Variability is difficult to manage

Observation #2

carpedia-observation-2One of the things we look for when we examine organizations is the degree of variability present. The more variability, the harder it is to manage. Variability can be both inherent in the nature of the industry and it can be self-imposed through policy or errors.

Variability is inherent in some industries. In restaurants, for example, the actual demand patterns may be fairly predictable (e.g. people eat lunch during a certain time period) but the volume of people coming into the restaurant may be affected by variables that are more difficult to predict (e.g. weather).

Variability can also be self-created. Policies related to things such as inventory levels, buying practices, shift scheduling, or customer service levels can all impact the degree of variability in a business. Errors in the process are another cause of variation. Inconsistent processes, operator error, and mechanical downtime all cause variations. Managers either have to fix the variation or build it into their planning and scheduling parameters.

Determining how much variability you have currently in your processes, and separating the inherent from the self-created is a good start to understanding how much your processes can be improved.