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Supply Chain Management and the Benefits of Root Cause Analysis

Professionals in the supply chain industry have many tools at their disposal, one of the best being a system known as “root cause analysis.” Root cause analysis can be a useful tool when used correctly. Successful businesses excel at supply chain management and understand the benefits of root cause analysis.

What is Root Cause Analysis?

Root cause analysis is a general approach to problem-solving in supply chain management that involves a series of steps designed to identify and correct the source of a supply chain vulnerability. Ultimately, root cause analysis could be useful in any situation where the supply chain is underperforming specific expectations or not meeting certain goals.

The process starts with identifying the problem itself. It is important to remember that there could be more than one root cause for a specific supply chain deficiency, and this analysis will only succeed if you identify each of them. Once these issues are identified, the next step involves addressing the problems. This requires a careful review not only of the issue itself but also of what it might take to resolve it.

How to Perform a Root Cause Analysis

Root cause analyses involve five distinct steps. These steps should help supply chain professionals identify the problem and resolve it.

Step 1: Gather Evidence

The first step is to perform a careful evaluation of every aspect of the issue to gather evidence related to the problem. Often, two unrelated issues end up being the combined root cause of a supply chain issue.

Step 2: Problem Statement

It is not enough to have a general idea of what the problem is. The second step of a root cause analysis requires a written explanation of the problem. This should be concise and put all the information regarding the problem in one place.

Step 3: Analyze the Root Causes

Before any solution can be adopted, the cause of the supply chain issue must be analyzed. Understanding how the issue occurred is necessary to ensure that the appropriate solution is implemented.

Step 4: Developing Solutions

A necessary part of the process is generating the best possible solution to the problem. In many cases, this could require more than one fix in the supply chain. Your analysis should point to all the problem areas in a way that leads you to develop effective solutions.

Step 5: The Final Report

A final report that lays out the entire root cause analysis process could be helpful now and in the future. These reports could be useful tools should similar issues come up again and can provide guidance while solutions are being considered and implemented. By following this procedure, businesses can effectively and efficiently manage issues in their supply chain with creative and custom-tailored solutions.

Avoid Vulnerabilities with the Help of Third-Party Logistics Providers

It is not enough to identify the cause of a problem in the supply chain. Taking action to address the issue and prevent it from happening again is vital to a business’s success.

In many situations, the guidance of 3PL provider could be invaluable in implementing a solution developed through a root cause analysis. To learn how Brown West Logistics could help solve supply chain issues for you, contact us right away.