Error Handling Part 2: Error Analysis, Evaluation and Corrective Actions

The aim of error analysis is usually to assess the effect of individual errors in order to initiate efficient corrective measures which are intended to prevent repeating occurrence, costs and downtime. Auxiliary variables must be used to measure the extent of the respective error. Error evaluation is often carried out with the help of Pareto analysis.

The Pareto analysis uses a column chart that presents, e.g., problems or costs in order of importance or occurrence. The Pareto principle is often referred to as the “80:20” rule which is based on the assumption that most effects of a problem (about 80%) are attributed to a small number (about 20%) of root causes.

The Pareto analysis represents a considerable decision-making aid as the errors that exert the greatest effect can be found fast and easy.

However, the costs of an error are often much greater than those determined by internal data. One reason is a possible impact of an error on the customer. This impact needs to be taken into account in a serious error evaluation. Even an error being rated to create "small" direct costs can cause a business risk. Let me introduce an easy example: A new product is introduced to the market but its delivery is performed incomplete. Hence, a subsequent delivery of items is needed. This delivery error is also registered but cannot be completely turned off and occurs again and again.

The costs for subsequent deliveries are easy to quantify and dwindling little to the consequences that follow: After a certain number of incomplete deliveries, customers do not order this product again and further purchase orders are lost. On closer inspection, the costs of the product development, marketing campaign and customer convincing by the sales organization must be counted – next to the loss of company image. Lost future profit for this product is even left unconsidered here and some customers might even be lost for other products of this company.

Hence, when looking at errors, not only obvious costs should be considered but also any potential impact on customers. In order to be able to cope with both factors, a further indirect error costs evaluation should be carried out, independently of the direct error costs one and, at best, similar to an FMEA analysis (error-possibility and influence analysis). After this direct and indirect error costs evaluation, the priority of the errors might change since now those ones with high impact on the customers gain importance.

Of particular importance are defects that have a highest impact on the customer, even if they do not often appear. Error evaluation can also take into account the likelihood whether a fault is noticed by the customer or not. This could be a source of criticism as the priority for errors that are not so quickly discovered by the customer is lowered. On the other hand, it becomes clear that high-margin defects are perceived and registered by the customer with certainty, even if no direct complaints should follow.

In summary, there are different approaches and possibilities to evaluate errors. In any case, possible effects on the customer should always be considered. This is also a way of practically implementing the customer orientation required by DIN EN ISO 9001.

Troubleshooting and corrective actions

The error analysis primarily serves to identify larger errors and problem areas in order to eliminate them in the context of corrective measures. In practice, there are often misunderstandings between troubleshooting and corrective action which are to prevent a repeated occurrence of errors. Each error usually entails a measure or immediate action, so that the entire operation can be continued.

This is troubleshooting: When it rains through the roof, a bucket is placed under roof hole first as an immediate measure. Later, the roof is repaired, so the bucket can be removed. The demand for a corrective action goes beyond this normal error recovery. The reason or circumstance why there was a hole in the roof is investigated, so that countermeasures can be implemented and corrective actions are done to prevent the roof from having any hole again. In general, corrective measures focus on problems that are more relevant, e.g., safety issues or if greater damage has occurred.

Hence, corrective actions or measures are taken to permanently eliminate errors. The entire process from error detection to completion of a corrective action can be described very well in a process description. The introduction of corrective measures is often costs a lot of time and money, so it is necessary to decide for which errors a corrective action should be taken. This decision as well as the subsequent steps of the corrective action should be recorded in a form.

The most important step of the corrective action is the root cause analysis because – in order to permanently eliminate a fault – the main cause must be known. In order to determine this cause with sufficient depth, all available information about the fault is to collect. In this research, often a chain of individual causes is encountered which in turn have their root cause in other events.

 The effectiveness of a corrective action

In general, any root cause must be investigated in detail in order to find an effective and appropriate solution that permanently eliminates the error or problem. After the implementation of the selected measures, the last step is an effectiveness review. The effectiveness of corrective actions cannot usually be assessed immediately as most errors have a more complex background. Therefore, it is necessary to observe for a longer period of time the process in which the error has occurred and, finally, to either confirm or not confirm the effectiveness of the corrective action.

Prevention measures can be carried out according to the same principles as corrective measures. The difference is – as the name implies – in the preventive character. Particular attention should be given to events that, although they have not yet caused a great mistake, can create great impact on the business. Prevention measures are needed whenever the organization is able to balance out an unwanted condition or process weakness, e.g., when the production notices bad raw material quality and rejects it to incoming goods. Hence, neither a damage, nor error costs, nor loss of image at a customer has occurred which would lead to corrective actions. However, if the raw material would have been used in production, it might later have made a serious impact on the business.

Poka Yoke is one of the main tools to prevent errors and will be discussed in the next part of this series. Also, Part 1: Error Detection, Management and Culture and this part 2 dealt with errors. The next parts will be about product and process defect and, later, about effects on customers and company as the headline drawing shows.