STATISTICS
ROUNDTABLE
Process Variation—Enemy and Opportunity
by Ronald D. Snee
A
s the giants of scientific man-
agement and the quality move-
ment long ago pointed out,
work takes place in a series of inter-
connected processes.
Improving the way we work entails
controlling and improving those
processes, whether they are manufac-
turing ones such as pellet extrusion in
pharmaceuticals, or business activi-
ties, such as loan application process
in financial services.
However, it’s impossible to control
and improve a process you do not
understand.
Such understanding begins with
variation—a venerable subject in sta-
tistical literature, but one that is some-
times misunderstood. Too often,
variation is seen merely as the enemy
that must be reduced whenever it
appears. But unless we achieve a full
and detailed understanding of varia-
tion, it inevitably reappears and wors-
ens. Dealing with it becomes like the
arcade game Whac-a-Mole—you
hammer it whenever it appears, only
to have it pop up in other places.
Instead of regarding variation as the
enemy, it is more productive to see it
as an opportunity. By fully identify-
ing, characterizing, quantifying and
reducing variation, you can improve
the bottom line through reduced oper-
ating costs and improve customer sat-
isfaction through better service.
You also can lift employee morale, a
frequently overlooked benefit of vari-
ation reduction. People do not like to
do rework, fail at their tasks or incur
the ire of customers. Interestingly,
employee satisfaction has been found
to be a good predictor of customer
satisfaction. Six Sigma can be effective
FIGURE 1 Delivery Days
Supplier Delivery time (days) Average Range
A 17, 2, 5, 12, 4 8 15
B 8, 10, 10, 9, 8 9 2
approach for reducing variation and
improving processes.1, 2
It is critical to distinguish between
improving the process average and
reducing variation. As Jack Welch
noted, “We have tended to use all our
energy and Six Sigma science to move
To control and
improve a process,
you must first fully
understand it.
the mean. The problem is, as has been
said, the mean never happens. The
customer only feels the variance that
we have not yet removed.”3
Consider two suppliers whose days
to delivery averages are almost identi-
cal but whose variations in days to
deliver differ (see Figure 1). Most cus-
tomers would prefer the consistency
of supplier B to the wide variations of
supplier A even though supplier B
takes a day longer, on average, to
deliver. In fact, if the customer is not
ready to receive the product, delivery
too early can sometimes be worse
than too late.
By focusing on variation reduction
rather than the process average, sup-
plier B is likely to enjoy higher cus-
tomer satisfaction and in the long run
win greater market share. As W.
Edwards Deming put it, “If I had to
reduce my message for management
to just a few words, I’d say it all had
to do with reducing variation.”4
Laws of Variation
Understanding variation
should be a core competen-
cy of statisticians, Six
Sigma Green and Black
belts, quality engineers,
quality managers and all
other improvement profes-
sionals. Charged with improving
processes, these professionals should
think deeply about variation and its
effects.
Statistical thinking is particularly
helpful because its three key ele-
ments—process, variation and data—
include the process that produces the
variation, the sources of the variation
and the use of data to deal with it.5,6
Further, as professionals approach
improvement work, they also should
be guided by the laws of variation:
• Variation is a fact of life—it is all
around us and present in every-
thing we do.
• All variation is caused.
• Variation can be predicted.
• Sources of variation are additive.
• Variation can be quantified.
• A small number of sources of vari-
ation contribute most of the varia-
tion.
• Process data contain variation pro-
duced by both the process and the
measurement system.
• Process input variation affects
process output variation.
• Variation affects managerial quali-
ty.
The process/variation perspective
provides the context for problem solv-
ing and process improvement work as
well as the pedigree of the data. Most
importantly, the process view increas-
es the likelihood problems will be
solved successfully.
Separating Process Variation
From Measurement Variation
There are two distinct kinds of
processes of interest in improvement
efforts. Processes that produce:
1. The product or service provided
by the organization to its cus-
tomers.
2. The data used to measure and
monitor the performance of the
process.
In seeking to understand the causes of
variation, it is imperative to sharply
distinguish between these two kinds
QUALITY PROGRESS I DECEMBER 2006 I 73
STATISTICS
ROUNDTABLE
of processes and consider both as pos-
sible sources of problems. Generally,
statisticians and quality professionals
need to pay more attention to the sec-
ond kind of process—the one that
generates the data. 7, 8
Consider a case in which process
performance data variy widely. For
example, the manufacturing depart-
ment says the variation is due to the
measurements coming from the ana-
lytical lab. The analytical lab says the
process is too variable and out of con-
trol. Who’s right? Fortunately, tools
exist to separate process variation
from measurement variation. For
example, if studies show the gage
repeatability and reproducibility
(R&R) variation is less than 30% of the
total variation, the measurement sys-
tem is acceptable for guiding process
improvement work.
