Definition – What is Process Variation?

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

Consistency facilitates 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

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. 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 isn’t, your company will be judged based on the Critical to Quality (CTQ) criterion of accurate billing.

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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’s the CTQ attribute you’re shooting for. There’s also an area that’s close enough to the bullseye to be acceptable. Then, there’s a “close, but no cigar” area where the conformance to CTQs isn’t 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. However, 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’re 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. Let’s 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’re still doing fine.

Think of the target analogy again. Unless you’re 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 is Sometimes More Important than Results

Surprised? Let’s use our shooting analogy again. We have two marksmen, Shooter A and Shooter B. Shooter A always does things differently. Sometimes, he’ll 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 is easy to analyze it and find out how he can hit the bullseye every time. He is consistent. Shooter A, on the other hand, is all over the place. You can’t pin down what he is doing right when he succeeds and what he is 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.

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. However, 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’s 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’s 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’s a workflow engine that helps you to analyze and improve business processes. Not sure how it works? We’re here to help. Book your free demo today. All you have to do is to define what you’d like Tallyfy to do for your business, and we’ll take it from there!

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About the author - Amit Kothari

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