes

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?

Performance Discrepancy

Supervisors’ failure to investigate loss incidents to determine the underlying causes

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

Unit I - Loss Incident Investigation Models

* Lesson I* Remember-

-The Heinrich one-cause accident investigation model-The Multiple causation theory

Reports Analyzed for Causes

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Series1

Series1 44 32 20 4 0

Carelessness Unsafe Act Act & cond Cond UC

Lack of Knowledge

10% (60) of 600 supervisors were asked to define or give an example of an underlying cause.

None was able toAll asked, “What’s an underlying cause?”

Lack of Knowledge (continued)

These 60 supervisors were asked to state the cause of this loss incident:

An employee used a ladder with a defective foot. The ladder shifted and the employee fell to the ground.

Not one supervisor asked for more detailsNo supervisor gave an underlying cause.

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.”

Example of Performance Discrepancy (Continued)

Cause of Loss Incident: “Employee was careless.”

Corrective Action: “Told employee not to step on pallets.”

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?

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?

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???

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?

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?

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?

More Valuable Feedback to Management LostDoes 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?

Even More Valuable Feedback to Management LostDoes 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?

Expected Results from Performance Improvement

25% reduction in the number of loss incidents within one year after end of training

2500

1875

0

500

1000

1500

2000

2500

Thisyear

NextYear

# L.I.

Philip Rivers:

This was one-half the reduction with my previous employer

Dollar Savings = $6,000,000

Assuming a 25% decline in the costs of loss incidents.

24.2

18.2

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5

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Thisyear

Nextyear

MillionsofDollars

Expected Losses w.o. Training

24.2

24.9

23.8

24

24.2

24.4

24.6

24.8

25

This year Nextyear

Millions ofDollars

Philip Rivers:

Assuming 3% inflation

Unit II- Identifying Underlying Causes

Upper line – Ex. Plant ManagerProcess Engineering – Ex. P.E. ManagerFacilities Engineering – Ex. F.E. ManagerLegal – Ex. Legal ManagerMaintenance – Ex. Maintenance ManagerHuman Resources – Ex. H.R. ManagerPurchasing- Ex. Purchasing Manager

Unit II- Identifying Underlying Causes

Scheduling – Ex. Scheduling SupervisorAccounting- Ex. Accounting ManagerQuality Assurance – Ex. Q.A. ManagerSales and Marketing – Ex. S & M Manager

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.

You Want To Better Serve Them

First-lineSupervisors

Quality product competitively priced w/o loss incidents

First-line Supervisors Are Management’s Customers

Staff & upper line managers

You Want Their Feedback

Staff & upper line managers

Underlying cause data

Better staff support

First-lineSupervisors

Quality product competitively priced wo loss incidents

Use of Loss Incident Investigative Data