The Deming Forum

Understanding variation – the springboard for process improvement

By Dr. Henry R. Neave

Edited and abridged by Mitch Beedie

There are four components, the main article: "Understanding Variation" and three linked expansions on the article.

“Unknowns and unknowables”

An organization’s complex activities cannot, of course, be wholly reduced to numbers. Deming emphasized that, when it comes down to it, the most important figures for managing a business are “unknown and unknowable”. If this comes as a surprise, think about lost customer goodwill and resulting lack of repeat sales caused by faulty products or bad service, and the costs to both business and the environment of wasting scarce resources. On the other side of the coin, could we really measure the increased business we get by delighting our customers rather than merely satisfying them? But while we cannot measure these figures directly, we can try to measure and interpret factors that influence them and are influenced by them.

So, you need to ask what figures (effects) are most important to the people affected by your company’s activities, whether good or bad. These people include customers, staff, shareholders, local authorities, governments, and the neighbours who are sharing in your factory’s environmental emissions. A company should chart figures from each of the major departments – such as sales, income, expenditure, accidents, profit, delivery times, proportion of quality defect(ive)s, waste of environmental resources like energy and water, key equipment downtimes, along with any major factors related to these figures.

Choose measures, preferably both from within and resulting from the process, that are directly or indirectly related to the quality of service or product. Where possible, go for measurements that are relatively easy to understand, rather than ultra-technical measures that only mean something to experts; this advice is of course particularly important with teams. Two other pieces of advice are important. First, control-charting different kinds of measurements simultaneously can show how some factors affect others. Second, it can also be very worthwhile to control-chart some processes over different time frames (for example, daily and monthly data for the same process) to learn more about both shorter- and longer-term behaviour.

For example, on the principle that your customers’ time is valuable, your company may want the phone to always be answered promptly by a receptionist who immediately directs the caller to the right person. Control charting the time taken to do this can show whether any types of phone calls pose a special problem to be worked on, and whether the more routine calls are being handled efficiently. They can also show up changes in performance, for example caused by the receptionist being ill and someone untrained taking over.

The intention is not to have scores of receptionists noting down how long they take to connect each caller. If such information is needed, it should be collected automatically, but that can itself generate (perfectly understandable) feelings of being spied on. This in turn largely depends on whether your company operates in a “climate of fear”. As with all improvements, it is not just what you do but how you do it. Improvements will only work if people understand that they are not being targeted. The stress must be on improving the system.

Real improvements aren’t necessarily simple. They need thought, discussions with staff, and acting on what staff tell you. One of Deming’s most endearing qualities was that, when he studied a company, he spent much of his time walking the factory, asking workers what their problems were. He recognized that problems are rarely the staff’s “fault”. For example, staff are working with the equipment they are given; this may be old and unreliable, or new and incomprehensible.

This is one reason why “SPC training” on its own is not enough. It ignores the culture within the company. The culture, however, is precisely what determines whether improvements will work. SPC gives guidance on what questions to ask, and when. But will these questions lead to the right answers? Ultimately, success will depend on factors like whether receptionists feel able to come back to you and say: “I spend all day listening to customers telling me they’re taking their business elsewhere because we can’t deliver, and now you’re asking me to write down how long they’re on the phone?”

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