Variation is the enemy!

If you toss a coin, what’s the chance of it landing on heads? Fifty percent. Therefore, if you toss a coin ten times, your expectation is to get five heads and five tails. Take out a coin and toss it ten times. What happened? Did you meet your expectations?

#Variation is lack of consistency or deviation from expectation. It can introduce waste and errors into a process. The more variation, the more errors. The more errors, the more waste. If there is variation in the results or outcomes, it will result in customer dissatisfaction, upsetting customers and potentially losing your business. It causes much difficulties, uncertainty, increased cost and a mixed result of performance like not meeting deadlines or contractual obligations.

Earlier, companies tended to measure process performance by average. For example, average delivery time or average support call length. However, a lot of companies are now moving away from this. Instead, they’re measuring variation. For example, differences in delivery time or support call lengths. Average measurements give us some useful data. But they don’t give us information about our product’s consistency. In most industries, focusing on decreasing fluctuations in processes increases performance.

We need to measure variation for a couple of reasons:

1. Reliability: We want our customers to know that they’ll always get a certain level of quality from us. Also, we’ll often have a Service Level Agreement or similar in place. Consequently, every product needs to fit specific parameters.

2. Costs: Variation costs money. So, to lower costs, we need to keep levels low.

A key element in achieving #OperationalExcellence is to identify sources of variation that affect a process, product, or service. Once identified the key sources can then be earmarked for attention. The current focus on #SixSigma, as a methodology to achieve Operational Excellence, has at its roots a focus on variation. The variation of actual occurrence versus the mean is a comparison you make frequently in Six Sigma.

Variation comes from two sources: common causes and special causes. Some variation is just natural; you can’t eliminate it. That’s a common cause variation. The natural forces of nature work to mix things up. It’s simply part of the normal course of events. Special cause variation is completely different — it’s directly caused by something special. These special causes are specific things you can identify and do something about.

With Six Sigma, you spend particular effort to understand the difference between common cause and special cause variation because they’re so different and because you go to special effort to identify which type is causing the variation and how it’s affecting the outcome.

The goal is to understand variation, control it, and minimize its impact, while accepting that it’s part of everyday life and a part of every organization.

Learnings From Operational Excellence Foundations - By Richard Chua

#OperationalExcellence #RichardChua #ProcessVariation #Variation #SixSigma #OperationalExcellence