How to make a Waterfall Chart in Excel? Easy with this free template!

Waterfall Chart Gif

 

Waterfall Charts (also called bridge analysis) are one of the best way to visualize variances between 2 reporting periods or between figures budgeted and actuals.

However, it is tricky to build them in Excel.

This is why have prepared a free and easy ready to use Excel template for you.

This template includes instructions, an illustrative example and a blank table ready to use. Save time and use this template for your next Waterfall!

Download the free template here: Waterfall Chart Template

And if you need more detailed instructions, here is a great video tutorial.

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The 5 WHYs

Description

Five whys (or 5 whys) is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem.

The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?”. Each answer forms the basis of the next question. The “five” in the name derives from an anecdotal observation on the number of iterations needed to resolve the problem.

The method provides no hard and fast rules about what lines of questions to explore, or how long to continue the search for additional root causes. Thus, even when the method is closely followed, the outcome still depends upon the knowledge and persistence of the people involved.

Origin

Sakichi Toyoda, the Japanese industrialist, inventor, and founder of Toyota Industries, developed the 5 Whys technique in the 1930s. It became popular in the 1970s, and Toyota still uses it to solve problems today.

Toyota has a “go and see” philosophy. This means that its decision making is based on an in-depth understanding of what’s actually happening on the shop floor , rather than on what someone in a boardroom thinks might be happening.

The 5 Whys technique is true to this tradition, and it is most effective when the answers come from people who have hands-on experience of the process or problem in question.

The method is remarkably simple: when a problem occurs, you drill down to its root cause by asking “Why?” five times. Then, when a counter-measure becomes apparent, you follow it through to prevent the issue from recurring.

Example

Delays in sales in a production company:

  1. Why is the turnover lower by 20% compared with budget?

Because we have delays on 2 major projects.

  1. Why?

Because it takes more time to build the product as normally.

  1. Why?

Because it is a new product and there are new technical requirements which needed to be modified once we moved into production. 

  1. Why?

Because the feasibility of the new technical requirements were not validated beforehand with the production

  1. Why?

Because to reduce the price and satisfy the client’s demand, we changed the design at the last minute without following the normal process of validating these design changes with the production.


Check also this article “The 12 FP&A Principles”.