In the case of destructive tests, in
which the sample is destroyed in run-
ning the test, nested sampling designs
are used to assess the validity of the
measurement system.9 In one study, a
measurement system variation repre-
sented 81% of the total variation.10 The
root cause was found to be the failure
to follow proper sampling procedures.
In a subsequent study in which the
sampling procedures were followed,
the measurement system variation
was reduced by 41%. Here the sam-
pling procedure is considered part of
the testing method.
It should be remembered, too, that
variation affects process flow. The
defects and rework caused by varia-
tion result in increased inventory,
more movement of material, overpro-
duction, wasted motion and wasted
production time—all significant
sources of slower process flow as well
as reduced customer satisfaction and
increased costs. Sensitivity to the
impact of variation on process flow
should therefore be part of lean stud-
ies of work processes.
How to Look For
Sources of Variation
Several approaches can be used to
find key sources of process variation
including:
• Mapping the process, identifying
the key input and output variables
at each step in the process, and
using a cause and effect matrix to
74 I DECEMBER 2006 I www.asq.org
prioritize the input variables to
find the most important ones.
• Mapping the process, brainstorm-
ing a list of key input variables
and using a fishbone diagram to
identify the most important of
them. This approach works best
when there is only one process
output variable of interest.
• Making a control chart of key
process output variables and look-
ing for out of control signals indi-
cating special cause variation,
which will identify key sources of
variation.
• Conducting a multi-vari study in
which data are collected on the
process as it operates.11 Analysis
of the data will detect key sources
of variation due to process vari-
ables and uncontrolled noise vari-
ables such as sources of process
input material, operating teams
and different pieces of equipment.
Process mapping and identifying
process variables via brainstorm-
ing or using the cause and effect
matrix are useful approaches to
identifying the variables to be
included in a multi-vari study.
Where to Look for Variation
In looking for sources of variation
there are some usual suspects, most
notably material lots, machines, oper-
ating lines and human behavior. The
guiding rule is all potential sources of
variation are guilty until the data
prove them innocent.
For example, a biopharmaceutical
process was producing lower than
expected yields, causing concern the
process would be unable to meet mar-
ket demand. A control chart analysis
of the yields of the previous 57 batch-
es showed a big difference in the
yields of the different raw material
batches used in the process. The speci-
fications on the raw material batches
were tightened, and the process yield
increased by 25%, significantly adding
to the bottom line as well as enabling
the process to meet customer demand.
Machines are often a potent source
of variations. Ellis R. Ott, quality pio-
neer and ASQ honorary member,
pointed out on many occasions that,
“Where there are three or four
machines one will be substantially
better or worse than the others.” Sim-
ilarly, different operating lines—
whether they are production lines in
manufacturing or a standardized
business process—that are apparently
identical in every respect nevertheless
might produce variation.
Often variation in operating lines—
both in manufacturing and services—
results from variations in human
behavior. Different people have differ-
ent methods and styles of working,
learning and thinking. They take in,
process and communicate information
in different ways. Moreover, people
differ from day to day, group to group
and organization to organization.
The effect of the “Monday morning
blues” on the work of individuals on
Monday vs. the rest of the week has
been well documented. People might
differ from group to group as a result
of cultural, educational and occupa-
tional backgrounds that affect their
work. People in a manufacturing orga-
nization might pay far more attention
to manufacturability while people in
product design might care more about
style or product features. The list of
possible differences is nearly endless.
For example, a manufacturing com-
pany had undertaken studies to help
increase the output of a process.
Analyses of the data showed none of
the variables studied had any signifi-
cant effect, yet there was considerable
variation in the output of the process.
Discussion then turned to the four
teams of operators that ran the process.
Analysis of the effects of these dif-
ferent teams revealed a major portion
of the variation in output was due to
one team’s having production levels
considerably higher than the other
three, which had essentially the same
output level. Not surprisingly, the
team with the highest output also was
the most experienced.
