Five Whys Exercise, Essay Example

Having read the required materials, I have learned that five whys technique is definitely a useful tool that can be applied in many aspects of the business life. Systematic thinking, which this method uses, is definitely a great way to study the problems inside the organization and find a way to solve them. While reading the example of systematic thinking using the five whys, I immediately thought of a business situation that occurred with one of my friends recently. One of my ex-classmates now works at a relatively small local frozen food wholesale company. Recently, the company started experiencing a decline in the cash flow, as some of the customers were dissatisfied with the fact that the orders were not delivered timely. This failure in fulfilling the contract requirements can certainly be placed on the logistics, and that what usually would have been done, but the problem is somewhat deeper. The company failed to meet the contract requirements systematically, which means that either the logistics inside the firm is entirely incompetent, or the reason for the delays is different.

The higher management decided to use five whys to determine the reason for delays becoming systematical. The first question was:

1. Why does the company fail to deliver the orders to the clients on time?

It turned out that logistics was not responsible for the problems: the cargos were actually held back by the supplier and later at the custom office. Quite logically, more questions arose:

2. Why was the shipment delayed by the supplier and why were there problems at the custom?

The containers with the frozen goods for the company that my friend works at were not given up by the supplier straight away because the cargo is no to be unloaded unless the payment is processed. Import operations managers have failed to arrange for the payment to be made in advance which eventually caused the delay. Problems at the custom occurred because not all of documents were sent on time. Blaming the import managers is the easiest solution, but not necessarily a correct one. The next question can be as follows:

3. Why was the payment not done on time and why wasn’t the necessary paperwork processed?

In fact, the papers were almost through by the time they were ready and the order for a bank transfer was placed. So, the import managers did not simply forget their duties, they just did not have enough time to do all that was required. Moreover, they failed to deliver all the paperwork on time on several occasions. Consequently, they are either lazy or unqualified or just constantly lack time. Quite obviously, the next “why” is based on these assumptions.

4. Why do the import operation managers lack time to perform their normal duties?

It turns out that only four people are working in the department and supervising the cooperation with the foreign partners. Three of them look for suitable offers and negotiate the price and shipping conditions, while the one person left is responsible for all the paperwork to service the cooperation with the firms from abroad. It is now obvious that only one person is not capable of handling all this flow of information and all the delays are easily explained this way. Some clarifications are still to be made concerning the problem that we witness.

5. Why are there not enough professional managers at the import operations department?

The company policy supposed that sales, marketing, and logistics are the most strategically important parts of the business. Management was trying to improve contacts with the clients, make sure there always is demand for the goods of the company. Eventually, the goal was achieved: there were customers, there was a service able to deliver the order, but there were not enough products to offer. The fact that several orders were cancelled because of the late delivery allowed us to find a much deeper, more important systematic flaw: there were serious mistakes in prioritizing. Marketing and logistics are definitely extremely important, but only as long as there is product to offer and distribute. The disproportion in the inner structure of the business has lead to serious malfunctions, which negatively influenced the overall performance. Five whys techniques allowed seeing into the nature of the problem and helped to figure out the way to not simply cure the symptoms, but get rid of the real problem.

Overall I think that the skill of systematic thinking is extremely important. In the complex business environment, solutions are often made too fast, without real studying of the problem. The cause and effect bonds are vital. For any business result, be it positive or negative, it is always necessary to figure out the reason   for this or that outcome. Correct usage of the five whys totally allows doing so. This tool helps to look into the matter, find the true reason for some problem, and really solve it.  It is definitely not the only way of analyzing some issue ad it has to be combined with other techniques, but still any modern manager that wishes to be successful should definitely be ware of the five why tool and actually know how to use it. Therefore, I find this exercise highly useful, as it allowed studying such an important concept in both theory and practice.

If the leader wishes to change anything inside the company, he first needs to know what needs to be changed. In order to answer this question, the real causes for all the problems have to be studied and arranged in a system that would make sense. The five whys technique is the fastest and the most effective way to do so.