Variation - The Foundation for Process Improvement

Variation is the difference between what you expect to see and what you actually observe (expected vs. observed).  One of the major influences on business by W. Edwards Deming was this focus on understanding variation and eliminating the portions of which you can control early in the process to improve.  Much of Japanese business practice is rooted in this as is Six Sigma and to a lesser extent, the Lean buzzword programs.

It is critical because without rationalizing variation, you have a high probability of investing in things that compound rather than reduce problems.    Using Deming's terminology, there are 2 main causes of variation, assignable (more commonly called special) and common.  Assignable or special causes are those you can identify and remove.  The common causes of variation are those that you can't control- the random or totally external  variables that are encountered.

Although it often conflicts with the near "instant gratification" approach of some western businesses, it is critical that you initially focus on understanding intimately the process you are trying to improve by focusing on identifying special causes of variation. Then, once identified, you can further identify the root causes and remove them and then monitor to ensure they don't re-enter.