When you run a business, or have any part in it, problems are par for the course. Whether it’s a product that malfunctions, a shipment that doesn’t reach the consumer on time or a service that isn’t delivered correctly, things can and will go wrong (it’s part of the process.)
Even when you take on an innovation project, being able to identify a problem along the way (and finding a solution) is critical. And you can only come up with a solution when you understand the cause (that is responsible for the detrimental effect).
A cause and effect diagram is a common tool that is used to better understand problems and design solutions for businesses.
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What is a Cause and Effect Diagram?
A cause and effect diagram is a tool used to uncover all the possible causes of a particular effect. In business parlance, the effect refers to a problem, product or service quality, a hiccup in processes, or internal issues, that have a negative impact on the overall business.
While some problems may be easy to solve and pinpoint (who sent out the wrong costing sheet…check the mail trail), there are certain causes that may be recurring or difficult to understand, since there are so many people involved.
The diagram is illustrated via a straight line with a triangle at the end. This triangle represents the effect or problem. And, jutting out from that straight line or “central spine,” are several more lines, pointing outwards, diagonally. These lines are the various causes leading up to that effect or problem. Since this set of straight and diagonal lines with a triangular head resembles the skeleton of a fish, the cause and effect diagram is also referred to as a “fishbone” diagram.
In simpler words, it helps a team identify the several different causes of a problem so that they can zone-in on the root cause (or causes). A fishbone diagram helps the team focus on the problem itself, in a streamlined manner, rather than the issues associated with the problem. So, rather than looking at the issues and symptoms (which are anyway evident) the team / manager / business can focus on the problem itself and come up with a solution.
This allows you to find ways to improve and amend the problem so that those related issues and symptoms eventually go away.
The History of the CE/Fishbone Diagram
Cause and effect diagrams are also called Fishbone Diagrams (because of their unique shape) Ishikawa Diagrams (named after the professor who invented it) and even Fishikawa Diagrams (a portmanteau of both).
The cause and effect diagram was created by Professor Kaoru Ishikawa at Tokyo University in the early 1940s. He was an academic, organisational theorist and quality process management specialist. He used this diagram to explain to engineers at Kawasaki Steel Works how a set of complex factors could be related to each other and used as a basis to gain a deeper understanding of the problem at hand.
Since its introduction in the 1940s, the cause and effect diagram has been refined and finds regular use in the analysis of industrial processes and business processes (and even in the healthcare sector).
CE Diagram Categories
When you are working on an innovation project, there are many factors and departments involved. Or, your project could one catering to different segments of the industry, from manufacturing to services. Based on broad categories of manufacturing, product marketing and services, they are further categorised as the 5Ms of Manufacturing, the 8Ps of product marketing and the 5 Ss of services.
|5Ms of Manufacturing|
Measurement / medium
|8Ps of Product Marketing|
People / Personnel
Proof / Physical evidence
|5Ss of Services |
Drawing a CE/Fishbone Diagram
Step 1: Draw a central spine, a straight line, and at the end of that line will be a box or triangle with the EFFECT (problem) written within it. This is called defining the effect.
Step 2: Draw the lines for broad categories of causes, similar to those outlined in the boxes above. These will protrude in a diagonal manner from the central spine, giving off the appearance of bones sticking out from the fish’s spine.
Step 3: Draw more lines (further causes) for each of those broad categories. These lines will protrude from the broader category lines, giving off the appearance of more small bones sticking out from the larger bones connected to the central spine.
Step 4: Now that you have both broad categories and subcategories of causes, you can continue to add further causes within each, analyse the diagram. You will need to go over each cause in detail and record relevant details and what other factors may be responsible for those causes. Eventually, you will reach the root cause.
Fishbone / CE Diagrams in Business
The cause and effect diagram may have been created from a manufacturing / quality control standpoint, but it is of great use in the world of business and innovation, where you are trying to build new products and services and establish a product-market fit.
Fishbone diagrams can be used to analyse business processes, identify bottlenecks in manufacturing processes, improve sales and after-sales service, and understand the customer’s wants better.
The fishbone allows for the team to work collaboratively, think creatively, and break things down at a macro and micro level.
Entrepreneurship and innovation projects require you to think on your feet and find solutions so that you can launch your product / service, or improve business performance. Cause and effect diagrams are a great way to get started on the path to a workable solution. Not only do you identify the problem or roadblock better, you also get a better understanding of the internal and external customer, product and market-related capabilities that affect your processes.
At NewLedge, we equip STEM graduates and professionals with industry-relevant business, entrepreneurship and innovation skills that help you make fast and effective decisions to solve problems and create valuable solutions and outcomes for your customers and your business. (And yes, we do make use of the fishbone / cause and effect diagram to aid our assessments, while we’re at it.)
If you’d like to learn more about out course that can help you work across manufacturing, product marketing and service-oriented roles within the STEM sector, visit www.newledge.io
What is the importance of a cause and effect diagram?
A cause and effect diagram is an important tool in business, learning and healthcare. There are quite a few benefits of cause and effect diagrams. It helps understand the many causes that contribute to an effect (or problem) and can even help identify a root cause as well as areas for improvement. Since it is a graphical representation, it makes the information easier to grasp and the relationship between the cause and effect is displayed clearly.
How do you make a cause and effect chart?
In most cases, creating a cause and effect diagram involves around 5 steps. First, you need to identify and clarify what the problem is. Then, identify the categories of causes. These causes will be put into the diagram with diagonal lines (the fishbones) against each category. Then, you need to brainstorm causes for each of those broad categories. Once that is done, identify the most significant causes from within them. Then, formulate a risk response plan, where you can find a way to get rid of the most significant causes leading to the problem.
How many types of cause and effect diagrams are there?
There are three different types of cause and effect diagrams. The basic type of cause and effect diagram example is the Dispersion analysis cause and effect flow chart. Then, there is the production process classification type of cause and effect diagram (where each discrete stage in the production process leading up to the effect is plotted along the main arrow or backbone) and the Case enumeration type of cause and effect diagram, where all the probable causes are listed first, after which the chart is drawn.