1. Reliability Center, Inc. © 2000 Root Cause Analysis: The PROACT™ Approach Presented by: Robert J. Latino Reliability Center, Inc. www.reliability.com

2. Reliability Center, Inc. © 2000 Table of Contents : Reliability Center Inc. Average ROI of Root Cause Analysis. Calculating a Gap PROACT Methodology PROACT Software, version 2

3. Reliability Center, Inc. © 2000 RCI Introduction Founded Allied Chemical’s Corporate R & D Reliability Center in 1972 Developed “The Reliability Approach to Quality and Productivity” R & D focused around Equipment, Process and Human Reliability

4. Reliability Center, Inc. © 2000 Introduction Average Returns On Investment 600 - 1000% "In essence, RCA is FREE!!!"

5. Reliability Center, Inc. © 2000 Average Returns On Investment 600 - 1000% Inland SteelE. Chicago, IN3,100% ROI Eastman ChemicalCo.Kingsport, TN4,200% ROI LYONDELL-CITGOHouston, TX17,900% ROI ROOT CAUSE ANALYSIS: Improving Performance for Bottom Line Results (Latino & Latino, 1999/June, CRC Press, Boca Raton, FL)

6. Reliability Center, Inc. © 2000 Failure Modes & Effects Analysis Calculate the "Gap" Actual = 275 Million Pounds/Year Gap = 115 Million Pounds/Year Potential* = 390 Million Pounds/Year * Note: Potential is top design capacity or high sustained production over a period of time

7. Reliability Center, Inc. © 2000 Failure Modes & Effects Analysis Determining the "Significant Few" 80% of loss 20% of loss RCA PSM - Problem Solving Methods for Continuous Improvement Root Cause Analysis

8. Reliability Center, Inc. © 2000 Two-Track RCA ApproachEvents Principal Analyst Required Involves All Levels Part Time/Full Time Root CauseRoot Cause Analysis Extremely Disciplined/High Attention to Detail Significant Few - 80% of Losses Hourly/Supervisory Level Part Time Problem Solving Skills Less Attention to Detail Random Many - 20% of Losses 100% Coverage RCA Methods PSM

9. Reliability Center, Inc. © 2000 Where do the Events To Analyze Come From? RCI’s Modified FMEA Process Meridium’s Reliability Suite DEI’s SAW (RCM) Program CMMS Generated Bad Actor Lists EAP/ERP Generated Bad Actor Lists Problems detected with a predictive maintenance tools Customer Complaint Lists Safety Incident Lists Quality Defect Lists Regulatory Incidents Maintenance Logs

10. Reliability Center, Inc. © 2000 Introduction PROACT ™ Methodology PReserve Event DataPReserve Event Data OrderOrder AnalyzeAnalyze Communicate Findings & RecommendationsCommunicate Findings & Recommendations Tracking the ResultsTracking the Results Failure Modes & Effects Analysis The RCA Process

11. Reliability Center, Inc. © 2000 PReserving Event Data You Need to...

12. Reliability Center, Inc. © 2000 PReserving Event Information Five Types of Event Data The 5 P's ™ Parts Position People Paradigms Paper

13. Reliability Center, Inc. © 2000 Ordering the Analysis RCA Project Flowchart Develop team charter, critical success factors, start/end dates Develop 5 P's ™ and data collection assignments Begin logic tree and assign verifications to team members (reiterate as needed) Develop recommendations and action plans Write report and make final presentation

14. Reliability Center, Inc. © 2000 Analyze The 7-Step Process 1. Describe the Event 2. Describe the Modes 3. Hypothesize 4. Verify the Hypotheses 5. Determine Physical Roots and Verify 7. Determine Latent Roots and Verify 6. Determine Human Roots and Verify

15. Reliability Center, Inc. © 2000 Three Levels of Cause Physical Roots Component Causes FailureAnalysis Human Roots Inappropriate Human Intervention "WitchHunting" Latent Roots Deficiencies in Management Systems RCA This is where most asset management programs stop!

