Tuesday, April 23, 2019

Containment Action, Corrective Action, Preventive Action, and PERT

This blog post uses the content from the https://www.8dreport.com/articles/difference-between-containment-corrective-and-preventive-actions-in-8d-report/ page and other informative websites.

In Problem Solving, after recognizing the problem, you are required to take the three actions: Containment Action, Corrective Action, and Preventive Action. (In some cases the Containment Action can overlap with the Corrective Action).

Many get confused between these three actions. Lets take a look at what these three actions are.
  • Containment actions are the actions that try to limit a specific problem’s extent and establish normal operations.
  • Corrective actions reveal and prevent the occurred problem from ever happening again by eliminating cause.
  • Preventive actions are clear solutions to improve processes and products and prevent similar potential problems from ever happening.

Lets look at an example:

The Problem is of project running out of budget.
The very obvious Root Cause is determined: Incorrect Effort Estimation. (Why does this always happen ;)

In this case the three actions to be taken are:

Containment Action: The most immediate action that has to be taken is to discuss the budget estimation with the client and to get approval for Schedule or Cost Baseline Change (wherever required)

Corrective Action: The corrective measures to be taken would be to revise the schedule and the cost baseline by re-estimating the efforts required for remaining task completion by using 3-Point Effort Estimation Technique.

Preventive Action: The Preventive Action is/are the action(s) that will be taken from this time onward. In this case, the problem requires to use 3-Point Effort Estimation Technique for estimation of all future projects.

OK, so what is three point estimation technique. From Wikipedia, this is:
The three-point estimation technique is used in management and information systems applications for the construction of an approximate probability distribution representing the outcome of future events, based on very limited information.

PERT (Program Evaluation And Review Technique) is the most commonly used method in three point estimation technique. From Wikipedia:

The program (or project) evaluation and review technique (PERT) is a statistical tool used in project management, which was designed to analyze and represent the tasks involved in completing a given project.
First developed by the United States Navy in the 1950s, it is commonly used in conjunction with the critical path method (CPM).

The parameters in PERT:
  • Most Likely Cost (Cm): This cost estimate considers everything goes as normal.
  • Pessimistic Cost (Cp): This considers the worst case and it assumes that almost everything goes wrong. 
  • Optimistic Cost (Co): This estimate considers the best case and assumes that everything goes better than planned.
  • PERT Estimate formula is: Ce = (Co + 4Cm + Cp)/6 provide a more accurate estimate.
  • Deviation: (Cp – Co)/6