Page 66 - How To Implement Lean Manufacturing

Inventory and Variation 47

About Variation
Production process variation is everywhere. It affects every aspect of every step of your
process and every specification of every part of your product. It is present in the materi-
als, the manpower, the methods, the measurement, and the environment of all that we
do to manufacture our products.

It is inevitable.
It is the enemy.
It is the enemy to not only good product quality, it is the enemy to rate, it is the
enemy to rate stability, and consequently it is the enemy to operating costs—but most
of all it is the enemy of bottom-line profits. Nothing is more basic to improving the
manufacturing systems than the reduction of variation.
Variation in a production process is to be understood, sought out, and destroyed.
Variation is “the inevitable difference of the individual outputs of a system.” I have
taught that definition for years and am not sure of its origin. I believe I can thank either
Walter Shewhart or Donald Wheeler for it, but I am not sure. But what is important is
that it is a clear representation of variation. It is:
• Inevitable
• Applicable to all outputs—in fact, it is applicable to every characteristic of each
output
• System generated—in other words, every part of everything that went into
making the individual output varies

Sometimes, especially as it applies to attribute data, I use a definition I found taken
from the writings of Walter Shewhart. Most people refer to this book as The Western
Electric Handbook, but it’s real name is Statistical Quality Control Handbook, (AT&T, 1956).
It is the three-part definition of variation and it says:

• Everything varies.
• Individual items are not predictable.
• Groups of items, from a constant cause system, tend to be predictable.

It does not really matter which definition you use. In a process, they both converge
and you find that variation is the enemy to both process stability and process capability.
It is the enemy to the very foundation of a Lean effort and must be understood and
aggressively reduced at all times, and in all processes.
So, to summarize… All systems have variation; hence, all systems will need some
inventory to maintain rate. However, inventory is a waste, but at some level it is a nec-
essary waste, so you will want to scientifically and
economically minimize it. To minimize the inven-
tory, you need to reduce the variation—there is no Point of Clarity To reduce
other productive way. In short, inventory reduction inventory levels, reduce variation.
is reduction of variation by another name.