I recently finished H. Edwards Deming last book, The New Economics. I thought of particular interest to Logistics / Supply Chain Managers was the discuss of common versus special variance. Two particularly interesting examples of each.
Common variance: A salesman comes into the office every day from 10 to 24 minutes late. Always a new excuse. To correct this type of variance problem a process change is necessary. The correction is rather simple, leave home earlier.That moves the center of the variance line on the graft to the left, and outcomes start moving to the on time area.
Special variance: A school child did a chart on how often the bus arrives at his home on time. Twenty points are all within 5 minutes of each other. Three points are beyond the 5 minute line caused by a bus breakdown, extreme weather, and a discipline problem. None of these problems can be handled by improving the bus schedule process, they need to be addressed individually.
Logistics / Supply Chain / Transportation managers are constantly facing difficulties and challenges in their operation. What these two variance types say that the solution to common variance issues is a process change, but some problems should be recognized as not being part of the process.