Root cause is the source of a problem that needs to be addressed if a repetition of the event is to be avoided. In problem solving, when an event occurs it may be caused by a variety of factors, that themselves are the consequences of other factors. Problem solving may probe the initial factors, and then the causes of those factors, which may point to a root cause, which is the ultimate reason for the event. For example, a supplier may have an average lead-time that is longer than the agreed lead-time. Investigation may reveal that the customer’s delivery is scheduled at the end of a van run. This may appear to be the cause of the extended lead-time. However, it may be the reason that the customer is at the end of the van run is that the supplier doesn’t have enough vehicles to meet customer demand, which in turn is due to undercapitalisation of their business. Alternatively, the supplier may value other customers more highly than this customer because other customers are more profitable, or because the agreed price is too low to be sustainable.« Back to Glossary Index
Discover the world’s largest Glossary of Procurement terms
With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.