What is process variation?

Tallyfy helps organizations reduce process variation through consistent, trackable workflows. Here is how we approach process improvement.

Process variation happens when processes fail to follow a precise pattern. It is a leading cause of quality issues both in transactional and production processes.

Consistency enables replication, and replication is often the key to growth and expansion, whether it’s for the owner of a franchise or the massive global scale of companies like McDonald’s (MCD) and Starbucks (SBUX). A Big Mac tastes (pretty much) the same wherever you go, and “Venti Latte” is a lingua franca in over 55 countries.

— Michael Hess (CBS)

Simply put, we aim to perform processes in such a way that the results are repeatable. If we don’t know how we got there, we won’t necessarily be able to achieve the same result in a predictable way. In fact, we probably won’t.

When quality issues arise, the problem is often only identified once the issue has turned into a full-blown disaster. From what I’ve seen working with operations teams across financial services (17%), healthcare (11%), and manufacturing (8%), managers who become aware of the exception or anomaly must now track down the source of the problem.

Not only that, but a smart manager also needs to determine just where things went pear-shaped and take the necessary steps to prevent the problem from cropping up again. If there is too much process variation, pinpointing areas for improvement becomes much more difficult.

Process variation is a concept of importance in business improvement methodologies such as the Six Sigma method. How do we determine whether a business process needs improving? Customer satisfaction based on the fulfillment of Critical to Quality criteria acts as a barometer.

Your customers have certain expectations. For example, if they receive a bill, they expect it to be one hundred percent accurate. If it is not, your company will be judged based on the Critical to Quality (CTQ) criterion of accurate billing.

Conformance is important

Conformance is the degree to which a company’s products or services conform to the critical to quality criteria. The outputs that are evaluated by customers are achieved through business processes, and yes, everything your business does involves some process or another.

Now imagine a target. It has a bullseye.

That is the CTQ attribute you are shooting for. There is also an area that is close enough to the bullseye to be acceptable. Then, there is a “close, but no cigar” area where the conformance to CTQs is not acceptable, followed by the outer ring of the target which we can describe as a situation in which the results achieved are way off the mark.

Your “bullseye” must be clearly defined based on what the client wants to see. This could embrace:

• Physical properties
• Technical specifications
• Service levels
• Timeframes

Since the achievement of CTQs is determined by processes, process variations are likely to cause an off the mark result.

You can have little process variation but still be off target

A lack of process variation doesn’t necessarily mean that your business is hitting the sweet spot with its customers. It might just mean that everyone is following a process that doesn’t result in customer satisfaction.

When quality issues occur, the first thing to do is to determine whether they were the result of a process variation or whether the process itself is fundamentally flawed.

In the former instance, lack of training, lack of the proper equipment to do the job properly, or simple negligence could all be possible causes. They’re easy enough to address. But when the process itself is ineffective, process redesign is called for.

To make this judgment call, managers need to know whether there is a clearly defined process and whether there was process variation or not. The latter can be more difficult to determine than many may realize.

Careful tracking of workflows, well-formulated standards, and clear allocation of responsibilities will make tracking a quality problem to its source much easier.

As with any conclusion, the conclusions you draw will only be as good as your data. Without accurate information, the best you can manage is a shot in the dark. Will you hit the bullseye? Only if you are very lucky!

There is usually some process variation

Unless you are working in a very closely controlled environment where outside variables have little impact, some process variation can be expected.

Here’s where most managers get it wrong: they see variation and immediately want to fix something. At Tallyfy, we’ve seen this pattern repeatedly - teams chase every minor deviation instead of focusing on what actually matters. But not all variation needs fixing. The real skill is knowing when to act and when to leave things alone.

Think about it this way. If your outputs cluster around an average with some natural spread - that’s just physics. Temperature fluctuates. People have good days and bad days. Raw materials vary slightly batch to batch. Statisticians call this dispersal from the mean, and you can measure it. But the fact that variation exists doesn’t mean your process is broken. Deming put it bluntly: uncontrolled variation is the enemy of quality. The keyword is “uncontrolled.” Normal, predictable wobble within expected limits? That’s just how reality works. The moment you start chasing every minor deviation, you’ll spend all your time adjusting things that don’t need adjusting - and probably make the variation worse.

Let us say you promise your clients overnight delivery, but your delivery truck breaks down. Alternatively, you use a courier for delivery, and your supplier has some kind of problem. If you have a contingency plan in place, and your customer still gets delivery within the acceptable limit, you are still doing fine.

Think of the target analogy again. Unless you are a deadeye Dick, you can hit the bullseye every time you shoot, but still not hit the exact same spot within the bullseye. Instead, what you have is a grouping of bullet holes within the bullseye.

Why reducing process variation is sometimes more important than results

Surprised? Let us use our shooting analogy again. We have two marksmen, Shooter A and Shooter B.

Shooter A always does things differently. Sometimes, he will stand on his head and shoot. Sometimes he stands to the left or to the right of the target. But despite this, he hits the bullseye 70 percent of the time.

