About this lesson
Variation and Control
All processes have variation. A portion of management's responsibility is to control that variation to be within acceptable levels. This lesson provides a background in the management discipline of SPC, with a focus on the role of Shewhart and Deming – two of the pioneers in the development of SPC.
When to use
All process have variation, so an analysis to understand and control variation is always appropriate. SPC is a proven business discipline to understand variation and provide guidance on control of that variation.
Process variation exists in all processes. A management goal of many 21st business managers is to identify the sources of variation and control the levels of variation within a process. Variation leads to unpredictable performance. Accommodating this unpredictability and the associated defects leads to economic losses for both the company and their customers. In addition, this unpredictability can generate high levels of customer dissatisfaction. Therefore controlling variation is an imperative for many companies. SPC is a proven method for identifying and controlling variation.
SPC was formulated by Walter Shewhart in the 1920s. He explained the concept of special cause variation and common cause variation. This led to the creation of control charts for monitoring process performance to determine the presence and magnitude of each. In addition, he created the process capability indices to show whether the process could meet the customer’s expectations.
Shewart demonstrated his theories in Department of Defense arsenals and then with Defense contractors during World War II. The widespread adoption and success of SPC during this time turned it into a standard business management process for manufacturing operations.
SPC was further developed by one of Shewhart’s students, Edward Deming. Deming used SPC in the USA Department of Agriculture during the 1930s where he found the need to add the sampling theories and principles to SPC. He worked with Shewhart in the Defense industry during World War II. However, Deming is best known for his work after the war.
Deming went to Japan as part of the USA government’s initiative to rebuild Japan following the war. In particular, he worked closely with Japanese automotive manufacturers and transformed that industry into a global power that was leading with their competitive advantage in quality. While in Japan, Deming expanded the principles of SPC to become a full blown management discipline and not just a quality control tool. He developed his System of Profound Knowledge that relied on SPC principles to address improvements in all business processes. Deming found that management failures and weaknesses accounted for 85% of the variation in business processes. By applying these principles, that variation could be identified and eliminated or controlled.
Hints & tips
- Variation always exists – so identify it, understand it, and control it
- SPC can be applied to any business process, and often has a larger impact on administrative and support processes since they seldom have established quality control procedures.
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