The Price of Poor Process Management

Examples of Business Mistakes Caused by Poor Process Management or Poor Knowledge Management

Below are examples of business mistakes that should have been prevented by people, processes and/or systems. These mistakes were not necessarily caused by poor rules management; they may have been caused by poor process management or poor knowledge management instead.

These examples fall into the "what were they thinking?" category:

Wrong Version Business Mistakes

• Wayward Airbus - Cross-border clashes have led to costly production errors. Job One for a new CEO will be to unify the jetmaker. "Airbus' A380 double-decker jet is two years behind schedule, sending billions of dollars in potential profits down the drain. But the reason sounds too simple to be true: Airbus factories in Germany and France were using incompatible design software, so the wiring produced in Hamburg didn't fit properly into the plane on the assembly line in Toulouse. It's one of the costliest blunders in the history of commercial aviation, and it has plunged Airbus into crisis. Chief Executive Christian Streiff quit on Oct. 9 after only three months on the job... The delays in the A380 mean EADS will take a $6 billion profit hit over the next four years... When bundles of the cabin wiring started arriving in Toulouse early this year, assembly slowed to a crawl. Workers tried to make them fit into the fuselage by pulling them apart and rethreading the wires, but that proved to be impractical, and the effort was abandoned. Airbus says it has introduced new software to correct the wiring design, but it will take months for engineers to get up to speed on the new system. That's why Airbus now predicts it won't deliver the first A380 orders until late 2007... BusinessWeek, Oct. 23, 2006

Units of Measurement Business Mistakes

• Salomon Brothers trader who single-handedly handily caused a 15 point drop in the Dow Jones Industrial Average in the last 5 minutes of trading due to misunderstanding the units of a "sell" order. He mistakenly sold 11 million shares ($500,000,000) of stock instead of $11 million dollars of stock. The Wall Street computers did the rest.
• Metric mishap caused loss of NASA orbiter (CNN) -- NASA lost the $125 million Mars Climate Orbiter because a Lockheed Martin engineering team used English units of measurement while the agency's team used the more conventional metric system for a key spacecraft operation. Sept. 30, 1999

Pricing Mistakes

• Amazon dinged on pricing gaffe - Some customers looking for a good deal on an LCD TV at Amazon.com this week are now staring at a blank wall. Sept. 6, 2005

Human Factors Design Business Mistakes

• Bad Human Factors Design - A scrapbook of illustrated examples of things that are hard to use because they do not follow human factors principles. By Michael J. Darnell
• John Grout's Mistake-Proofing Center - "The causes of defects lie in worker errors, and defects are the results of neglecting those errors. It follows that mistakes will not turn into defects if worker errors are discovered and eliminated beforehand..."
• John Grout's Poka-Yoke Page - Information on Mistake-Proofing, Zero Quality Control, & Failsafing (note: A poka-yoke device is any mechanism that either prevents a mistake from being made or makes the mistake obvious at a glance)

This list is to be continued... We welcome your suggestions.

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