ABSTRACT

In Chapter 24, we opened this section about cost in the supply chain. We pointed to variability as a root cause of unnecessary supply chain cost. This chapter explores variability in greater detail and shows how it adds cost. Because supply chains are more complex, their productivity is especially vulnerable to variability. Variations will be difficult to recover from; schedules will be uncertain, and effectiveness will deteriorate. The quotation above by an executive at Ford shows the importance placed by that company on eliminating variability at a time, in 1988, when the quality of cars from Detroit was suspect.