Cause of variation
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Cause of variation is the difference between an expected result or outcome and the actual result or outcome. In management, cause of variation is the identification of factors that contribute to differences between projected and actual performance. It is a process of evaluating the data to identify the source of the variation and determine its impact on the overall system. Cause of variation analysis can help managers determine if the variation is due to normal fluctuations or to an underlying issue that needs to be addressed. The analysis can help managers determine the best action to take to achieve the desired results.
Example of cause of variation
- A manufacturing company notices that their production output is lower than expected. They can use cause of variation analysis to identify the potential causes of the lower output, such as an increase in faulty raw materials, a decrease in available labor, or a decrease in efficiency due to outdated equipment.
- A hospital notices that there is a higher than expected number of patients in the emergency room. They can use cause of variation analysis to identify the potential causes of the higher number, such as an increase in the number of non-emergency cases, a decrease in available medical staff, or a decrease in efficiency due to outdated equipment.
- A retail store notices that their sales have decreased compared to the same period last year. They can use cause of variation analysis to identify the potential causes of the decrease, such as an increase in competition, an increase in online shopping, or a decrease in customer satisfaction due to poor customer service.
Types of cause of variation
Cause of variation can be categorized into several types. These include:
- Special Causes of Variation: Special causes of variation are those factors that are outside of the normal range of expected variation, and are caused by a specific event or factor. They are typically caused by external factors such as changes in the market or environment, or by internal factors such as operational errors or mismanagement.
- Common Causes of Variation: Common causes of variation are those factors that are within the normal range of expected variation, and are caused by internal factors such as the natural fluctuations of the system, or by external factors such as the natural environment.
- Systemic Causes of Variation: Systemic causes of variation are those factors that are part of the system and are caused by a combination of external and internal factors. These are typically caused by structural or organizational issues, such as inadequate resources or processes.
- Uncontrollable Causes of Variation: Uncontrollable causes of variation are those factors that are outside of the control of the organization and are typically caused by external factors such as natural disasters, economic downturns, or political changes.
Limitations of variation
The limitations of cause of variation analysis include:
- Difficulty in isolating the effect of a single factor: When multiple factors are at play, it can be difficult to isolate the effect of a single factor on the variation. This can lead to inaccurate results.
- Overlooking other factors: If the cause of variation analysis fails to take into account other factors that could be causing the variation, it can lead to inaccurate conclusions.
- Ignoring external factors: External factors such as customer preferences or economic conditions can have a significant impact on performance. If these are not taken into account, the cause of variation analysis may be insufficient.
- Time consuming: Analyzing the cause of variation can be a time consuming and resource intensive process, making it difficult to incorporate in regular management practices.
- Difficulty in quantifying effects: It can be difficult to quantify the effects of a particular factor on the variation, making it hard to measure the impact of any changes.
Suggested literature
- Muhammad, N. Z., Keyvanfar, A., Abd Majid, M. Z., Shafaghat, A., Magana, A. M., & Dankaka, N. S. (2015). Causes of variation order in building and civil engineering projects in Nigeria. Jurnal Teknologi, 77(16).
