CHAPTER 5

The Effects of Variance in the System

Reduction of variability is the key to achieving stability. Variability comes in two forms:

  1. Self-inflicted variability—that which you control

  2. External variability, which is primarily related to the customers, but also to suppliers and to the variation that is inherent to the product itself …

Liker and Meier (2006, p. 74)

Variance is defined by the American Heritage College Dictionary as “a difference between what is expected and what actually occurs.” The previous quote illustrates that there are multiple sources of variance in a process. This implies that there are multiple methods to manage the variation and to eliminate the variation in the system. What an operations manager has to understand, ...

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