What did Deming mean when he said that it is important to manage with a knowledge of variation?

Question

What will be an ideal response?

Answer 1

Effective leaders know that people must be included in the organization's decision-making processes. They also know that sharing information is critical to making good decisions. Management by fact involves understanding the how's and why's of a situation before taking action. Management by fact requires an appreciation for and understanding of the key systems of an organization. Effective leaders realize that management of systems requires knowledge of the interrelationships between all the components within the system and the people that work in it. Information can sometimes be misleading. When leaders manage by fact, they use objective evidence to support their decisions. Objective evidence is not biased and is expressed as simply and clearly as possible. More importantly, it is traceable back to its origin, whether that be a customer, an order number, a product code, machine, or an employee. Effective leaders are the ones who remember to ask Dr. Deming's favorite question: How do we know? Knowing the answer to this question verifies where the information has come from, its importance and relationship with the issue at hand. Having this knowledge means having the facts available to support a plan of action.

Chapter 2 discussed the two sources of variation in a process as identified by Dr. Shewhart. Controlled variation, the variation present in a process due to the very nature of the process, can be removed from the process only by changing the process. Uncontrolled variation, on the other hand, comes from sources outside of the process. It is not normally part of the process and can be identified and isolated as the cause of a change in the behavior of the process. To manage with an understanding of variation means that a leader would recognize the type of variation present and respond accordingly. As Dr. Deming clarified, it would be a mistake to react to any fault, complaint, mistake, breakdown, accident, shortage as if it came from a special cause when in fact there was nothing special at all, i.e., it came from random variation due to common causes in the system. It is also a mistake to attribute to common causes any fault, complaint, mistake, breakdown, accident, shortage when it actually came from a special cause. An understanding of variation enables leaders to make the right choices and deal with problems as they arise appropriately.