16. Reliability Center, Inc. © 2000 Review of RCI's RCA Process Summary of Event Description of Event Mechanism Logic Tree Review Review of Root Cause Action Matrix Recognition of Participants Involved Question & Answer Sessions Commitment to Action Plan Communicate Findings & Recommendations RCFA Presentation Agenda

17. Reliability Center, Inc. © 2000 Tracking for Results As Proaction Increases... Production Increases Profits Increases Growth & Security Increases

18. Reliability Center, Inc. © 2000 PROACT® Software Plant Engineering Magazine 1998 Gold Award Winner General & Maintenance Software Root Cause Analysis System

19. Reliability Center, Inc. © 2000 Root Cause Analysis System VERSION 3

20. Reliability Center, Inc. © 2000 The PROACT ® System PReserving Event Data Ordering the Analysis Team Analyzing Event Data Communicating Findings & Recommendations Tracking For Bottom Line Results

21. Reliability Center, Inc. © 2000 PReserving Event Data The 5 P’s Team Member File Linking

22. Reliability Center, Inc. © 2000 Ordering the Analysis Team Easily Assign Members Team Pool Quickly Set Permissions by Right- Clicking

23. Reliability Center, Inc. © 2000 Analyzing Event Data Drag/Drop Logic Tree Logic Tree Icons Presentation Mode

24. Reliability Center, Inc. © 2000 Table of Contents Description of Failure Event Description of Failure Mechanism Overview of PROACT ™ methodology Root Cause Action Matrix I. Executive Summary Detailed Recommendations II. Detailed/Study Section III. Appendices Recognition of Participant Involved Additional (Optional) 5 P’s Data Collection Forms Team Member Data Team Charter Team CSF’s Team Start/End Dates Verification Log Logic Tree Communicating Findings & Recommendations

25. Reliability Center, Inc. © 2000 Communicating Findings & Recommendations Custom Report Writer

26. Reliability Center, Inc. © 2000 Tracking For Bottom Line Results Chart Wizard

27. Reliability Center, Inc. © 2000 PROACT ® Training Problem Solving Methods (PSM) for Business, Industry & Government (1-Day) - For Team Members Root Cause Analysis Methods for Principal Analysts (3-Days) - For Team Leaders The Reliability Performance Process (TRPP © ) for Managers (1-Day) - For Team Sponsors Root Cause Analysis Overview for Managers (1-Day) - For Team Sponsors www.reliability.com PROACT ® Software Training (1- Day) - For PROACT ® Users

28. Reliability Center, Inc. © 2000 What’s The Organization’s Objective? Desktop Version Single-User VS Enterpris e Version Enterpris e Version Enterpris e Version Enterpris e Version Network (SQL/ORACLE) USA Europe Asia Latin America Server

29. Reliability Center, Inc. © 2000 PROACT ® 3.0 Enterprise Version Establishes Knowledge Management System for Corporation Develops World Class Analytical Skills Results in Drastic Cost Savings and Improved Performance Ensures Regulatory Compliance Significantly Reduces Cycle Times to Conduct Root Cause Analyses Produces Quick and Quantum ROI’s Benefits:

30. Reliability Center, Inc. © 2000 PROACT ® 3.0 Enterprise Version RCA Database Search Capability Quality Control Publishing Feature Team Member Security Options Drag/Drop Logic Tree Development File Linking Options Customizable Report Writer Importable Team Pool Enhanced Printing of Logic Tree Built-In Presentation Mode Features:

31. Reliability Center, Inc. © 2000 Where Do We Go From Here? Root Cause Analysis Methods for Principal Analysts (3-Days) - For Team Leaders (A.C.R.) Problem Solving Methods (PSM) for Business, Industry & Government (1-Day) - For Team Members (M.R.P.) The Reliability Performance Process (TRPP © ) for managers (1-Day) - For Team Sponsors PROACT ® Software Training (1- Day) - For PROACT ® Users