Understanding Process Variations and their Impact on Product Quality

The capacity of a process is expected to ensure that output just matches demand. Excess capacity is wasteful and costly; too little capacity means dissatisfied customers and lost revenue. A process with the right capacity requires having very precise forecasts of demand, interpreting forecast results into a process that is capable of meeting the expected demand. 

However, process variation and demand variability can affect impact achieving a match between process output and demand, making it quite challenging. Therefore, to enhance better effectiveness, it is necessary for managers to be able to manage and if possible, eliminate variation. 

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A very negative impact of variations is disruption of operations and supply chain processes, thereby interfering with optimal functioning. 

Some examples of how process variations can lead to disruptive operations include the following:

• Additional cost, delays and shortages.
• Poor quality products and/or services.
• Inefficient work systems.

Poor quality and product shortages or service delays usually results in dissatisfied customers and, if not attended to and corrected leads to damage of organization’s reputation which in turn, affects future sales.

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Understanding Process Variation

Variation occurs in all business processes which results either due to variety or variability. An example is random variability which is inherent in every process; it is always present. Variation can also occur as the result of management choices to offer customers variety. The following are some basic sources of variation:

1. The variety of goods or services being offered. An increase in the variety of goods and services, results in consequent increase in the variation of production or service requirements.
2. Structural variation in demand. These types of variations, which include trends and seasonal variations, can easily be predicted. They are particularly important for capacity planning.
3. Random variation. This natural variability is inherent to diverse degrees in all processes, as well as in demand for services and product. They cannot be generally influenced by managers.
4. Assignable variation. These variations are caused by defective inputs, incorrect work methods, out-of-adjustment equipment, and so on. They can be traced and be reduced or eliminated by analysis and corrective action.

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About the Author

Adebayo is a thought leader in continuous process improvement and manufacturing excellence. He is a Certified Six Sigma Master Black Belt (CSSMBB) Professional and Management Systems Lead Auditor (ISO 9001, 45001, ISO 22000/FSSC 22000 etc.) with strong experience leading various continuous improvement initiative in top manufacturing organizations. 

You can reach him here.