Shooter B always stands on the same spot and aims his firearm in exactly the same way, his shots almost always hit the target 100mm outside of the bullseye. Which of these two shooters can most easily improve their marksmanship?

Because Shooter B always uses the same process, it’s easy to analyze it and find out how he can hit the bullseye every time. He’s consistent.

Shooter A, on the other hand, is all over the place. You can’t pin down what he’s doing right when he succeeds and what he’s doing wrong when he fails.

Thus, by reducing the process variation, we also make improvement much easier. As a result, the seemingly counter-intuitive measure of reducing variation regardless of results can ultimately lead to significant improvement in business processes.

Example Procedure

Print Production & Quality Control Workflow

1Initial Print Job Setup

2Configure Print Properties

3Submit Print Request

4Review File and Specifications

5Get Cost Approval If Needed

+2 more steps

View template

Example Procedure

Design Standards

1Review Visual Aesthetics

2Validate Problem-Solution Fit

3Check Balance and Creative Elements

4Verify Brand Consistency

5Review Accessibility Standards

+1 more steps

View template

Example Procedure

Warehouse Delivery Receiving & Inspection Workflow

1Receive and log incoming shipment

2Create receiving log entry

3Verify shipment against purchase order

4Conduct damage inspection

5Sign delivery confirmation and document receipt

+2 more steps

View template

Using Tallyfy to limit business process variation

Business processes consist of a number of steps carried out by people who have specific positions in the team structure. Workflows should be clearly defined so that each person knows exactly what they should be doing and when they should do it.

When roles and responsibilities are clearly defined and presented, process variations are reduced. People still find workarounds. But even when clear processes are in place, the human element could mean that a process is derailed or diverted somewhere along the line.

With Tallyfy, the allocation of roles within processes, and the alerts that tell employees it is time to take action are all in place on a single dashboard with need-to-know information included.

Compliance with business processes is therefore much easier to achieve. Now that you know that the processes you have developed are being followed, you can fine-tune them so that you hit the bullseye and end up with a happy client.

As for statistical analysis, that is easily achieved using Tallyfy. Any flaws, hang-ups or hitches that could lead to business process variation can be identified and ironed out.

Tallyfy is more than just a way of allocating work; it is a workflow engine that helps you to analyze and improve business processes.

Not sure how it works? We are here to help. Book your free demo today. All you have to do is to define what you would like Tallyfy to do for your business, and we will take it from there!

Is variation under control?

Related questions

What is the meaning of process variation?

Process variation The inherent variability in any process or system. It’s similar to how the ups and downs work in the rest of your life: Some days you are more productive, and some days you’re not. In the world of manufacturing or business, such slight shifts may impact the quality of a product or delivery of a service. The knowledge of process variation enables companies to better their business practices and to perform consistently.

How do you identify process variation?

Detecting process variation is akin to being a detective on your own factory floor. You can even employ basic tools like a control chart to monitor measurements over time, to see if there is a pattern or a sudden spike. Another is to collect data and construct histograms so you can see how your process results are distributed. Sometimes even just watching the process closely or talking to the people involved can surface hidden variations that could be driving your outcomes.

What is the Six Sigma process variation?

Six Sigma is the superhero for battling variations in processes. It’s an approach that seeks to make processes so consistent that they generate only 3.4 defects per million opportunities. From what I’ve seen across thousands of customer conversations, most companies never get close to that target - but even modest improvements yield dramatic results. One service business we worked with documented their SOPs and reduced process variation enough to cut their workforce from 65 to 15 people while simultaneously quadrupling revenue.

Think of your favorite restaurant - if they got your order wrong once in 300,000 visits! That is Six Sigma consistency! This entails the use of statistical tools to quantify, analyze, and eliminate variation in business processes, so as to accomplish near-perfect quality of products or services.

What is an example of process variability?

Let us picture a coffee shop. Variability in the process could appear in the time it takes to prepare each latte.

A barista some days could deliver drinks in two minutes flat, and other times five minutes, maybe. There could be a number of factors at play for that variance, including the experience of the barista, how busy the coffee shop is, or what kind of milk they are serving. Understanding these differences can assist the coffee shop owner with achieving greater consistency as well as customer satisfaction.

What is the difference between process variation and tolerance?

Visualize process variation and tolerance as playing a game of darts. Process variation is how much spread there is in your throws against the dartboard - the natural range of outcomes in your process.

(The target itself, in this case, is tolerance, and again, transmen have long been caught in the cross hairs.) Tolerance, on the other hand, is a bullseye - it is that area you are aiming to hit. If variation is about what actually happens, tolerance is about what you are willing to accept. A good process should keep variation as close to the upper and lower specification limits as possible, and you would like all your darts to land in the bullseye, right?

What are the two types of causes for process variation?

Process variation can be traced to two principal sources, much like the weather has two different kinds of causes. The first reason is that we have common cause variation - the natural ebb and flow of a process, such as variations in temperature leading to paint taking longer or a shorter time to dry. Then there is special cause variation - unexpected events that interfere with the process, say, a power outage that halts production. Understanding the distinction allows managers to determine whether to implement system-wide improvements or address targeted issues to ensure optimal performance for their operations.