effective desicion making process

Week Two

Lecture: Principles of problem solving

For any kind of industry and process, inefficiencies will be affecting the goal objective of a company. As decision maker, it is important to be able how to react to this type of situation. Therefore, the first is to understand a problem solving process:

Feedback Loop: Review and Revise

The first step of the problem solving process is to be able to correctly determine the cause of the problem. To support the decision maker in finding an effective definition of the problem, there are several techniques take can be used for this process.

· Five W’s: This technique requires that you pose and respond five simple questions. What, when, why, where, and who.

· Affinity diagrams: This technique involves jotting down ideas on Post-It Notes®. Ideas stem from a free-flowing brainstorm activity and result in random ideas. Ideas are then rearranged by themes or patterns.

AFFINITY DIAGRAMS

The generation of ideas should be free without any initial analysis. After all the ideas have been presented, then a process of selection and organization will be done to classify them per areas of concern, priority and so on.

AFFINITY DIAGRAMS

SWOT Analysis: SWOT stands for strengths, weaknesses, opportunities, and threats. SWOTs are helpful when seeking a clear understanding of your business conditions, and it also used at the personal level.

This tool allows you to define the situation of your process at the present moment by identifying the strengths of your process. The strengths should be measurable. Also allows you to determine what areas the process is not performing as expectations. These areas are called weakness points.

After reviewing the strengths and weaknesses, the analyst will develop alternatives to improve the weakness without negatively affecting the strength. These alternatives will be posted as opportunities. Then, if those opportunities are not implemented, then it is important to identify the potential negative impact to the process to create the awareness of doing nothing.

Flow charts: These are visual diagrams depicting a business process flow. These diagrams are easy to construct, and are easy to understand. Diagrams can be as detailed as needed, and help identify work flow commonalities and disjunctions.

Ex: Packaging Process Diagram

The flow chart allows the analyst to establish the sequence of functions required to achieve a goal. With this sequence, the analyst should be able to determine the associate operational cost of each step to determine the opportunities of identifying the performance problems.

Cost Associated to the Task

Cause and Effects Diagram: This is another simple, yet very useful and popular problem solving tool. This tool allows problem solvers to graphically identify multiple potential causes to a problem.

Potential causes may always pose the same level of risks for the organization. Ranking potential causes is useful to weed out irrelevant or inconsequential factors that are discovered during the initial investigation.

Cause and Effect Diagram (Fish Bone)

Pareto Analysis: The Pareto principle allows you to identify the vital few, and the insignificant many. Where 80% of the problems are cause by 20% of the causes.

Pareto Analys

Frequency diagram: This tool ranks, in a given data set, all the suspect causes from the most frequently occurring to the least (i.e.: applies to sample or population data sets).