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Identifying, Categorizing and Quantifying Primary Sources of Manufacturing Variances for Process Improvement and Reduction of Overall Cost Variance Open Access

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This Praxis research developed a Management Control Plan to enable a manufacturing company to determine, control, and eliminate potential root causes of variances in the production of more than 12,000 products. After cost variances in materials usage, waste, and labor were identified, categorized and quantified, lean six-sigma process improvement tools were applied to reduce and control variances. The presence of high unfavorable variances indicated problems that should be addressed for quality and financial purposes. Root cause analyses were used to identify the sources of variance and control charts were utilized to establish and analyze process performance. Time series data was collected and analyzed on select product workstation assembly operations that were applicable to all company products. Implementation of the Management Control Plan increased profitability, maintained and improved product quality and drove continuous improvement.

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