Variation describes how consistent a process’ output is. Reducing variation is a fundamental goal of Lean Six Sigma, as it means more consistent results that meet customer requirements.
A customer places an order and is told it will take 5 to 15 days for delivery. You make a request for a transaction in your company and you’re told it will happen in five to 15 days. Why is there so much variation?
Variation does not just impact time performance. Variation also impacts how well specifications are met or not met. In other words, variation impacts quality. There are specifications for services and products. These specifications are expressed as specification limits.
Here’s the curve showing an example of the distribution compared to the specification limits.
The performance is off target and has wide variation. Because large areas of the curve are outside the lower and upper specification limits, defects occur frequently. While companies make changes to adjust the mean or average to be on target, as shown here, the wide variation still results in performance outside the specification limits. In other words, defects still occur.
How often do companies report only means or averages? And when the mean hits a target, they celebrate, or should they? For example, we did very well last month. Our average or mean delivery time was 33 hours and that is less than our 34 hour guarantee. But then, why are there customer complaints on late deliveries? This diagram shows why. It is the variation. Variation has to be reduced to improve performance. Section marked projects are excellent for reducing variation. Here’s the result.
With performance on target and the variation reduced, there is a huge reduction in defects, quality improves. So the next time anyone brags about average performance being on target, ask them about variation.