Anticipating Variation
One of the most effective ways to
reduce variation is to anticipate it
and then prevent it by designing
processes, products and management
practices to be insensitive to uncon-
trollable variation. This concept of
insensitivity to variation, often called
robustness, is a key aspect of statisti-
cal thinking, yet it is greatly under-
used.12
As the quality movement has taught

us, 100% quality cannot be inspected
in after the fact; it should be designed
in from the inception of a product, pr-
ocess or management practice. A
robust product can be designed to be
insensitive to variations in conditions
of manufacture, distribution, use and
disposal. A robust process should be
insensitive to uncontrollable variations
in process inputs, external factors and
transformations in the course of the
process such as activities, steps,
process variables and uncontrolled
noise variables.
To create robust management prac-
tices, you should develop strategies
relatively insensitive to economic
trends and cycles. You also should
design a project system insensitive to
changes in personnel and project
scope. You also can create working
conditions that take into account dif-
fering employee needs, such as flexi-
ble work hours, and you can enable
personnel to adapt to changing busi-
ness needs.
How to Know When
You Understand a Process
Whether you are anticipating varia-
tion in a future process or confronting
it in an existing process, how do you
know when you have achieved the full
understanding of the process essential
for controlling that variation? Simply
put, you understand a process when it
is possible to predict its future perfor-
mance. A process is understood when:
• Critical variables (X’s) that drive
the process are known.
• Critical uncontrolled (noise) vari-
ables that affect the process output
are known, and the process has
been designed to be insensitive to
these uncontrolled variations.
• Measurement systems for process
variables (X’s) and outputs (Y’s)
are in place and the amount of
measurement variation is known.
• Process capability is known.
• Effective process control proce-
dures and control plans are in
place.
With the understanding of process
variation as the foundation of process
understanding, improvement profes-
sionals then can be continually on the
lookout for important sources of vari-
ation—whether in the process itself or
the measurement process—and confi-
Statement of Ownership,
Management, and
Circulation
dently reduce that variation, secure in (Act of August 12, 1970; Section 3685,
Title 39, United States Code)
the knowledge they can significantly
improve performance. 1. Title of Publication: Quality Progress
2. Publication Number: 0033-524X
3. Date of Filing: October 1, 2006
REFERENCES
1. R.D. Snee and R.W. Hoerl, Leading Six 4. Frequency of Issues: Monthly
Sigma: A Step-by-Step Guide Based on Experience 5. Number of Issues Published Annually: 12
With GE and Other Six Sigma Companies, Financial 6. Annual subscription price: $80.00
Times Prentice Hall, 2003.
2. R.D. Snee and R.W. Hoerl, Six Sigma Beyond 7. Location of Known Office of Publication: ASQ,
600 N. Plankinton Ave., Milwaukee, WI 53203
the Factory Floor: Deployment Strategies for Fin-
ancial Services, Health Care and the Rest of the Real 8. Location of Headquarters or General Business Offices
Economy, Financial Times Prentice Hall, 2005. of Publisher: Same
3. General Electric Co., 1998 Annual Report,
www.ge.com/annual98/pdf/full.pdf.
9. Name and Address of Publisher: William A. Tony, ASQ,
600 N. Plankinton Ave., Milwaukee, WI 53203;
4. Henry R. Neave, The Deming Dimension, SPC
Editor: William A. Tony, 600 N. Plankinton Ave.,
Press, 1990.
5. ASQ Statistical Division, Glossary and Tables Milwaukee, WI 53203
for Statistical Quality Control, third edition, ASQ 10. Owner: ASQ, 600 N. Plankinton Ave., Milwaukee, WI
Quality Press, 1996. 53203
6. R.W. Hoerl and R.D. Snee, Statistical 11. Known Bondholders, Mortgagees, and Other Security
Thinking: Improving Business Performance, Holders Owning or Holding 1% or More of Total
Duxbury Press, 2002. Amount of Bonds, Mortgages, or Other Securities:
7. R.D. Snee, “Are We Making Decisions in a
Not Applicable
Fog? The Measurement Process Must Be
Continually Measured, Monitored and Im- 12. FOR COMPLETION BY NONPROFIT ORGANIZATIONS
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Just Practice. If You’re Not Measuring, You’re tax purposes: has not changed during the preceding
Not Competing,” Quality Progress, Vol. 39, No. 5, 12 months
2006, pp. 72-74.
13. Publication Title: Quality Progress
9. R.D. Snee, “Graphical Analysis of Process
Variation Studies.” Journal of Quality Technology, 14. Issue date for Circulation Data below: August 2006
Vol. 15, 1983, pp. 76-88. 15. Extent and nature Average no. Actual no.
10. G.E.P. Box, J.S. Hunter and W.G. Hunter, of circulation of copies of copies of
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