February 29, 2008 | Barb Carr

Transaction Processes and Root Cause Analysis… When It’s Your Money!

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On February 25th, the Federal Deposit Insurance Corporation (FDIC) made public their January Enforcement Actions. Of course my first thoughts were… “where’s my money? is it safe in my bank?” Evidently my bank is doing fine because it did not make the hit list… or is it? So what kind of errors were the financial institutes making?

The core statement in all the findings seemed to be “unsafe or unsound banking practices”. Lower down the chain of complaints were comments such as no independent reviewer, management not certified, no internal audits conducted, and inadequate transactions which did not follow FDIC regulations. For TapRooT® root cause analysis system users, these words sound quite familiar: procedure and policy not used, independent quality control needs improvement, worker selection needs improvement. So the question is what is the tie between FDIC failed audits and an incident investigation…. the answer is none.

The incident or scope of the analysis (investigation) for the FDIC audit could be “Completed Commercial Loan Applications did go through an external review per regulation”. In a safety incident we start with a sequence of events. In the Loan Application we start with the transaction such as customer applies for loan. See below for an example of a SnapCharT® – “What Happened?”, combined with a Six Sigma Tool Called a Swimlane. Had the the financial institutions performed a proactive analysis using this process could they have prevented the audit failure? Keep in mind that once SnapCharT® was developed for this investigation, problems would be grouped, causal factors would be identified, and then effective corrective actions would be developed using TapRooT®’s SMARTER Checklist.

Think about it…. how often in your business are you auditing your business risk processes to identify possible Significant Issues before they happen? Do you have engineering gateways such as IPDS that are failing? In your integrated supply chain what processes are failing? If you fail an audit are your investigating the transaction or process using TapRooT®? If you use Six Sigma for Root Cause Analysis are you using the most effective process accepted by businesses worldwide? If not Call us at System Improvements, Inc. at 865.539.2139. Register for the Summit in Las Vegas in June, where we will be discussing how to improve your Lean Six Sigma Root Cause Analyses.

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