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Options for addressing nonconforming imported products and materials



The transport agency delivers improved transport outcomes within an integrated transport strategy. Its purpose is to enable safe, efficient and reliable journeys on the road network.

It has identified problems associated with the use of nonconforming imported products and materials in its projects. In this context, nonconforming items are those materials, fabricated products and services that:

  • Claim to be something they are not,
  • Are not fit-for-purpose, or
  • Do not meet required specified standards.

The presence of nonconforming imported products and materials in projects has resulted in significant adverse impacts on:

  • Delivery of programs of works
  • Direct and indirect costs associated with replacement or rectification
  • The road network and the customer experience
  • Workplace and community safety
  • The reputation of the agency
  • Accurate reporting of project cost, time and delivery performance.

Where this work contributes

Our work with the agency was based on the proposition that an understanding of the underlying or root causes of nonconforming imported products and materials will lead to a more structured approach to developing options to reduce the likelihoods and impacts of nonconformances. The overall aim was to assist the agency to select and justify options that will lead to improved outcomes for the organisation.

We followed a two-part approach:

  • The first part of our work, described in an earlier case study (available here), developed detailed context information and then used a root cause analysis process to identify the underlying or root causes of nonconformances (Figure 1)
  • The second part, described here, developed and elaborated on options to address selected root causes (Figure 2).

Figure 1: Understand the causes in detail

Figure 2: Develop options for improvement

Outcomes from the initial analysis

Out initial analysis developed four high-level cause and effect trees, summarised in Figure 3, that were further elaborated into 11 detailed trees. An interactive workshop with a range of Government and industry stakeholders developed a large number of causes, with 112 relevant root causes.

Figure 3: Initial cause and effect tree

Options for improvement


The second part of our work drew on the root cause analysis to develop options for improvement. The structure outlined in Figure 4 shows the main steps in what was a highly interactive process.

Figure 4: Develop options for improvement


We initially consolidated and grouped all the causes, both intermediate and root causes, from the root cause analysis. We selected our ‘top ten’ causes for discussion with the agency, based on:

  • Their frequency of occurrence
  • Their perceived consequences
  • Ensuring the set of causes had appropriate coverage and diversity across all areas of potential interest.

The agency selected six causes from the ten for further analysis. For the six selected causes, we developed initial bow tie structures (Figure 5) in a simple template like the one in Figure 6. We drew on relevant cause and effect trees from the first part of our work, as some causes appeared in similar forms in different places, and we incorporated existing agency controls where relevant and known. We sought input from the agency team and its professional advisors to expand and document the preconditions, consequences and existing controls.

Figure 5: Bow tie structure

Figure 6: Bow tie template

Bow tie analysis assists in the identification of control gaps, where there are causes or consequences that don’t have a matching control. This helps in developing improvement options, specifically those intended to address the gaps.

Stakeholder workshop

We then facilitated a detailed options workshop with key stakeholders having an interest in nonconforming imported products and materials. The stakeholders included:

  • Internal stakeholders and subject matter experts in the agency
  • Subject matter experts across the broader transport sector
  • Industry participants and industry associations
  • Engineering consultants familiar with overseas procurement and supply.

In the first part of the workshop, in a highly interactive process the participants:

  • Reviewed and expanded the bow tie templates for each of the six causes, and identified control gaps
  • Identified 71 potential improvement options across the six causes
  • Conducted an outline analysis of the advantages and disadvantages of each of the options
  • Conducted an initial triage: Yes, the option seemed clearly worthwhile; Maybe, more information would be needed to support a decision; or No, the option seemed clearly not worth pursuing.

The agency team then selected six of the most promising options for further analysis in the second part of the workshop. They covered a range of different forms of response, including testing, verification of both products and suppliers, and procurement process improvements.

For the six selected options, the workshop participants developed detailed notes on their advantages and disadvantages, in templates like the one in Figure 7. The categories in which advantages and disadvantages were recorded were based on the consequence criteria the agency uses in its enterprise risk management process, and hence linked to the agency's’ core organisational objectives. These criteria were chosen to best assist the agency team in preparing business cases to justify the selected options.

Figure 7: Options analysis template


There were several outcomes from the workshop that will assist the agency team as it progresses towards implementing improvement actions:

  • There were very detailed descriptions of the advantages and disadvantages for the agency associated with the six selected options, to assist in building business cases and justifying specific actions
  • A further ten options were identified as potentially highly worthwhile, for more detailed investigation following the implementation of the first six
  • A set of beneficial low-cost options was also identified, suitable for immediate implementation.


Bow tie analysis and risk treatment

Bow tie analysis is a very useful technique for risk treatment activities. Templates like Figure 6 support structured information gathering and analysis. In particular, the gap analysis provides an indication of where there are control gaps, and the specific gaps help align options for new risk treatment activities, and the new controls they might introduce, to specific causes and consequences.

Because the controls for a particular risk are all listed and classified in one template, the analysis also helps the suite of controls to be seen as a whole, thus providing further insights that may support:

  • The development of additional controls that may not be apparent from a simple gap analysis
  • Simplifications or modifications to the controls that will promote more efficient operations.

Evaluating improvement options

When considering improvement options as part of risk treatment, in most circumstances we recommend an option for implementation if it provides a net benefit for the organisation, where the advantages and benefits from implementing it outweigh the disadvantages and costs. We followed the same approach in this case.

There was one extension of our common practice: we disaggregated the advantages and disadvantages into four categories in the template in Figure 7. These categories were linked to agency objectives via the criteria for evaluating consequences in the agency's approach to risk management. This meant the analysis and evaluation was more accessible for senior managers, and hence more acceptable, as it was couched in familiar terms that are linked directly to agency’ objectives.

It is important to use language and approaches that are tailored for the organisation and the decision makers who must use the outcomes from the analysis. If the language is unfamiliar, there is a danger the results will be viewed with suspicion, perhaps as either irrelevant or ‘too complicated’. On the other hand, couching the results in terms of concepts and words that are in common use in the organisation facilitates acceptance, understanding and insight. This means managers do not need to translate unfamiliar material into terms with which they are comfortable, and hence it assists them to make better decisions, and often more quickly.

Other lessons

Many of the lessons noted in the earlier case study relating to the first part of our work were reinforced in this second part.

Good workshop preparation encourages the participants to engage in their own preparation, makes the workshop itself far more effective and efficient, sends a clear message that the workshop is important for the sponsor, and demonstrates that the time and effort of the participants is valued and appreciated.

Broad stakeholder engagement facilitated the detailed analyses of potential options and a wide sharing of insights. It also went a long way towards justifying the outcomes from the workshop as sound and reasonable.

Australian road transport agency
October 2018
Roads and highways
Public sector and government business
Services included:
Risk treatment