Root Cause Analysis

Root Cause Analysis ( RCA) is a method of problem solving that concentrates on identifying and solving the root causes of problems rather than just addressing the obvious symptoms.
Common RCA techniques are 5 Whys, Pareto Analysis, Cause and Effect diagram or fishbone diagram.

The 5 Whys method is based on empirical evidence that it takes five "why" questions, asked sequentially, each to the answer of the previous why question, to get to the root cause of a problem. However the no. 5 is just symbolic, it could be 3 or 10.

Pareto Analysis is based on the Pareto principal which states that 80% of the events are caused by 20% of the possible causes for those events. It involves arranging the causes by their freq. and then working on the top 20% frequent causes.

The 5 Whys technique can be applied to the Iridium failure as follows:

1. Why was Iridium shutdown?
Ans: It could not meet the $90 million bond payment, so the bank ordered it to be shutdown.

2. Why could Iridium not meet the $90 million bond payment.
Ans: It could not find enough subscribers for its service, hence there was a scant revenue stream for Iridium.

3. Why did Iridium not find enough subscribers for its service
Ans: It did not work as advertised, was not available anywhere in the world, had heavy handsets, did not work indoors, voice quality was poor and the airtime charge was too high for customers to be interested.

4. Why did Iridium have the issues addressed above?
Ans: Inaccurate/insufficient market research. They should have known beforehand that the handsets had to have been lighter, and the price point was too high for widespread adoption. The technical feasibility study, of meeting the standards for availability and voice quality expected by the customer, was found wanting.

5. Why was the market research / technical feasibility study not performed to standards?
Ans: Insufficient importance given, maybe due to inefficient management.

Since, then Iridium has been brought out of bankruptcy and is now called Iridium Satellite LLC. A privately held company. It has seen continuous growth in its subscribers, currently reporting them as 225,000. The calling rate seems to have been reduced to around $1.5/per min. and it boasts of voice quality 3 times better than its competitors. It is however, difficult to know how the voice quality compares to regular cellphones.