Managing Variability in Manufacturing and Services

Variability is known to degrade performance in manufacturing and service environments in some way. If no measures are taken to reduce variability, systems can be protected from the negative impact of variability by installing buffers. One can choose between three buffer types: inventory buffers, capacity buffers and/or time buffers. In reality, reducing variability and installing these buffer types are frequently translated into management interventions such as adapting lot sizes, sequencing, scheduling, influencing the release mechanism, pooling, etc. This paper distinguishes between six types of variability: natural and artificial, functional and dysfunctional, and predictable and unpredictable variability. All types of variability are illustrated through examples within manufacturing and service environments. Finally, specific solutions are proposed for all these examples and are linked to ways of reducing and/or coping with variability.